SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period from ___________ to ____________.
Commission File Number 0-29935
20/20 NETWORKS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 33-0677140
(State or other jurisdiction of incorporation or
organization)(IRS Employer Identification No.)
20700 Ventura Blvd., #227, Woodland Hills, California 91364
(Address of principal executive offices)
(818) 227-9494
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal
year, if changed since last report)
Indicate by check mark whether the registrant (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 November 14, 2003 there were 1,710,991 shares of Common Stock of the
issuer outstanding.
TABLE OF CONTENTS
PART I FINANCIAL STATEMENTS
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 7
Item 3 Controls and Procedures 8
PART II OTHER INFORMATION
Item 1 Legal Proceedings 8
Item 2 Changes in Securities 8
Item 3 Default upon Senior Securities 8
Item 4 Submission of Matters to a Vote of Security Holders 8
Item 5 Other Information 8
Item 6 Exhibits and Reports on Form 8-K 8
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
20/20 NETWORKS, INC.
BALANCE SHEET
September 30, December 31,
2003 2002
----------------- ---------------
(Unaudited)
Assets $ - $ -
================ =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 142,352 $ 103,419
Accounts payable - related party 22,229 22,229
---------------- -------------
Total current liabilities 164,581 125,648
---------------- -------------
Stockholders' deficit:
Common stock, $.001 par value, 100,000,000 shares authorized,
1,710,991 and 430,991 shares issued and outstanding: 1,711 431
Additional paid-in capital 875,783 749,063
Deficit accumulated during the development stage (1,042,075) (875,142)
---------------- -------------
Total stockholders' deficit (164,581) (125,648)
---------------- -------------
$ - $ -
================ =============
20/20 NETWORKS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
------------------ --------------- ----------------- ------------------
Cost and Expenses:
General and administrative $ 18,263 $ 4,626 $ 166,933 $ 20,594
Net loss $ (18,263) $ (4,626) $ (166,933) $ (20,594)
================ ============= ================ ================
Basic and diluted loss per common share $ (0.01) $ (0.01) $ (0.18) $ (0.05)
================ ============= ================ ================
Weighted average shares outstanding 1,710,991 430,991 909,233 430,991
================ ============= ================ ================
20/20 NETWORKS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
2003 2002
----------------- -----------------
Cash flows from operating activities:
Net loss $ (166,933) $ (20,594)
Adjustments to reconcile net income to net cash
used in operating activities:
Common stock for services 128,000 -
Changes in operating assets and liabilities
Accounts payable 38,933 20,594
--------------- ---------------
Net cash provided by (used in) operating activities - -
--------------- ---------------
Net increase (decrease) in cash and cash equivalents - -
Cash and cash equivalents at beginning of period - -
--------------- ---------------
Cash and cash equivalents at end of period $ - $ -
=============== ===============
Cash paid for:
Taxes $ - $ -
Interest $ - $ -
20/20 NETWORKS, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
September 30, 2003
Note 1: Presentation
The balance sheet of 20/20 as of September 30, 2003, the related statements of
operations for the three and nine months ended September 30, 2003 and 2002 and
the statements of cash flows for the nine months ended September 30, 2003 and
2002 included in the financial statements have been prepared by 20/20 without
audit. In the opinion of management, the accompanying condensed financial
statements include all adjustments (consisting of normal, recurring adjustments)
necessary to summarize fairly 20/20's financial position and results of
operations. The results of operations for the three and nine months ended
September 30, 2003 are not necessarily indicative of the results of operations
for the full year or any other interim period. The information included in this
Form 10-QSB should be read in conjunction with Management's Discussion and
Analysis and Financial Statements and notes thereto included in 20/20's December
31, 2002 Form 10-KSB.
NOTE 2 - COMMON STOCK
During the nine months ending September 30, 2003, 20/20 issued 1,280,000 shares
of common stock for services valued at $128,000.
NOTE 3 - AGREEMENT AND PLAN OF REORGANIZATION
In June 2003, 20/20 entered into an agreement to acquire E-Z Arch, LLC
("EZ-Arch") where E-Z Arch was to exchange 100% of its common stock and cash for
majority control of 20/20. The transaction was terminated in October, 2003.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
This report contains forward looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. 20/20's actual results could differ materially
from those set forth on the forward looking statements as a result of the risks
set forth in 20/20's filings with the Securities and Exchange Commission,
general economic conditions, and changes in the assumptions used in making such
forward looking statements.
GENERAL
20/20 Networks, Inc. formerly known as 20/20 Web Design, Inc. (the "Company")
was incorporated on August 31, 1995 as "Visioneering Corporation" under the laws
of the State of Nevada, to engage in any lawful corporate undertaking,
including, but not limited to, selected mergers and acquisitions. The Company
subsequently changed its name to "Asiamerica Energy Group, Inc." on January 12,
1996 when it entered into an agreement to acquire an oil and gas company. No
stock was issued and no assets were acquired as this acquisition was not
consummated.
The Company then changed its name to "Care Financial Group, Inc." on April 29,
1996. At that time, the Company had agreed to form a wholly owned subsidiary,
Care Concepts, Inc., a Nevada corporation ("Care Concepts"). The Company issued
3,700,000 shares of its common stock to Care Concepts which shares were valued
at $25,000. Care Concepts was in the business of designing and building
specialized motor vehicles for physically handicapped drivers and passengers.
Ultimately, this acquisition did not succeed and the Company paid Care Concepts
$80,000 to terminate the agreement between Care Concepts and the Company while
the shareholders of Care Concepts retained their shares of the Company's common
stock. The Company subsequently approved a 250-to-1 reverse stock split after
this transaction was terminated.
On May 15, 1997, the Company changed its name to "Trump Oil Corporation"
("Trump"). Trump proposed to merge with Fenway Resources Ltd., a Canadian
company involved in natural resource development which wanted to develop and
construct a cement manufacturing facility in the Philippines. This proposed
merger was never consummated and no shares were issued pursuant to this
agreement.
None of the proposed business activities for which the Company's name was
changed produced any revenues or created any appreciable business activities for
the Company. On March 10, 1999, the Company entered into a letter of intent with
20/20 Web Design, Inc. ("20/20 Web"), a Colorado corporation, a wholly owned
subsidiary of Multi-Source Capital, Ltd. ("MSC"), also a Colorado corporation.
The Company entered into an Agreement and Plan of Reorganization and completed
its acquisition of 20/20 Web, with the Company changing its name as a result. As
a result of the merger, MSC became the owner of 80% of the issued and
outstanding shares of the Company. The Company recorded the 8,620,000 shares of
stock issued to MSC at par value for a total of $8,620. MSC was later acquired
by TeleMall Communications, Inc. ("TeleMall"), a publicly traded company which
subsequently changed its name to Crown Partners, Inc. ("Crown").
In 1999, the Company continued the business of the Colorado corporation it
acquired and continued to design and maintain web sites for small, private
companies. The Company's clients included a jewelry store, a gift basket company
and certain other small companies. The revenues received from these operations
were minimal.
In December, 1999, the Company formed a wholly owned subsidiary, Stein's Cake
Box ("Cake Box"), a Nevada corporation. The Company entered into a letter of
intent with a bakery operation in Lewisville, Texas controlled by the Company's
president, Randy Sutton. The Company lent $195,000 to Cake Box in connection
with the letter of intent. Cake Box used the $195,000 to pay some of the
construction costs of a proposed bakery operation estimated to ultimately cost a
total of $750,000. The proposed construction project was to expand an existing
bakery operation located at the same location, College Connection, Inc. dba
Stein's Bakery (the "Bakery"), also run by Mr. Sutton. In late February, 2000,
the Company and the Bakery mutually agreed to cancel their letter of intent
concerning Cake Box, although the Bakery remained liable to repay the $195,000
it acquired from Cake Box. Due to the subsequent filing of a petition under the
U.S. Bankruptcy Code, the Company was unable to collect this debt. In February
2001, the Company entered into a letter of intent with BentleyTel.com, Inc.
("BentleyTel"), a Nevada corporation, to acquire BentleyTel in a statutory
merger. The terms of the proposed acquisition require, among other things, that
the Company to increase its authorized capital from twenty five million shares
of common stock to one hundred million shares, approve a forward-split of
one-for-four and change its name to "BentleyTel, Inc." The transaction was not
completed and the Company changed its name back to 20/20 Web Design, Inc.
During the quarter ended March 31, 2003, the Company approved a 100-to-1 reverse
split and a change of name to "20/20 Networks, Inc.".
20/20 is presently inactive and seeking suitable acquisition candidates. 20/20
can be defined as a shell company whose sole purpose at this time is to locate
and consummate a merger or acquisition with a private entity.
20/20 presently has no office space.
As of September 30, 2003, 20/20 had no employees.
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 2002
There were no revenues or cost of revenues for the three and nine months ended
September 30, 2003 and 2002, respectively.
20/20's expenses for the three months ended September 30, 2003 were
approximately $18,263, representing general and administrative expenses, which
are primarily from professional services. 20/20 recorded a net loss of $18,263
for the three months ended September 30, 2003. 20/20's expenses for the three
months ended September 30, 2002 were $4,626 representing general and
administrative costs. 20/20 recorded a net loss of $4,626 for the three months
ended September 30, 2002. The net loss per share was $0.01 for the three months
ended September 30, 2003 compared to a net loss of $0.01 per share for the three
months ended September 30, 2002.
20/20's expenses for the nine months ended September 30, 2003 were approximately
$166,930, representing general and administrative expenses which are primarily
from the issuance of 1,280,000 shares of common stock for services valued at
$128,000 or $0.10 per share. 20/20 recorded a net loss of $166,930 for the nine
months ended September 30, 2003. 20/20's expenses for the nine months ended
September 30, 2002 were $20,594 representing general and administrative costs.
20/20 recorded a net loss of $20,594 for the nine months ended September 30,
2002. The net loss per share was $0.18 for the nine months ended September 30,
2003 compared to a net loss of $0.05 per share for the nine months ended
September 30, 2002.
As of September 30, 2003 and 2002, 20/20 had no assets. 20/20's current
liabilities at September 30, 2003 were approximately $156,000 compared to
liabilities of approximately $126,000 for the year ended December 31, 2002. This
difference is primarily attributable to the expenses incurred in filing a
registration statement under the 1934 Act and the associated legal and
accounting expenses incurred as a result as well as legal costs incurred in
connection with the BTC transaction. Shareholders' deficit at September 30, 2003
was approximately $165,000 compared to total shareholders' deficit of $126,000
for the year ended December 31, 2002.
20/20 anticipates that until a business combination is completed with an
acquisition candidate, it will not generate revenues and may operate at a loss
after completing a business combination, depending upon the performance of the
acquired business.
20/20 will attempt to carry out its business plan as discussed above. 20/20
cannot predict to what extent its lack of liquidity and capital resources will
hinder its business plan prior to the consummation of a business combination.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, 20/20 has experienced no significant change in liquidity or
capital resources or stockholders equity other than the receipts of proceeds
from offerings of its capital stock. 20/20 received $250,000 from an offering
conducted under Rule 504 of Regulation D in 1999. 20/20 also raised
approximately $158,000 from the issuance of 7,200,000 shares of 20/20's common
stock prior to 1997. In 1997, 20/20 raised an additional $345,000 from the sale
of its common stock. 20/20's balance sheet as of September 30, 2003 reflects no
assets and limited liabilities. Further, there exist no agreements or
understandings with regard to loan agreements by or with the Officers,
Directors, principals, affiliates or shareholders of 20/20.
20/20 is continuing to search for suitable merger candidates or other businesses
to become involved in so that it can commence operations and generate revenues
to continue paying its bills.
20/20 will attempt to carry out its plan of business and hopes to enter into a
business combination with another entity. 20/20 cannot predict to what extent
its lack of liquidity and capital resources will hinder its business plan prior
to the consummation of a business combination.
NEED FOR ADDITIONAL FINANCING
20/20's existing capital is not sufficient to meet 20/20's cash needs, including
the costs of compliance with the continuing reporting requirements of the
Securities Exchange Act of 1934, as amended. Once a business combination is
completed, 20/20's need for additional financing is likely to increase
substantially.
No commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any funds will be
available to 20/20 to allow it to cover its expenses.
20/20 might seek to compensate providers of services by issuing common stock in
lieu of cash.
DESCRIPTION OF PROPERTIES
20/20 presently has no office space.
EMPLOYEES
As of September 30, 2003, 20/20 had no employees.
Inflation
20/20's results of operations have not been affected by inflation and management
does not expect inflation to have a significant effect on its operations in the
future.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures. Based on the evaluation by
Mr. Charles Smith, both the chief executive officer and chief accounting officer
of the Company, of the effectiveness of the Company's "disclosure controls and
procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
and 15d-15(e)) conducted as of September 30, 2003 the filing date of this
quarterly report (the "Evaluation Date"), Mr. Smith concluded that, as of the
Evaluation Date, our disclosure controls and procedures were adequate to ensure
that material information relating to us and our subsidiaries would be made
known to him by others within those entities.
(b) Changes in internal control over financial reporting. There were no
significant changes in our internal control over financial reporting during our
most recent fiscal quarter that materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART II
Items No. 1, 3, and 4 - Not Applicable.
ITEM 2. CHANGES IN SECURITIES
In September 2003, 20/20 issued 1,280,000 shares of common stock to various
consultants for services rendered. These shares were registered on a Form S-8
Registration Statement.
Item No. 5 - Other Information
None
Item No. 6 - Exhibits and Reports on Form 8-K
(a) No reports on Form 8-K were filed during the quarter ended September 30,
2003.
(b) Exhibits
None
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
20/20 NETWORKS, INC.
By /s/ Charles Smith
--------------------------
Charles Smith, President, CFO
Date: November 14, 2003
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Charles Smith, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of 20/20 Networks, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
small business issuer and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under my supervision, to
ensure that material information relating to the small business issuer,
including its consolidated subsidiaries, is made known to me by others within
those entities, particularly during the period in which this report is being
prepared;
b) Paragraph omitted in accordance with SEC transition instructions
contained in SEC Release No. 33-8238;
c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's fourth
fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.
Date: November 14, 2003
By: /s/ Charles Smith
-------------------------------
Charles Smith
President and Chief Executive Officer
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Charles Smith, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of 20/20 Networks, Inc. on Form 10-QSB for the quarterly period ended
September 30, 2003 fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934 and that information contained in
such Form 10-QSB fairly presents in all material respects the financial
condition and results of operations of 20/20 Networks, Inc.
By:/s/ Charles Smith
--------------------------
Name: Charles Smith
Title: President and Chief Executive Officer
November 14, 2003