Tom, the numbers look good to me.
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-26668
HITSGALORE.COM, INC.
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(Exact name of Registrant as specified in its charter)
FLORIDA 65-0036344
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10134 6TH Street, Suite J, Rancho Cucamonga, CA 91730
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(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (909) 481-8821
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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 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
Number of shares outstanding of the issuer's Common Stock, par value .001 per
share, as of June 30, 1999 - 49,203,160 shares.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HITSGALORE.COM, INC.
BALANCE SHEETS
June 30, December 31,
1999 1998
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(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 272,955 $ 1,013
Accounts and notes receivable trade, less
allowance for returns of $11,000 in 1999 1,312,199 --
Accounts receivable from officers and employees 60,500 --
Other current assets 32,688 971
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Total current assets 1,678,342 1,984
Property and equipment, net of accumulated
depreciation of $26,675 and $1,883 329,323 29,750
Intangible assets, net of accumulated
amortization of $38,808 in 1999 426,892 --
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Total assets $ 2,434,557 $ 31,734
========== ======
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable $ 13,609 $ --
Borrowings from affiliated company -- 22,699
Accounts payable 42,872 --
Accrued expenses and other current liabilities 7,500 7,776
Income taxes payable 157,752 252
Merger liabilities assumed 689,976 --
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Total current liabilities 911,709 30,727
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Long-term portion of notes payable 12,230 --
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Total liabilities 923,939 30,727
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Commitments and contingencies
Stockholders' equity:
Class A convertible preferred stock, stated
value and liquidation preference - $1.00 per
share; authorized 5,000,000 shares, issued and
outstanding 500,000 shares 55,000 --
Class B convertible preferred stock, stated
value and liquidation preference - $1.00 per
share; authorized 10,000,000 shares, issued and
outstanding 100,000 shares 54,764 --
Common stock, $.001 par value; authorized
50,000,000 shares, issued and outstanding
49,203,160 shares 49,203 --
Common stock, $0.001 value, 2,267,858 shares
to be issued 507,700 --
Additional paid in capital 11,306,716 --
Stock subscription receivable (10,000,000)
Retained earnings (accumulated deficit) ( 462,765) 1,007
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Total stockholders' equity 1,510,618 1,007
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Total liabilities and stockholders' equity $ 2,434,557 $ 31,734
========== ======
See Notes to Financial Statements
HITSGALORE.COM, INC.
UNAUDITED STATEMENTS OF OPERATIONS
Six Months Three Months
Ended Ended
June 30, June 30,
1999 1999
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Gross revenues $ 1,899,284 $ 1,436,200
Allowances for returns and refunds (212,815) (141,410)
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Net revenues 1,686,469 1,294,790
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Costs and expenses:
Selling, general and administrative expenses 1,202,475 1,021,797
Depreciation and amortization 63,600 59,257
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Total costs and expenses 1,266,075 1,081,054
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Income from operations 420,394 213,736
Interest income 2,415 2,415
Interest expense (378) (378)
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Income before income taxes 422,431 215,773
Provision for income taxes 157,500 78,970
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Net income $ 264,931 $ 136,803
========= =========
Basic earnings per share $ 0.01 $ --
========= =========
Diluted earnings per share $ 0.01 $ --
========= =========
See Notes to Consolidated Financial Statements
HITSGALORE.COM, INC.
UNAUDITED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999
Net cash used in operating activities $ (868,564)
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Cash flows from investing activities:
Expenditures for furniture and equipment ( 296,365)
Expenditures for intangible assets ( 98,500)
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Net cash used in investing activities ( 394,865)
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Cash flows from financing activities:
Proceeds from issuance of common stock
and from exercise of options and warrants 1,849,760
Proceeds from common stock to be issued 138,500
Payments on merger liabilities assumed ( 425,779)
Payment of borrowings from affiliated company ( 22,699)
Payment of borrowings from officers and stockholders ( 2,250)
Payments on notes payable ( 2,161)
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Net cash provided by financing activities 1,535,371
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Net increase (decrease) in cash 271,942
Cash and cash equivalents at beginning of the
period 1,013
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Cash and cash equivalents at end of the period $ 272,955
=========
Supplemental Disclosure of Cash Flow Information and Non-cash Investing and
Financing Activities:
Issuance of common stock upon conversion of notes
payable $ 5,000
Merger liabilities assumed 1,873,722
Non-cash liquidations of merger liabilities assumed 676,304
Stock subscription receivable 10,000,000
Issuance of common stock in exchange for intangible
assets 367,200
Issuance of note payable in exchange for equipment 28,000
Cash paid during the period for:
Interest 378
Income taxes --
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