U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: October 31, 2001
OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission file number 333-61714
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Inventoy.com, Inc.
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(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
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (561) 482-6952
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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 December 10, 2001 there were 5,211,000 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 QUARTERLY 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 ................................................4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................9
Item 6. Exhibits and Reports on Form 8-K.....................................9
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
To the extent that the information presented in this Quarterly Report on
Form 10-QSB for the quarter ended October 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 Quarterly 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 Quarterly
Report. When considering such forward- looking statements, you should keep in
mind the risks referenced above and the other cautionary statements in this
Quarterly Report.
3
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Inventoy.com, Inc.
(A Development Stage Company)
Balance Sheets
October 31, July 31,
2001 2001
-------- --------
(Unaudited)
---------
Assets
Current assets:
Cash $ 53,838 $ 62,991
-------- --------
Total current assets 53,838 62,991
-------- --------
Other assets:
Purchased toy designs 3,000 3,000
-------- --------
Total assets $ 56,838 $ 65,991
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 3,648 $ 6,864
-------- --------
Total liabilities 3,648 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 78,523 81,849
Subscriptions receivable (600) (600)
Retained earnings (deficit) (29,944) (27,333)
-------- --------
Total shareholders' equity 53,190 59,127
-------- --------
Total liabilities and
shareholders' equity $ 56,838 $ 65,991
======== ========
See accompanying Notes to Financial Statements.
4
Inventoy.com, Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
Period from
Three months Three months August 11, 1999
ended ended (inception)
October 31, October 31, to October 31,
2001 2000 2001
----------- ----------- -----------
Revenues:
Net sales $ -- $ -- $ --
----------- ----------- -----------
Expenses:
General and administrative 2,797 9,075 31,104
----------- ----------- -----------
Total Expenses 2,797 9,075 31,104
Other Income:
Interest 185 6 1,159
----------- ----------- -----------
Net income (loss) $ (2,612) $ (9,069) $ (29,945)
=========== =========== ===========
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 3,680,556
=========== ===========
See accompanying Notes to Financial Statements.
5
Inventoy.com, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Period from
August 11,1999
Three Months Ended (inception)
October 31, to October 31,
2001 2000 2001
-------- -------- --------
Cash flows from operating activities:
Net loss $ (2,612) $ (9,069) $(29,945)
Adjustments to reconcile net loss
to cash provided (used) for operating activities:
Common stock issued for services -- -- 50,000
-------- -------- --------
(2,612) (9,069) 20,055
Increase (decrease) in operating accounts payable (3,216) 11,088 3,648
-------- -------- --------
Cash provided (used) for operating activities (5,828) 2,019 23,703
-------- -------- --------
Cash flows from financing activities:
Proceeds of private placement offering net of
$3,325, $2,014 and $80,965 direct costs (3,325) 10,486 30,135
-------- -------- --------
Cash provided (used) for financing activities (3,325) 10,486 30,135
-------- -------- --------
Increase (decrease) in cash (9,153) 12,505 53,838
Cash, beginning of period 62,991 -- --
-------- -------- --------
Cash, end of period $ 53,838 $ 12,505 $ 53,838
======== ======== ========
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
deferred design costs $ -- $ -- $ 3,000
See accompanying Notes to Financial Statements.
6
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). The interim statements are unaudited and, in the
opinion of management, include all adjustments (which include only normal
recurring adjustments) necessary to present fairly the Company's financial
position as of October 31, 2001 and the results of its operations and cash flows
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 three months ended October 31, 2001 are
not necessarily indicative of the results that will be obtained for the year
ending July 31, 2002.
2. Supplemental Cash Flow Information
October 31 October 31
2001 2000
-------- --------
Cash paid during the three months for:
Interest $ -- $ --
===== ======
Income taxes $ -- $ --
===== ======
Non-cash financing transaction:
Direct stock placement costs $ -- $3,325
===== ======
7
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 begin 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 to decide whether a fact-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 build and 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 manufactures' representatives.
From its inception to the time of filing this report, Inventoy has been
developing its business and had no operations. Inventory 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 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.
8
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 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
9
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
14th day of December, 2001.
Inventoy.com, Inc.
By: /s/ Ed Kaplan
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Ed Kaplan, President, CEO
and Chairman of the Board
(principal financial officer)
10