U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual report under section 13 or 15 (D) of the
Securities Exchange Act of 1934 for the fiscal year
ended December 31, 2000
[ ] Transition report under section 13 or
15 (d) of the Securities Exchange Act of
1934 for the transition period from _____
to _____
YSEEK, INC. f/k/a SWIFTYNET.COM, INC.
(Name of small business issuer in its charter)
Florida 65-0783722
(State or other jurisdiction of (I.R.S. Employer Identi-
incorporation or organization) fication No.)
761 Coral Reef Drive, Tampa, Florida 33602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (813) 926-1603
Securities registered under
Section 12(b) of the Exchange Act: Name of exchange on which registered
None OTC
Bulletin Board
Securities registered under Section
12(g) of the Exchange Act:
Common stock, $.0001 par value
Class A Common Stock Warrants, $.01 par value
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 ___
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
The issuer's revenue for the most recent fiscal year, ending December 31,
2000, was $0.
The aggregate market value of the voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of March 27,
2001, was approximately $2,091,982.64.
The number of shares of the Company's common stock, par value $.0001 per
share, outstanding as of March 27, 2001, was 25,315,000. The number of the
Company's Warrants, for the purchase of one share of common stock as of March
27, 2001, was 567,240. Transitional Small Business Disclosure Format (Check One)
Yes____ No X
Part I
Item 1. Description of Business
The Company
Yseek, Inc. is a Florida Corporation formed on September 23, 1997("Yseek"). The
Company is a successor to Steele Holdings, Inc., a Florida Corporation formed on
August 13, 1997. Rachel Steele was the sole shareholder of and President of
Steele Holdings. On January 20, 1998, the Company and Steele Holdings, Inc.,
were reorganized with all the assets of Steele Holdings being transferred into
the Company. All 6,000 authorized shares of common stock were exchanged on a one
to one thousand basis for shares in the Company. After the reorganization, all
stock in the Company was owned by the Company's president, Rachel Steele. Steele
Holdings has conducted no other business, held no other assets and was dissolved
on October 16, 1998. On October 22, 1999, the Company changed its name to
SwiftyNet.com, Inc. On January 29, 2001, the Company changed its name to
Yseek,Inc.
The Company was originally formed to develop, own and operate a chain of
full-service car washes and express oil change centers.
The Company constructed an oil change center in Palm Harbor Florida on real
property owned by the Company (the "Center"). The approximately one (1) acre
site was purchased from Champion Hills by the Company's predecessor for
$312,500. The first Center was opened on January 18, 1999.
The Center was sold on April 19, 2000, for a cash sales price of $1,000,000. The
sales price was determined through arms-length negotiations. The car wash was
purchased by In and Out Express Lube, Inc. There were no material relationships
between the purchaser and the Company or its affiliates, or any officer or
director, or any associate of such officer or director.
On December 17, 1999, the Company purchased all of the outstanding shares of
Rankstreet.com, Inc. ("Rankstreet"), in exchange for 4,000,000 shares of common
stock. Rankstreet is a Florida corporation that was formed on October 28, 1999.
Its assets consist primarily of the service contributions of its three
shareholders and a $10,000 contract for software development. Yseek issued
2,000,000 shares of common stock to the three principal shareholders of
Rankstreet (the "Principals") at closing and subsequently the 2,000,000 balance
of the shares were issued to the Principals. Pursuant to the Purchase Agreement,
the Principals have an option to purchase 51% of Rankstreets' outstanding shares
30 days following a successful initial public offering of Rankstreets'
securities for seventy-five thousand dollars ($75,000).
The Rankstreet.com web site provides rankings of the number of hits on a
specific web site. The sites are grouped by industry. The web site also acts as
a server for business to business advertising. The primary expenditures for the
development of the Rankstreet site were made prior to its acquisition by the
Company and are reflected in the financial statements and in Management's
Discussion and Analysis.
In November 2000, the Company entered into a non-exclusive 10-year license for
web-based Internet search software with Norman J. Jester, III, for a total
consideration of 1,430,000 restricted shares of common stock. In January 2001,
the Company used the software to begin operating the Yseek.com web site.
Yseek.com provides a free search engine and links by category to other World
Wide Web sites at [www.yseek.com] The Company anticipates Yseek.com will
generate advertising revenues and will be used to increase awareness of the
Rankstreet.com web site. We do not know if either site will ever be profitable.
In order to attract more users to Yseek.com and Rankstreet.com, on December 1,
2000, Yseek entered into a Traffic Promotion Agreement with CandidHosting.com in
consideration of the transfer of 1,430,000 restricted shares of common stock.
Industry Description and Outlook
Competition among internet portals and search engines is significant and
competition providing statistical ranking of web usage is increasing. Yseek's
success will depend on the continued growth and success of markets for goods,
services and information on the Internet. A substantial portion of Yseek's
future revenues and profits will depend upon the widespread acceptance and use
of the Internet as an effective medium of business and communication by
potential customers. Rapid growth in the use of and interest in the Internet has
occurred only recently. As a result, use of the Internet and other online
services as a medium of commerce may not continue to develop. Demand and market
acceptance for recently introduced services and products over the Internet are
subject to a high level of uncertainty, and there are few proven services and
products. The Company's success will depend on our ability to attract and retain
users. Both the Yseek, Inc. search web site and the Rankstreet web site compete
with other web sites which also offer similar services for free. The primary
source of revenue from both sites is expected to be advertising, the rates for
which are based on the number of persons using the web site. As a result, the
success of both sites, and therefore the profitability of the Company, is
dependent upon Yseek's ability to attract and retain users. The completion of
other established web sites such as Yahoo and Alta Vista, which are better
funded and more extensively advertised, may adversely affect the Company's
ability to attract and retain users.
Business Strategy
The Company intends to continue to diversify. Over the next year it will focus
the majority of its efforts on the development in the Internet market and
marketing of the Yseek and the Rankstreet.com web sites. The success of the web
site will depend upon the continued growth of the Internet trend. The Company
signed nondisclosure and noncompetition contracts with all of Rankstreets
developers, employees and consultants. In the future, the Company intends to
continue to look for opportunities to purchase and develop new and innovative
Internet and other technologies and will continue to diversify its business.
During 2000, the Company sold shares totaling 355,980 at prices ranging from
$0.75 to $1.00 per share. Total proceeds of $236,274, net of related expenses
were received from these sales. Certain shares were sold with warrants totaling
249,000.
Government Regulation
The Company is subject to various local, state and federal laws regulating the
discharge of pollutants into the environment. The Company believes that its
operations are in compliance in all material respects with applicable
environmental laws and regulations. Compliance with these laws and regulations
is not expected to materially affect the Company's competitive position.
Regarding its wholly owned subsidiary, the Company is subject to developing
regulations involving the Internet. The Company believes that it is currently in
compliance with all state and federal Internet regulation and will continue to
monitor those regulations as they develop.
Rankstreet.com, as an Internet company, is subject to some regulation in every
state, as well and federal regulation. The Company believes that the number of
regulations will continue to increase and that compliance will become more
expensive. Currently the Company believes that Rankstreet is in compliance with
all state and federal regulations.
Marketing
Marketing of the Company's web sits is provided through linking agreements with
other web sites. Yseek has retained Candidhosting.com, Inc. to increase use of
Yseek's web sites. The Company is currently sending out e-mails to more than 2.3
million Web publishers inviting them to list their site on Rankstreet.com. This
form of marketing will be on going. The Company also is running a promotion
until December 31, 2000 to attract more listings on Rankstreet.com. The $3
million advertising sweepstakes will give three entrants $1 million each in
advertising space on Rankstreet.com. Additionally the Company is "banner
swapping" with other websites for more exposure. These marketing activities
require minimal amounts of cash.
Item 2. Description of Property
The company's sole car wash was sold on April 19, 2000 for a cash sales price of
$1,000,000. The sales price was determined through arms-length negotiations. The
car wash was purchased by In and Out Express Lube, Inc. There were no material
relationships between the purchaser and the Company or its affiliates, or any
officer or director, or any associate of such officer or director.
Item 3. Legal Proceedings
The Company is not a party to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the Company's security holders
during the 2000 year. The Company's name change ot Yseek, Inc. was approved by a
majority of the Company's outstanding shares without a meeting.
Part II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company's common stock and warrants are traded on the Over-the-Counter
Bulletin Board. The high and low sales prices for each quarter since then are as
follows:
Common Stock
High Low
1st quarter 2000 $4.00 $1.563
2nd quarter 2000 $3.5633 $1.500
3rd quarter 2000 $1.844 $ .875
4th quarter 2000 $1.375 $ .344
Warrants
High Low
1st quarter 2000 - -
2nd quarter 2000 - -
3rd quarter 2000 - -
4th quarter 2000 .25 .03
The approximate number of holders of record of common stock is 102. The number
of Class A Warrant holders is 11. No dividends have been declared to date. The
future dividend policy will depend upon the Company's earnings, capital
requirements, financial condition and other factors considered relevant by the
Company's Board of Directors. None of the outstanding warrants have been
exercised.
Recent Sales of the Company's Securities.
The following issuances of the Company's securities have been made since the
filing of the Company's report on Form 10-QSB for the quarter ended September
30, 2000:
------------------------- ------------- -------------------- ------------------ -------------------------------------
Recipient Date Number of Type Consideration
Securities
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
CandidHosting.com, Inc. 12-07-00 1,000,000 Common Stock Consulting services
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Marlene Trupiano 11-25-00 250,000 Common Stock Web design and consulting services
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Nick Trupiano 11-25-00 5,000 Common Stock Web design and consulting services
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Paul Runyon 11-25-00 500,000 Common Stock Consulting services concerning
mergers and acquisitions
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
CandidHosting.com, Inc. 12-01-00 1,430,000 Common Stock Traffic Promotion Agreement
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
David S. Goldman 12-19-00 1,430,000 Common Stock Consulting Agreement
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
David S. Goldman 12-19-00 1,000,000 Option to Consulting
purchase
Restricted
Common Stock for
$.50/share for 3
years
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
CandidHosting.com, Inc. 12-01-00 1,430,000 Common Stock Traffic Promotion Agreement
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
CandidHosting.com 12-01-00 1,000,000 Option to Consulting
purchase
Restricted
Common Stock for
$.50/share for 3
years
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Norman J. Jester, III 10-14-00 1,430,000 Common Stock Non-Exclusive License Agreement
(858,000
shares
assigned to
Voice Media,
Inc.)
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Voice Media, Inc. 11-00 1,430,000 Common Stock Consulting Agreement
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Voice Media, Inc. 11-00 1,000,000 Option to Consulting
purchase Common
Stock for
$.50/share for 3
years
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Voice Media, Inc. 11-00 1,430,000 Common Stock Traffic Promotion Agreement
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Harlin Mitaur 11-09-00 50,000 Common Stock Web design services
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Shoreliner Capital 01-17-01 200,000 Common Stock Public relations services
Limited Partnership
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Shoreliner Capital 01-17-01 500,000 Warrant to Public relations services
Limited Partnership purchase Common
Stock for
$.50/share
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Richard Kleinberg 02-09-01 400,000 Common Stock Final payment of Rankstreet
acquisition pursuant to Agreement
dated 11-19-99
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Vladimir Rafalovich 02-09-01 400,000 Common Stock Final payment of Rankstreet
acquisition pursuant to Agreement
dated 11-19-99
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Edgar Arvelo 02-09-01 200,000 Common Stock Final payment of Rankstreet
acquisition pursuant to Agreement
dated 11-19-99
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Markham/Novell 01-09-01 100,000 Common Stock Public relations services
Communications, Ltd.
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Mark R. Dolan 01-10-01 125,000 Common Stock Consulting
------------------------- ------------- -------------------- ------------------ -------------------------------------
------------------------- ------------- -------------------- ------------------ -------------------------------------
Mark R. Dolan 01-10-01 75,000 Option to Consulting
purchase shares
for $.50/share
for 2 years
------------------------- ------------- -------------------- ------------------ -------------------------------------
Special Note Regarding Forward Looking Statements.
This annual report on Form 10-KSB of Yseek, Inc. for the year ended December 31,
2000 contains certain 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, which are intended to be covered by the safe
harbors created thereby. To the extent that such statements are not recitations
of historical fact, such statements constitute forward-looking statements which,
by definition, involve risks and uncertainties. In particular, statements under
the Sections; Description of Business, Business Strategy and Management's
Discussion and Analysis of Financial Condition and Results of Operations contain
forward-looking statements. Where, in any forward-looking statement, Yseek
expresses an expectation or belief as to future results or events, such
expectation or belief is expressed in good faith and believed to have a
reasonable basis, but there can be no assurance that the statement of
expectation or belief will result or be achieved or accomplished.
The following are factors that could cause actual results or events to differ
materially from those anticipated, and include but are not limited to: general
economic, financial and business conditions; competition from other Internet
companies; popularity of the Internet; exploration risks; changes in and
compliance with governmental regulations; changes in tax laws; and the costs and
effects of legal proceedings.
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis should be read in conjunction with the
Financial Statements and the related Notes thereto included elsewhere in this
report. This report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, those discussed in "Special
Note Regarding Forward-Looking Statements."
PLAN OF OPERATION
In April, 2000, the Company sold its car wash and quick lube shop (the Center)
to allow the Company to focus its efforts entirely on its internet business. The
Company plans to focus all its attentions for the next year on its subsidiary
Rankstreet.com, Inc. and other potential acquisitions of Internet related
companies. The sale of the Center resulted in net cash proceeds of approximately
$223,000 which will provide working capital to further the development of the
Company's internet business.
As of December 31, 2000, the Company had a positive working capital position,
but continued to have losses from continuing operations. The Company's loss from
continuing operations for the year ended December 31, 2000 was $2,674,514. Of
this amount, approximately one-fourth consisted of depreciation and amortization
or salaries contributed to the Company, and one-half consisted of stock issued
for services. Therefore the cash used in continuing operations was approximately
$286,000 for the year ended December 31, 2000. The sale of the car wash and
quick lube shop generated approximately $223,000 in cash after the payoff of
both mortgages on the Center. These funds were used to fund operations during
the remainder of 2000. After the sale of the Center, the Company has one note
payable totaling approximately $15,500 and normal recurring accounts payable.
Additionally, the Company has few fixed general and administrative expenses.
Since inception, two of the Company employees have contributed their salaries to
the Company, reducing cash requirements. The other two current Company employees
are paid from profits only, again limiting cash requirements. Additionally, many
of the Company's consultants have been willing to accept stock for services. The
Company believes that the cash generated from the Center sale, and continuing
stockholder loans as needed, will be sufficient to meet normal operating
requirements.
The Company's expansion plans include the launching and marketing of
Rankstreet.com. In December 1999, the Company acquired all the outstanding stock
of Rankstreet.com, Inc. in a stock for stock transaction that required no cash
outflow. Rankstreet.com launched its Web site in early May 2000. This all-in-one
Web site includes a directory, Web counter and business to business Internet
advertising agency. The primary function of the Web site is to provide
comparative statistical analysis of Internet advertising. The Rankstreet.com
website is now fully functional and operational. Approximately 800 websites are
currently being ranked. The focus is now to sign up additional websites and to
sell advertising on the Rankstreet website.
The Company is currently sending out e-mails to more than 2.3 million Web
publishers inviting them to list their site on Rankstreet.com. This form of
marketing will be on going. The Company also is running a promotion until
December 31, 2000 to attract more listings on Rankstreet.com. The $3 million
advertising sweepstakes will give three entrants $1 million each in advertising
space on Rankstreet.com. Additionally the Company is "banner swapping" with
other websites for more exposure. These marketing activities require minimal
amounts of cash.
The software development costs to launch the initial Rankstreet.com web site
have been expended as of June 30, 2000. These costs were funded through
operations and stock sales in December 1999 and the first quarter of 2000 and
through the issuance of stock in the second quarter of 2000. Additional
enhancements to the Web site will take place, as funds are available.
The Company plans to generate revenues from its Web site in several ways.
Revenues will be generated through the sale of banner advertising, commissions
earned from selling advertising for participating web sites, and consulting
related to Internet marketing. The Company will also design banner ads for
advertisers for a fee. The Company is now beginning to sell advertising.
The Company's expansion plans also include acquiring and developing other unique
Internet companies. In October 2000, the Company entered into a one year
consulting agreements with a company to assist the Company in the acquisition,
development and marketing of Internet companies, technologies and Web
properties. In December, 2000, the Company entered into a software license
agreement for the use of a keyword biddable search engine in exchange for
1,430,000 shares of common stock. In November and December, 2000, the Company
entered into five one-year consulting agreements with companies and individuals
to assist the Company with the management, marketing and operation of web sites.
The Company agreed to issue 5,790,000 shares of its common stock with piggyback
registration rights to the consultants upon execution of the contracts.
Additionally, the Company entered into two traffic promotion agreements. The
Company issued 2,860,000 shares of its common stock in exchange for services
whose purpose is procuring traffic to the Company web sites.
The Company does not have any planned major purchases of property and equipment
and does not anticipate any additional debt financing in 2000. The Company is
currently seeking more office space for expanding operations. This includes the
hiring of ad sales professionals, Web designers, software engineers and
administrative personnel.
The success and magnitude of the above described expansion plans are dependent
upon the Company's ability to raise funds. However, the Company plans to pursue
its acquisition plans primarily through the issuance of additional shares of its
common stock.
YSEEK, INC. (FORMERLY SWIFTYNET.COM, INC.)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Yseek, Inc. (formerly Swiftynet.com, Inc.):
We have audited the accompanying consolidated balance sheet of Yseek, Inc.
(formerly Swiftynet.com, Inc.) as of December 31, 2000, and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the year ended December 31, 2000. These consolidated financial
statements are the responsibility of the management of Yseek, Inc. (formerly
Swiftynet.com, Inc.). Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. We did not audit the
consolidated statements of operations, changes in stockholders' equity and cash
flows for the year ended December 31, 1999. These statements were audited by
other auditors whose report has been furnished to us and our opinion insofar as
it relates to those statements, is based solely on the report of the other
auditors.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Yseek, Inc. (formerly
Swiftynet.com, Inc.) as of December 31, 2000, and the results of its operations
and its cash flows for the years ended December 31, 2000 and 1999, in conformity
with generally accepted accounting principles.
Certified Public Accountants
Tampa, Florida
March 16, 2001
YSEEK, INC. (FORMERLY SWIFTYNET.COM, INC.)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
ASSETS
------
Current assets
Cash $ 1,050
Prepaid expenses 3,349,469
______________
Total current assets 3,350,519
______________
Property and equipment, net 809,535
______________
Other assets
Shareholder loan receivable 160,262
Intangible assets, net 2,035,328
Deposits 30,000
______________
Total other assets 2,225,590
______________
Total Assets $ 6,385,644
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities
Accounts payable and accrued expenses $ 32,275
Current maturities of long-term debt 4,636
_______________
Total current liabilities 36,911
_______________
Long-term debt, less current maturities 10,781
Commitments and contingencies
Stockholders' equity
Common stock; $.0001 par value;
50,000,000 shares authorized;
23,840,100 shares issued and outstanding 2,383
Paid-in capital 10,398,372
Accumulated deficit (4,062,803)
_______________
Total stockholders' equity 6,337,952
_______________
Total Liabilities and Stockholders' Equity $ 6,385,644
_______________
The accompanying notes to financial statements
are an integral part of these statements.
YSEEK, INC. (FORMERLY SWIFTYNET.COM, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
______________ ______________
Revenues $ - $ -
______________ ______________
Expenses
Selling, general and administrative 1,693,991 843,308
Depreciation and amortization 581,202 13,749
______________ ______________
Total expenses 2,275,193 857,057
______________ ______________
Other income (expense)
Interest income 9,068 3,460
Interest expense (4,670) -
______________ ______________
Total other income (expense) 4,398 3,460
______________ ______________
Loss from continuing operations (2,270,795) (853,597)
______________ ______________
Discontinued operations
Loss from discontinued carwash
and quick-lube operations (53,719) (183,637)
Loss on disposal of property, equipment
and related assets (350,000) -
______________ ______________
Loss from discontinued operations (403,719) (183,637)
______________ ______________
Net loss $ (2,674,514) $ (1,037,234)
Loss per common share
From continuing operations $ (.14) $ (.10)
Discontinued operations
Loss from operations - (.02)
Loss on disposal (.03) -
______________ ______________
Total loss per share $ (.17) $ (.12)
______________ ______________
Weighted average common shares outstanding 16,018,736 8,699,531
The accompanying notes to financial statements
are an integral part of these statements.
YSEEK, INC. (FORMERLY SWIFTYNET.COM, INC.)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
Common Stock Retained
Total Earnings Total
__________________________ Paid-in (Accumulated Stockholders'
Shares Amount Capital Deficit) Equity
____________ _____________ ____________ ________________ ________________
Balance, December 31, 1998 8,394,120 $ 839 $ 1,409,222 $ (351,055) $ 1,059,006
Common stock sold 291,000 29 290,971 - 291,000
Common stock issued to consultants
and in satisfaction of obligation 272,000 27 324,473 - 324,500
Common stock reacquired and cancelled
in settlement of deposit receivable (50,000) (5) (209,995) - (210,000)
Services donated by stockholder - - 53,750 - 53,750
Common stock issued by shareholder in
settlement of Company obligations - - 133,000 - 133,000
Common stock issued for acquisition
of Rankstreet.com, Inc. 2,000,000 200 1,562,300 - 1,562,500
Net loss - - - (1,037,234) (1,037,234)
____________ _____________ ____________ ________________ ________________
Balance, December 31, 1999 10,907,120 1,090 3,563,721 (1,388,289) 2,176,522
Common stock sold 355,980 36 236,238 - 236,274
Common stock issued for services 9,912,000 991 4,707,679 - 4,708,670
Common stock issued for
property and equipment 1,665,000 166 849,584 - 849,750
Common stock issued for
acquisition of Rankstreet.com, Inc. 1,000,000 100 999,900 - 1,000,000
Services donated by stockholder - - 41,250 - 41,250
Net loss - - - (2,674,514) (2,674,514)
____________ _____________ ____________ ________________ ________________
Balance, December 31, 2000 23,840,100 $ 2,383 $ 10,398,372 $ (4,062,803) $ 6,337,952
____________ _____________ ____________ ________________ ________________
The accompanying notes to financial statements
are an integral part of these statements.
YSEEK, INC. (FORMERLY SWIFTYNET.COM, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
______________ ______________
Operating activities
Net loss $ (2,674,514) $ (1,037,234)
______________ ______________
Adjustments to reconcile net loss
to net cash used in operating activities:
Contributed services 41,250 53,750
Stock issued to consultants 956,170 262,000
Stock issued by shareholder in
settlement of Company obligations - 133,000
Depreciation and amortization 596,238 74,924
Loss from disposal of assets from
discontinued operations 350,000 -
Increase in inventory - (7,060)
Increase in prepaid expenses 448,035 257,552
Decrease in accounts payable (4,007) (18,709)
______________ ______________
Total adjustments 2,387,686 755,457
______________ ______________
Net cash used in operating activities (286,828) (281,777)
Investing activities
Acquisition of property and equipment (9,801) (19,819)
Decrease (increase) in deposits and other assets 2,600 (200)
Net proceeds from sale of discontinued
business segment 223,071 -
______________ ______________
Net cash provided by (used in)
investing activities 215,870 (20,019)
Financing activities
Proceeds from issuance of notes payable - 78,313
Payments on notes payable (16,964) (116,897)
Net proceeds from issuance of stock and
contribution of cash 236,274 250,000
Net advances (to) from a stockholder (184,927) 57,319
______________ ______________
Net cash provided by financing activities 34,383 268,735
______________ ______________
Net decrease in cash (36,575) (33,061)
Cash, beginning of year 37,625 70,686
______________ ______________
Cash, end of year $ 1,050 $ 37,625
The accompanying notes to financial statements
are an integral part of these statements.
YSEEK, INC. (FORMERLY SWIFTYNET.COM, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
Supplemental disclosures of noncash investing and financing activities
2000 1999
______________ ______________
Business acquired by issuance of
common stock $ 1,000,000 $ 1,562,500
Settlement of deposit receivable by
reacquiring 50,000 shares of common stock - 210,000
Settlement of obligation to issue 10,000
shares of common stock by issuing the stock - 62,500
Acquisition of prepaid asset with
issuance of common stock 3,752,500 -
Issuance of 1,262,000 shares of common
stock for consulting services 956,170 -
Settlement of debt by issuance of 41,000
shares of common stock - 41,000
Acquisition of software through the
issuance of common stock 849,750 -
Cash flow information
2000 1999
______________ ______________
Cash paid for interest $ 37,759 $ 63,220
The accompanying notes to financial statements
are an integral part of these statements.
YSEEK, INC. (FORMERLY SWIFTYNET.COM, INC.)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
(1) Significant Accounting Policies:
The following is a summary of the more significant accounting policies and
practices of Yseek, Inc. (formerly Swiftynet.com, Inc.) (the Company) which
affect the accompanying financial statements.
(a) Organization-Yseek, Inc. was incorporated on September 23, 1997. The
Company changed its name from Swifty Carwash & Quik-Lube, Inc. to Swiftynet.com,
Inc. on October 20, 1999. The Company changed its name from Swiftynet.com, Inc.
to Yseek, Inc. on January 29, 2001.
(b) Operations-The Company acquires and develops unique Internet companies,
technologies and Web properties that have the potential to make an impact on the
industry. In late 1999, the Company acquired a company that has developed a web
site to provide comparative statistical analysis of Internet advertising. Late
in 2000, the Company launched a new Web search engine to be called Yseek.com. In
1999 and early 2000, the Company owned and operated a carwash and oil change
facility in Florida. The facility was sold in April 2000.
(c) Basis of presentation-The financial statements include the Company and
its wholly owned subsidiary. All intercompany accounts and transactions have
been eliminated. Prior to January 1, 1999, the Company was considered a
development stage enterprise.
(d) Use of estimates-The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
(e) Cash-For the purposes of reporting cash flows, the Company considers
all highly liquid investments with an original maturity of three months or less
to be cash equivalents.
(f) Property and equipment-Property and equipment are recorded at cost.
Depreciation is calculated using the straight-line method over the useful lives
of the assets, ranging from 10 to 40 years. Maintenance and repairs are charged
to operations when incurred. Betterments and renewals are capitalized. When
property and equipment are sold or are otherwise disposed of, the asset account
and related accumulated depreciation account are relieved and any gain or loss
is reflected in the statement of operations. The cost of purchased software is
capitalized and depreciated using the straight-line method over their estimated
useful lives of three to ten years.
(g) Loss per common share-Loss per share is based on the weighted average
number of common shares outstanding during each period in accordance with
Statement of Financial Accounting Standards No. 128, Earnings Per Share. In
computing diluted earnings per share, shares to be issued contingent on certain
events in connection with the Rankstreet acquisition and warrants exercisable
into 318,240 shares were excluded because the effects were antidilutive.
(h) Advertising-Advertising costs are charged to operations when incurred.
Advertising expense was $2,928 and $13,561 for the year ended December 31, 2000
and 1999, respectively.
(1) Significant Accounting Policies: (Continued)
(i) Deferred income taxes- Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statements carrying amounts of existing assets and
liabilities and their respective income tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized as income in the period that included the
enactment date.
(j) Reclassifications-Certain reclassifications have been made to 1999
financial information to conform to the 2000 presentation.
(k) Goodwill-Goodwill is a result of the business acquisition described in
Note 2. Goodwill is being amortized using the straight-line method over its
estimated useful life of five years. Amortization expense was $512,082 and
$13,000 in 2000 and 1999, respectively. Accumulated amortization was $525,082 at
December 31, 2000.
(2) Business Acquisition:
On December 17, 1999, the Company purchased all the outstanding stock of
Rankstreet.com, Inc., a development stage enterprise. The Company issued
2,000,000 shares of common stock. The 2,000,000 shares were subject to
cancellation if the Rankstreet.com web site was not functional and available for
interactive customer usage by November 17, 2000. In addition, the Company will
issue an additional 1,000,000 shares at which time the Rankstreet.com web site
is fully functional and available for interactive customer usage. The Company
will issue an additional 1,000,000 shares one year from the date the
Rankstreet.com web site is advertised for use by the general public. These
contingent shares will be recorded when the outcome of the event is determinable
beyond a reasonable doubt.
In addition, the selling Rankstreet.com shareholders are each issued an option
to purchase as a group 51% of Rankstreet's outstanding common stock for $75,000
as of a date 30 days following a successful initial public offering of
Rankstreet.com, Inc. securities.
In the transaction, accounted for as a purchase, the Company recorded the above
acquisition at $1,562,500, the market value attributed to the 2,000,000 shares
less a 50% discount because the shares are unregistered and are such a
significant block of stock for the Company. The $1,562,500 has been classified
as goodwill and software development costs and is being amortized over five
years, its estimated useful life.
In May 2000, it was determined the Rankstreet.com web site was fully functional
and available for interactive customer use and an additional 1,000,000 shares
were issued. The Company recorded the issuance at $1,000,000, the market value
attributed to the 1,000,000 shares less a 50% discount because the shares are
unregistered, are a significant block of stock, and the stock is not easily
marketable. The Company capitalized the $1,000,000 value as goodwill, which is
being amortized over five years, its estimated useful life.
Rankstreet.com had no significant results of operations either prior or
subsequent to its acquisition.
The value of the additional 1,000,000 shares will be recorded when their
issuance is assured.
(3) Property and Equipment:
Property and equipment as of December 31, 2000, consist of:
Software $ 860,255
Furniture and fixtures 16,637
________________
876,892
Less: accumulated depreciation 67,357
Property and equipment, net $ 809,535
Depreciation expense was $19,417 and $59,828 in 2000 and 1999, respectively.
Amortization expense on software, which is included in depreciation expense, was
$64,739 in 2000. Accumulated amortization on software was $64,739 as of December
31, 2000 which is included in accumulated depreciation.
(4) Long-term Debt:
Long-term debt as of December 31, 2000, consists of the following:
Note payable to finance company, interest at
14.9%, payment of $522 per month including
interest through December 2003, collateralized
by equipment $ 15,417
_______________
15,417
Less: Amounts currently due 4,636
_______________
$ 10,781
_______________
The following is a schedule by year of the approximate principal payments
required on the above note as of December 31, 2000: Year Ending December 31,
2000:
Year Ending
December, 31 Amount
___________________ __________________
2000 $ 4,636
2001 4,992
2002 5,789
2003 -
2004 -
(5) Income Taxes:
No provision for income taxes has been recorded for 2000 or 1999 due to net
losses incurred.
Temporary differences giving rise to the deferred tax assets consist primarily
of the deferral and amortization of start-up costs for tax reporting purposes
and differences in lives and depreciation methods for property and equipment and
intangible assets. Management has established a valuation allowance equal to the
amount of the deferred tax assets due to the uncertainty of realization of the
benefit of the net
YSEEK, INC. (FORMERLY SWIFTYNET.COM, INC.)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
(5) Income Taxes: (Continued)
operating losses against future taxable income. The components of deferred tax
assets at December 31, 2000, consist of the following:
Deferred tax assets:
Net operating loss $ 840,000
Deferred start up costs and other
temporary differences 185,000
Valuation allowance (1,025,000)
________________
Net deferred tax asset $ -
________________
The Company has operating losses of approximately $3,232,000 which can be used
to offset future taxable income. These losses begin to expire in the year 2018.
(6) Stock Transactions:
During 2000, the Company sold shares totaling 355,980 at prices ranging from
$0.75 to $1.00 per share. Total proceeds of $236,274, net of related expenses
were received from these sales. Certain shares were sold with warrants totaling
249,000. See Note 8 for the exercise price and termination dates of warrants.
During 2000, the Company issued 1,262,000 shares of common stock to certain
individuals for services. The Company recorded an expense of $956,170, the
market value of the shares less a 50% discount because the shares are
unregistered, are a significant block of stock and the stock is not easily
marketable.
During 2000, the Company issued 1,665,000 shares of common stock to certain
individuals for software and a license to use software. The Company capitalized
$849,750, the market value of the shares less a 50% discount because the shares
are unregistered, are a significant block of stock and the stock is not easily
marketable.
During 2000, the Company issued 5,790,000 shares of common stock under
consulting agreements with certain individuals and companies. The consulting
agreements are for one year and expire in late 2001. The Company recorded a
prepaid expense of $2,465,500 related to these agreements, the market value of
the shares less a 50% discount because the shares are unregistered, are a
significant block of stock and the stock is not easily marketable. During 2000,
the Company expensed $295,781 utilizing the straight line method over the life
of the agreements. Additionally, options were granted to three entities as part
of these agreements. See Note 9 for the terms of the option agreements.
During 2000, the Company issued 2,860,000 shares of common stock under two
traffic promotion agreements. These agreements are for one year, or until the
Company's web sites have received an aggregate of 45,000,000 hits under each
agreement, whichever is earlier. The Company recorded a prepaid expense of
$1,287,000 related to these agreements, the market value of the shares less a
50% discount because the shares are unregistered, are a significant block of
stock and the stock is not easily marketable. During 2000, the Company expensed
$107,250 utilizing the straight-line method over the life of the agreement.
(7) Commitments and Related Party Transactions:
The President and Operations Manager performed services for the Company at no
cost. The Board of Directors valued these services at $41,250 and $53,750 at
2000 and 1999, respectively, and recorded this amount as an expense and an
increase in additional paid-in capital in the accompanying financial statements.
The Operations Manager has an employment contract through March 2001, with a
minimum salary of $25,000 per year.
In connection with the acquisition of Rankstreet.com, Inc. the Company entered
into employee agreements with two individuals for a period ending November 19,
2001. These agreements are automatically renewable for an additional two year
period unless canceled by written notice by either party. The terms of these
agreements call for the payment of a base salary to be determined by the Board
of Directors of Rankstreet.com, Inc. plus a percentage of pre-tax profit or
revenue. The Board of Directors has not determined the amount of base pay. In
the event that the Company terminates these employees, the Company shall pay an
amount equal to 100% of the employee's base salary for the remainder of the
agreement or a period of two years, whichever is less. No amounts were due at
December 31, 2000 under these agreements.
During 1999, the Company issued 262,000 shares of common stock to certain
individuals for services, some whom are current shareholders. The Company
recorded an expense of $262,000, the estimated value of the shares issued based
on other sales of stock during the year.
During 1999, the Company's majority shareholder transferred 133,000 shares of
common stock to certain individuals, some whom are current shareholders, for
services performed on behalf of the Company. The Company recorded a contribution
to capital and an expense of $133,000, the estimated value of the shares issued
based on other sales of stock during the year.
On August 8, 1998, the Company entered into a consulting and contracting
agreement with a stockholder whereby the stockholder would explore, investigate,
and locate appropriate parcels of land and supplies of equipment on behalf of
the Company. In addition, the stockholder would provide certain construction
services to the Company. In exchange for these services, the Company would pay
the stockholder between three and five percent of the total costs of projects
which have been negotiated or performed by the stockholder. The Company paid the
stockholder $210,000 to be used on behalf of the Company in connection with this
agreement. In 1999, the stockholder returned 50,000 shares of common stock to
the Company in settlement of this deposit. These shares have been cancelled.
In November 1998, the Company entered into a consulting contract with a
stockholder. The contract calls for annual compensation of $72,500 for a period
of three years. During 1999, this contract was amended to allow the consultant
to provide services on an as needed basis for a negotiated amount rather than a
stated amount. No fees have been paid under this contract. During 2000 the
Company issued 67,000 shares of common stock to the consultant and recorded
$61,744 in expense, the current market value attributed to the 67,000 shares
less a 50% discount because the shares are unregistered and due to the lack of
marketability of the Company stock.
The above related party agreements are not necessarily indicative of the
agreements that would have been entered into by independent parties.
(7) Commitments and Related Party Transactions: (Continued)
During 1998, the Company entered into an agreement for use of a private suite at
the Raymond James Stadium for the 1998 through 2003 football seasons. Included
in deposits at December 31, 2000 and 1999 is a $30,000 deposit in accordance
with the terms of this agreement. The Company incurred expenses of $33,030 and
$31,120 during 2000 and 1999, respectively related to this agreement. The
Company is committed under this agreement for an annual fee of $30,000 through
2003.
The Company entered into a three-year advertising promotion and publicity
agreement and recorded a prepaid expense of $270,400. Each year, the Company
reduces this prepaid asset in amounts equal to the greater of the actual costs
incurred under the agreement or an amount equal to the amortization of the
initial amount over the three year term using the straight line method. The
Company expensed $17,400 and $230,467 in 2000 and 1999, respectively. This
amount was fully amortized at December 31, 2000.
(8) Warrants:
At December 31, 2000, the Company had outstanding exercisable warrants to
purchase 318,240 shares of the Company's common stock at $2.00 per share. The
warrants expire in 2001.
At December 31, 2000, the Company had outstanding exercisable warrants to
purchase 249,000 shares of the Company's common stock at various prices based
upon expiration dates. Warrants expiring in 2001, 2002 and 2003, are exercisable
at $3.00, $5.00 and $7.00, respectively.
Prior to expiration, the warrants may be redeemed by the Company at a price of
$.01. As of December 31, 2000 no warrants have been redeemed.
(9) Stock Options:
The Company granted options to consultants under various consulting agreements.
These agreements grant to the consultants the option to purchase shares of
Company common stock at a fixed price of $.50 per share. Management has
determined these per share prices equals or exceeds fair market value. These
options expire on the third anniversary date of the execution date of the
respective agreement and are immediately vested.
A summary of consultant option activity follows:
December 31,
____________________________
2000 1999
_____________ _____________
Outstanding, beginning of year - -
Issued 3,000,000 -
Cancelled - -
_____________ _____________
Outstanding, end of year 3,000,000 -
_____________ _____________
(9) Stock Options: (Continued)
The Company follows SFAS 123 in accounting for stock options issued to
nonemployees. The fair value of each option granted is estimated using the
Black-Scholes stock option pricing model. The following assumptions were made in
estimating fair value: risk-free interest rate of 5.33%; no dividend yield;
expected life of one and one-half years; 9.65% volatility. There was no
compensation cost related to these options.
The weighted average exercise price of options granted was $.50 in 2000. The
weighted average fair value of options granted was $.01 in 2000.
(10) Discontinued Operations:
On April 19, 2000, the Company sold or disposed of 100% of the assets and
liabilities of its carwash and quick-lube segment. The sale price was $1,000,000
and the Company received cash of approximately $223,000 after selling expenses
and payment of related mortgages. The results of operations for the periods
presented are reported as a component of discontinued operations in the
statements of operations. Additionally, the loss incurred on the sale of the
operations is also presented separately as a component of discontinued
operations.
Summarized results of carwash and quick-lube operations for the years ended
December 31, 2000 and 1999 are as follows:
Year Ended
December 31,
_______________________________
2000 1999
_____________ ________________
Net sales $ 82,191 $ 179,382
_____________ ________________
Operating income (loss) $ (53,719) $ (183,637)
_____________ ________________
Income (loss) from
discontinued operations $ (53,719) $ (183,637)
_____________ ________________
(11) Subsequent Events:
On January 9, 2001, the Company issued 100,000 shares as a retainer to a company
for public relations services. The agreement obligates the Company to issue up
to 50,000 additional shares if certain target stock prices are achieved.
On January 10, 2001, the Company issued 125,000 shares of common stock to an
individual for consulting services. The Company also granted an option to
purchase 75,000 shares at $.50 per share, expiring January, 2003.
On January 29, 2001, the Company issued 200,000 shares of common stock to a
partnership in exchange for public relations services for up to one year. The
Company also issued 500,000 warrants at an exercise price of $.50 per share as
part of this agreement.
(11) Subsequent Events: (Continued)
On February 9, 2001, the Company issued 1,000,000 shares of common stock to the
former shareholders of Rankstreet.com, Inc. under the terms of the acquisition
agreement (see Note 2).
On February 13, 2001, the Company issued 50,000 shares of common stock to two
individuals for services.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The Company has not had any disagreement with its independent auditor on any
matter of accounting principles or practices or financial statement disclosure.
Effective July 21, 2000, Yseek engaged B2d Semago(f/k/a Semago & Co., P.A.)
as its independent auditors for the year ending December 31, 2000 to
replace the firm of Pender Newkirk & Company, C.P.A., who were dismissed as
its auditors effective July 21, 2000. The decision to change auditors was
approved by Board of Directors.
The reports of Pender, Newkirk & Company, on the consolidated financial
statements of Yseek, Inc., from August 13, 1997 (inception) to December 31,
1999, did not contain an adverse opinion or a disclaimer of opinion and were not
qualified as to uncertainty, audit scope or accounting principles.
There were no disagreements with Pender, Newkirk & Company on any matters of
accounting principles or practices, financial statement disclosure or auditing
scope and procedures in connection with the audits of SwiftyNet's consolidated
financial statements for the two-year period ended December 31, 1999 or during
the subsequent period preceding the dismissal date of July 21, 2000, including
the period covered in SwiftyNet's 10-QSB filed May 13, 2000.
Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act
The following is a brief description of the educational and business experience
of each director, executive officer and key employee of the Company:
Rachel L. Steele, age 32, is a Director as well as President and Secretary of
the Company. She has held these positions since the inception of the Company.
Ms. Steele is a graduate of the University of Southern Florida with a degree in
Business Administration. Since graduating from college in May of 1994, Ms.
Steele has spent the majority of her time managing her own investment portfolio.
In addition, Ms. Steele has from time to time provided certain financial
consulting services to individuals and corporations.
Raymond Lipsch, age 61, is a Director, Chief Executive Officer, Chief Financial
Officer and Treasurer of the Company. Mr. Lipsch has been CEO, Treasurer and
Director since inception of the Company. Mr. Lipsch was elected as CFO in the
first quarter of 1999. Mr. Lipsch attended Northwestern University in Illinois.
Mr. Lipsch has over 30 years of entrepreneurial and management experience,
specializing in the development of new companies, developing new divisions and
re-energizing troubled ones. Since 1992, Mr. Lipsch has been engaged in the
sales and marketing of insurance products, first as an independent agent, then
as a sales representative for American Express. Since May 1994, Mr. Lipsch has
been employed as a sales representative for Av-Med.
Donald C. Hughes, age 46, is a Director as well as a Vice President of the
Company. Mr. Hughes has held these positions since the inception of the Company.
Mr. Hughes graduated from the University of Florida in 1977 with a degree in
Building Construction. In 1985, Mr. Hughes formed his own construction company,
Donald C. Hughes General Contractor, Inc., which has been in operation for
thirteen years and which engages primarily in the development and construction
of single family residences and small commercial buildings.
David Weintraub, age 37, has been the Operations Manager for the Company since
April 1999. Mr. Weintraub has managed his own portfolio for the five years prior
to working for the Company.
Richard Kleinberg, age 51, is the sole Director and President of Rankstreet.com,
Inc. He has held these positions since the Company's inception in October 1999.
In 1971, Mr. Kleinberg graduated from Suny State University in Albany, New York
with a Bachelors of Science in Sociology. From May 1996 to April 1998, Mr.
Kleinberg was the Resource Director for Wolf Advisory/Arcus where he oversaw
corporate technology staffing for clients. From April 1998 to the present time,
he is President of Thunderland Corporation, a technology consulting and staffing
company. In that position he directs and administers the corporation.
Vladimir Rafalovich, age 39, is Vice President of Technology for Rankstreet.com,
Inc. He has held that position since October 1999. He graduated from the Russian
Academy of Science in 1990 with a PH.D. in Physics. From April 1999 to the
present, Mr. Rafalovich has worked for Cox Target Media as a software
development engineer. From February 1998 until April 1999, he worked in the same
position for Briggs Industries. Since December 1996 he has worked as a software
engineer for Briggs Industries and Sembler Company. Prior to that he was an
Instructor at Daniel Webster College. From February 1996 to December 1996, Mr.
Rafalovich worked as a programmer/analyst for DNS Worldwide.
No voting arrangements exist between the officers and directors. The above
persons were selected pursuant to provisions in Article IV of the Company's
By-Laws, all holding office for a period of one year or until their successors
are elected and qualified. None of the officers or directors of the Company have
been involved in legal proceedings during the past five years which are material
to an evaluation of the ability or integrity of any director, person nominated
to become a director, or executive officer of the issuer, including any state or
Federal criminal and bankruptcy proceedings.
Beneficial Owner Reporting Compliance
Failure to File Form 5
Stanley and Arlene Rabushka
10% Shareholder February 2000
Item 10. Executive Compensation
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Other Securities All
Principal Annual Restricted Underlying Other
Position Compen Stock Options/ LTIP Compens-
Year Salary($) Bonus($) sation Awards($) SARs(#) Payouts($) sation($)
Rachel Steele
President, Secretary 0 0 0 0 0 0 0 0
Raymond Lipsch
CEO, CFO, Treasurer 0 0 0 0 0 0 0 0
Donald Hughes
Vice President 0 0 0 0 0 0 0 0
Richard Kleinberg
President (Rankstreet) 0 0 0 0 0 0 0 0
Vladimir Rafalovich 0 0 0 0 0 0 0 0
Vice President(Rankstreet)
All of the Company's officers and director but Ms. Steele are engaged in other
enterprises on a full-time basis. Ms. Steele donated her salary ($41,250) to the
Company. No other officer or directors have been compensated for their services
in those capacities. At this time, the Company does not plan on paying its Board
of Directors in return for their services as Directors.
Item 11. Security Ownership of Certain Beneficial Owners and Management
None of the officers and directors have received a salary during the past twelve
months. There are no officer or director groups. As a group, the officers and
directors of the Company own 82% of the outstanding shares of common stock. As
of March, 1999 the stock ownership of the Officers and Directors and 10%
Shareholders was as follows.
Title Name and Amt and Percent
of Address Nature of of
Class of Beneficial Owner Beneficial Ownership Class
Common Rachel L. Steele 4,429,768 17.50%
Stock 17521 Crawley Road
Odessa, FL 33556
Common Raymond Lipsch 426,500 1.68%
Stock 9522 Michigan Avenue
Odessa, FL 33556
Common Donald Hughes 171,720 .68%
Stock 3112 Harborview Avenue
Tampa, FL 33611
Common Richard Kleinberg 1,600,000 6.32%
Stock 614 Rollingwood Lane
Valrico, FL 33594
Common Vladimir Rafalovich 1,600,000 6.32%
Stock 3407 Williston Loop
Land O'Lakes, FL 34639
Common Candidhosting.com, Inc. 3,860,000 15.25%
Stock 412 East Madison
Suite 1000
Tampa, FL 33602
Common Voice Media, Inc. 3,718,000 14.69%
Stock 2533 North Carson Street
Suite 1091
Carson City, NV 69708
Common
Stock Total 15,805,968 62.44%
Don Hughes and Raymond Lipsch also own the warrants in the following number and
with the following terms:
Class Amount Exercise Price Exercise Date
Donald Hughes Class A Common Stock 65,440 7.25 12/31/02
Raymond Lipsch Class A Common Stock 23,040 7.25 12/31/02
Item 12. Certain Relationships and Related Transactions
The Company entered into an employment contract with David Weintraub on April 1,
1999. Mr. Weintraub will be employed by the Company as Operations Manager for a
salary of $25,000 per year. The term of employment is two years. In 1999, Mr.
Weintraub donated his salary for the year 1999 to the Company.
On December 13, 1999, Rankstreet entered into employment agreements with Richard
Kleinberg and Vladimir Rafalovich. They shall act as President and
Vice-President of Marketing for Rankstreet.com respectively. They will both be
compensated at a base salary to be determined by the Board of Directors and
based upon the profitability of the Rankstreet.com web site once that site
opens. The site is anticipated to open on April 1, 2000. No compensation other
than the share received during Rankstreet's acquisition has been paid. The term
of the contracts are two years and are automatically renewable unless cancelled
in writing by either party.
On July 20, 1999, the Company entered into a promissory note with Stanley
Rabushka, a greater than 10% shareholder for $25,000 at a rate of 1% over prime.
That note has been paid off by legal services performed by Mr. Rabushka for the
Company in early 2000. The Company also extended loans to Donald Hughes, its
Vice President and Director, and Raymond Lipsch, its Chief Executive Office,
Chief Financial Officer, Treasurer and Director as well as another shareholder
in the amount of $41,000. The terms of the promissory notes dated March 1, 1999
were for repayment in equal monthly installments at 7% interest per annum. The
debt was converted to shares of common stock and paid back to the shareholders
in May 1999.
On or around December 13, 1999, the Company entered into a consulting agreement
with Edgar Arvelo, a former principal of Rankstreet. Pursuant to that
agreement Mr. Arvelo will provide the Rankstreet with consulting services for
web site development in excess of 2000 hours per year for one year. The
agreement provides that all services have been compensated for under the
original Rankstreet acquisition when Mr. Arvelo was issued 400,000 shares of
the Company stock.
Don Hughes as president of Don Hughes General Contractor, Inc., who is also a
Director and Vice-President of the Company, entered into a contract with the
Company to provide consulting services in construction and real estate for which
a sum of $210,000 was deposited for his use. On or around November 30, 1999, Mr.
Hughes paid the Company for the amount deposited by returning 50,000 shares of
stock to the Company with each share being valued at $4.00 voiding any agreement
for consulting services.
Since the reorganization and through November 15 1998, Mr. Lipsch received
compensation for consulting services totaling $72,500 pursuant to his oral
agreement regarding consulting for the Company's private and public offerings
for a time not less then 250 hours per year. Mr. Lipsch's contract provided for
this same arrangement every calendar year expiring on November 15, 2001. On
April 1, 1999, the Company entered into a new agreement with Mr. Lipsch for
consulting services with the rate of compensation to be determined by the Board
of Directors. No compensation has been received under this agreement as of the
end of 1999.
In addition, the Company has entered into a six (6) year license agreement with
the Tampa Bay Buccaneers for a Luxury Suite. The agreement required a deposit of
$30,000 and then payments of $30,000 per year with half of that amount due on
September 1, and half due on December 1. The term of the agreement began in
1998.
Item 6. Exhibits and Reports on Form 8-K
Exhibit Description Number
(2)Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession......................................
(3)Articles of Incorporation and By-Laws.....................................
*(3.1)Articles of Incorporation.............................................
**(3.2)By-Laws.............................................. ................
++(3.3)Articles of Amendment Name Change.....................................
(4)Instruments Defining the Rights of Security Holders
(a)Subscription Agreement..................................................
*(b)Warrant Agreement......................................................
++(c)Warrant Resolution dated March 2 2000..................................
(9)Voting Trust Agreement.....................................................
(10)Material Contracts........................................................
*(10.1)Equipment Purchase Contract..........................................
*(10.2)Construction Contract................................................
*(10.3)Architect Contract...................................................
*(10.4)Consulting Contract-Donald Hughes....................................
*(10.5)Employment Contract-Stanley Rabushka.................. ..............
*(10.6)Promissory Note - Swifty.............................................
*(10.7)Promissory Note - Steele ............................................
*(10.8)Consulting Contract-John Oster ......................................
*(10.9)Raymond Lipsch Contract .............................................
*(10.10)Land Purchase Contract..............................................
**(10.11) Stanley Rabushka Employment and Stock Agreement....................
**(10.12) Tampa Bay Buccaneers Agreement.....................................
***(10.13)Edgar Arvelo Consulting Contract....................................
***(10.14)Richard Kleinberg Employment Contract...............................
***(10.15)Vladimir Rafalovich.................................................
***(10.16)Martinez Consulting Contract........................................
****(10.17)Purchase and Sale Contract between Jim Malak
and/or Assigns and SwiftyNet.com, Inc.
dated April 6, 2000.................................................
+(10.18)Consulting Agreement with Netelligent Consulting
dated October 11, 2000..............................................
+(10.19)Consulting Agreement with Frank Pinizzotto
dated September 19, 2000............................................
+(10.20)Consulting Agreement with Gigi Pinizzotto
dated September 19, 2000............................................
+(10.21)Professional Services Agreement with
Laurie Stern dated July 31, 2000....................................
+(10.22)Consulting Agreement with Mark Daniel White
dated September 19, 2000............................................
++(10.23)Consulting Agreement withi Nick Trupiano
dated November 25, 2000............................................
++(10.24)Consulting/Option Agreement with CandidHosting.com, Inc.
dated December 1, 2000.............................................
++(10.25)Consulting/Option Agreement with David S. Goldman
dated December 19, 2000............................................
++(10.26)Consulting/Option Agreement with Voice Media, Inc.
dated December 1, 2000.............................................
++(10.27)Public Relations Agreement with Shoreliner
Capital Ltd. Partnership dated January 17, 2001....................
++(10.28 Traffic Promotion Agreement with Voice Media, Inc.
dated November, 2000...............................................
++(10.29)Traffic Promotion Agreement with CandidHosting.com,Inc.
dated December 1, 2000.............................................
++(10.30)Consulting Agreement with Paul Runyon
dated November 25, 2000............................................
++(10.31)Non-Exclusive License Agreement with Norman J. Jester, III
dated November, 2000...............................................
++(10.31)Client Services Agreement with Markham/Novell
Communications, Ltd. dated January 9, 2001 ........................
++(10.32)Client Services Agreement with Novell Markham
Communications, Ltd. dated January 9, 2001.........................
++(10.33)Stock Option Agreement with Mark P. Dolan
dated January 10, 2001.............................................
++(10.34)Assignment of Contract with Netelligent
dated December 7, 2000.............................................
++(10.35)Consulting Agreement with Marlene Trupiano
dated January 3, 2000..............................................
++(10.36)Consulting Agreement with Marlene Trupiano
dated November 25, 2000............................................
++(11) Statement re: computation of per share earnings...........Note 6 to
Financial
Statements
(13)Annual or Quarterly Reports, Form 10Q...............................None
(16)Letter regarding Changes in Certifying Accountant...................None
(18)Letter on change in accounting principles...........................None
(21)Subsidiaries of the registrant......................................None
(22)Published report regarding matters submitted to vote................None
(23)Consents of Experts and Counsel.....................................None
(24)Power of Attorney...................................................None
+(27)Financial Data Schedule...............................................
(99)Additional Exhibits.................................................None
* Previously filed with Form 10-SB on November 23, 1998.
** Previously filed with Form 10-SBA No. 1 on February 2, 1999.
*** Previously filed with Form 10-KSB filed on March 30, 2000.
**** Previously filed with Form 10-QSB filed May 15, 2000.
+ Previoiusly filed with Form 10QSB filed 11-17-00
++ Filed herewith
Reports on Form 8-K
On July 27, 2000, the Company filed a report on form 8-K reporting its change of
auditors replacing Pender, Newkirk & Company, C.P.A., with Senago & Co., P.A.
pursuant to Item 4 of that report.
On April 20,2000, the company filed a report on form 8-K reporting the sale of
its car wash located at 32663 U.S.Highway 19, North Palm Harbor, Florida,
pursuant to Item 2 of that report. This form was amended on September 17, 2001
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SwiftyNet.com, Inc.
Date: March 8, 2001
By:/S/ Rachel Steele
-----------------------
Rachel Steele, President,
Secretary, Director
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Date:March 8, 2001 By:/S/ Rachel Steele
-----------------------
Rachel Steele, President,
Secretary, Director
Date:March 8, 2001 By:/S/ Raymond Lipsch
-----------------------
Raymond Lipsch,
Chief Executive Officer,
Chief Financial Officer,
Treasurer, Director
Date:March 8, 2001 By:/S/ Donald Hughes
----------------------
Donald Hughes, Vice President,
Director