SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 December 31, 2002
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[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to _____________
Commission file number 000-13337
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Buy It Cheap.com, Inc.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 22-2497491
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(State or other jurisdiction of (IRS Employer Identification No.>
incorporation or organization)
1800 Bloomsbury Avenue, Ocean, NJ 07712
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(Address of principal executive offices)
732-922-3355
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(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
9,040,582 shares of Common Stock, $.001 par value per share,
at February 3, 2003.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements of Buy It Cheap.com, Inc. (unaudited)
Balance Sheet as of December 31, 2002 and June 30, 2002.
Statements of Loss for the three and six month periods
ended December 31, 2002 and December 31, 2001 and the
period July 19, 1999 to December 31, 2002.
Statements of Cash Flows for the six months ended December
31, 2002 and for the period July 19, 1999 to December 31, 2002.
Notes to Financial Statements
BUY IT CHEAP.COM, INC.
(A Development Stage Company)
Balance Sheets
(Unaudited)
As of
-----
December 31, 2002 June 30, 2002
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Assets
Current assets:
Cash $ 9,768 $ 6,371
Other current assets 1,000 1,000
-------- ---------
Total current assets 10,768 7,371
-------- ---------
Investment in and net advances to joint
venture 620,535 620,535
Reserve against investment in and net
advances to joint venture (620,535) (620,535)
Property and equipment, net of
depreciation 2,375 8,358
-------- ---------
Total assets $ 13,143 $ 15,729
======== =========
Liabilities and Equity
Current liabilities:
Accounts payable $ 148,373 $ 154,945
Due to officers and directors 5,559 5,559
Convertible note payable 16,198 16,198
Due to stockholder 20,000 -
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Total current liabilities 190,130 176,702
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Total liabilities 190,130 176,702
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Stockholders' equity:
Preferred stock - Series C, $.001 par
Authorized - 2,000,000 shares
Issued and outstanding - 10,000 shares 10 10
Common stock - $.001 par
Authorized - 20,000,000 shares
Issued and outstanding - 9,190,802 shares
issued and 9,040,582 shares outstanding 9,191 9,191
Paid in capital 787,140 767,540
Treasury stock (751,100) (751,100)
Deficit accumulated during the
development stage (222,228) (206,213)
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Total stockholders' equity (176,987) (160,973)
-------- ---------
Total Liabilities and Equity $ 13,143 $ 15,729
======== =========
See Notes to the Financial Statements
BUY IT CHEAP.COM, INC.
(A Development Stage Company)
Statements of Loss
(Unaudited)
Cumulative
For the three For the six for the period
months ended month ended July 19, 1999
December 31, December 31, to
2002 2001 2002 2001 Dec. 31, 2002
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Sales Revenues $ - $ - $ - $ - $ -
Direct operating
costs 491 675 1,166 2,285 21,722
General and
administrative
expenses 6,995 11,998 14,847 29,245 200,504
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Total expenses 7,486 12,673 16,013 31,530 222,226
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Net loss $(7,486) $(12,673) $(16,013) $(31,530) $(222,226)
===== ====== ====== ====== =======
Net loss per share $ - $ - $ - $ -
===== ====== ====== ======
See Notes to Financial Statements
BUY IT CHEAP.COM, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Cumulative
from July 19,
For the six months ended 1999 to
December 31, December 31,
2002 2001 2002
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Cash flows from operating
activities:-
Net loss $ (16,013) $ (31,530) $ (222,226)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation and amortization 5,982 5,982 38,891
Changes in assets and
liabilities
Other current assets - - (1,000)
Accounts payable (6,572) (19,088) 10,451
------- -------- --------
Net cash used by operating
activities (16,603) (44,636) (173,884)
------- -------- --------
Cash flows from investing
activities
Purchase of property and
equipment - - (23,275)
Decrease in amount due from
officers/directors - 28,790 -
Cash acquired - - 1,927
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- 28,790 (21,348)
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Cash flows from financing
activities:
Sale of Common stock - 20,000 185,000
Loan from stockholder 20,000 - 20,000
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20,000 20,000 205,000
------- -------- -------
Net increase (decrease) in cash 3,397 4,154 9,768
Cash at beginning of period 6,371 12,452 -
------- -------- -------
Cash at end of period $ 9,768 $ 16,606 $ 9,768
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SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Liabilities assumed in the acquisition of Northeast
(USA) Corp. for common stock $ (190,957)
Accounts payable satisfied by issuance of common stock
and convertible note payable 32,395
Software costs financed by issuance of common stock 15,000
--------
$ (123,562)
========
See Notes to Financial Statements
Buy It Cheap.com, Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
Summary of Significant Accounting Policies
Basis of Presentation
The interim financial statements included in this report have been prepared by
Buy It Cheap.com, Inc. (the "Company") without audit in accordance with
generally accepted accounting principles and pursuant to the rules and
regulations of the Securities and Exchange Commission for interim financial
information. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures made
are adequate to make the information presented not misleading.
In the opinion of management, the information furnished for the three and six
month periods ended December 31, 2002 and 2001 includes all adjustments,
consisting solely of normal recurring accruals, necessary for a fair
presentation of the financial results for the respective interim periods.
The results of operations for the three and six month periods ended December
31, 2002 are not necessarily indicative of the results of operations to be
expected for the fiscal year ending June 30, 2003. It is suggested that the
interim financial statements be read in conjunction with the audited
financial statements of the Company for the year ended June 30, 2002, as
filed with the Securities and Exchange Commission on Form 10-KSB.
Net Loss Per Common Share
The weighted average number of common shares outstanding used in computing net
loss per common share was 9,040,582 for each of the three month periods
December 31, 2002 and 2001, and 9,040,582 and 8,940,582 shares for the six
month periods ended December 31, 2002 and 2001 respectively. The weighted
average number of common shares used in computing the net loss per common
share does not include any shares issuable upon the assumed conversion of
the preferred stock since the effect would be anti-dilutive.
Due to Stockholder
During the quarter, a stockholder made a $20,000 advance to the Company. The
characterization of the advance and its use by the Company has not yet been
determined.
Item 2. Management's Discussion and Analysis or Plan of Operation
The Company entered the Internet retailing business through the formation of a
separate entity by two of its directors. The new entity was able to raise
limited start-up capital for an Internet retailing business. For accounting
purposes, the combination of the two companies was treated as an acquistion
of the Company by this new entity. Subsequent to the completion of this
acquisition the Company changed its name to Buy It Cheap.com, Inc. and
commenced an Internet retailing operation under the website "Buyitcheap.com."
The Company must still arrange settlement of its liabilities and raise
substantial new investment capital in order to effectively develop this
business.
Financial and Operating Plan for the Next 12 Months
The Company plans to operate over the next 12 months with little overhead
consisting primarily of office rental, transfer agent fees, web hosting and
professional fees. No salaries or wages are currently paid. While the Company
is currently readying its website, it cannot predict with certainty when the
site will be fully operational. Until there is positive cash flow from its
Internet business, or the Company is able to raise a substantial amount of
new capital, there will be few, if any paid employees. The Company plans that
sales transactions, for the most part, will be handled automatically over
the Internet requiring little labor or office space requirements. The Company
believes it can become a viable business within 12 months (subject to the
outcome of previously described legal proceedings) if it is able to raise
additional capital. The objective of the Company will be to establish the
viability necessary to attract substantial new investment capital to expand
its business.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB contains forward-looking statements
within the meaning of the Private Securities Litigation Act of 1995 and
Section 21E of the Securities Exchange Act of 1934, as amended, that are based
on the beliefs of the Company's management as well as assumptions made by and
information currently available to the Company's management. The Company
desires to take advantage of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 and is making this cautionary
statement in connection with such safe harbor provisions. When used in this
Quarterly Report on Form 10-QSB, the words "estimate," "project," "believe,"
"anticipate," "intend," "expect," "plan," "predict," "may," "should,"
"will," the negative thereof and similar expressions are intended to identify
forward-looking statements.
Forward-looking statements are inherently subject to risks and uncertainties,
many of which cannot be predicted with accuracy and some of which might not
even be anticipated. Future events and actual results, financial and
otherwise, could differ materially from those set forth in or contemplated by
the forward-looking statements contained herein. Important factors that could
contribute to such differences include, but are not limited to, the fact that
the Company is in the early stages of developing its Internet retailing
business, the Company's dependence on growth of the Internet, rapid
technological changes in the market, the effect of substantial competition in
the Internet retail market, the effect of changes in governmental regulation
of the Internet and the effect of general economic and market conditions.
Other factors may be described from time to time in the Company's other
filings with the Securities and Exchange Commission, news releases and other
communications. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
Company does not undertake any obligation to release publicly any revisions
to these forward-looking statements to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
Item 3. Controls and Procedures
Anthony J. Consi, our Chief Executive Officer, and Stephen E. Roman, Jr., our
Chief Financial Officer, performed an evaluation of the Company's disclosure
controls and procedures within 90 days prior to the filing date of this report.
Based on their evaluation, they concluded that the controls and procedures
in place are sufficient to assure that material information concerning the
Company which could affect the disclosures in the Company's quarterly and
annual reports is made known to them by the other officers and employees of
the Company, and that the communications occur with promptness sufficient
to assure the inclusion of the information in the then-current report.
There have been no significant changes in the Company's internal controls or
in other factors that could significantly affect those controls subsequent to
the date on which Messrs. Consi and Roman performed their evaluation.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None
(b) Current Reports on Form 8-K filed during the quarter
ended December 31, 2002
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BUY IT CHEAP.COM, INC.
/s/ Stephen E. Roman, Jr.
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Date: February 11, 2003 Stephen E. Roman, Jr.
Vice President and Principal
Accounting Officer
* * * * * * * * * * * * * * * * * *
CERTIFICATION FOR 10-QSB
I, Anthony J. Consi, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Buy It
Cheap.com, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date");
and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: February 11, 2003
/s/ Anthony J. Consi
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Anthony J. Consi
President and CEO.
CERTIFICATION FOR 10-QSB
I, Stephen E. Roman, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Buy It
Cheap.com, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date");
and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: February 11, 2003
/s/ Stephen E. Roman, Jr.
--------------------------
Stephen E. Roman, Jr.
Vice President and CFO.