10-Q 1 newcom63001.txt NEWCOM FORM 10-Q, 6-30-01 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended June 30, 2001 Commission File No. 0-30727 ------- NEWCOM INTERNATIONAL, INC. ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada 88-0320439 ----------------------------------- ---------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 515 West Pender Street, Vancouver, British Columbia V6B 6H5 ------------------------------------------------------ ---------------------- (Address of principal executive offices) (Zip Code) (604) 681-5678 ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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: As of June 30, 2001, there were 15,500,000 shares of the Registrant's $ .01 par value common stock issued and outstanding. NEWCOM INTERNATIONAL, INC. INDEX Page PART I Item 1. Financial Statements Balance Sheet - June 30, 2001 (unaudited)........................ 1 Statements of Operations - Three and Six Months Ended June 30, 2001 and 2000 (unaudited) and the period from September 12, 1996 (inception) to June 30, 2001 (unaudited).................................. 2 Statements of Cash Flows - Six Months Ended June 30, 2001 and 2000 (unaudited) and the period from September 12, 1996 (inception) to June 30, 2001 (unaudited).................................. 3 Notes to Financial Statements.................................... 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................... 6 PART II Item 1. Legal Proceedings................................................. 7 Item 2. Changes In Securities............................................. 7 Item 3. Defaults Upon Senior Securities................................... 7 Item 4. Submission of Matters to a Vote of Security Holders............... 7 Item 5. Other Information................................................. 7 Item 6. Exhibits and Reports on Form 8-K.................................. 7 Signatures........................................................ 8 I NewCom INTERNATIONAL INC. (A blank-check company) Balance Sheet

See accompanying notes to financial statements. 1 NewCom INTERNATIONAL INC. (A blank-check company) Statements of Operations

See accompanying notes to financial statements. 2 NewCom INTERNATIONAL INC. (A blank-check company) Statements of Cash Flows

See accompanying notes to financial statements. 3 NewCom INTERNATIONAL INC. (A blank-check company) Notes to Financial Statements Note 1. Description of Business and Summary of Significant Accounting Policies Description of Business NewCom International Inc. (the "Company") was incorporated in Nevada in September 1996 under the name of AgriNet, Inc. In October 1996, NewCom amended its Articles of Incorporation to change its name to NewCom International Inc. Since its incorporation, NewCom has not conducted any significant operations. NewCom's activities to date have focused primarily on incorporation activities and the identification of potential operating opportunities or acquisitions targets. Since NewCom has not yet commenced any principal operations and has not yet earned significant revenues, NewCom is considered to be a blank-check company. Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Unaudited Interim Financial Statements The interim financial data as of June 30, 2001, and for the three months and six months ended June 30, 2001 and 2000, is unaudited; however, in the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company's financial position as of June 30, 2001, and the results of its operations and cash flows for the three months and six months ended June 30, 2001 and 2000. Going Concern and Management's Plans NewCom has not commenced significant operations, and has limited liquid resources. Such matters raise substantial doubt about NewCom's ability to continue as a going concern. Management's plans with respect to these conditions are to continue searching for additional sources of capital and new operating opportunities. In the interim, NewCom will continue operating with minimal overhead, and key administrative and management functions which will be provided by consultants. Accordingly, the accompanying financial statements have been presented under the assumption NewCom will continue as a going concern. No adjustments have been made to the accompanying financial statements as a result of this uncertainty. 4 NewCom INTERNATIONAL INC. (A blank-check company) Notes to Financial Statements (Continued) Note 2. Commitments Effective October 1, 1999, NewCom entered into an Advisory and Management Agreement (the "Agreement") with NuVen Advisors Limited Partnership ("NuVen"). In April 2000, the Agreement, and the amount due was assigned to NewBridge Capital, Inc. ("NewBridge") by NuVen. Pursuant to the terms of this agreement, NewCom is required to pay $3,500 per month, plus expenses, in exchange for NewBridge's assistance in the formulation of possible acquisition strategies, and the management of financial and general and administrative matters. In addition, NewCom is required to pay a fee equal to 10% of the asset value or investment made in NewCom resulting from NewBridge's efforts, and a transaction fee (as defined) equal to 5% of the proceeds received by NewCom in connection with a sale of its assets. No amounts were due to NewBridge at June 30, 2001 (see below). In May 2000, the Company paid NewBridge $258,000, of which $75,000 was for services rendered in preparation and filing of its Form 10-SB with the Securities and Exchange Commission, among other services, and amounts due to NuVen and Newbridge totaling $82,200 for advisory fees and out of pocket expenses. During the three months and six months ended June 30, 2001, $27,965 and $46,465, respectively, of advisory fees and out of pocket expenses were recorded against the prepaid expense. The balance at June 30, 2001 was $54,335. 5 NewCom INTERNATIONAL INC. (A blank-check company) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Three Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2000 ------------------------------------------------------------------------------ There were no operating revenues recorded during the three months ended June 30, 2001 or 2000. The Registrant's general and administrative expenses were $22,344 for the three months ended June 30, 2001, as compared to $120,220 for the same period last year. The change is primarily attributable to consulting and legal fees incurred in connection with the preparation of its Form 10-SB with the Securities and Exchange Commission . Six Months Ended June 30, 2001 Compared to Six Months Ended June 30, 2000 -------------------------------------------------------------------------- The Registrant had no revenues for the six months ended June 30, 2001 or 2000. The Registrant's total general and administrative expenses were $43,991 for the six months ended June 30, 2001, as compared to $138,109 for the same period last year. The change is primarily attributable to consulting and legal fees incurred in connection with the preparation and filing of its Form 10-SB with the Securities and Exchange Commission . Liquidity and Capital Resources The Registrant has incurred net losses and negative cash flows from operating activities. The Registrant had minimal cash and cash equivalents at June 30, 2001 and had negative working capital of $108,533 as of June 30, 2001. The limited working capital is a direct result of the Registrant incurring expenses for professional, consulting and advisory services and other overhead during the period. As of the date of this Report, the Registrant has no material commitments for capital expenditures and no commitments for additional equity or debt financing. During the fiscal year 2000, $260,557 of cash was received on notes receivable. Additionally during fiscal year 2000, the Company paid NewBridge $258,000, of which $157,200 was for services rendered, advisory fees and out of pocket expenses. During the three months and six months ended June 30, 2001, $27,965 and $46,465 of advisory fees and out of pocket expenses were applied to the prepaid amount. Going Concern As a result of the Registrant having no revenue producing activities, the Registrant has limited cash and cash equivalents remaining as of June 30, 2001, to finance future operations. Such conditions raise substantial doubt about the Registrant's ability to continue as a going concern. The Registrant will continue searching for additional sources of capital and new operating opportunities. In the interim, the Registrant will continue operating with minimal overhead, and key administrative and management functions which will be provided by consultants. 6 NewCom INTERNATIONAL INC. (A blank-check company) PART II: OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes In Securities None. Item 3. Defaults Upon Senior Securities None Item 4. Submission Of Matters To A Vote Of Security Holders None Item 5. Other Information None Item 6. Exhibits And Reports On Form 8-K (a) Exhibits - None (b) Form 8-K - None 7 NewCom INTERNATIONAL INC. (A blank-check company) SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Company NewCom International Inc. Date: August 6, 2001 by: /s/ David Lo -------------------------- David Lo President and Director 8

NEWCOM INTERNATIONAL INC 10-Q