10-Q 1 form10q0802.txt UNITED STATES SECURITIES EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ----------------------------------------------------------------- [X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended August 31, 2002 ----------------------------------------------------------------- ANYTHING2SHIP, INC. ---------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 22-3642435 -------- ------------ (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 509 Madison Avenue, Suite 404 New York, New York 10022 ----------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number (212) 561-0908 -------------- Check here whether the issuer (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _____ No_______ As of August 31, 2002, the following shares of the Registrant's common stock were issued and outstanding: 12,500,000 shares of voting common stock PART I - FINANCIAL INFORMATION October 7, 2002 To the Board of Directors Anything2Ship, Inc. I have reviewed the accompanying balance sheet of Anything2Ship, Inc. as of August 31, 2002 related Income Statement and the statement of Cash flows for the period then ended. These Financial Statements are the responsibility of the Corporation's Management. I conducted my review in accordance with generally accepted review standards. Those standards require that I perform the review to obtain reasonable assurance about whether the Financial Statements are free of material misstatement. A review includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. A review also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall Financial Statement presentation. Very truly yours, /s/ Frank E. Hanson ------------------------ Frank E. Hanson CPA ANYTHING2SHIP, INC. (A Developmental Stage Company) CONDENSED CONSOLIDATED BALANCE SHEET As Of As Of August 31, 2002 Feb. 28, 2002 (Unaudited) (Audited) -------------------------------- ASSETS Current Assets Cash $ 99 $1,060 Fixed Assets - Note 6 151,559 127,604 ---------- ---------- TOTAL ASSETS $106,858 $128,664 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 47,877 $ 6,963 Accrued Expenses $ 95,054 10,017 Loan Payable & Lease payable 198,718 203,827 ----------- ---------- Total Current Liabilities $ 341,649 $220,807 LONG TERM LIABILITIES Lease payable 3,069 5034 Loan Payable - Astride Property Holdings Ltd 80,514 80,514 RLI Capital Limited 238,291 185,051 ---------- ---------- Total Liabilities $663,523 $491,406 Stockholders' Equity Common Stock, $.001 par value, Authorized 25,000.000 Shares; Issued and Outstanding 12,500,000 Shares 12,500 12,500 Issued and Outstanding 6,000,000 shares as of Feb. 28, 2002 Additional Paid in Capital 218,778 187,583 Deficit Accumulated During the Development Stage (743,143) (562,825) ---------- ---------- Total Shareholders' Deficit (511,865) (362,742) ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $151,658 $128,664 ========== ==========

The accompanying notes and accountant's report are an integral part of these financial statements. ANYTHING2SHIP, INC. CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) For the 3 Mos Ended For the 3 Mos Ended August 31 May 31 ---------------------------------------------- TOTAL REVENUES: $ 0 $ 0 $ 0 $ 0 OPERATING EXPENSES: Accounting 2,500 1,750 2,500 3,000 Legal 2,500 3,354 2,500 4,000 Rent Expense 1,650 15,047 1,600 600 Filing Fees 50 58 13 13 Contributed Services 15,000 15,000 15,000 15,000 Interest 3,857 5,330 3,791 - Telephone 1,076 6,439 2,277 - Utilities 48 3,084 48 - Consulting 39,900 87,190 21,000 - Insurance 72 998 120 - Office Expense 0 3,157 4,232 - Depreciation Expense 31,616 859 21,929 - Bank Service Charges 231 - - - Property Tax 486 - - - Sales Tax 223 - - - Travel 1,456 - 5,672 - ----------- ---------- --------- --------- Total Operating Expenses $ 96,808 142,266 75,891 22,613 Net Loss (96,808) (142,266) (75,891) (22,613) ----------- ---------- --------- --------- Accumulated Deficit - Beginning of Period (642,478) (235,463) (562,825) (212,850) ----------- ---------- --------- --------- Accumulated Deficit - End of Period (743,143) (377,729) (642,478) (235,463) ----------- ---------- --------- --------- Net Loss per Share $(0.0805) $(0.01) $(0.06) $(0.09) =========== =========== ========= ========= Weighted Average number of shares outstanding 12,500,000 12,500,000 12,500,000 2,619,555

The accompanying notes and accountant's report are an integral part of these financial statements. ANYTHING2SHIP, INC. STATEMENT OF CASH FLOWS For the 3 mos For the 3 mos Ended Ended to to August 31, 2002 August 31, 2001 ------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $(100,665) $(142,266) Adjustments to Reconcile Net Loss to Net Cash Used in operating Activities: Depreciation 36,366 859 Change in Operating Assets and Liabilities 100,665 5,162 ------------------------------- Net Cash Used in Operating Activities 36,366 (120,645) Investing Activities (50,445) ------------------------------- Cash Flows from Financing Activities (14,079) 334,204 Net cash provided by (used in) financing activities 12,995 (213,559) ------------------------------- Net Increase(decrease)in cash and cash equivalents (1,084) 0 Cash and cash equivalents at the beginning of the period 1,183 3 ------------------------------- Cash and cash equivalents at the end of the period $ 99 3 ===============================

The accompanying notes and accountant's report are an integral part of these financial statements. ANYTHINGS2SHIP INC. NOTES TO FINANCIAL STATEMENTS August 31, 2002 NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES A. Description of Company Anything2Ship Inc.,("the Company") is a for-profit corporation, incorporated under the laws of the State of Delaware on December 31, 1996 under the name MCC Catering Inc. The Company is a developmental stage company. The Company's principal objective is the development of a digital technology platform to service the shipping industry. B. Basis of Presentation Financial statements are prepared on the accrual basis of accounting. Accordingly, revenue is recognized when earned and expenses when incurred. C. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. Significant estimates in the financial statements include the assumption that the Company will continue as a going concern. See Note 3. D. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term investments with maturity of three months or less to be cash equivalents. E. Consolidation Policy The accompanying consolidated financial statements include the accounts of the Company and all of its wholly owned and majority owned subsidiaries. There were no inter-company transaction to eliminate in consolidation. F. Purchase Agreement On May 29, 2001, the Company entered into an agreement whereby it agreed to be purchased by AutoFirst Limited, a company incorporated under the laws of the United Kingdom. AutoFirst Limited is a development stage company with $3 of assets and no liabilities as of May 29, 2001. The agreement called for a one- for 2.5 reverse split of Anything2Ship Inc.'s currently outstanding shares resulting in 2,400,000 outstanding. The financial statements as presented reflected the stock split. Anything2Ship Inc., then issued 12,500,00 post-reverse split shares with a par value of $12,500 to the shareholders of AutoFirst Limited and others in exchange for 100% of the issued and outstanding stock of AutoFirst Limited. Anything2ship accounted for the purchase agreement transaction as a capital transaction rather than a business combination. Additional paid in capital was reduced for the $12,500 par value of the stock. Anything2Ship issued in exchange for the outstanding stock of AutoFirst. Anything2Ship recorded AutoFirst's cash of $3 as its own assets. No goodwill or other intangible asset was recorded. Upon consummation of the transaction, the prior historic financial statements of the new entity reflected AutoFirst's historic financial statements. The Company is known as Anything2Ship, Inc. Although Anything2Ship is the legal acquirer of AutoFirst, AutoFirst is the acquirer for accounting purposes because the former shareholders of AutoFirst hold 81% of the total shares of Anything2Ship, and the former shareholders of Anything2Ship hold 19% of the total shares immediately after the acquisition. Thus, the former shareholders of AutoFirst have control of the merged entity. G) Furniture, fixtures, equipment and automobile are recorded at cost. Fixed assets are depreciated on a straight line or accelerated method at rates dependent on the type of asset. NOTE 2 - USE OF OFFICE SPACE The Company uses 250 square feet of space for its executive offices at City Tower, 40 Basinghall Street, London, UK which it receives from one of its shareholders at no cost. The fair market value of this office is $200 per month, which is reflected as an expense with a corresponding credit to additional paid-in capital. The Company also leased office space in Stamford, Connecticut. NOTE 3 - LIQUIDITY The Company's viability as a going concern is dependent upon raising additional capital, and ultimately, having net income. The Company's limited operating history, including its losses and no revenues, primarily reflect the operations of its early stage. As a result, the Company had from time of inception to August 31, 2002 no revenue and a net loss from operations of $(743,143). As of August 31, 2002, the Company had a net capital deficiency of $(511,865). The Company requires additional capital principally to meet its costs for the implementation of its business plan, for general and administrative expenses and to fund costs associated with the start up of its operations. It is not anticipated that the Company will be able to meet its financial obligations through internal net revenue in the foreseeable future. Anything2Ship Inc. does not have a working capital line of credit with any financial institution. Therefore, future sources of liquidity will be limited to the Company's ability to obtain additional debt or equity funding. NOTE 4 - CONTRIBUTED SERVICES On March 1, 1999 two of the Company's officers began rendering services on behalf of the company at no cost. The fair market value is $2,500 per officer per month. Each amount is reflected as an expense with a corresponding credit to additional paid in capital. NOTE 5 - FIXED ASSETS Fixed Assets consist of the following: Accumulated Cost Depreciation Net ----------------------------------- Computer hardware, software and office Equipment $270,890 $119,331 $151,559 NOTE 6 - NOTE PAYABLE - CRITERION MANAGEMENT SERVICES LIMITED On June 17, 2001, the Company entered into an agreement to purchase computer hardware and software. The agreement calls for 4 payments of $50,000, including principal and interest. The agreement is evidenced by a note. $50,000 was due on December 17, 2001 and three instalments of $50,000 each are due 90, 180 and 270 days after the first instalment however Criterion has agreed to postpone first payment until September 2002 or until financing is in place which ever occurs first. NOTE 7. RELATED PARTY TRANSACTION AND LOAN PAYABLE - ASTRIDE PROPERTY HOLDINGS LTD. Astride Property Holdings Ltd. is a shareholder of Anything2Ship, Inc. Astride Property Holdings Ltd. has agreed to supply funds up to $75,000 to Anything2Ship to cover Anything2ship's financial obligations. Subsequent to that, there is no guarantee or assurance that Astride Property Holdings Ltd. will advance Anything2Ship any further funds or that Anything2Ship will be able to raise any additional funds to meet its financial obligations. Anything2Ship anticipates that its capital resources, as provided through its arrangement with Astride Property Holdings Ltd., will permit the company to maintain its current implemented operations for at least twelve (12) months. As of May 31, 2002, $80,514 was outstanding on this loan. The loan is not evidenced by a note. The informal agreement calls for no payment of interest. Anything2Ship intends to repay the loan out of any fundraising that it may carry out or when the Company achieves sustainable revenue. NOTE 8 - LOAN PAYABLE - RLI CAPITAL RLI Capital Limited has agreed to supply funds to Anything2Ship to cover Anything2Ship's financial obligations. Subsequent to that, there is no guarantee or assurance that RLI Capital Limited will advance Anything2Ship any further funds or that Anything2Ship will be able to raise any additional funds to meet its financial obligations. Anything2Ship anticipates that its capital resources, as provided through its arrangement with RLI Capital Limited, will permit the company to maintain its current implemented operations for at least twelve (12) months. As of August 31, 2002, $238,291 was outstanding on this loan. The loan is not evidenced by a note which calls for interest of 6% per year to be added to the principal balance monthly. Anything2Ship intends to repay the loan out of any fundraising that it may carry out or when the Company achieves sustainable revenue. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION OVERVIEW -------- Anything2Ship Inc., ("A2S"), a development stage company, was organized in January 1997 as MCC Catering Inc., under the laws of the State of Delaware, having the stated purpose of engaging in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. A2S has limited operating history upon which investors can rely upon in evaluating the company. On May 29, 2001, the Company acquired Autofirst Limited, a UK corporation with the stated aim of developing and acquiring technology to develop a digital platform to match shippers with hauliers. As part of this transaction, the company effectuated a 2.5 to one reverse split of the company's outstanding shares of common stock and issued 10,100,000 shares of common stock to the shareholders of Autofirst Limited. This resulted with the company having outstanding 12,500,000 shares of issued and outstanding common stock as at May 31, 2002. On May 31, 2001 the company changed its name to Anything2Ship Inc. The shareholders of Autofirst Limited assumed control of the Company on May 29, 2001. On October 4, 2002, the Company filed an SB/2 Registration statement with the Securities & Exchange Commission to register 11,495,400 shares. Anything2ship Inc., (hereinafter "A2S") is a web enabled freight management service primarily focused on the spot freight marketplace. Our business is initially being launched in the UK, and is expected to subsequently expanding throughout the European Union countries. In the event such an expansion is successful, the company will attempt to continue with an expansion to the United States. There is no guarantee that A2S' plans shall be successful or that it shall become profitable. Investors are alerted that there exist significant risks associated with investment in A2S. A2S has created a new market dynamic that virtually eliminates the significant inefficiency in the buying and selling of freight services between spot buyers and shippers (Small to Medium Enterprises-"SME's") of freight over 150 lbs and Carriers seeking to fill empty space backhauls. By utilizing the Internet, A2S has codified in time and place terms a random marketplace by matching in real-time the supply and demand needs of an extensive spot shipper market. Plagued by underutilized trucking capacity, carriers are currently running 36% empty in the UK and higher in Europe. The logistics market in the UK is over $150 billion, but with the planned expansion into Europe the total market exceeds $ 1.5 trillion, which is fragmented into thousands of companies. The top 15 UK Carriers account for less than 6% of the market; A2S's target market is 2.7 million of the 3.7million UK SME's (Details: Appendix 1). To achieve its Year 3 goal, A2S needs to capture 1% of this SME target market, or 27,000 shippers. The growth in the road haulage market will be characterized by wider international coverage, an increasing reliance on Information Technology (IT), and growth in rationalization as larger companies target acquisitions in order to increase their geographic and product coverage. In addition, the industry will remain burdened by overcapacity that will further intensify competition and create demand for greater efficiency, capacity management, and cost control. A2S will seek to provide a unique freight management service that satisfies the unmet needs of buyers and sellers of spot freight. It will seek to accommodate the small to medium size businesses (SME's) who are plagued by the frustration of getting competitive quotes, prompt service and efficient accounting reconciliation. Conversely, A2S will seek to help carriers optimize capacity by reaching SME's that have been inherently too expensive and inefficient to prospect. A2S seeks to provide the SME buyer of spot freight with real-time quotes from Carriers with underutilized capacity by their postcode preferences, thus giving shippers a new level of competitive pricing, service, and efficiency within the entire transaction process. A2S also seeks to provide Carriers with new revenue sources from an untapped market, thereby increasing load optimization and margins, while reducing costs and credit risk. A2S shall focus on the 150lbs/68 kilos plus spot freight marketplace, which is approximately 5 times the value of the FedEx/UPS market in the US. This market is highly fragmented and therefore poorly served. A2S will seek to initially serve the UK SME market by creating efficient, automated, cost effective service in place of a manually intensive, time consuming and fragmented process. No recognized brand currently serves this market. A2S consolidates the SME marketplace by creating "critical mass" for the Seller (Carrier) looking to optimize capacity and reduce the average 36% running empty capacity. The A2S system perfects a disorganized supply and demand marketplace. A2S utilizes the existing physical infrastructure of the marketplace by using digital technology to match buyers and sellers. Thus A2S will seek to derive revenues from buyer and seller by taking a commission when a transaction is completed, this creates dependency driven by time and cost savings. Additionally, A2S expects to have low fixed costs, all of the above are core factors that also exist in the eBay model. A2S intends to charge a minimum of 2% from the Carrier and marks up the Carrier Quote by 15% to the shipper. As A2S fills excess capacity, which is otherwise unused, it will create lower and more competitive pricing for A2S customers. Our Product is an efficient and cost effective electronic system that allows shippers to get competitive real-time quotes matched to carriers under utilized capacity by zip code preferences. A2S electronically arranges all documents, payments, bills of lading, tracking and delivery notices. This approach retains and maintains existing purchasing behavior but eliminates phone and fax practice. This is achieved in part through the support of Oracle 11i Financials, which provide a powerful web hub of accounting, customer service, and reporting tools. This is in conjunction with the Oracle Database that is the industry standard database platform. In addition, the Company is integrating a number of existing applications and platforms used by the Airline Industry, IRS and the US Postal service. Reliability, scalability and the elimination of reliance on proprietary protocols and standards will be insured. The Company's main product and hub of its technology is expected to begin trials over the coming quarter. Management have expended great quantities of time developing and refining the operating System. The technology is being pooled together from various sources and is being developed by Italian Software developer, Systeam SpA, a Rome based corporation. It is expected that live tests will be carried out prior to the end of the next quarter. Results of Operations The Company's viability as a going concern is dependent upon raising additional capital, and ultimately, having net income. The Company's limited operating history, including its losses and no revenues, primarily reflect the operations of its early stage. As of August 31, 2002, the Company had a net capital deficiency of $(743,143). The Company requires additional capital principally to meet its costs for the implementation of its business plan, for general and administrative expenses and to fund costs associated with the start up and operations. It is not anticipated that the Company will be able to meet its financial obligations through internal net revenue in the foreseeable future. Anything2ship, Inc., has a loan agreement with RLI Capital Ltd. It is anticipated that this agreement will be enough to fund the company over the next 12 months. The Company reported no revenues for the three-month periods ended August 31, 2002 and 2001, respectively. Operating expenses for the three-month and six month period ended August 31, 2002 were $96,808 and $172,699, respectively, compared to the three-month and six-month period ended August 31, 2001 of $142,266 and $164,879, respectively. The increase reflects the Company's increased activity in developing the company's technology platform and the development if the company's corporate structure. Operating expenses are comprised mainly of Accounting, legal, and other professional fees. The Company reported interest charges of $7,648 for the six months ended August 31, 2002, an increase of $2,318 from the six months ended August 31, 2001. This increase reflects deferred charges related to the Company's financing agreement, with RLI Capital Ltd. Depreciation expense totaled $31,616 and $53,545 in the three and six-month period ended August 31, 2002, respectively, compared to $859 in the three and six-month period ended August 31, 2001, respectively. Liquidity and Capital Resources The Company anticipates that it will continue to incur significant operating losses for the foreseeable future. There can be no assurance as to whether or when we will generate material revenues or achieve profitable operations. We are actively seeking strategic alliances in order to develop and market our products. We have a Credit Facility with RLI Capital Limited which as at 31st August 2002 $238,291 was outstanding. We anticipate that our capital resources, as provided through the agreement with RLI Capital Ltd will permit the Company to maintain our current operations for at least 12 months. Risk Factors We have no recent operating history upon which a comparison or conclusion can be made for the evaluation of the future operation of our business. We have recently obtained loan funding to enter the shipping and haulage market specifically the sector delivering 150lbs and above and providing a web enabled freight management service primarily focused on the spot freight marketplace. We are currently completing our software platform and have not yet entered into any agreements with carriers or shippers. No assurance can be given that we will establish our proposed digital platform. We expect to commence commercial operations, during 2002, although no assurance can be given that this will occur. Accordingly, we have no operating history on which you can evaluate our future performance. We are at an early stage of development and it is possible that we may not achieve the revenues that we anticipate. If that occurs, we will receive less than our projected income from our operations and our ability to operate on a profitable basis will suffer. Before investing, you should carefully evaluate the risks, uncertainties, expenses and difficulties frequently encountered by early stage companies. We Need To Initiate Our Marketing And Sales Operations. These Activities Will Strain Our Limited Resources, and Failure to Effectively Manage The Implementation and Growth of Our Business Could Disrupt Our Operations And Prevent Us From Generating The Revenues We Expect. We will have to commence our marketing and sales operations in order to successfully implement our business strategy. This will involve the recruitment of management and staff, the establishment of sales and marketing infrastructures and the development of efficient delivery systems. If we are successful in commencing commercial operations, we may then experience rapid growth, requiring us to manage multiple relationships with shippers and carriers using our service. The implementation of operations and the subsequent expansion of such operations which may follow can be expected to strain our management, operational, financial, and technological resources. If we fail to manage our growth in a manner that minimizes these strains on our resources it could disrupt our operations and ultimately prevent us from generating the revenues we expect. The implementation and growth of our business will also depend on our ability to attract and retain qualified employees and consultants, particularly marketing and sales personnel. If we fail to manage our growth successfully, our business will suffer. Our Digital Technology Platform To Match Shippers With Haulers Is Our Only Current Product. Our Anticipated Future Revenue Growth And Profitability Will Suffer If It Does Not Achieve Broad Market Acceptance. We have yet to generate any use of our product. We have no potential sources of revenues from anything other than through use of our digital platform. Accordingly, we cannot give any assurance that sufficient market penetration can be achieved so that we can operate profitably. If we are unable to sell our product or if acceptance develops more slowly than expected, our business will be materially and adversely affected. We Will Not Be Able To Generate Revenues Or Profits If We Are Unable To Compete Effectively With Haulers and Consolidators. Our ability to generate revenues and operate profitably will be directly related to our ability to compete effectively existing systems used by operators in the haulage market. Although we believe that we can effectively compete on the basis of price and quality of service, we will face competition from haulers and consolidators virtually all of whom are larger than we are, and have substantially more assets and resources than we have. Our future success will depend, to a significant extent, on a number of factors, including acceptance of our product and our ability to successfully develop and exploit such acceptance. We can give no assurance that we will be able to overcome the competitive disadvantages we face as a small company with limited capital and without a history of successfully developing and marketing a digital platform product. Our Future Success Is Dependent On The Performance And Continued Service Of Our Executive Officers And Key Employees, And Our Ability To Attract And Retain Skilled Personnel. Our performance and future operating results are substantially dependent on the continued service and performance of our president, treasurer and chief executive and other management. To the extent that the services of such persons become unavailable, our business or prospects may be adversely affected. Should we be required to do so, we do not know whether we would be able to employ equally qualified persons to replace any of these persons. We do not currently maintain "key man" insurance for any of our executive officers or other key employees and do not intend to obtain this type of insurance following the completion of this offering. If we are successful in implementing and developing our business, we will require additional managerial, administrative and support personnel. Competition for highly qualified personnel is intense, and we cannot assure that we can retain our key employees or that we will be able to attract or retain qualified personnel in the future. The loss of the services of any of our management or other key employees and our inability to attract and retain other necessary personnel could have a material adverse effect on our financial condition, operating results, and cash flows. See "Management". We May Need Financing Which May Not Be Available And, If Available, Might Only Be Available On Unfavorable Terms While we believe we have sufficient capital for the next twelve months, presently unanticipated occurrences and expenses may make it necessary for us to raise funds through equity or debt financings until such time, if ever, as we are able to operate profitably. In the event that we do require such outside funding, there is no assurance that we will be able to obtain it on terms beneficial to us, if at all. Should that occur, we might be prevented from commencing commercial operations or, if we have begun commercial operations, we might have to curtail or cease them. We Have Incurred Losses From Inception And Expect To Continue To Incur Losses Unless And Until We Successfully Commence Commercial Operations. As of August 31, 2002, we had incurred losses since our inception of $743,143. We have had no operating revenues and have not yet commenced commercial operations. Although we expect to commence commercial operations during 2003, no assurance can be give that will do so or if commenced that we will achieve profitability. Our failure to commence commercial operations and achieve profitability would have a material adverse effect on our business. If we lose key management or other personnel our business will suffer. We are highly dependent on the principal members of our management staff. We also rely on consultants and advisors, to assist us in formulating our development strategy. Our success also depends upon retaining key management and technical personnel, as well as our ability to attract and retain additional highly-qualified personnel. We face intense competition for personnel from other companies, government entities and other organizations. We may not be successful in retaining our current personnel. We may not be successful in hiring or retaining qualified personnel in the future. If we lose the services of any of our management staff or key technical personnel, or if we fail to attract qualified personnel, our ability to acquire, develop or sell products would be adversely affected. Our management and internal systems might be inadequate to handle our potential growth. Our success will depend in significant part on the expansion of our operations and the effective management of growth. This growth will place a significant strain on our management and information systems and resources and operational and financial systems and resources. To manage future growth, our management must continue to improve our operational and financial systems and expand, train, retain and manage our employee base. Our management may not be able to manage our growth effectively. If our systems, procedures, controls, and resources are inadequate to support our operations, our expansion would be halted and we could lose our opportunity to gain significant market share. Any inability to manage growth effectively may harm our ability to institute our business plan. Because we intend to have international operations, we will be subject to risks of conducting business in foreign countries. If, as we anticipate, international operations will constitute a part of our business, we will be subject to the risks of conducting business in foreign countries, including: o difficulty in establishing or managing distribution relationships; o our inability to locate qualified local employees, partners, and suppliers; o the potential burden of complying with a variety of foreign laws, and trade standards; and o general geopolitical risks, such as political and economic instability, changes in diplomatic and trade relations, and foreign currency risks. We cannot predict our future capital needs and we may not be able to secure additional financing which could affect our ability to operate as a going concern. We may need additional financing to continue to fund the development of our products and to generally expand and grow our business. To the extent that we will be required to fund operating losses, our financial position would deteriorate. There can be no assurance that we will be able to find significant additional financing at all or on terms favorable to us. If equity securities are issued in connection with a financing, dilution to our stockholders may result, and if additional funds are raised through the incurrence of debt, we may be subject to restrictions on our operations and finances. Furthermore, if we do incur additional debt, we may be limiting our ability to repurchase capital stock, engage in mergers, consolidations, acquisitions and asset sales, or alter our lines of business or accounting methods, even though these actions would otherwise benefit our business. If adequate financing is not available, we may be required to delay, scale back or eliminate our development programs, to relinquish rights to certain technologies or products, or to license third parties to commercialize technologies or products that we would otherwise seek to develop. Any inability to obtain additional financing, if required, would have a material adverse effect on our ability to continue our operations and implement our business plan. The prices we charge for our products may decrease and our revenues could decrease. Our ability to market our products successfully depends in part on the price we may be able to charge for our products We may encounter significant financial and operating risks if we grow our business through acquisitions. As part of our growth strategy, we may seek to acquire or invest in complementary or competitive businesses, products or technologies. The process of integrating acquired assets into our operations may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for the ongoing development of our business. We may allocate a significant portion of our available working capital to finance all or a portion of the purchase price relating to possible acquisitions although we have no immediate plans to do so. Any future acquisition or investment opportunity may require us to obtain additional financing to complete the transaction. The anticipated benefits of any acquisitions may not be realized. In addition, future acquisitions by us could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and amortization expenses related to goodwill and other intangible assets, any of which could materially adversely affect our operating results and financial position. Acquisitions also involve other risks, including entering markets in which we have no or limited prior experience. We could face increased competition. Our shipping services compete against a variety of Internet and traditional shipping services and, brokers. We face competition from both Internet commerce companies as well as traditional, software development companies and offline companies within the shipping industries. Competition among shipping-related software products and services generally and commercial Web sites offering shipping-related products and services may increase significantly in the future. To compete successfully as a commercial entity, we must significantly increase awareness of our services and brand name. We cannot assure that we can compete successfully against current or future competitors, many of which have substantially more capital, existing brand recognition, resources and access to additional financing. Our existing and potential competitors may develop products and services that are perceived as better than those we provided or other achieve greater market acceptance. All these competitive pressures may result in increased marketing costs, or loss of market share or otherwise may materially and adversely affect our business, results of operations and financial condition. The provisions of Delaware law may inhibit potential acquisition bids that stockholders may believe are desirable, and the market price of our common stock may be lower as a result. We are subject to the anti-takeover provisions of Section 203 of the Delaware corporate statute, which regulates corporate acquisitions. These provisions could discourage potential acquisition proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others from making tender offers for our common stock. As a result, these provisions may prevent our stock price from increasing substantially in response to actual or rumored takeover attempts. These provisions may also prevent changes in our management. PART II - OTHER INFORMATION Item 1. Legal Proceedings There are currently no pending legal proceedings against the company. Item 2. Changes in Securities There were no changes in securities for this period. Item 3. Defaults upon Senior Securities There has been no default in the payment of principal, interest, sinking or purchase fund instalment. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders for this period. Item 5. Other information There is no other information to report which is material to the company's financial condition not previously reported. Item 6. Exhibits and Reports on Form 8-K The company has not filed Form 8-K in this period ending August 31, 2002. SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. ANYTHING2SHIP INC. ------------------------------------ (Registrant) Date: October 21, 2002 By: /s/ LINDEN BOYNE ---------------- Director

ANYTHING2SHIP INC 10-Q