10QSB 1 form10q.txt FORM 10QSB FOR PERIOD ENDED MARCH 31, 2001 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE --------- SECURITIES EXCHANGE ACT OF 1934 For quarterly period ended March 31, 2001 ____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _______ Commission file number: 000-30156 ENTHEOS TECHNOLOGIES, INC. -------------------------- (exact name of small business issuer as specified in its charter) NEVADA 98-0170247 ------------- ---------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) Suite 311 - 15 Wertheim, Richmond, Ontario L4B 3H7 ------------------------------------------ ------- (Address of principal executive offices) Registrant's telephone number, including area code: (905) 709-8240 Check whether the issuer: (1) has filed all reports required by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No State the number of shares outstanding of each of the Issuer's classes of common equity as of the latest practicable date: as of May 11, 2001, there were 49,264,808 shares of the Issuer's Common Stock, $0.00001 par value per share outstanding. Transitional Small Business Disclosure Format (Check One): Yes [ ] No [x] ENTHEOS TECHNOLOGIES, INC. FORM 10-QSB, QUARTER ENDED MARCH 31, 2001 INDEX
PART I FINANCIAL INFORMATION Item 1 Financial Statements Consolidated Balance Sheet as of March 31, 2001 3 Consolidated Statement of Operations for the Quarter Ended March 31, 2001 and 2000 4 Consolidated Statement of Cash Flows for the Quarter Ended March 31, 2001 5 Notes to Interim Consolidated Financial Statements 7 All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. Item 2 Management's Discussion and Analysis 8 PART II OTHER INFORMATION Item 1 Legal Proceedings 9 Item 2 Changes in Securities 9 Item 3 Defaults Upon Senior Securities 9 Item 4 Submission of Matters to a Vote of Security Holders 9 Item 5 Other Information 9 Item 6 Exhibits and Reports on Form 8-K 10 Signatures 10
ITEM 1 Financial Statements ENTHEOS TECHNOLOGIES, INC. INTERIM CONSOLIDATED BALANCE SHEET MARCH 31, 2001 AND DECEMBER 31, 2000 (Unaudited)
ASSETS March 31,2001 Dec.31, 2000 ------------- ------------ Current Assets Cash $ 1,003,403 $ 938,147 Accounts Receivable 0 153,711 Total Current Assets $ 1,003,403 $1,091,858 Property and Equipment, Net (Note 2) 291,438 305,862 Other Assets Goodwill (Note 2)-net of amortization of $13,750 and 36,250 38,750 $11,250 Total Assets $ 1,331,091 $1,436,470 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 140,777 $ 105,049 Stockholders' Equity Preferred Stock: $0.0001 Par Value; Authorized Shares, 5,000,000 shares; Issued and None None Outstanding, None Common Stock: $0.00001 Par Value; Authorized Shares, 200,000,000; Issued and Outstanding, 49,264,808, 49,264,808 at March 31, 2001 and December 31, 2000, respectively 492 492 Additional Paid In Capital 3,555,924 3,555,924 Loss Accumulated During the Development Stage (2,366,102) (2,224,995) Total Stockholders' Equity $ 1,190,314 $ 1,331,421 Total Liabilities and Stockholders' Equity $1,331,091 $1,436,470
ENTHEOS TECHNOLOGIES, INC. INTERIM CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (Unaudited)
For The Three Months For The Three Months Ended March 31, 2001 Ended March 31, 2000 -------------------- -------------------- Revenues $ 64,841 $ 0 Cost of Revenues 0 37,757 Gross Profit $ 27,084 $ 0 Expenses General and Administrative 181,646 200,385 Total Expenses $ 181,646 $ 200,385 Other Income Interest Income 13,455 23,847 Net Income (Loss) Available to Common $ (141,107) $ (176,538) Stockholders Basic Loss Per Common Share $ (0.003) $ (0.003) Basic Weighted Average Common Shares 49,264,808 49,264,808 Outstanding
ENTHEOS TECHNOLOGIES, INC. INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (Unaudited)
Three Months Ended Three Months Ended March 31, 2001 March 31, 2000 -------------- -------------- Cash Flows From Operating Activities Net Loss $ (141,107) $ (176,538) Adjustments to Reconcile Net Loss to Net Cash Used By Operating Activities Depreciation 16,924 4,341 Changes in Assets and Liabilities (Increase) Decrease in Accounts Receivable 153,711 (Increase) Decrease in Prepaid Rent (10,819) (Increase) Decrease in Security Deposits (5,230) Increase (Decrease) in Accounts Payable 35,728 11,637 Total Adjustments 206,363 (71) Net Cash Used By Operating Activities 65,256 (176,609) Cash Flows From Investing Activities 0 0 Cash Flows From Financing Activities 0 0 Increase (Decrease) in Cash and Cash Equivalents 65,256 (176,609) Cash and Cash Equivalents, Beginning of Year 938,147 1,905,478 Cash and Cash Equivalents, End of Year $ 1,003,403 $ 1,728,869
ENTHEOS TECHNOLOGIES, INC. INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000 (Unaudited) Supplemental Information
Three Months Ended Three Months Ended March 31, 2001 March 31, 2000 -------------- -------------- Cash Paid For: Interest $ 0 $ 0 Income Taxes $ 0 $ 0
ENTHEOS TECHNOLOGIES, INC. NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2001 AND 2000 NOTE 1 - PRESENTATION OF INTERIM INFORMATION The accompanying unaudited interim financial statements have been prepared in accordance with Form 10QSB and in the opinion of management of Entheos Technologies, Inc. (the Company), include all normal adjustments considered necessary to present fairly the financial position as of March 31, 2001 and the results of operations for the Three months ended March 31, 2001 and 2000. These results have been determined on the basis of generally accepted accounting principles and practices and applied consistently with those used in the preparation of the Company's 2000 Annual Report in Form 10KSB. Certain information and footnote disclosures normally included in the financial statements presented in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that the accompanying unaudited interim financial statements be read in conjunction with the financial statements and notes thereto incorporated by reference in the Company's 2000 Annual Report in Form 10KSB. NOTE 2 - PROPERTY AND EQUIPMENT Property and Equipment consists of the following at March 31, 2001:
Computer Equipment $ 413,808 Computer Software 70,890 Furniture and Fixtures 11,614 Total $ 496,312 Less Accumulated Depreciation 204,874 Net Book Value $ 291,438
Depreciation expense charged to operations during 2001 was $14,424. Intangible assets represent the Company name and the Company amortizes the Intangible assets using the straight-line method over its estimated useful life- 5 years. Amortization Expenses charged to operations during 2001 was $2,500. ITEM 2. Management's discussion and analysis of financial condition and results of operations When used in this discussion, the words "believes," "anticipates," "expects," and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Actual results, performance or achievements could differ materially from those anticipated in such forward looking statements as a result of numerous factors, including but not limited to the Company's ability to continually expand its subscriber base and opt-in email lists, market its services to potential advertisers, the regulatory environment in which the Company operates, future acceptance of its services and other factors described in the company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures made by the Company which attempt to advise interested parties of the factors which affect the Company's business, in this report, as well as the Company's periodic reports on Forms 10-KSB, 10QSB and 8-K filed with the Securities and Exchange Commission. Overview -------- Entheos Technologies Inc. ("Entheos" or the "Company"), through its wholly owned subsidiary, Email Solutions, Inc., operates as an Application Service Provider developing reliable, scalable, real time, high volume outsourced email services. The Company also operates a media streaming portal website (www.whatsonline.com) and a website focused on the home improvement market (www.callapro.com). On March 21, 2001, Entheos announced its plans to sell both of its online properties due to low traffic to and lack of meaningful revenues from the sites. Results of Operations --------------------- Revenues. The Company generated $64,841 in revenues for the three months ended March 31, 2001, versus $0 for the same period in 2000. To date, the Company has not relied on revenues for funding. Although planned operations have commenced, there has no significant revenues derived therefrom. General and Administrative Expenses. During the three months ended March 31, 2001, the Company incurred $181,646 in general and administrative expenses, a decrease of 9.3% from first quarter 2000 expenses of $200,385. This decrease in the first quarter is primarily due to lower salary expenses and reflect a reduction in the ongoing costs of developing the Company's web properties. Interest Income. Interest income was $13,455 and $23,847 for the three month period ended March 31, 2001 and 2000, respectively. Interest earned in the future will be dependent on Company funding cycles and prevailing interest rates. Provision for Income Taxes. As of March 31, 2001, the Company's accumulated deficit was $2,366,102 and as a result, there has been no provision for income taxes to date. Net Loss. For the three months ended March 31, 2001, the Company recorded net loss of $141,107 or $0.003 per share, compared to a net loss of $176,538, or $0.003 per share, for the same period in 2000. Liquidity and Capital Resources ------------------------------- As at March 31, 2001, the Company had a cash balance of $1,003,403, compared to $938,147 as at December 31, 2000. The Company has financed its operations primarily through cash on hand during the three month period ending March 31, 2001. Net cash used by operating activities was $65,256 for the three month period ending March 31, 2001, compared to net cash used of $176,609 for the same period in 2000. This change was primarily due to a decrease in accounts receivable of $153,711 and an increase in accounts payable of $35,728. The Company's future funding requirements will depend on numerous factors. These factors include the Company's ability to operate its business profitably in the future, recruit and train qualified management, technical and sales personnel, and the Company's ability to compete against other, better capitalized corporations who offer similar web based services. The Company may raise additional funds through private or public equity investment in order to expand the range and scope of its business operations. The Company may seek access to the private or public equity but there is no assurance that such additional funds will be available for the Company to finance its operations on acceptable terms, if at all. 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 Financial Data Schedule (b) Reports on Form 8-K None Signature Page Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ENTHEOS TECHNOLOGIES, INC /s/ Kesar S. Dhaliwal --------------------- Kesar S. Dhaliwal CEO and President /s/ Harmel S. Rayat ----------------- Harmel S. Rayat Director and Chairman /s/ Herdev S. Rayat ----------------- Herdev S. Rayat Director, Secretary & Treasurer Dated: May 10, 2001