FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: September 30, 2001
Commission file number: 333-48312
FreewillPC.com, Inc.
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(exact name of registrant as specified in its charter)
Nevada 75-2877111
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(State of Incorporation) (IRS ID No.)
709-B West Rusk, Suite 500, Rockwall, Texas 75087
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 972-772-5930
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past twelve 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 [ ].
Shares of common stock outstanding at September 30, 2001:
4,422,000
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page Number
Item 1. Financial Statements - these statements have
been reviewed by an independent public accountant 1 - 6
Item 2. Managements's Discussion and Analysis
of Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION 8
FREEWILLPC.COM, INC.
a Development Stage Company
CONDENSED BALANCE SHEETS
September 30, 2001 and December 31, 2000
ASSETS
Sept 30, 2001 Dec 31, 2000
(Unaudited)
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CURRENT ASSETS:
Cash $50,122 $4,480
Accounts receivable 6,217
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Total current assets 56,339 4,480
PROPERTY AND EQUIPMENT:
Website (net of $4,444 and $1,945 amortization respectively) 5,556 8,055
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TOTAL ASSETS $61,895 $12,535
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable $13,042 $6,947
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 25,000,000 authorized,
4,422,000 and 4,200,000 shares issued and outstanding
at September 30, 2001 and December 31, 2000 respectively 4,422 4,200
Additional paid-in-capital 56,578 10,400
Deficit accumulated during the development stage (12,147) (9,012)
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Total Stockholders' Equity 48,853 5,588
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $61,895 $12,535
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See notes to unaudited condensed financial statements F-1
FREEWILLPC.COM, INC.
a Development Stage Company
CONDENSED STATEMENT OF OPERATIONS
Three months and nine months ended September 30, 2001 and 2000, and
Period from inception (June 13, 2000) to September 30, 2001
Period from Period from
June 13, 2000 June 13, 2000
Three months Three months Nine months (Date of inception)(Date of inception)
ended ended ended to to
09/30/01 09/30/00 09/30/01 09/30/00 09/30/01
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------------------------- -------------------------------- ------------------
REVENUE:
Sales $6,217 $0 $10,459 $1,429 $16,128
COST OF SALES: 4,923 0 8,220 1,318 13,228
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GROSS PROFIT 1,294 0 2,239 111 2,900
OPERATING EXPENSE:
Depreciation and amortization 833 833 2,500 1,111 4,445
Consulting - related party 3,500 3,500
General and administrative 971 436 2,874 745 7,102
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Total Operating Expense 1,804 1,269 5,374 5,356 15,047
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NET LOSS ($510) ($1,269) ($3,135) ($5,245) ($12,147)
=============================================================== ==================
Weighted average shares outstanding 4,245,848 4,200,000 4,215,451 4,198,165 4,208,477
=============================================================== ==================
Loss per share - basic and diluted ($0.00) ($0.00) ($0.00) ($0.00) ($0.00)
=============================================================== ==================
See notes to unaudited condensed financial statements F-2
FREEWILLPC.COM, INC.
a Development Stage Company
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT
Period from inception (June 13, 2000) to September 30, 2001
Common Stock Paid In Accumulated
Shares Amount Capital Deficit Total
--------------------------------------------------------------- ------------------
Balance,
June 13, 2000
(date of inception) -0- -0- -0- -0- -0-
Shares issued on June 13, 2000 for:
Cash 500,000 500 500
Services 3,500,000 3,500 3,500
June 15, 2000 for:
Website development 200,000 200 9,800 10,000
Paid in capital by shareholder 600 600
Net Loss (9,012) (9,012)
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Balance
December 31, 2000 4,200,000 $4,200 $10,400 ($9,012) $5,588
=============================================================== ==================
Sale of common stock 222,000 222 55,278 55,500
Expenses of offering (10,000) (10,000)
Paid in capital by shareholder 900 900
Net Loss (3,135) (3,135)
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Balance
September 30, 2001 4,422,000 4,422 56,578 (12,147) 48,853
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See notes to unaudited condensed financial statements F-3
FREEWILLPC.COM, INC.
a Development Stage Company
STATEMENT OF CASH FLOWS
Three months and nine months ended September 30, 2001 and 2000, and
Period from inception (June 13, 2000) to September 30, 2001
Period from Period from
June 13, 2000 June 13, 2000
Three months Three months Nine months (Date of inception)(Date of inception)
ended ended ended to to
09/30/01 09/30/00 09/30/01 09/30/00 09/30/01
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------------------------- -------------------------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($510) ($1,269) ($3,135) ($5,245) ($12,147)
Adjustments to reconcile net loss to net
cash (used) by operating activities:
Increase (decrease) in accounts payable 9,788 (1,214) 6,095 104 13,042
Decrease (increase) in accounts receivable (6,217) (6,217) (6,217)
Items not requiring cash:
Stock issued for services 3,500 3,500
Amortization 833 833 2,499 1,111 4,444
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NET CASH (USED) BY OPERATING ACTIVITIES: 3,894 (1,650) (758) (530) 2,622
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of assets 0 0 0 0 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock (net of offering expense) 45,500 0 45,500 500 46,000
Payment of expense by shareholder 300 300 900 300 1,500
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Total cash flows from financing activities 45,800 300 46,400 800 47,500
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NET INCREASE IN CASH $49,694 ($1,350) $45,642 $270 $50,122
CASH, BEGINNING OF PERIOD 428 1,620 4,480 0 0
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CASH, END OF PERIOD $50,122 $270 $50,122 $270 $50,122
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Note:
Non-cash investing activity - the company issued 200,000 shares valued at $0.05
per share for a total of $10,000 for development of its website.
See notes to unaudited condensed financial statements F-4
FREEWILLPC.COM, INC.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
September 30, 2001
Note A - Presentation
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The accompanying condensed financial statements have been prepared by the
Company without audit and reflect all adjustments, consisting of normal
recurring adjustments, accruals, and other items which are, in the opinion of
management, necessary for a fair statement of the financial position of the
Company as of September 30, 2001, and the related results of operations and cash
flows for the interim periods indicated. The results of operations covered are
not necessarily indicative of the results to be expected for the full year or
any other interim period.
The statements have been prepared in accordance with the regulations of the
Securities and Exchange Commission; accordingly, certain information and
footnote disclosures normally included in annual financial statements prepared
in accordance with accounting principles generally accepted in the United States
have been condensed or omitted. The financial statements should be read in
conjunction with the audited financial statements and notes thereto of
FreewillPC.com, Inc. for the period June 13, 2000 (date of inception), to
December 31, 2000, which are included in the Company's Form SB-1 filed with the
Securities and Exchange Commission.
Note B - Common Stock Issuances
-------------------------------
On June 13, 2000, the Company issued 4,000,000 shares to the President for
$4,000, comprised of $500 cash and $3,500 of his services. The services were
valued at $3,500 and the stock issued at par since it was impossible to
determine the fair value of the services. The common stock was issued upon
formation of the Company for services performed before, during and after
formation of the Company.
On June 15, 2000, the Company issued to an unrelated party 200,000 shares for
the development of its website valued at $10,000. The value assigned of to the
website development was fair market value but the number of shares issued for
this website was negotiated and determined by the Company and the developers of
the website since there was no readily determinable market value for the shares.
The basis for valuing the shares at $0.05 per share, which is substantially
below the offering price per share to the public, is that the developers were
giving services in exchange for stock before offering shares to the public and
the website was a prerequisite for the Company to start in business which then
allowed the Company to offer shares to the public. The value substantially below
the public offering price was negotiated since the developers were not
guaranteed that the Company would be able to sell stock to the public and no
guarantee that the Company would be successful. The value of $0.05 per share is
substantially above the price the President paid two days earlier since the
President developed the plan for the Company over a period of time, formed the
Company, and purchased shares immediately upon formation; the plan included the
filing of a registration statement with the U.S. Securities and Exchange
Commission to raise funds at $0.25 per share.
F-5
FREEWILLPC.COM, INC.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
September 30, 2001
Note B - Common Stock Issuances - (continued)
---------------------------------------------
On July 26, 2001, the Company's Form SB-1 registration statement with the U.S.
Securities & Exchange Commission became effective and allows the Company to sell
registered common stock to fund the Company with a minimum of $50,000 and a
maximum of $500,000, which represents 200,000 shares of common stock if the
minimum is sold and 2,000,000 shares of common stock if the maximum is sold. As
of September 30, 2001, the Company had sold 222,000 shares for $55,500 under
this registration statement.
Note C - Ability to Continue Operations
---------------------------------------
The Company's financial statements as of December 31, 2000 included in the Form
SB-1 filing, contains a disclosure expressing substantial doubt regarding
Freewill's ability to continue as a going concern. The Company has begun to
raise additional capital. The future capital need swill be highly dependent on
our ability to control expenses as well as the market's demand for Freewill's
services and products. Thus, any projections of future cash needs and cash flows
are subject to substantial uncertainty.
F-6
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
The Registrant filed a registration statement on Form SB-1 with the Securities
and Exchange Commission to raise a minimum of $50,000 and a maximum of $500,000
which became effective on July 26, 2001. The Registrant has raised funds under
that registration statement and as of September 30, 2000 had sold 222,000 shares
by raising $55,500 and broken escrow. The Registrant continues to solicit funds
under this Registration statement and is focusing most of its efforts on raising
funds. Under this offering, the Registrant was authorized to sell a minimum of
200,000 shares and a maximum of 2,000,000 shares at $0.25 per share, for a
maximum of $500,000.
As of the date of this filing, the Registrant is still soliciting funds under
its offering, and spending most of its time and effort to raise those funds.
The Registrant is engaged in the sale of computers and computer peripheral
products over the internet. We have done some limited marketing and have pursued
combining computer consulting and sales as a way to increase our margins and
visibility among small businesses. This allows us to target small businesses and
offer them some sort of support which indirectly steers them to our website,
even if we do not provide computer advice or consulting to them. We expect this
will cause small businesses to think of us first in the future when they go to
buy computers and/or computer peripheral equipment. We expect that we will
finish our offering in the fourth quarter and do more advertising and product
and website promotion after the offering is closed.
Liquidity
The Registrant has liquid assets of $56,339 and total current assets of $56,339.
This amount includes the $55,500 of funds raised in the offering described
above. The Registrant has minimal expenses and no commitments.
Capital Resources
The Registrant's capital resources have been generated from the sale of products
through its web site and has capital resources from the sale of stock under its
registration statement that became effective July 26, 2001.
There were no plans or requirements for purchase of capital items during the
quarter for company purposes. The Registrant does not foresee any material
capital purchase in the coming twelve months.
7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not involved in any legal proceedings.
Item 2. Changes in Securities.
Registrant has made no changes in its securities.
Item 3. Defaults Upon Senior Securities.
Registrant has no senior securities and accordingly no
defaults.
Item 4. Submission of Matters to a Vote of Security Holders.
Registrant submitted no matters to a vote of security holders.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
None.
8
Pursuant to the requirements 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.
FreewillPC.com, Inc.
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(Registrant)
BY: /s/ David McCune
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David McCune
Its: President and Secretary
DATE: November 15, 2001
Rockwall, Texas