=================================================================UNITED STATES

SECURITIES AND EXCHANGE COMMISSION450 Fifth Street, N.W.Washington, D. C.   20549_______________________

FORM 10-QSB

 

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2000

[   ] TRANSITION REPORT UNDER SECTION 14 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ____________ to ______________

Commission file number __000-30675___________

eMajix.com, Inc.

(Exact name of Small Business Issuer in its charter)

_____Oklahoma ____	               		_______73-1561191_______ 
(State of Incorporation)   		        (I.R.S. Employer Identification No.)

7450 South Winston Avenue

__________Tulsa, Oklahoma 74136_________

(Address of principal executive offices.)

 

Registrant's telephone number:     (918) 599-9555

 

As of August 31, 2000, there were 21,668,600 shares of Common Stock, $0.00005 par value, of the issuer outstanding .

 =================================================================

 
**INDEX**
 
**Part I.  FINANCIAL INFORMATION**
ITEM I.	Financial Statements (unaudited)

	Balance Sheets	

		June 30, 2000 and March 31, 2000		4

	Statement of Operations

		For the three months ended June 30, 2000 and 1999

		And for the period of March 31, 1999 to June 30, 2000		5

	Statement of Changes in Stockholders Equity		6

	Statement of Cash Flows

		For the three months ended June 30, 2000 and 1999

		And for the period of March 31, 1999 to June 30, 2000		7

	Notes to Financial Statements		8-11

ITEM 2.	Managements Discussion, Analysis of Financial Condition and Results of Operations, and plan of operation.		12-13

		

		**PART  II.   OTHER INFORMATION**
Item 1.	Legal Proceedings		14	

Item 2.	Changes in Securities		14

Item 3.	Defaults Upon Senor Securities		14

Item 4.	Submission of matters to a vote to security Holders		14

Item 5.	Other Information		14

Item 6.	Exhibits and Reports on Form 8-K		14
**	Signatures		15
****
 

 

2
**PART I   FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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3

eMajix.com, Inc.(A DEVELOPMENT STAGE COMPANY)BALANCE SHEETS

ASSETS 

	June 30,	March 31,    

	2000    	2000	

 	

Current assets:                         

	Cash 	$    15,743	$     27,060 

	Accounts receivable officer	4,000	-		

	Prepaid expense	___1,685	________-
  	Total current assets 	__21,428	      27,060

Equipment, net	__13,413	        2,416
Other assets:                      

	Deposits 	 850	-

	Licenses, net  (Note 2)	   __246,651	   252,975

		Total other assets	__247,501	_252,975	         

  	Total assets	                 $  282,342$   282,451 
   	

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:                         

	Accounts payable and accrued expense	$     8,862	$      4,620

 	Notes payable, current  (Note 4)	_100,000	   250,000 
	

	Total current liabilities 	_108,862	   254,620
Commitments and contingencies (Notes 1, and 5)     

Stockholders' equity:

Common stock, $.00005 par value; 

	200,000,000 shares authorized; 

	21,486,400 and 20,872,500 issued and outstanding		

	June 30, 2000 and March 31, 2000, respectively	1,075	1,044

Additional paid-in capital	242,040	36,931 

Deficit accumulated during the 

	development stage                  	              _ (69,635)	        (10,144)

	Total stockholders equity 	_173,480	     27,831

	Total liabilities and stockholders equity                               $  282,342   	 $  282,451 
See accompanying summary of accounting policies and 

notes to financial statements.

4

eMajix.com, Inc. 

(A DEVELOPMENT STAGE COMPANY)STATEMENTS OF LOSS 

 

                                                        		Date from   

                                                      		 Inception

                                      	  		     (March 30,1999)  

	Three Months Ended			    to        

                                       	   June 30, 	June 30,	June 30,

                                        		2000	  1999         	2000 

Revenues                     		$          -	$          - 	      $         -

Operating expenses:                               

 	 

	Consulting fees		13,624		18,824	

	Depreciation & amortization		6,912		6,912

	Other expense		5,411	35	8,048

	Payroll		12,000		12,000

	Professional services		13,448	250 	 13,698

	Shareholder expense		1,371		1,371

	Software expense		1,741		1,741

	Telephone expense		1,985		2,437	

	Travel expense 		____670	_______ 	___2,275
         Total operating expenses 		__57,162	 __    285	__67,306
Other expense				

	Interest expense		(2,329)	_______-	__(2,329)		

                                  					  

Net Loss		$  (59,491)	$ (   285)	$ (69,635)

Net loss per share basic   		 		$  (0.003)  	$  (0.00)

Weighted average number 

 of shares basic		21,168,018		3,000,000 

 

 

 

 

 

 

 

See accompanying summary of accounting policies andnotes to financial statements.

5

eMajix.com, Inc.(A DEVELOPMENT STAGE COMPANY)STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY 

                                        	Deficit
	 Accumulated
	Additional  	During the
	Common Stock 	  Paid-in     Development
                         	Shares	Amount	 Capital    	 Stage    	Total
Common stock issued for: 

	Cash at $0.001 per share 	19,000,000	$  960	$   8,385	-		$ 9,345	
	Cash at $0.0005 per share 	1,500,000	65	590	-		655	
	Cash at $0.333 per share	75,000	4	24,996	-		25,000

	 

	License agreement at 

	$0.01 per share	297,500	15	  2,960	-		2,975

Net loss    	____-____ 	  ____-_	____-___	$  (10,144)	    (10,144)	

Balance March 31, 2000	20,872,500	1,044	 36,931	  (10,144)	 27,831

 

Common stock issued for: 

	Cash at $0.333 per share	576,000	29	191,971	-	192,000	

	Services	37,900	2	13,138	-	13,140	

Net loss	____-____	____-_	____-___	(59,491)	(59,491)

Balance June 30, 2000	21,486,400	  $ 1,075	$242,040	$(69,635)	$173,480
	 

			

		
 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying summary of accounting policies and

notes to financial statements.

6

eMajix.com, Inc.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS

                                                        		Date from   

                                                      		 Inception

                                      	  		     (March 30,1999)  

	Three Months Ended	to        

                                       	   June 30, 	June 30,	June 30,

                                        		2000	  1999         	2000 

Cash flows from operating activities:                                 

Net (loss) 	$(59,491)	$ (285)	$ (69,635)

Adjustments to reconcile net loss to cash

 Provided (used) by operating activities:

	Depreciation and amortization	6,912		6,912

	Stock issued for services:	13,140		13,140

	Changes in operating assets and liabilities:                               

		Accounts receivable	(4,000)		(4,000)	Prepaid expense	(1,685)		(1,685)

		Accounts payable and accrued expense	__4,242	_____20	___8,862
	Net cash used in operating activities	(40,882)	      (265)	   (46,406)

Investing activities: Purchase of fixed assets	(11,585)	           	   (14,001)  

 Other assets	___(850)	______-_	___(850)

Cash used in investing activities 	(12,435)	       -      	_  (14,851)

Financing activities:                                 

	Note payable - related party		 	100,000

	Proceeds from sale of common stock 	192,000	   1,500	    227,000 

	Repayment of note payable 	(150,000)	   ________	       (250,000)     

Net cash provided by financing activities	 	      __42,000	   1,500	   77,000

Net increase (decrease) in cash	  	(11,317)	1,235	15,743

Cash, beginning of period		_27,060	         -    	__   -__
Cash, end of period 	$ 15,743	$  1,235	$  15,743

Supplemental disclosures of cash flow information:                                

Cash paid during the period for:                                 

	Interest                              	$          -	$       -	     $       - 
	Income taxes	$          -	$       -	   $        -
Noncash financing activities:                               

	Issuance of common stock in 

	exchange for ClearVideo license          	$      -     	   $      -       	 $      2,975

	Issuance of common stock for service 	 13,140		13,140

	Issuance of note payable in 

	exchange for ClearVideo license	  _______	        -       	   250,000

		$  13,140	$      -       	$ 266,115
See accompanying summary of accounting policies and

notes to financial statements.

7

eMajix.com, Inc.

(A DEVELOPMENT STAGE COMPANY)

SUMMARY OF ACCOUNTING POLICIES

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-QSB andItems 303 and 310(b) of Regulation S-B.  Accordingly, they do not include all of the information and footnotes required by generally accepted principles for complete financial statements.  In the opinion of management, all adjustments) consisting ofnormal recurring adjustments) considered necessary for a fair presentation have been included.  Operating results for the three month period ended June 30, 2000, are not necessarily indicative of the results that may be expected for the year ended March31, 2001.  For further information, refer to the financial statements and footnotes thereto included in the eMajix.com, Inc. or the "Company" audited financial statements for the year ended March 31, 2000 included in the Company Form 10-SB.

Nature of Business

eMajix.com, Inc. ("the Company") is a development stage enterprise which holds an exclusive license to 1) compile, display, use, copy and modify ClearVideo source code and create enhancements to the source code, 2)use the ClearVideo source code, its run-time versions and any derivatives created by the Company, 3) the right to manufacture for the purpose of distributing and sub-licensing products and services created by any derivatives to end users in run timeversions, 4) the right to sublicense the rights granted by the licensor to the Company, 5) and the right to enter into a research and development agreement with another entity for developing new products provided that the Company will own at least (50%)or more of the voting securities of such entity.  The Company intends to offer video compression services primarily for downloading and streaming high quality video with synchronized audio for use on the Internet, various advertising applications, for theradio, television, and cable broadcasting companies.  The Company was incorporated pursuant to the laws of the state of Oklahoma on March 30, 1999 as Southern Wireless, Inc.  The Company changed its name to Emajix.com, Inc. on April 5, 2000.

Cash Equivalents

For financial reporting purposes, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent.  Financial instruments, which potentially subject theCompany to a concentration of credit risk, consist of cash and cash equivalents.  Cash and cash equivalents consist of funds deposited with various high credit quality financial institutions.

Equipment

Equipment is recorded at cost.  Depreciation and amortization are provided using the straight-line method over the useful lives of the respective assets.  Major additions and improvements are capitalized.  Upon retirement or disposal,the cost and related accumulated depreciation or amortization are removed from the accounts and any gain or loss is reflected in operations. 

Licenses

The costs associated with acquiring exclusive licensing rights to patented technology have been capitalized and are being charged to expense using the straight line method of amortization over ten years, the estimated remaining usefullives of the patents.

8

eMajix. com, Inc.(A DEVELOPMENT STAGE COMPANY)

SUMMARY OF ACCOUNTING POLICIES

In accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long- lived Assets and for Long-lived Assets to be Disposed of", management of theCompany reviews the carrying value of its intangible assets on a regular basis.  Estimated undiscounted future cash flows from the intangible assets are compared with the current carrying value.  Reductions to the carrying value are recorded to the extentthe net book value of the property exceeds the estimate of future discounted cash flows.

Income Taxes

Income taxes are provided based on the liability method of accounting pursuant to SFAS No. 109, "Accounting for Income Taxes."  Under this approach, deferred income taxes are recorded to reflect the tax consequences on future years ofdifferences between the tax basis of assets and liabilities and their financial reporting amounts at each yearend.  A valuation allowance is recorded against deferred tax assets as management does not believe the Company has met the "more likely than not"standard imposed by SFAS No. 109 to allow recognition of such an asset.

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 ofcontingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheet for cash equivalents and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. 

Research and Development Costs

Research and development costs are charged to expense as incurred.

Net Loss Per Share

SFAS No. 128 requires dual presentation of basic EPS and diluted EPS on the face of all income statements for all entities with complex capital structures.   Basic EPS is computed as net income divided by the weighted average number ofcommon shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities.  The Company had dilutive potential common stock at June30, 2000, however, the diluted EPS has not been shown as the effect of the incremental shares would be antidilutive.  

 

 

 

 

 

 

9

eMajix.com, Inc.

(A DEVELOPMENT STAGE COMPANY)NOTES TO FINANCIAL STATEMENTS

1.   Development Stage Operations and Going Concern

The Company has been in the development stage since its inception.  The Company has no recurring source of revenue and has incurred losses since inception.  These factors raise substantial doubt about the ability to continue as a goingconcern.  The financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

Management of the Company has undertaken certain actions to address these conditions.  Management currently plans to commence production in the third quarter of this year.  To this end, management is currently in negotiations withpotential customers and with marketing representatives to establish a product channel.  Funds required to carry out management's plans are expected to be derived from future stock sales or borrowings from outside parties.  There can be no assurances thatthe Company will be successful in executing its plans.

2.   Licenses

In March 2000, the Company acquired exclusive licensing rights, from Iterated Systems, Inc., to compile, use, copy and modify ClearVideo Source Code and to create and manufacture products and services.Additionally, the license agreement provides that the Company may sublicense any products and services which it creates using the technology under the licensing agreement.  The license was acquired for  $250,000 and the issuance of 297,500 shares ofcommon stock, valued at $2,975. 

3.   Income Taxes

At June 30, 2000 and March 31, 2000, the Company had net deferred tax assets of approximately $20,200 and $3,500 respectively,  principally arising from net operating loss carryforwards for income tax purposes.  As management of theCompany cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at March 31, 2000. At June 30, 2000 and March31, 2000, the Company has net operating loss carryforwards totaling approximately $10,144, which will expire in the year 2015.

4.   Notes Payable

	Notes payable at June 30, 2000 and March 31, 2000, consist of the following:
		June 30,	March 31.

	     2000	  2000	

Non-interest bearing note payable to Iterated Systems, Inc.,

due on May 15, 2000, secured by all tangible and intangible

assets of the Company	$              -	     $	150,000

10% unsecured note payable to Ryan Corley, President of 

the Company, due on demand	   100,000		   100,000
	Total maturities, all current	$ 100,000		$  250,000
10

5.   Anti-Dilution Clause

The agreement with Iterated Systems, Inc., contains an anti-dilution clause whereby the percentage of ownership of the Company common stock by Iterated shall be no less than 1.25% of the total outstanding shares at any given time.This provision shall terminate after the last day of the first sixty (60) day period during which : (i) the common stock of the Company is traded on NASDAQ, or the American or the New York Stock Exchange and (ii) the Market Capitalization of the Companydoes not fall below fifty million dollars and (iii)  the 297,500 shares of common stock that Iterated received under the agreement become free trading Rule 144 stock or are covered by a registration statement in compliance with the Act and (iv) the shareprice of the Company shares traded on NASDAQ, the American Stock Exchange or the New York Stock exchange does not fall below $2.10.  This provision also terminates if Iterated sells or disposes of the shares that it received under this agreement.

6.   Stock Transactions

	During the quarter ended June 30, 2000, the Company issued 576,000 shares of its restricted Rule 144 Common Stock to two accredited individuals in exchange for $192,000 to help meet working capital needs.  The Company also issued37,900 shares of its restricted Rule 144 Common Stock to six different individuals for $13,140 in services provided to the Company during this quarter.

On June 8, 2000, the board of directors granted an employee and a member of the board of directors options to purchase 200,000 shares each of Company restricted Rule 144 Common Stock   at $.40 per share.  The options are exercisable atany time prior to June 8, 2003.  

7.   Subsequent Events

	Subsequent to June 30, 2000, the Company issued 57,000 shares of its restricted Rule 144 Common Stock to one individual for $19,000 in services provided to the Company.  Additionally, the Company issued 125,200 shares of itsrestricted Rule 144 Common Stock to two accredited individuals for $58,400 to help meet working capital needs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11
**Item2. 	Management Discussion and Analysis or Plan of Operation.**
The following plan of operation, discussion of the results of operations and financial conditions should be read in conjunction with the financial statements and related notes appearing in this report.

eMajix.com, Inc. (the "Company") is a development stage enterprise formed under the laws of the State of Oklahoma on March 30, 1999.   On March 17, 2000, the Company entered into an exclusive license agreement for theworld-wide rights to certain copyrighted and trademarked software, denoted as "ClearVideo", for fractal digitization and compression of video images with quality audio synchronization. ClearVideo can reduce video and audio files by approximately95-98% and virtually duplicate the quality of the original files.  ClearVideo should revolutionize how video with synchronized audio files are transmitted over both narrow and broadband lines.  With the compression results obtainable, almost any Internetuser should be able to download compressed audio and video files over ordinary analog connections or digital connections.  

The Company intends to commence marketing ClearVideo during the third quarter upon completion of modifications and updating of the source code for ClearVideo initially by licensing the technology to third parties, offering compressionservices, downloading and streaming services to customers.

The Company currently can satisfy it current cash requirements for approximately 45 days and has a plan in place to raise additional working capital by the sale of shares of the Company common stock to select perspective individuals.This plan should provide the additional necessary funds required to enable the Company to complete the updating and revisions to the source code until the Company can generate enough cash flow from operations to sustain its operations.

The Company does not anticipate any significant cash requirements for the purchase of any facilities.  The Company will be required to purchase additional equipment to provide compression services to prospective customers.

The Company currently has three full time employees on the payroll and five part time employees that are being compensated with shares of the Company restricted Rule 144 Common stock.  It is anticipated that the Company will need tohire an additional two or three full time employees in order to complete the updating of the source code and the commencement of marketing the product.  

The Company generated revenues of $-0- during the first fiscal quarter ended June 30, 2000, as compared to $-0- in the comparable period of the prior fiscal year.   The Company generated no revenue for the current fiscal period due tothe effort expended in updating the source code for the licensed ClearVideo software acquired in March of this year.  The Company expects to generate revenue upon the completion of the source code updates by the end of the third quarter.  

General and administrative (operating costs) for the Company totaled $57,162 during the current quarter as compared to $285 in the comparable period of the prior fiscal year. Most of the current period cost is comprised of consultingfees and payroll costs associated with the updating of the source code for ClearVideo, legal and professional fees incurred in preparation of the annual report for the year ended March 31, 2000 and the preparation and filing of the Form 10SB, and otheradministrative cost involved in setting up the Company in preparation for operations.  During the comparable period of the prior year the Company had no business activity.

Interest and financing cost totaled $2,329 during the quarter ended June 30, 2000 as compared to $-0- during the comparable quarter for 1999.

 

12

The Company did no record any tax expense during the current quarter or the comparable quarter a year-ago due to the net operating losses incurred during both periods.

Net loss for the three months ended June 30, 2000, was $59,491 that equated to loss per share of ($.003).  Net loss for the comparable quarter of 1999 was $285 that equated to a nil loss per share.  Virtually all of the 2000 loss wasdue to the costs incurred in consulting fees and payroll costs associated with the updating of the source code for ClearVideo, legal and professional fees incurred in preparation of the  annual report for the year ended March 31, 2000 and the preparationand filing of the Form 10SB

At June 30, 2000, the Company had cash and cash equivalents of $15,743 a decrease of $11,317 from March 31, 2000.  The decrease was due to expenditures relative to updating the source code for ClearVideo and legal and professional feesincurred in the annual examination of the Company financial statements and preparation of the Form10-SB.

Statement Regard Forward-Looking Statements.

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Exchange Act which represent the expectations or beliefs concerning future events that involve risks and uncertainties,including but not limited to the demand for Company products and services and the costs associated with such goods and services.  All other statements other than statements of historical fact included in this Quarterly Report including, withoutlimitation, the statements under "Managements Discussion and Analysis or Plan of Operations" and elsewhere in the Quarterly Report, are forward-looking statements.  While the Company believes that the expectations reflected in suchforward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct.

NO CURRENT TRADING MARKET FOR THE COMPANYS SECURITIES.  There is currently no established public trading market for the securities of the Company.  The Company intends to apply for admission to quotation of its securities on the NASDOTC Bulletin Board and, if and when qualified, it intends to apply for admission to quotation on the NASDAQ SmallCap Market.  There can be no assurance that an active or regular trading market for the common stock will develop or that, if developed, willbe sustained.  Various factor, such as operating results, changes in laws, rules or regulations, general market fluctuations, changes in financial estimates by securities analysts and other factors may have a significant impact on the market of theCompany securities.  The market price for the securities of public companies often experience wide fluctuations that are not necessarily related to the operating performance of such public companies such as high interest rates or impact of overseas markets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13
**PART II    OTHER INFORMATION**
Item 1.	Legal Proceedings

We are not a party to any material legal proceedings.

Item 2.	Changes in Securities

Not applicable

Item 3.	Defaults Upon Senor Securities

Not applicable

Item 4.	Submission of matters to a vote to security Holders

	At our annual meeting of Shareholders held on June 8, 2000, the following individuals were elected to the Board of Directors by the following votes cast at the meeting:

		For	Against
Louis J. Aloisio		16,147,000	-0-

Ryan Corley		16,147,000	-0-

Lonny Davis		16,147,000	-0-

W.H. Walker, Jr.	16,147,000	-0-

Shareholders also ratified the selection of Brown Graham & Company P.C. as the independent accountants for the year ended March 31, 2000 and the appointment of Brown Graham & Company P.C. as independent accountants for theCompany for the fiscal year ended March 31, 2001. There were 16,147,000 votes cast in favor of both proposals and no votes against both proposals.	

Item 5.	Other Information

Not applicable

Item 6.	Exhibits and Reports on Form 8-K

(a) 	Exhibits

	27 Financial Data Schedule

 

 

 

 

 

 

 

 

 

14
**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

		eMajix.com, Inc.______
		    (Registrant)	

	Dated:   September 5, 2000	/s/ Ryan Corley________ 
			     (Signature)

			Ryan Corley___________
			President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15**