FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] 15,ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: 3/31/02
OR
[ ]15,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 -
Email Mortgage.com, Inc.
(Exact name of Registrant as specified in its charter)
Colorado 84-1565820
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5650 Greenwood Plaza Boulevard, Suite 201
Greenwood Village, CO 80111
(Address of principal executive offices) (Zip Code)
303-575-1155
(Address and telephone number of registrant's principal
executive offices and principal place of business.)
Securities registered pursuant to
Section 12(b) of the Act: None
Securities registered pursuant to
Section 12(g) of the Act: Common Stock,
$.001 par value
Check whether the Company (1) has filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act during the preceding 12
months (or such shorter period that the Company was
required to file such reports), and (2) has been
subject to such filing requirements for at least
the past 90 days.
Yes __x__ No _____
Check if there is no disclosure of delinquent
filers in response to Item 405 of Regulation S-B is
not contained in this form, and no disclosure will
be contained, to the best of Company's knowledge,
in definitive proxy or information statements
incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.
[ x ]
2
The Company's revenues for its most recent fiscal
year were $1,750. As of March 31, 2002, the market
value of the Company's voting $.00l par value
common stock held by non-affiliates of the Company
was $102,200.
The number of shares outstanding of Company's only
class of common stock, as of March 31, 2002 was
2,501,400 shares of its common stock. Check whether
the Issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of
the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes __x__ No _____
No documents are incorporated into the text by
reference.
Transitional Small Business Disclosure Format
(check one)
Yes No x
-------- --------
3
PART I
ITEM 1. BUSINESS
We are a direct facilitator to wholesale banks with
a complete mortgage product mix. We provide
lender direct pricing and convenience by
facilitating the mortgage process in matching the
borrower with an appropriate wholesale bank, plus
we give the personal attention and service that you
would get from a mortgage broker.
Email Mortgage assists whole mortgage banks in
obtaining the necessary information to provide a
wide variety of mortgage products including:
- conventional loans up to $275,000,
- loans that allow income and asset sections
of loan applications to remain blank, and
- loans that do not meet the requirements of
Fannie Mae, an agency that sets guidelines for
loans they will purchase.
Based on in-house research, Email Mortgage will
facilitate some of the best home equity loans
available. Email Mortgage will work with
wholesale banks to provide a line of high loan to
value, no income verification, stated income loans
available in that we do not verify the amount of
income stated on a loan application. These no
income verification stated income loans can finance
100% of the value of a home.
Email Mortgage currently has approval to act as a
retail agent with MidAmerica Mortgage Corp.,
Countrywide Home Loans and GB Home Equities. We
do not have binding contracts with any of these
lenders. We retain a percentage of the loan. A
published rate sheet is available daily setting out
the daily percentage rate. The rate is based on
the current interest rate and ranges from 1/2% to 1
1/4% of each loan. We retain this revenue as
well as a separately negotiated origination fee for
the mortgage transaction.
We expect to get leads and then generate revenue
from our website by placing our link to the website
on various realtors' websites by direct link.
We have not generated significant revenues from
these activities at this time. As volume of
business increases, expenses will also increase as
our employees begin to draw salaries. We will
enter into written employment agreements with our
current officers and key employees yet to be named.
To date, no specific terms have been negotiated.
4
Business Strategy. We will utilize the expertise
of our principal officers to develop lending
opportunities. Each individual will use his
previous business contacts to develop potential
opportunities. Additionally, we shall sell our
services through our employees and authorized
representatives. Our management has extensive
experience in the mortgage industry.
We shall equip our offices with a network of
personal computers that will allow our staff to
access e-mail, the Internet and a collection of
applications designed to optimize the productivity
of our staff.
We will use high speed modem communications and the
most current loan processing software that
interfaces directly with the Fannie Mae System and
several credit reporting software companies.
Internet. We will utilize the Internet as a
medium for delivery of specific content as well as
automated interactive functionality, pursuing
several major purposes:
Provide mortgage professionals with interactive
automated tools to improve their efficiency and
effectiveness in the processes of mortgage
origination, placement, tracking, analysis, and
processing.
Increase market visibility of pricing and mortgage
rates to a wider variety of clients.
Provide a wide range of users the most favorable
and competitive mortgage rates as well as an
efficient mechanism to obtain additional
information.
We have entered into an oral agreement with E-Mail
RealEstate, an affiliated corporation to expand the
retail market for real estate and to create a
comfortable market environment for buyers,
including market research as well as assistance in
the accomplishment of the sale. We agreed to pay
Email RealEstate beginning January 1, 2001, $20 per
month per realtor that has a website on Email
RealEstate that includes a hotlink to
EmailMortgage.
Through our oral agreement with E-mail RealEstate,
we intend to provide substantially increased
efficiency to the primary and secondary real estate
market participants by:
5
- offering a full range of real estate
listings.
- offering a wide range of information
regarding the specific properties.
- offering a list of real estate brokers; real
estate broker information.
While maintaining the privacy of the respective
institutions, we will track the untapped
inventories of the real estate market and present
these inventories to potential buyers. We will
also offer all pertinent financing information.
Online mortgage brokering is in the development
stage on the Internet. The product is well-suited
for online distribution, with a high informational
content, a lack of differentiation between
different producers, a fragmented market, and
existing inefficiencies in distribution. Based on
our in-house research, the existing lenders have
been slow to pick up on the potential of the
Internet as a medium and may not have the
technological expertise or confidence to exploit
the channel even if they do grasp its strategic
importance.
WWW.EmailMortgage.com. Since inception, we have
worked on developing our website. This website
allows realtors to send loan applications directly
to us for approval. We have enhanced the website
to permit realtors to use the site to:
- fill out loan applications for prospective
borrowers,
- check the status of a previously submitted
application and
- to interact with us during the loan process.
Marketing Strategy. We will use hotlinks with
different established websites to display internet
banners on the their home web page. We have
already advertised on local television stations and
local cable stations. We own our production tapes
for these commercials. We will also use other
inexpensive advertising such as magazines and
newspapers. We will commence negotiations with
the various established websites in the near future
so that the marketing can commence upon successful
completion of this offering.
Competition. We will compete by price and
service. The prices or price ranges for our
products and service will vary depending on
services provided.
6
The market for Internet products and services is
highly competitive and competition is expected to
continue to increase significantly. There are no
substantial barriers to entry in these markets, and
we expect that competition will continue to
intensify. Although we currently believe that the
diverse segments of the Internet market will
provide opportunities for more than one supplier of
products and services similar to ours, it is
possible that a single supplier may dominate one or
more market segments. We will compete with many
other providers of informational services on the
Internet.
In addition, we also compete directly with other
information dissemination entities. E-Loan and
Quicken Mortgage are companies that offer similar
services on the Internet.
Government Regulation. In Colorado, no licenses
are required to conduct operations in the mortgage
industry. As we expand, we may be subject to
various state regulations which could require
substantial compliance and result in additional
costs.
ITEM 2. PROPERTIES.
Email Mortgage.com, Inc.'s principal executive and
administrative offices are at 5650 Greenwood Plaza
Boulevard, Suite 201, Greenwood Village, Colorado
80111. These offices consist of 700 square feet
and are leased on a monthly basis at the lease
price of $650 per month.
ITEM 3. LEGAL PROCEEDINGS.
Email Mortgage.com, Inc. is not involved in any
legal proceedings at this date.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS.
During the fourth quarter of the fiscal year ended
March 31, 2002, no matters were submitted to a vote
of Email Mortgage's security holders, through the
solicitation of proxies.
7
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Market Information. Email Mortgage's common
stock has been listed on the OTC Bulletin Board
maintained by the NASD since March 2002.
Quarter Ended High Bid Low Bid
3-31-02 $.40 $.21
Holders. The approximate number of holders of
record of Email Mortgage $.001 par value common
stock, as of July 10, 2002 was 40.
Dividends. Holders of Email Mortgage's common
stock are entitled to receive such dividends as may
be declared by its board of directors.
Tradability. We do not meet the requirements for
our stock to be quoted on NASDAQ and the
tradability in our stock will be limited under the
penny stock regulation.
If the trading price of our common stock is less
than $5.00 per share, trading in the common stock
would also be subject to the requirements of Rule
15g-9 under the Exchange Act. Under this rule,
broker/dealers who recommend low-priced securities
to persons other than established customers and
accredited investors must satisfy special sales
practice requirements. The broker/dealer must make
an individualized written suitability determination
for the purchaser and receive the purchaser's
written consent prior to the transaction.
SEC regulations also require additional disclosure
in connection with any trades involving a "penny
stock", including the delivery, prior to any penny
stock transaction, of a disclosure schedule
explaining the penny stock market and its
associated risks. Such requirements severely limit
the liquidity of the common stock in the secondary
market because few broker or dealers are likely to
undertake such compliance activities. Generally,
the term penny stock refers to a stock with a
market price of less than $5.00 per share.
8
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Trends and Uncertainties. Demand for Email
Mortgage's project will be dependent on, among
other things, market acceptance of the Email
Mortgage.com concept, the quality of its services,
and general economic conditions, which are cyclical
in nature. Inasmuch as a major portion of Email
Mortgage's activities will be the receipt of
revenues from our services, Email Mortgage's
business operations may be adversely affected by
Email Mortgage's competitors and prolonged
recessionary periods.
Capital and Source of Liquidity. Prior to the
recent offering, all of the initial working capital
was obtained from the sale of common shares to the
current officers, directors and principal
shareholder ($2,650) and loans from a related party
of ($70,325). We raised $251,400 through the
sale of common stock in our recent public offering.
Email Mortgage may require additional loans to
expand our current and strategic business plans.
We do not have any funding arrangements with any
third party or any affiliates, including the
Clarkson Trust.
For the year ended March 31, 2002, we received
proceeds from the sale of common stock of $250,500,
loans from a related party of $10,400 and repaid
$67,745 in related party loans, made advances to
affiliated company of $22,000 and repaid affiliate
advance of $15,0000 resulting in net cash provided
by financing activities of $186,155.
For the year ended March 31, 2002, we received
loans from a related party of $51,425 and sold
common stock for cash of $2,650 resulting in net
cash provided by financing activities of $54,075.
For the year ended March 31, 2002 and 2001, we did
not pursue any investing activities.
On a long-term basis, liquidity is dependent on
continuation and expansion of operation and receipt
of revenues, additional infusions of capital, and
debt financing. Email Mortgage believes that
The proceeds received from its recent public
offering will allow Email Mortgage to increase its
marketing and sales efforts and thereafter result
in revenue and greater liquidity in the long term.
However, there can be no assurance that Email
Mortgage will be able to obtain additional equity
or debt financing in the future, if at all.
9
Results of Operations. Since inception, Email
Mortgage has not received any significant revenues
from operations. For the year ended March 31,
2002, we received revenue of only $1,750 from loan
processing fees. We had a net loss of $45,036 for
the year ended March 31, 2002. Operating expenses
for that same period were $33,353 consisting of
loan processing costs of $750, professional fees of
$43,349, rent of $3,250 and other expenses of
$1,004.
For the year ended March 31, 2001, we received
revenue of $1,500. We had a net loss of $68,106
for the year ended March 31, 2001. Operating
expenses for that same period were loan processing
costs of $5,800, professional fees of $13,550,
consulting services of $10,000, web site design
expenses of $23,500, rent of $3,450 and other
expenses of $11,806.
Plan of Operation. Email Mortgage is in the
development stage and has not conducted any
significant operations to date or received
significant operating revenues. Email Mortgage can
satisfy our cash requirements in the next twelve
months with the proceeds from the current offering.
We will not need to conduct any research and
development regarding our business plan.
We do not expect to purchase any plant or
significant equipment.
We agreed to pay Email RealEstate, an affiliate,
beginning January 1, 2001, $20 per month per
realtor that has a website on Email RealEstate that
includes a hotlink to EmailMortgage. If we do not
have sufficient funds to cover these payments, we
may have to use some of the proceeds of the current
offering or obtain additional financing through
debt or equity.
Email Mortgage may experience problems; delays,
expenses, and difficulties sometimes encountered by
an enterprise in Email Mortgage's stage of
development, many of which are beyond Email
Mortgage's control. These include, but are not
limited to, unanticipated problems relating to the
development of the system, manufacturing costs,
production and marketing problems, additional costs
and expenses that may exceed current estimates, and
competition.
10
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
Email Mortgage.com, Inc.
(A Development Stage Company)
We have audited the balance sheet of Email
Mortgage.com, Inc. as of March 31, 2002, and the
related statements of operations, changes in
stockholders' equity, and cash flows for the two
years then ended and for the period from inception
(March 28, 2000) to March 31, 2002. These
financial statements are the responsibility of the
Company's management. Our responsibility is to
express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with auditing
standards generally accepted in the United States
of America. Those standards require that we plan
and perform the audit to obtain reasonable
assurance about whether the financial statements
are free of material misstatement. An audit
includes examining on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as well
as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred
to above, present fairly, in all material respects,
the financial position of Email Mortgage.com, Inc.
as of March 31, 2002, and the results of its
operations and cash flows for the two years then
ended and for the period from inception (March 28,
2000) to March 31,
2002, in conformity with generally accepted
accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Dillon, Colorado
May 31, 2002
11
Email Mortgage.com, Inc.
(A Development Stage Company)
Balance Sheet
March 31, 2002
ASSETS
Current assets: 2002
Cash $ 143,114
Advances to affiliated company 7,000
-----------
Total current assets 150,114
-----------
$ 150,114
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,026
-----------
Total current liabilities 1,026
Loans from related parties 2,580
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value,
10,000,000 shares authorized, no shares
issued and outstanding -
Common stock, $.001 par value,
100,000,000 shares authorized, 2,500,500
shares issued and outstanding 2,501
Additional paid in capital 255,649
(Deficit) accumulated during
development stage (111,642)
-----------
146,508
-----------
$ 150,114
===========
See accompanying notes to financial
statements.
12
Email Mortgage.com, Inc.
(A Development Stage Company)
Statements of Operations
Years Ended March 31, 2002 and 2001 and
For the Period From Inception (March 28, 2000)
to March 31, 2002
Period From
Year Ended Inception To
March 31, March 31,
2002 2001 2002
Revenue:
Loan processing fees $ 1,750 $ 1,500 $ 3,250
Interest income 1,567 - 1,567
--------- --------- ----------
3,317 1,500 4,817
Operating expenses:
Loan processing costs 750 5,800 6,550
Professional fees 43,349 13,550 56,899
Consulting services - 10,000 10,000
Web site design expenses - 23,500 23,500
Rent 3,250 3,450 6,700
Other expenses 1,004 11,806 12,810
--------- --------- ----------
33,353 68,106 116,459
--------- --------- ----------
(Loss from operations) and
net (loss) $ (45,036) $ (66,606) $ (111,642)
Per share information:
Basic and diluted (loss) per
common share $ (0.02) $ (0.03) $ (0.05)
Weighted average shares
outstanding 2,375,250 2,216,667 2,279,250
See accompanying notes to financial
statements.
13
Email Mortgage.com, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
For the Period From Inception (March 28, 2000)
to March 31, 2002
Deficit
Additional Accumulated
Common Stock Paid-in During Develop-
ACTIVITY Shares Amount Capital ment Stage Total
Shares issued for cash
May 2000 @ $.001 2,200,000 $ 2,200 $ - $ - $ 2,200
October 2000 @.01 45,000 45 405 450
Shares issued for services
October 2000 @ $1.00 5,000 5 4,995 - 5,000
Net (loss) for the period
ended March 31, 2001 - - - (66,606)
(66,606)
-------- --------- ------- -------- --------
Balance, March 31,
2001 2,250,000 2,250 5,400 (66,606)
(58,956)
Sale of common stock for cash
in October 2001 251,400 251 250,249 - 250,500
Net (loss) for the year
ended March 31, 2002 - - - (45,036)
(45,036)
-------- --------- -------- -------- ---------
Balance, March 31,
2002 2,501,400 $ 2,501 $255,649 $(111,642) $ 146,508
See accompanying notes to financial
statements.
14
Email Mortgage.com, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended March 31, 2002 and 2001 and
For the Period From Inception (March 28, 2000)
to March 31, 2002
Period From
Year Ended Inception To
March 31, March 31,
2002 2001 2002
Net income (loss) $ (45,036) $ (66,606) $(111,642)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Services provided for common stock - 5,000 5,000
Expenses contributed to capital by shareholder - 8,500 8,500
Changes in assets and liabilities:
Increase in accounts payable 1,026 - 1,026
---------- --------- ---------
Total adjustments 1,026 13,500 14,526
---------- --------- ---------
Net cash provided by (used in)
operating activities (44,010) (53,106) (97,116)
Cash flows from financing activities:
Common stock sold for cash 250,500 2,650 253,150
Repayment of related party loans (67,745) - (67,745)
Advances to affiliated company (22,000) - (22,000)
Repayment of affiliate advance 15,000 - 15,000
Loans from related party 10,400 51,425 61,825
---------- -------- ---------
Net cash provided by (used in)
financing activities 186,155 54,075 240,230
---------- -------- ---------
Increase (decrease) in cash 142,145 969 143,114
Cash and cash equivalents,
beginning of period 969 - -
---------- -------- ---------
Cash and cash equivalents,
end of period $ 143,114 $ 969 $ 143,114
See accompanying notes to financial
statements.
15
Email Mortgage.com, Inc.
(A Development Stage Company)
Statements of Cash Flows
Years Ended March 31, 2002 and 2001 and
For the Period From Inception (March 28, 2000)
to March 31, 2002
Period From
Year Ended Inception To
March 31, March 31,
2002 2001 2002
------ ------ -----------
Supplemental cash flow information:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
See accompanying notes to financial
statements.
16
Email Mortgage.com, Inc.
Notes to Financial Statements
March 31, 2002
Note 1. Organization and Summary of Significant
Accounting Policies.
The Company was incorporated in Colorado on March
28, 2000 and began operations on May 25, 2000. The
Company's activities to date have been limited to
organization and capital formation. The Company
plans to engage in the residential mortgage
business via the use of an Internet website. The
Company has chosen March 31st as the end of its
fiscal year.
Revenue Recognition:
Revenue is recognized at the time the service is
performed.
Loss per share:
Basic Earnings per Share ("EPS") is computed by
dividing net income available to common
stockholders by the weighted average number of
common stock shares outstanding during the year.
Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-
average number of common stock shares outstanding
during the year plus potential dilutive instruments
such as stock options and warrants. The effect of
stock options on diluted EPS is determined through
the application of the treasury stock method,
whereby proceeds received by the Company based on
assumed exercises are hypothetically used to
repurchase the Company's common stock at the
average market price during the period. Loss per
share is unchanged on a diluted basis since the
assumed exercise of common stock equivalents would
have an anti-dilutive effect.
Cash:
For purposes of the statement of cash flows, the
Company considers all highly liquid debt
instruments purchased with maturity of three months
or less to be cash equivalents.
Estimates:
The preparation of the Company's financial
statements requires management to make estimates
and assumptions that affect the amounts reported in
the financial statements and accompanying notes.
Actual results could differ from these estimates
17
Fair value of financial instruments
The Company's short-term financial instruments
consist of cash and cash equivalents and accounts
payable. The carrying amounts of these financial
instruments approximate fair value because of their
short-term maturities. Financial instruments
that potentially subject the Company to a
concentration of credit risk consist principally of
cash. During the year the Company did not maintain
cash deposits at financial institutions in excess
of the $100,000 limit covered by the Federal
Deposit Insurance Corporation. The Company does
not hold or issue financial instruments for trading
purposes nor does it hold or issue interest rate or
leveraged derivative financial instruments
Intangible Assets and Long Lived Assets:
The Company makes reviews for the impairment of
long-lived assets and certain identifiable
intangibles whenever events or changes in
circumstances indicate that the carrying amount of
an asset may not be recoverable. Under SFAS No.
121, an impairment loss would be recognized when
estimated future cash flows expected to result from
the use of the asset and its eventual disposition
is less than its carrying amount. No such
impairment losses have been identified by the
Company for the period ended March 31, 2002.
Stock-based Compensation
The Company adopted Statement of Financial
Accounting Standard No. 123 (FAS 123), Accounting
for Stock-Based Compensation beginning with the
Company's first quarter of 1996. Upon adoption of
FAS 123, the Company continued to measure
compensation expense for its stock-based employee
compensation plans using the intrinsic value method
prescribed by APB No. 25, Accounting for Stock
Issued to Employees. Stock based compensation paid
by the Company during the period ended March 31,
2001 is disclosed in Note 3.
New Accounting Pronouncements
In June 2001, the Financial Accounting Standards
Board issued SFAS No. 141, Business Combinations
("SFAS 141), which is required to be adopted for
business combinations initiated after June 30,
2001. SFAS 141 prohibits the use of the pooling of
interest method of accounting.
18
Management believes that the adoption of SFAS No.
141 has had no impact on the Company for the year
ended February 28, 2002.
In June 2001, the Financial Accounting Standards
Board issued SFAS No. 142, Goodwill and Other
Intangible Assets ("SFAS 142), which is required to
be adopted for fiscal years beginning after
December 15, 2001. The Company plans to adopt SFAS
142 during the first quarter of its 2002 fiscal
year. SFAS 142 establishes accounting rules for
recording goodwill and other intangible assets. It
prohibits the amortization of goodwill and
intangible assets that have an indefinite useful
life. Such assets are required to be tested for
impairment on an annual basis. Company plans to
follow the requirements of SFAS 142 to account for
any merger that it may enter into.
Management believes that the adoption of SFAS No.
142 has had no impact on the Company for the year
ended March 31, 2002.
In August 2001, the Financial Accounting Standards
Board issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (SFAS
144), which is required to be adopted for fiscal
years beginning after December 15, 2001. SFAS 144
establishes accounting rules for recognition and
measurement of impairment losses of certain long-
lived assets.
Management believes that the adoption of SFAS No.
144 has had no impact on the Company for the year
ended March 31, 2002.
Note 2. Stockholders' Equity.
During May 2000, the Company issued 2,200,000
shares of it's restricted common stock to an entity
controlled by an individual who also controls an
entity that has made cash and other advances to the
Company. The shares were valued at $.001 per share
for an aggregate of $2,200 and this amount has
reduced the amount due the entity for cash
advances.
During October 2000, the Company issued 5,000 to a
consultant for services provided to the Company.
The fair value of the shares issued for the
services amounted to $1.00 per share and such value
is consistent with the proposed offering price in
it's initial public offering.
19
During October 2000, the Company issued an
aggregate of 45,000 shares of its common stock to
two individuals who are officers of the Company
aggregating $450 in private sale transactions. The
shares were sold at a price of $.01 per share.
During October 2001, the Company sold an aggregate
of 250,500 shares of its common stock for cash at
$1.00 per share.
Note 3. Commitments and contingencies
The Company leases its office facility on a month
to month basis.
The officers and directors of the Company are
involved in other business activities and may
become involved in other business activities in the
future. Such business activities may conflict with
the activities of the Company. The Company has not
formulated a policy for the resolution of any such
conflicts that may arise.
The Company has entered into an oral agreement with
E-Mail Real Estate.com, Inc. (Real Estate), an
affiliated corporation, whereby it will pay,
beginning January 1, 2001, $20 per month per
realtor that has a website included in Real
Estate's operations that includes a hotlink to the
Company's website. The Company has not incurred
any liability in connection with the oral agreement
as of March 31, 2002.
Note 4. Income Taxes
Deferred income taxes may arise from temporary
differences resulting from income and expense items
reported for financial accounting and tax purposes
in different periods. Deferred taxes are classified
as current or non-current, depending on the
classifications of the assets and liabilities to
which they relate. Deferred taxes arising from
temporary differences that are not related to an
asset or liability are classified as current or
non-current depending on the periods in which the
temporary differences are expected to reverse. The
Company had no significant deferred tax items arise
during any of the periods presented.
The Company has not provided for income taxes
during the years ended March 31, 2002 and 2001 as a
result of operating losses. The Company has a net
operating loss carryforward at March 31, 2002 of
approximately $111,000 which will expire if unused
in 2022. The Company has fully reserved the
20
deferred tax asset (approximately $37,700) that
would arise from the loss carryforward since the
Company cannot predict a level of operations that
would assure the utilization of the loss in future
periods. The reserve increased by approximately
$15,000 during the year ended March 31, 2002.
Note 5. Related Party Transactions
An individual who controls the entity that owns the
majority of the Company's outstanding common stock
also controls an entity that has advanced funds to
the Company and has paid expenses in behalf of the
Company.
During the year ended March 31, 2001, the entity
advanced $50,450 in cash to the Company and paid
expenses in behalf of the Company aggregating
$11,675. As discussed in Note 3, the Company
issued common stock to repay $2,200 of the cash
advanced. During the year ended March 31, 2002,
the related party loaned the Company $10,400 in
cash and the Company repaid $67,745 in cash. The
Company had an outstanding advance balance due the
related party of $2,580 at March 31, 2002.
During the year ended March 31, 2002, the Company
loaned $22,000 to an affiliated company and paid a
loan referral fee to another related company. As of
December 31, 2001, the affiliate had paid
professional fees in favor of the Company amounting
to $15,000 and the balance due from the affiliate
was $7,000 at that date.
During the year ended March 31, 2001, the Company
acquired ownership rights to an Internet website
known as "emailmortgage.com". The Company acquired
the website from an entity controlled by an
individual who also controls another entity that
owns a majority of the Company's common stock. The
amount paid for the development of the website by
the seller ($11,500) has been included in loans
from related parties at March 31, 2001. The
Company has charged the website cost to start up
expenses during the current year.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have not been any changes in or disagreements
with accountants on accounting and financial
disclosure.
21
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE
COMPANY
Executive Officers and Directors. Our executive
officers and directors and their business
experience follows:
Name Position
Dianne VandenBurg, age 41 President/Director
Gary Rothwell, age 61 Secretary/Treasurer/
Director
Resumes:
Dianne VandenBurg. Ms. VandenBurg has been
president and director of Email Mortgage since
inception. From 1993 to 1997, Ms. VandenBurg was
the Vice President for the Metrum Community Credit
Union. Her duties included teller and bookkeeping
that included balancing check books and returning
checks. She also originated and processed loans
for second mortgages, cars, installment loans.
Additionally, her duties included vice president
duties such as managing the credit union when the
president was not present.
From 1997 to 2000, Ms. VandenBurg was hired as a
manager of Centennial Banc Share's loan processing
department. Her duties included taking a loan
from origination to funding. Ms. VandenBurg also
administered Centennial's $5,000,000 warehouse
lines of credit. When Centennial Banc Share
acquired Entrust Mortgage, Ms. VandenBurg joined
Entrust as supervisor for the processing center.
Ms. VandenBurg has completed and is certified in
different classes in the lending business which
include:
- FHA Direct Endorsement underwriting classes
- Accounting courses
- Introduction to business
- Rex Johnson lending course
Gary Rothwell. Mr. Rothwell has been secretary,
treasurer and a director of Email Mortgage since
inception. From 1997 to present, Mr. Rothwell has
been involved in various aspects of the home
mortgage business for over 20 years. In 1977, he
was the president and founder of G & E builders,
Inc., an enterprise focused on the building,
22
marketing and sale of custom homes. In 1983 he
was issued a Series 7; general securities, and a
Series 24; general securities principals license.
In 1990, he became the sales manager for Yorkshire
Real Estate. His duties included the hiring and
training of real estate agents, advertising, public
relations and real estate loan applications, with
follow through from origination to closing.
Mr. Rothwell has been the owner of Tiffany Real
Estate since 1993. Tiffany Real Estate is a full
service real estate company dedicated to providing
customers with a complete program to fit their
needs when buying a home.
In 1997, Mr. Rothwell began working in the
residential mortgage lending business. He has
worked with lenders such as:
- Service Mortgage Corp
- Total Mortgage Professionals
- Mortgage Processing Services, and
- Mortgage 2000
He has been president of Merit Mortgage Corp. since
1997.
ITEM 10. EXECUTIVE COMPENSATION
Remuneration. To date, no material compensation
has been paid to the officers of Email Mortgage.
Prior officer and director, Mr. Naschinski received
5,000 common shares as partial compensation for his
services.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following tabulates holdings of common shares
of Email Mortgage (on a fully diluted basis) by
each person who, subject to the above at the date
of this prospectus, holds of record or is known by
management to own beneficially more than 5.0% of
the common shares and, in addition, by all
directors and officers of Email Mortgage
individually and as a group.
Number & Class Percentage of
Name and Address of Shares Shares
Dianne VandenBurg 125,000 1.00%
30954 Highway 24
Simla, CO 80835
23
Gary Rothwell 100,000 .80%
3299 E. Otero Circle
Littleton, CO 80111
The Clarkson Trust 11,000,000 87.95%
5650 Greenwood Plaza Boulevard
Suite 221
Greenwood Village, CO 80111
All Directors & Officers
as a group (2 persons) 225,000 1.80%
-------------------
Pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, beneficial
ownership of a security consists of sole or shared
voting power (including the power to vote or direct
the voting) and/or sole or shared investment power
(including the power to dispose or direct the
disposition) with respect to a security, whether
through a contract, arrangement, understanding,
relationship, or otherwise. Unless otherwise
indicated, each person indicated above has sole
power to vote, or dispose or direct the disposition
of all shares beneficially owned, subject to
applicable community property laws.
The trustee of the Clarkson Trust is Jerry Burden,
located at 5650 Greenwood Plaza Boulevard, Suite
221, Greenwood Village 80111, a U.S. citizen.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
An individual who controls the entity that owns the
majority of the Company's outstanding common stock
also controls an entity that has advanced funds to
the Company and has paid expenses in behalf of the
Company.
During the year ended March 31, 2001, the entity
advanced $50,450 in cash to the Company and paid
expenses in behalf of the Company aggregating
$11,675. As discussed in Note 3, the Company
issued common stock to repay $2,200 of the cash
advanced. During the year ended March 31, 2002,
the related party loaned the Company $10,400 in
cash and the Company repaid $67,745 in cash. The
Company had an outstanding advance balance due the
related party of $2,580 at March 31, 2002.
During the year ended March 31, 2002, the Company
loaned $22,000 to an affiliated company and paid a
loan referral fee to another related company. As of
24
December 31, 2001, the affiliate had paid
professional fees in favor of the Company amounting
to $15,000 and the balance due from the affiliate
was $7,000 at that date.
During the year ended March 31, 2001, the Company
acquired ownership rights to an Internet website
known as "emailmortgage.com". The Company acquired
the website from an entity controlled by an
individual who also controls another entity that
owns a majority of the Company's common stock. The
amount paid for the development of the website by
the seller ($11,500) has been included in loans
from related parties at March 31, 2001. The
Company has charged the website cost to start up
expenses during the current year.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
List of Exhibits
The following exhibits are filed with this report:
None
Reports on Form 8-K
None
25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended,
the Company has duly caused this Report to be
signed on its behalf by the undersigned duly
authorized person.
Date: July 8, 2002
By: /s/ Dianne VandenBurg
------------------------
Dianne VandenBurg
President
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this report has
been signed below by the following persons on
behalf of the Company and in the capacities and on
the dates indicated.
/s/Dianne VandenBurg, Principal Executive Officer July 8, 2002
-------------------- Principal Financial Officer
Controller Director
/s/Gary Rothwell Secretary/Treasurer July 8, 2002
-------------------- Director