Edgar Filing: NETMAXIMIZER COM INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 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 No. 0-28407
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NETMAXIMIZER.COM, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)

FLORIDA 65-0907899
------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

7491 North Federal Highway, C-5, Suite 262, Boca Raton, Florida 33487
---------------------------------------------------------------------
(Address of principal executive office)
(Zip Code)

(561) 750-2143
--------------------------------------------------
Registrant's telephone number, including area code)

4400 North Federal Highway, Suite 307, Boca Raton, FL 33431
-----------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed 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 registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No __
-

The number of shares outstanding of the issuer's Common Stock, $.001 par value,
as of November 12, 2001 was 40,450,480.

NETMAXIMIZER.COM, INC.

INDEX

Page
----------

Facing Sheet ....................................................... CoverPage
Index .............................................................. i
Part I - Financial Information
Item 1. Financial Statements .................................... 1
Condensed Balance Sheets
September 30, 2001 and December 31, 2000 ................ 1
Condensed Statements of Operations
Three months and nine months ended September 30, 2001
and September 30, 2000; and cumulative from inception ... 2
Condensed Statements of Cash Flows
Nine months ended September 30, 2001 and September 30,
2000; and cumulative from inception ..................... 3
Notes to Condensed Financial Statements ...................... 4-8
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations ................ 9-12
Item 3. Quantitative and Qualitative Disclosures about
Market Risk ......................................... 13
Part II - Other Information
Item 1. Legal Proceedings ....................................... 13
Item 2. Changes in Securities ................................... 13
Item 3. Defaults Upon Senior Securities ......................... 14
Item 4. Submission of Matters to a Vote of Security Holders ..... 14
Item 5. Other Information ....................................... 14
Item 6. Exhibits and Reports on Form 8-K ........................ 14
Signature .......................................................... 15

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

NETMAXIMIZER.COM, INC.
(A Development Stage Enterprise)
BALANCE SHEETS

September 30, December 31,
ASSETS 2001 2000
------ ------------ ------------
(Unaudited)

Current Assets:
Cash, including restricted cash of $1,272 ........................... $ 53,457 $ 80,448

Inventories -- 158,287
------------ ------------
Total current assets ................................................ 53,457 238,735

Property and Equipment ............................................... 24,728 80,637
Web Site Design, Net ................................................. 1,035,870 521,389

Other Assets ......................................................... 42,150 93,940
------------ ------------
Total assets ........................................................ $ 1,156,205 $ 934,701
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
Current Liabilities:
Accounts payable and accrued liabilities:
Accrued interest, stockholder ....................................... $ 268,674 $ 134,961
Related parties -- 113,450
Other ............................................................... 409,094 475,728
Due to officer/stockholder .......................................... 21,388 23,046
Note payable, other ................................................ 4,696 4,696
------------ ------------
Total current liabilities ........................................... 703,852 751,881
------------ ------------
Long-Term Debt and Other Obligations:
Notes payable, stockholder, net of unamortized discount of $1,088,882
and $1,519,421 ...................................................... 892,057 461,518
Deposits on stock to be issued ...................................... 140,000 437,388
Obligation related to stock options to be issued .................... 660,000 660,000
Note payable, other ................................................ 6,564 7,625
------------ ------------
1,698,621 1,566,531
------------ ------------

Commitments, Contingencies and Subsequent Events .................... -- --
Stockholders' Deficiency:
Common stock, $.001 par value; 75,000,000 shares authorized;
40,290,482 and 39,203,006 shares issued and outstanding ............. 40,290 39,203
Additional paid-in capital .......................................... 11,322,330 9,386,029
Deficit accumulated during the development stage .................... (12,608,888) (10,808,943)
------------ ------------
Total stockholders' deficiency ...................................... (1,246,268) (1,383,711)
------------ ------------
Total liabilities and stockholders' deficiency ...................... $ 1,156,205 $ 934,701
============ ============

See Notes to Condensed Financial Statements

NETMAXIMIZER.COM, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS

Three Months Nine Months
Ended September 30, Ended September 30, Cumulative
------------------- ------------------- from
2001 2000 2001 2000 Inception
---- ---- ---- ---- ---------
(Unaudited) (Unaudited) (Unaudited)

Revenue ................................ $ 699 $ 3,625 $ 43,603 $ 12,962 $ 77,368
------------ ------------ ------------ ------------ ------------

Costs and Expenses:
Direct costs of revenue ....... 1,494 4,978 162,156 12,762 190,008
General and administrative .... 188,366 556,080 861,027 1,576,240 3,333,509
Amortization of web site design 97,414 74,979 255,320 224,957 668,921
Amortization of debt discount . 143,513 132,730 430,538 318,005 892,056
Interest expense, stockholder . 49,366 42,124 134,507 90,390 273,469
Amortization of deferred
compensation expense .......... -- 321,658 -- 964,972 964,972
Stock and options issued for
services ...................... -- -- -- -- 6,363,321
------------ ------------ ------------
480,153 1,132,549 1,843,548 3,187,326 12,686,256
------------ ------------ ------------ ------------ ------------

Net Loss ............................... (479,454) (1,128,924) (1,799,945) (3,174,364) (12,608,888)
============ ============ ============ ============ ============

Net Loss Per Share - Basic and Diluted . (0.01) (0.03) (0.05) (0.08)
============ ============ ============ ============

Weighted Average Shares Outstanding .... 40,290,482 39,162,136 39,836,354 39,156,083
============ ============ ============ ============

See Notes to Condensed Financial Statements

NETMAXIMIZER.COM, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS

Nine Months
Ended September 30, Cumulative
--------------------- from
2001 2000 Inception
---- ---- ---------
(Unaudited) (Unaudited)

Cash Flows from Operating Activities:
Net loss ........................................ $ (1,799,945) $ (3,174,364) $(12,608,888)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization of deferred compensation ....... -- 964,972 964,972
Amortization of discount .................... 430,539 318,005 892,057
Depreciation and amortization ............... 295,612 246,004 751,694
Officer compensation ........................ -- -- 150,000
Consulting fees paid by stockholder on behalf
of Company ................................ -- -- 24,000
Options granted for services ................ -- -- 6,163,321
Common stock issued for services ............ -- 200,000 205,000
Loss on sale of assets ...................... 23,082 -- 23,082
Changes in operating assets and liabilities:
Inventories ................................... 158,287 (138,158) --
Other assets .................................. 34,324 (202,440) (14,434)
Accounts payable and accrued liabilities ...... (202,084) 264,305 273,644
Accrued interest, stockholder ................. 133,713 90,390 268,674
------------ ------------ ------------
Net cash used in operating activities ..... (926,472) (1,431,286) (2,906,878)
------------ ------------ ------------

Cash Flows from Investing Activities:
Expenditures for property and equipment ......... -- (38,563) (59,386)
Web site design costs ........................... (737,800) (485,000) (1,272,800)
Other ........................................... (1,658) (4,191) (8,272)
------------ ------------ ------------
Net cash used in investing activities ..... (739,458) (527,754) (1,340,458)
------------ ------------ ------------

Cash Flows from Financing Activities:
Proceeds from long-term debt, related party ..... -- 1,830,939 1,980,939
Proceeds from sales of common stock ............. 1,640,000 100,000 2,324,388
Repayments on long-term debt .................... (1,061) (1,894) (4,534)
------------ ------------ ------------
Net cash provided by financing activities . 1,638,939 1,929,045 4,300,793
------------ ------------ ------------

Net Increase (Decrease) in Cash .................. (26,991) (29,995) 53,457

Cash, Beginning .................................. 80,448 39,055 --
------------ ------------ ------------

Cash, Ending ..................................... $ 53,457 $ 9,060 $ 53,457
============ ============ ============

Non-Cash Investing and Financing Transactions:
Equipment purchased in exchange for debt ........ $ -- $ 15,794
============ ============

See Notes to Condensed Financial Statements

NETMAXIMIZER.COM, INC.
(A Development Stage Enterprise)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001
(Unaudited)

NOTE 1. SUMMARY OF BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements have been
prepared by the Company pursuant the rules and regulations of the
Securities and Exchange Commission ("SEC") and, in the opinion of
management, include all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of financial position,
results of operations and cash flows for the interim periods. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and
regulations of the SEC. The Company believes that the disclosures
contained herein are adequate to make the information presented not
misleading. The statements of operations for the three months and nine
months ended September 30, 2001 are not necessarily indicative of the
results to be expected for the full year. These unaudited financial
statements should be read in conjunction with the audited financial
statements and accompanying notes included in the Company's 2000
Annual Report on Form 10-K for the year ended December 31, 2000.

The condensed financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business.
Recurring losses from operations and operating cash constraints are
potential factors which, among others, may indicate that the Company
will be unable to continue as a going concern for a reasonable period
of time. The independent auditors' report on the December 31, 2000
financial statements stated that "... the Company's recurring losses
from operations and current cash constraints raise substantial doubt
about the Company's ability to continue as a going concern. The
financial statements do not include any adjustments that might result
from the outcome of this uncertainty."

The financial statements do not include adjustments relating to the
recoverability and classification of recorded asset amounts, or the
amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The
Company's ability to continue as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on a
timely basis and ultimately to attain profitable operations.

NETMAXIMIZER.COM, INC.
(A Development Stage Enterprise)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001
(Unaudited)

Business

The Company is an Internet marketing company that introduces customers
to those who sell goods and services. The Company collects fees based
on visitors who reach third party sites and commissions on any
purchases made by such customers. The Company provides access to third
party sites primarily to members of affinity groups such as churches,
schools and unions.

NOTE 1. SUMMARY OF BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Development Stage Enterprise

As described above, the Company was incorporated on June 29, 1995,
and, since that time, has been primarily involved in organizational
activities, developing a strategic plan for the marketing of its
products, and raising capital. Planned operations, as described above,
have not commenced to any significant extent. Accordingly, the Company
is considered to be in the development stage, and the accompanying
financial statements represent those of a development stage
enterprise.

Net Loss Per Common Share

The Company computes earnings (loss) per share in accordance with SFAS
No. 128, "Earnings Per Share." This standard requires dual
presentation of basic and diluted earnings per share on the face of
the income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the
diluted earnings per share computation.

Net loss per common share (basic and diluted) is based on the net loss
divided by the weighted average number of common shares outstanding
during the year.

The Company's potentially issuable shares of common stock pursuant to
outstanding stock options and warrants are excluded from the Company's
diluted computation, as their effect would be anti-dilutive.

NOTE 2. WEB SITE DESIGN

These costs consist of fees for a total of $1,694,800 paid to a
consultant, which is owned or controlled by a major stockholder, as
follows: $1,406,800 to be paid in cash and 56,655 shares of Company
common stock valued at the market value of such stock on the date of
issuance ($5.08 per share) or $288,000.

NETMAXIMIZER.COM, INC.
(A Development Stage Enterprise)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001
(Unaudited)

NOTE 2. WEB SITE DESIGN (Continued)

The following is an analysis of web site design costs by Phase as of
September 30, 2001:

Phase Phase Phase Phase Phase
One Two Three Four Five Total
---------- ---------- ---------- ---------- ---------- ----------

Cost ................... $ 350,000 $ 330,000 $ 155,000 $ 625,000 $ 234,800 $1,694,800
Accumulated amortization 350,000 137,500 51,667 119,663 -- 658,830
---------- ---------- ---------- ---------- ---------- ----------

Unamortized cost ...... $ $ 192,500 $ 103,333 $ 505,337 $ 234,800 $1,035,970
========== ========== ========== ========== ========== ==========

Phase One of the web site was available for use on November 4, 1999,
and the Company commenced amortizing the cost of Phase One ($350,000)
over an estimated useful life of fourteen months as of that date.
Phases Two and Three were placed in service during 2000, Phase Four
was placed in service in 2001 and all are being amortized over an
estimated useful life of thirty-six months. Phase Five has not yet
been placed in service.

In the opinion of management, the functionality of the website and
therefore recoverability of costs was not materially affected by the
change in the Company's business model in the quarter ended June 30,
2001.

NOTE 3. DISPOSITION OF ASSETS

Inventory

In May 2001, pursuant to a change in business model, the Company sold
all the inventory in a liquidation sale for approximately $40,000. The
inventory sold had a cost of approximately $158,000.

Property and Equipment

In May 2001, the Company exchanged property and equipment with a net
book value of approximately $44,000 for prepaid rent of approximately
$21,000 resulting in a loss on sale of approximately $23,000.

NOTE 4. COMMON STOCK

On September 13, 2000 the Company entered into an agreement to issue
up to 1,000,000 units, comprised of one share of Company common stock
and one warrant, for $5.00 per unit for total proceeds of up to
$5,000,000. The warrant entitles the holder to purchase one share of
Company common stock for $10.00 for a term of five

NETMAXIMIZER.COM, INC.
(A Development Stage Enterprise)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001
(Unaudited)

NOTE 4. COMMON STOCK (Continued)

years. As of September 30, 2001, the Company received $437,388 for the
purchase of 87,477 units.

On February 12, 2001, the Company entered into an agreement to sell
666,666 units, comprised of one share of Company common stock and two
warrants, for $1.50 per unit for total proceeds of $1,000,000. The
warrant entitles the holder to purchase two shares of Company common
stock for $1.875 per share for a term of five years. The Company
received $1,000,000 of proceeds on February 14, 2001.

On May 16, 2001, the Company entered into an agreement to sell 333,333
units, comprised of one share of Company common stock and two
warrants, for $1.50 per unit for total proceeds of $500,000. The
warrant entitles the holder to purchase two shares of Company common
stock for $1.85 per share for a term of five years. The Company
received $500,000 of proceeds on May 16, 2001.

On August 29, 2001, the Company entered into an agreement to sell
66,666 units, comprised of one share of Company common stock and two
warrants, for $1.50 per unit for total proceeds of $100,000. The
warrant entitles the holder to purchase two shares of Company common
stock for $2.84 per share for a term of five years. The Company
received $100,000 of proceeds on August 29, 2001. The common shares
subscribed were issued by the Company on November 12, 2001.

On September 18, 2001, the Company entered into an agreement to sell
26,666 units, comprised of one share of Company common stock and two
warrants, for $1.50 per unit for total proceeds of $40,000. The
warrant entitles the holder to purchase two shares of Company common
stock for $3.15 per share for a term of five years. The Company
received $40,000 of proceeds on September 18, 2001. The common shares
subscribed were issued by the Company on November 12, 2001.

On October 1, 2001, the Company entered into an agreement to sell
66,666 units, comprised of one share of Company common stock and two
warrants, for $1.50 per unit for total proceeds of $100,000. The
warrant entitles the holder to purchase two shares of Company common
stock for $3.90 per share for a term of five years. The Company
received $100,000 of proceeds on October 1, 2001. The common shares
subscribed were issued by the Company on November 12, 2001.

On October 19, 2001, the Company entered into an agreement to sell
13,333 units, comprised of one share of Company common stock and two
warrants, for $1.50 per unit for total proceeds of $20,000. The
warrant entitles the holder to purchase two

NETMAXIMIZER.COM, INC.
(A Development Stage Enterprise)

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2001
(Unaudited)

NOTE 4. COMMON STOCK (Continued)

shares of Company common stock for $3.20 per share for a term of five
years. The Company received $20,000 of proceeds on October 19, 2001.

On November 3, 2001, the Company entered into an agreement to sell
66,666 units, comprised of one share of Company common stock and two
warrants, for $1.50 per unit for total proceeds of $100,000. The
warrant entitles the holder to purchase two shares of Company common
stock for $2.285 per share for a term of five years. The Company
received $20,000 of proceeds on November 3, 2001.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements. Any
statements that are not statements of historical fact should be regarded as
forward-looking statements. For example, the words "intends," "believes,"
"anticipates," "plans," and "expects" are intended to identify forward-looking
statements. There are a number of important factors that could cause our actual
results to differ materially from those indicated by such forward-looking
statements. These factors include without limitation those factors contained in
our Form 10-K for the year ended December 31, 2000, filed with the Securities
and Exchange Commission. In addition, the recent terrorist attacks on the United
States, possible responses by the U.S. government, the effects on consumer
demand, the financial markets and other conditions increase the uncertainty
inherent in forward-looking statements.

The following discussion of our results of operations and financial condition
should be read together with our unaudited Financial Statements contained in
Part I, Item 1 and the related Notes in this Form 10-Q, and our audited
Financial Statements and the related Notes contained in our Form 10-K filed with
the Securities and Exchange Commission.

Overview

On September 28, 2001 we announced that we ended our extensive beta testing and
commenced revenue generating operations. As of that date, we opened eleven (11)
originating sites, which are Internet portals that appear uniquely and
individually branded for each affinity group enrolled in the Netmaximizer.com
Affinity Group Program. An affinity group is a group of people who are members
of an organization who share a common interest, such as a church, union or
school. We create a link from the affinity group's web site to an originating
site that enables the members of the affinity group to visit third party sites
and make purchases, thereby generating fees and commissions which are paid to
us. We in turn pay forty percent (40%) of those fees to the affinity group.
Since September 28, we have opened originating sites for 76 additional affinity
groups representing approximately 445,000 members.

On October 3, 2001, we announced that we had reached agreement with Consensus
Investments Limited to extend our current financing arrangement with them until
March 31, 2002. Based on a letter of intent executed last February, Consensus
agreed purchase up to $5 Million of our securities, called units, consisting of
one share of our common stock plus warrants to purchase an additional two shares
of stock at an exercise price equal to the closing bid price on the date the
warrant was issued. The warrants expire five years from their date of issuance
and the purchase price per unit is $1.50. We also reported that we recently
received $360,000 from Consensus to purchase additional units, as disclosed
elsewhere in this Quarterly Report. Consensus has thus far invested a total of
$1,860,000 in us, and along with the extension, they negotiated an increase in
the total amount they may invest to $7,600,000. Consensus is under no obligation
to invest any additional funds, notwithstanding the extension of the financing
arrangement.

On October 18, 2001, we announced the expansion of our business operations to
offer free, individually branded online portals directly to certain businesses.
We will create a link from a

business' existing web site to an originating site. As the employees and
customers of the business conduct their online activities through that
originating site, their activities generate fees and commissions which are paid
to us. We, in turn, pay to the business forty per cent (40%) of the money we
receive as the result of those activities.

On October 23, 2001, we responded to the recent tragedies experienced in the
United States by adapting our technology to provide a free, uniquely branded
portal to certain charities and emergency service organizations virtually
overnight. This will enable those agencies to receive funds derived from the
fees and commissions generated when persons use their portal to conduct their
regular activities online in the same manner as affinity groups and businesses
receive such funds. Because of the charitable purpose being served by these
originating sites, we have not fixed a standard forty percent rate to calculate
the portion of fees and commissions to be paid to the charities and emergency
service organizations. Instead, the rate will be negotiated between our
management and the management of the charity.

A number of risks arise under this expanded business model, in addition to those
disclosed in our prior reports filed with the Securities and Exchange
Commission. Some important factors that could cause actual results or outcomes
to differ materially from those discussed in the foregoing include, but are not
limited to the following: whether members of affinity groups will use the sites
and thereby generate usage fees, whether we will be able to open additional
originating sites, whether we will be successful in recruiting additional
affinity groups as program participants, whether employees and customers of
businesses will use the sites and thereby generate fees and commissions, whether
such usage will enhance a business' bottom line, whether we will be successful
in recruiting businesses as program participants, whether charitable
organizations will accept the donated portals or whether members of the public
will use the donated sites and thereby generate fees and commissions, and
whether or not additional funding will be forthcoming from Consensus.

Despite our enthusiasm as we commence revenue generating operations, we are
cautious regarding the fourth quarter based on a deteriorating economic
environment and the uncertain effects of the terrorist attacks of September 11,
2001. Like most consumer businesses, our business is affected by general
economic, political and public safety conditions that impact consumer confidence
and spending. The impact of these terrorist attacks and the government's
response to them may have both short-term and long-term adverse effects on our
revenues, results of operations, financial condition and prospects. It is likely
that the terrorist attacks will have an immediate impact on our business as a
result of the contraction in consumer confidence and a negative impact on the
retail environment generally. Additional terrorist attacks or related events
such as bioterrorism using anthrax could adversely impact all consumer
businesses, including ours. It is not possible at this time to predict the
longer-term effects of the attacks, or the impact of actions taken in response
to the attacks, on general economic, political and public safety conditions and
our results of operations.

Material Changes in Results of Operations

We remain a development stage company. As of September 30, 2001, full operations
had not commenced, although we had begun revenue generating activities by
opening a small number of affinity group originating sites. We intend to
continue to open additional affinity group and

business originating sites through the remainder of the year. Additionally, we
plan to accelerate our marketing efforts on behalf of those and other affinity
groups and businesses. Prior to September 28, 2001, although we had
insignificant revenue generated from start-up operations, we had no material or
substantive transactions or results of operations. As a result, no meaningful
comparison can be made between our present operations and our operations during
the years ended December 31, 1995 to December 31, 2000.

Material Changes in Financial Condition

Our total assets were approximately $1,156,000 at September 30, 2001, compared
with $935,000 at December 31, 2000, and $1,478,000 at June 30, 2001. The
increase in assets during the first nine months of calendar year 2001 was
primarily attributable to our further development of our web site.
Notwithstanding the investment in our common stock, discussed below, our cash
account declined due to our lack of revenue. Our cash and short-term investments
were $53,457 at September 30, 2001, compared with $80,448 at December 31, 2000
and $242,143 at June 30, 2001. Our current liabilities were $703,852 at
September 30, 2001, compared with $751,881 at December 31, 2000 and $829,885 at
June 30, 2001. This decrease was principally the result of reduced operating
costs.

During the three months ended September 30, 2001, we had minimal active business
operations, resulting in revenue from operations of $699. Although we began
opening originating sites for actual operations as of September 28, 2001,
because of the method by which we are compensated for activities through the
originating sites, no significant revenue from those operations was earned
during the quarter. For the nine months ended September 30, 2001, we also had
revenue resulting from the liquidation sale of our inventory previously
reported, $40,126 during the second quarter when the sale was conducted and
$2,778 during the first quarter.

During the nine months ended September 30, 2001 we incurred costs and expenses
of $1,843,548 as compared to $3,187,326 for the nine months ended September 30,
2000. This decrease was due primarily to the revision to our strategic plan,
reducing the number of employees, eliminating inventory and certain
infrastructure, and the recognition of deferred compensation (which only
occurred during 2000). The approximate amounts of the components of the costs
and expenses are as follows: amortization of web site design $255,000;
amortization of debt discount $431,000; payroll $299,000; professional fees
$124,000; interest on promissory notes $135,000; rent $95,000; consulting fees
$76,000; commissions $61,000; telephone $17,000; travel $22,000; insurance costs
$18,000; Internet access $13,000; depreciation $9,000; other operating costs
$289,000. By comparison, the components of the costs and expenses of
approximately $480,000 for the three-month period ending September 30, 2001, are
as follows: amortization of debt discount $144,000; payroll $81,000;
amortization of web site design costs $97,000; professional fees $24,000;
interest on promissory notes $49,000; rent $18,000; consulting fees $0;
commissions $22,000; telephone $(3,500); travel $6,000; insurance costs $4,000;
Internet access $4,000; depreciation $2,000; other operating costs $32,500.

Liquidity and Capital Resources

As of September 30, 2001, we had $53,457 in cash, as compared with $80,448 at
December 31, 2000. During this same nine-month period ending September 30, 2001,
we received $1,640,000 of proceeds from the sale of stock and warrants.

We intend to fund continuing operations of the Company through revenues
generated by fees and commissions which are commencing as we establish
additional operating sites. Nonetheless, it may be necessary for us to raise
additional capital through additional sales of unregistered shares of our common
stock conducted under exemptions provided by the Securities Act or by the rules
of the SEC. There can be no assurance that we will be able to receive sufficient
revenue for operations or to raise additional capital on favorable terms and in
the time required. If we are unable to generate sufficient revenues from
operations or raise additional capital it is questionable whether we could
continue as a going concern.

Because of the revision to our business plan, we anticipate that our cash
requirements will be smaller than originally projected due to the reduced number
of employees and operating facilities that will be required, as well as the
elimination of costs associated with inventory expansion and maintenance.
Nonetheless, there can be no assurance that our actual expenditures for the
remainder of the year will not exceed our estimated operating budget. Actual
expenditures will depend upon a number of factors, some of which are beyond our
control, including, among other things, reliability of the assumptions of
management in estimating revenues versus costs and timing, and the time expended
by professionals and consultants and fees associated therewith. Moreover, we
have significant short term liabilities that must be satisfied.

Recent Financing

On August 29, 2001, we accepted a subscription from Consensus Investments
Limited to purchase 66,666 units, comprised of one share of our common stock and
two warrants, for $1.50 per unit for total proceeds of $100,000. The warrant
entitles the holder to purchase two shares of our common stock for $2.84 per
share for a term of five years. The shares were issued on November 12, 2001.

On September 18, 2001, we accepted a subscription from Consensus Investments
Limited to purchase 26,666 units, comprised of one share of our common stock and
two warrants, for $1.50 per unit for total proceeds of $40,000. The warrant
entitles the holder to purchase two shares of our common stock for $3.15 per
share for a term of five years. The shares were issued on November 12, 2001.

On October 1, 2001, we accepted a subscription from Consensus Investments
Limited to purchase 66,666 units, comprised of one share of our common stock and
two warrants, for $1.50 per unit for total proceeds of $100,000. The warrant
entitles the holder to purchase two shares of our common stock for $3.90 per
share for a term of five years. The shares were issued on November 12, 2001.

On October 19, 2001, we accepted a subscription from Consensus Investments
Limited to purchase 13,333 units, comprised of one share of our common stock and
two warrants, for $1.50

per unit for total proceeds of $20,000. The warrant entitles the holder to
purchase two shares of our common stock for $3.20 per share for a term of five
years. The shares have not yet been issued and therefore are not included in the
number of shares outstanding reported herein.

On November 3, 2001, we accepted a subscription from Consensus Investments
Limited to purchase 66,666 units, comprised of one share of our common stock and
two warrants, for $1.50 per unit for total proceeds of $100,000. The warrant
entitles the holder to purchase two shares of our common stock for $2.285 per
share for a term of five years. The shares have not yet been issued and
therefore are not included in the number of shares outstanding reported herein.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

None.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On August 8, 2001, a summons and complaint was filed in the United States
Bankruptcy Court for the Eastern District of Pennsylvania by Global Financial
Press, Inc., et al, as Debtor and Debtor-in-Possession seeking to recover
payment they allege we owe them for services. They demand $18,602.17 plus
interests, costs and attorney's fees. Management contests the amount claimed but
intends to try to negotiate a reasonable settlement to avoid the costs and
uncertainties of litigation as soon as the Company's liquidity situation
permits.

From time to time, the Company is a party to routine litigation incidental
to its business. Management does not believe that any of these pending legal
proceedings or the previously-reported suit by Charles Aker, individually or in
the aggregate, will materially impact the Company's financial condition or
results of operations.

Item 2. Changes in Securities.

On September 18, 2001, we accepted a subscription from Consensus
Investments Limited to purchase 26,666 units, comprised of one share of our
common stock and two warrants, for $1.50 per unit for total proceeds of $40,000.
The warrant entitles the holder to purchase two shares of our common stock for
$3.15 per share for a term of five years. The shares were issued on November 12,
2001.

On October 1, 2001, we accepted a subscription from Consensus Investments
Limited to purchase 66,666 units, comprised of one share of our common stock and
two warrants, for $1.50

per unit for total proceeds of $100,000. The warrant entitles the holder to
purchase two shares of our common stock for $3.90 per share for a term of five
years. The shares were issued on November 12, 2001.

On October 19, 2001, we accepted a subscription from Consensus Investments
Limited to purchase 13,333 units, comprised of one share of our common stock and
two warrants, for $1.50 per unit for total proceeds of $20,000. The warrant
entitles the holder to purchase two shares of our common stock for $3.20 per
share for a term of five years. The shares have not yet been issued and
therefore are not included in the number of shares outstanding reported herein.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information

Except for agreements with our affinity groups, the Company has terminated
substantially all of the leases and contracts previously disclosed. To the best
information available to management, we believe there are no remaining material
obligations under any of those leases or contracts.

Item 6. Exhibits and Reports on Form 8-K

(a) Index and Exhibits

None.

(b) The following report on Form 8-K was filed by the Company during the
period covered by this report:

The Registrant filed a report dated September 28, 2001 on Form 8-K
reporting an Item 5 event.

SIGNATURE

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.

Dated: November 14, 2001

NETMAXIMIZER.COM, INC.

/s/David A. Saltrelli
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David A. Saltrelli, President
President

/s/Peter G. Schuster
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Peter G. Schuster, Treasurer
Chief Financial Officer