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Form 10QSB/A for BUDGETHOTELS COM INC

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thepennyking   Tuesday, 01/06/04 08:46:05 PM
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Form 10QSB/A for BUDGETHOTELS COM INC
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16-Apr-2003

Quarterly Report


ITEM 6. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OR PLAN OF OPERATIONS.
The following discussion should be read in conjunction with the consolidated statements and the notes thereto:


OPERATIONS DURING THE INTERIM PERIOD OF FEBRUARY 28, 2003.


Net sales for the three month period ended February 28, 2003 were $218,065, compared to sales of $188,362 for the comparative three month period ended February 28, 2002 as a result of the sale of one of the Company's domain names.

The Company had a net loss of $11,288 for the three month period ending February 28, 2003 compared to a net loss of $120,761 for the comparative period ended February 28, 2002 as a result of a significant decrease in general and administrative expenses.



LIQUIDITY AND CAPITAL RESOURCES


The Company's cash overdraft decreased by $20,020 November 30 2002, by settling certain expenses by the issuance of stock. The Company expects to raise the necessary additional working capital to sustain operations until profitability is achieved from a combination of: reduction of expenses, settling certain liabilities through the issuance of stock and, possibly, a private placement.


RESULTS OF OPERATIONS


i) SALES

A breakdown of the net sales is as follows:


FOR THE THREE MONTHS
ENDED FEBRUARY 28
----------------------
2003 2002
-------- --------
Internet travel web site revenue $ 32,069 $ 10,548
Advertising display boards 130,562 173,670
Sale of domain name 49,500 --
Internet Kiosks and other 5,934 4,144
-------- --------
$218,065 $188,362
======== ========

Revenues from the Company's Internet travel based web sites increased for the three month period ended February 28, 2003 in the amount of $21,521 (i.e.) 204% compared to the three month period ending February 28, 2002.
Revenues from the Company's advertising display boards have decreased for the three month period ended February 28, 2003 in the amount of $29,344 (i.e.) 16% compared to the three month period ending February 28, 2002.

ii) GROSS PROFIT MARGINS

The Company's commission costs for the three month period ending February 28, 2003 were $41,220 or 19% of net sales compared to $33,898 or 18% of net sales for the comparative period, and as a result the Company's gross profit margins from operations amounted to 81% compared to a gross profit margin of 82% for the comparative period.

iii) GENERAL AND ADMINISTRATIVE EXPENSES

The Company's general and administrative expenses decreased from $256,867 for the three month period ending February 28, 2002 to $167,596 for the comparative period ending February 28, 2002.

The decrease in the general and administrative expenses was primarily due to a streamlining of the Company's operations.

iv) INCOME (LOSS) FROM OPERATIONS

As a result of the sale of one of the Company's domain names and decreased general and administrative costs, the Company's net loss decreased from $120,781 for the three month period ending February 28, 2003 to $11,288 for the three month period ending February 28, 2003.




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