UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the quarterly period ended October 31, 2000
OR
( ) 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: 0-28514
TREASURY INTERNATIONAL, INC.
(Name of Small Business Issuer in Its Charter)
Delaware 98-0160284
--------------- --------------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
1081 King St., E 2nd Floor
Kitchener, Ontario N2G 2N1
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(Address of Principal Executive Offices) (Zip Code)
------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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
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As of October 31, 2000, 92,196,677 shares of the registrant's common
stock were outstanding.
The aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of October 31, 2000 was $4,003,445.
Shares of Common Stock held by each executive officer and directors and by each
persons who beneficially owns more than 5% of the outstanding Common Stock have
been excluded in that such persons may under certain circumstances be deemed to
be affiliates. This determination of executive officer or affiliate status is
not necessarily a conclusive determination for other purposes.
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PART I Financial Information
--------------------------------
ITEM 1. Financial Statements
----------------------------
Bromberg & Associate
-------------------------------- 1183 Finch Ave. West, Suite 305
Toronto, Ontario M3J 2G2
Phone: (416) 663-7521
CHARTERED ACCOUNTANTS Fax: (416) 663-1546
ACCOUNTANTS' REVIEW REPORT
Board of Directors and Shareholders
Treasury International, Inc.
We have reviewed the accompanying interim consolidated balance sheet of
Treasury International, Inc. as at October 31, 2000, and the interim
consolidated statements of operations, and cash flows for the period then ended
in accordance with statements on standards for accounting and review services
issued by the American Institute of Certified Public Accountants. All
information included in these interim consolidated financial statements is the
representation of management of Treasury International, Inc.
A review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted audited standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying interim consolidated financial
statements in order for them to be in conformity with generally accepted
accounting principles.
BROMBERG & ASSOCIATE
CHARTERED ACCOUNTANTS
TORONTO, CANADA
December 8, 2000
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TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED BALANCE SHEET
AS AT OCTOBER 31, 2000
(UNAUDITED)
ASSETS
<TABLE>
<S> <C> <C>
October 31, 2000 January 31, 2000
CURRENT
Accounts receivable $ 758,831 $ 662,531
Due from Wexcap Group, LLC 3,000 3,000
Marketable Securities (Note 7) 201,436 -
Sundry assets 21,922 2,607
------------------ -------------------------
985,189 668,138
Promissory Note Receivable (Note 3) 2,649,398 2,649,398
Goodwill (Notes 2b & 4) 174,549 381,929
Research & Development Costs (Notes 2c & 5) 289,562 160,002
Capital Assets (Notes 2d &6) 30,882 14,925
Long Term Investments (Note 7) 66,417 -
------------------ -------------------------
$ 4,195,997 $ 3,874,392
================== =========================
LIABILITIES
CURRENT
Bank Indebtedness $ 65,979 $ 56,547
Accounts payable and accrued liabilities 216,807 153,839
Current portion of long-term debt (Note 8) 328,568 197,344
------------------ -------------------------
611,354 407,730
Loans from Officers & Directors 250,244 43,772
Long Term Debt (Note 8) 477,003 45,903
================== =========================
$ 1,338,601 $ 497,405
================== =========================
SHAREHOLDERS' EQUITY
SHARE CAPITAL
Authorized
100,000,000 common shares at $.0001
Issued
92,196,677 common shares (Note 9) 9,219 9,510
Contributed surplus (Note 10) 4,751,814 4,896,694
Deficit (1,903,637) (1,529,217)
------------------ -------------------------
2,857,396 3,376,987
------------------ -------------------------
Total Liabilities & Shareholders Equity $ 4,195,997 $ 3,874,392
================== =========================
</TABLE>
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TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENT OF DEFICIT
NINE MONTH PERIOD ENDED OCTOBER 31, 2000
(UNAUDITED)
October 31, 2000 October 31,1999
Balance, Beginning of Period $ 1,529,217 $ 1,758,328
Net (Income) Loss for the Period 374,420 (200,612)
----------------------- -----------------------
Balance, End of Period $1,903,637 $ 1,557,716
----------------------- -----------------------
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TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED OCTOBER 31, 2000
(UNAUDITED)
October 31,2000 October 31,1999
REVENUE
Operations $ 253,210 $ 205,092
Management Fee Income - 33,333
Interest and Penalty Income (Note 3) - 455,321
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TOTAL INCOME 253,210 693,946
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COST OF GOODS SOLD 196,280 170,045
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GROSS PROFIT 56,930 523,901
---------------- --------------
EXPENSES
General and Administrative 282,354 289,922
---------------- --------------
INCOME (LOSS) from Operations
before undernoted items (225,424) 233,979
Amortization (Notes 4,5,6) 128,598 24,773
Financing Cost 20,398 8,594
---------------- --------------
NET INCOME (LOSS) $ (374,420) $ 200,612
================ ==============
Income (Loss) per Share (0.0004) 0.0022
---------------- --------------
Weighted Average Number of 91,930,100 92,200,296
Common Shares Outstanding ================ ==============
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TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENT OF
CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE MONTH PERIOD ENDED OCTOBER 31, 2000
(UNAUDITED)
<TABLE>
<S> <C> <C> <C>
COMMON PAID-IN CONTRIBUTED
SHARES CAPITAL SURPLUS
---------------- ----------- ----------------
Balance-January 31, 2000 95,101,777 $ 9,510 $ 4,896,694
Issued 323,900 shares of common stock at $0.11 323,900 32 35,597
per share under the Company's Employee Benefit
Plan Registration Statement of February 25,
1998.
Issued 171,000 shares of common stock in 171,000 17 34,183
consideration for the reduction of Notes
Payable by $34,200.
Returned 3,200,000 shares of common stock to (3,200,000) (320) (199,680)
the company from its subsidiary Pioneer Media
Group (Compelis Corporation).
Returned & cancelled 600,000 shares of common (600,000) (60) (54,940)
stock for cash consideration of $55,000
Issued 400,000 shares of common stock at $0.10 400,000 40 39,960
per share under the Company's Employee Benefit
Plan Registration Statement of February 25,
1998.
---------------- ----------- ----------------
Balance- Ocotber 31, 2000 92,196,677 $ 9,219 $ 4,751,814
================ =========== ================
</TABLE>
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TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTH PERIOD ENDED OCTOBER 31, 2000
(UNAUDITED)
October 31, 2000 October 31, 1999
Cash flows from operating activities
Net income (loss) ($ 374,420) $ 200,612
Adjustment to Retained Earnings - (850,000)
Amortization 128,598 24,773
(Increase) decrease in accounts receivable (96,300) 340,410
Increase in amount due from Wexcap Group - (3,000)
(Increase) decrease in sundry assets (19,315) 15
Increase in accounts payable 62,968 100,597
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Net cash used for operating activities (298,469) (186,593)
------------- -------------
Cash flows from financing activities
Loans Payable 206,472 -
Promissory note receivable - 10,000
Notes payable 562,324 284,009
Proceeds on issue of common shares (145,171) 316,000
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Cash provided by financing activities 623,625 610,009
------------- -------------
Cash flows from investing activities
Long Term Investments (267,853) -
Goodwill 200,000 (396,809)
Research and development costs (241,090) (82,632)
Purchase of capital assets (25,645) (7,744)
------------- -------------
Cash used for investing activities (334,588) (487,185)
------------- -------------
Increase in bank indebtedness (9,432) (63,769)
Bank balance (indebtedness), beginning of period (56,547) 19,956
------------- -------------
Bank indebtedness, end of period ($ 65,979) $ 43,813
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<PAGE>
TREASURY INTERNATIONAL, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT OCTOBER 31, 2000
1. Nature of business
Treasury International, Inc., through its wholly owned
subsidiaries, Compelis Corporation and Retailport.com, Inc., is
involved in the development of business to business E-Commerce,
Web-enabled database publishing and Internet Portal development.
2. Summary of significant accounting policies
a) Basis of consolidation
These consolidated financial statements include the accounts of the
company and the revenues and expenses of Compelis Corporation and
Retailport.com, Inc., its wholly owned subsidiaries.
b) Goodwill
The goodwill arises on the purchase of common shares of Compelis
Corporation. Amortization is provided on a straight-line basis over a
twenty-year period. During the period, the goodwill amount was reduced
by $200,000 as a result of the cancellation of 3,200,000 shares related
to the purchase of Compelis Corporation (formerly Pioneer Media Group).
c) Research and development costs
The research and development costs relate to the work done in
developing an e-commerce software package and an Internet point of sale
package, together with database development. Amortization is provided
on a straight-line basis over a three-year period.
d) Capital assets
Capital assets are recorded at cost less accumulated amortization.
Amortization is provided as follows:
Office equipment - 20% diminishing balance
Computer equipment - 30 % diminishing balance
Leasehold improvements - term of lease
e) Revenue Recognition
Revenue is recognized when customers are invoiced for products shipped
by the company.
f) Income per share
Income per share is calculated based on the weighted average number of
shares outstanding during the period.
g) General
These financial statements have been prepared in accordance with United
States generally accepted accounting principles (GAAP), as they relate
to these financial statements.
9
<PAGE>
3. Promissory Note Receivable
The promissory note receivable was received from the purchaser of
the company's former subsidiary, Mega Blow Moulding Limited on November
30, 1998. The Note and the interest due are both in default.
4. Goodwill
October 31, 2000 January 31, 2000
-------------------------------------- -----------------------
Accumulated Net book
Cost Amortization value Net book value
---------- ------------- ------------ -----------------------
$ 196,809 $ 22,260 $ 174,549 $ 381,929
========== ============= =========== ====================
5. Research & Development Costs
October 31, 2000 January 31, 2000
-------------------------------------- -----------------------
Accumulated Net book
Cost Amortization value Net book value
---------- ------------- ----------- -----------------------
$ 474,630 $ 185,068 $ 289,562 $ 160,002
========== ============= =========== ====================
6. Capital assets
October 31, 2000 January 31, 2000
---------------------------------- -------------------
Accumulated Net book Net book
Cost Amortization value value
--------- ------------ -------- --------------
Office equipment $ 21,715 $ 14,601 $ 7,114 $ 8,320
Computer equipment 43,594 19,826 23,768 6,483
Leasehold 1,407 1,407 - 122
improvements --------- ------------ -------- --------------
$ 66,716 $ 35,834 $ 30,882 $ 14,925
========= ============ ======== ==============
7. Long Term Investments
During the period the Company made certain equity investments in
other Corporations that management considers to be strategic or
synergistic to the Company's growth.
8. Notes payable
The notes payable consist of the following:
Due Date Principal Amount Interest Rate
Current $ 328,568 12% - 15%
July 20, 2005 $ 477,003 12%
---------------
Total $ 805,571
---------------
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<PAGE>
9. Stock Options
a) Options to purchase common shares have been issued under the
Employee Benefit Plan Registration Statement, registered February
25, 1998, to officers and key employees of the company and its
subsidiary. Options outstanding at October 31, 2000 are as
follows:
Year Granted Expiry Date Price Range No. of Shares
--------------------------------------------------------------------
November 1, 2000 October 31, 2001 $ 0.11 85,000
November 1, 2001 October 31, 2002 $0.11 410,000
--------------------------------------------------------------------
Total Outstanding 495,000
------------
b) As at October 31, 2000, 400,000 warrants were issued and exercised
at a price of $0.10 per share, 1,097,500 warrants were issued and
exercised at a price of $0.11 per share and 7,500 warrants were
issued and exercised at a price of $0.16 per share, for each
warrant owned. These warrants covered in this plan are exercisable
over a 3 year period and expire in November 2002.
10. Contributed surplus
Contributed surplus represents the premium paid on the issuance of
common shares.
11. Income taxes
As at October 31, 2000 the company had a net operating loss
carryover of approximately $2,633,000 expiring in various years through
2015.
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<PAGE>
ITEM 2. Management's Discussion and Analysis or Plan of Operation
Forward Looking Statements
--------------------------
The information contained in Item 2 of this Form 10-QSB,
Management's Discussion and Analysis or Plan of Operation, contains
"forward looking statements" within the meaning of Section 27A of the
Securities Act 1933, as amended (the "Securities Act"), and Section 21E
of the Securities exchange Act of 1934, as amended (the "Exchange
Act"). Actual results may materially differ from those projected in the
forward looking statements as a result of certain risks and
uncertainties set forth in this report. Although management believes
that the assumptions made and expectations reflected in the forward
looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that
actual future results will not be different from the expectations
expressed in this report.
Overview
--------
Treasury International, Inc. is an asset management company in the
business of development and acquisition of proprietary assets that
offer significant growth potential. Treasury attempts to enhance
shareholder value through an asset management and acquisition strategy
that targets companies or activities where Treasury's management,
shareholders and corporate structure can be leveraged to improve
strategic market position, productivity and growth potential of its
managed assets.
On November 30, 1998 the Company entered into an agreement to sell
its operating subsidiary Mega Blow Mouldings Ltd. ("Mega Blow") for
$4,250,000. To date the Company has received cash considerations of
$360,000 and a $1,394,266 credit to retire its long-term debt and
interest obligation related to Treasury's purchase of this asset in
October 1996. The Company currently holds a Promissory Note, signed by
the purchaser, with an outstanding balance of $2,649,398 plus interest.
The Note along with the interest due on the outstanding principal
balance is currently in default. The Company believes it is in a
position to reacquire the asset should it be determined that an
acceptable settlement cannot be reached with the parties involved in
the Purchase Agreement. However, there can be no assurance that, should
the Company reacquire Mega Blow, it will be able to adequately allocate
the resources necessary to operate the Company as an ongoing concern.
Operating Plan
--------------
The Company, through its operating subsidiaries, designs, develops
and delivers Internet-based enterprise management and communication
solutions for organizations with less than 500 employees and sales of
less than $100 million. The Company's products facilitate the sharing
of business-critical information between employees, trading partners
and customers to streamline processes, to encourage knowledge transfer
and to build competitive advantage. The Company's operations include
Compelis Corporation, Retailport.com, Inc. and Webco-ops.com, Inc. and
12
<PAGE>
the Company owns the following suite of proprietary software assets and
activities known as the Active Business Solutions: ActiveRMS,
ActiveCommerce, ActiveCatalog, ActiveCD, ActiveDataBank, ActiveHost and
ActiveDesign.
Market Opportunities
--------------------
Organizations are spending increasing amounts of their Information
Technology budgets on solutions that will link disparate information
databases to present business-critical information to anyone, anywhere
at anytime. To enable this transfer of information companies must
aggregate data from legacy operating systems and other sources such as
print media, vendor catalogs, etc. Data aggregation is an arduous task
for organizations who manufacturer or distribute many products from
many suppliers to many customers. The success and growth of online
communities, B2B trading exchanges and e-Catalogs is often hampered by
the inefficient access to product information and the inability to link
information to business-critical data sources such as internal ERP and
management information systems (MIS).
The Company believes that as organizations seek to improve
efficiencies in their business processes they will require solutions to
aggregate data and publish information independent of its format,
media, location or system. Distributed business-critical information is
becoming an increasingly important factor for competitive advantage. As
a result the Company believes organizations will demand integrated
technologies for print, CD-ROM and the Internet as well as solution
providers who understand data aggregation.
Products and Technologies
-------------------------
In May 2000, the Company released its core family of
Internet-based software solutions - ActiveRMS for retailers,
ActiveCommerce for the manufacturing and distribution markets. Both
ActiveRMS and ActiveCommerce employ Microsoft Commercial Internet
System (MCIS), Microsoft SQL Server 7.0 and run on the Windows NT
computing platform. The Company's products are based on industry and
Web standards including: SQL, Site Server, ASP, HTML, PDF, Java and
ActiveX.
Product Development
-------------------
In order for the Company to compete it must continue to enhance
the functional aspects of its software as well as introduce new
software solutions to the market. To date its investment has been to
build an Internet-based application tool set that allows companies to
update the content of their corporate web site (news releases, product
specials, etc.), market products through their online catalog, manage
the Request for Quote (RFQ) and Quoting function of their customer
service department, online order entry, inventory management, price
promotions and customer account management.
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<PAGE>
The Company further intends to integrate ActiveRMS (Enterprise
Management toolset for Retailers) and Active Commerce (E-business
toolset) into ActiveCo-op a new Web-based product to manage the
relationships of trading partners within vertically defined communities
(or co-operatives). This tool set would enable trading partners to
interact, collaborate and conduct business over the Internet while also
integrating internal and external operations with their online
E-commerce initiatives.
Treasury's ability to develop and release new products and product
enhancements in a timely manner is subject to a number of factors
including: the availability of qualified personnel, its ability to
solve technical issues, allocatation of adequate resources amoung
competing priorities of the Company and other factors outside the
control of the Company. There can be no assurance that the Company will
not experience difficulties that could delay or prevent successful
development and marketing of new products or product enhancements.
Competition
-----------
The Active Business Solutions suite of products competes on a
functional basis within the Company's targeted vertical markets and the
general market for integrated communication solutions. As a result of
the wide range of products and services the Company offers it has a
number of competitors. In the E-commerce/E-business market its
competitors include other Microsoft solution providers, small
entrepreneurial web developers, ERP solution providers and major
E-commerce companies. In catalog publishing and the advertising agency
business competitors include independent printers, small advertising
agencies, integrated communications firms and large periodical
publishers.
The Company believes its competitive advantage comes from the
ability of its people resources experienced in product application and
database development, creative design, business analysis and sales - to
develop integrated communication solutions for print, CD-ROM and the
Internet. In addition, it believes the markets will continue to grow
for content aggregators and developers as more companies implement
communication strategies for print and the Web. By employing capable
personnel and implementing proven strategies for bringing products to
market the Company believes it can secure market share.
The Company expects competition to increase as new players enter
the market and as products continue to be developed. The Company is
aware of numerous major software developers as well as smaller
companies who are focusing significant resources on the development and
marketing of competitive products. Many of these competitors have
secured market share due to their longer operating histories and
greater financial, technical and marketing resources. There is no
assurance that the Company and its products will be able to compete
effectively in the face of price competition, name recognition and
financial pressures caused by the increased numbers of competitors.
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<PAGE>
Compelis Corporation
--------------------
Compelis Corporation is a technology solutions provider with a
primary focus on helping its clients aggregate their knowledge assets
into databases and publishing that content to a variety of media:
Internet, CD-ROM and Print. The Company's target markets include
manufacturers, distributors and retailers who require integrated
communication solutions that improve their business processes by
automating the flow of information and transactions through their
supply chains with anyone, anywhere and at anytime.
Compelis offers its clients a single technology partner for
Internet-based Electronic Commerce (on-line shopping), Electronic
Business (online Request for Quote, Quoting, Purchase Order and trading
co-operatives), Electronic Catalogs (Internet and CD ROM), Print
Catalogs, Brochures and Flyers, Creative Design including Corporate Web
Sites and Corporate Identity, Aggregated Industry Data and Information
Asset Management.
Compelis generates revenue from the sale and delivery of its
Active Business Solutions suite. These include revenues from the
creation of content for catalogs, project management fees, software
licence sales (ActiveCommerce, ActiveCD), the resale of third party
services (print, CD replication, hardware and software), custom
programming, website hosting, creative design and strategic planning.
Retailport.com, Inc.
--------------------
Retailport.com, Inc. is a retail industry portal endeavoring to
link trading partners in these initial retail verticals: sporting
goods, specialty card, gift and hard goods. The Company believes that
creating unique Internet portals where Industry partners can interact
and transact business in a secure online environment will create a
compelling reason for key players to be involved. The site will include
online auctions, Industry news, business to business forums, aggregated
industry E-catalogs and classifieds for excess inventory, employment
opportunities, business directories, etc.
These portals will be powered by ActiveRMS and ActiveCommerce, an
E-commerce, E-business suite built on Microsoft's Industry Standard
Internet technologies: SQL Server, NT and Site Server, Commerce
Edition. With the growth in use and functionality of business to
business Internet systems, the opportunity to tie together trading
partners (manufacturers, distributors and retailers) as well as
E-commerce (retailers and their customers), Retailport.com, Inc. has
the favorable position of being an early entrant in the thin-client,
Internet-based, retail systems market. ActiveRMS is an Internet-based
Retail Management System (including Point-of-Sale, Inventory Control,
Customer Database, Inventory Transfer & Allocation, Consolidated Chain
Management and Reporting) that enables companies to make the link
between their in store operations and their E-commerce initiatives.
15
<PAGE>
ActiveRMS is deployed by Application Service Providers (ASP).
These ASPs host and manage the technology infrastructure for the
retailer thereby reducing the overhead burden associated with
management of the enterprise's Information Technology systems. The
retail store accesses the software through their Internet browser at
the POS terminal. This model allows for anywhere, anytime access to
mission critical enterprise data and provides a significantly lower
total cost of technology ownership for the retailer.
As an outsourced Internet-based software solution, ActiveRMS
generates revenues from three sources: first, from Value Added Reseller
(VAR) partners who sell product licenses for each customer
installation; second, Application Service Provider (ASP) partners who
host and support the ongoing technology infrastructure requirements for
ActiveRMS customers; third, from professional services custom
programming, consulting and project management - billings to meet the
more sophisticated technology requirements of larger installations.
Ongoing revenues are generated from hosting the applications, help desk
support contracts and product training.
Webco-ops.com, Inc.
-------------------
Webco-ops.com, Inc. intends to create trading environments
(exchanges, co-operatives) for trading partners, within targeted
vertical market sectors, that aggregate industry information and
facilitates the exchange of goods, service and transactions through
their established supply chains. These co-operatives are designed to
more quickly and cost effectively move products through the supply
chain, automate business processes for the participants and create an
infrastructure where trading partners can safely and securely exchange
information and conduct transactions.
AMR Research recently estimated that the growing B2B e-commerce
market would hit $5.7 trillion by the end of 2004, over 52% of those
transactions are predicted to flow through online exchanges.
These online trading co-operatives will be architected on the
Company's ActiveCommerce E-commerce/E-business infrastructure.
ActiveCommerce is a feature rich web development toolset that enables
companies to deploy their online E-commerce initiatives powered by
Microsoft's Industry Standard Internet technologies: SQL Server, NT and
Site Server, Commerce Edition.
Online Trading Co-operatives link buyers and sellers in an
electronic marketplace designed to process transactions and exchange
information in real-time. This automation of business processes allows
trading partners to build more integrated and profitable relationships
and to track more efficiently the movement on goods, services and
transactions through their supply chains. These co-operatives
strengthen the supply chain relationships between manufacturer,
distributor, retailer and end consumer. WebCo-ops.com intends to create
Internet portals with key partners and market influencers in order to
maximize the co-operative's reach to manufacturers, distributors and
consumers.
16
<PAGE>
Revenue opportunities are twofold: transaction fees charged on the
sale of goods and services flowing through the co-operative and
subscription fees paid by participants in the co-operative. Each
co-operative can be set-up as independent business units with ownership
shared with participants or outside investors and will be responsible
for its development, market penetration and operation.
During the next 12 to 24 months, Treasury intends to continue its
expansion goals. The Company plans to achieve its asset building
objectives: i) gain strategic position for its subsidiaries, ii)
improve asset productivity and iii) improve growth potential in both
emerging technologies and key targeted vertical market sectors by
continuing to build its current technology assets and by seeking
strategic alliances or acquisitions to expand its market reach. To
increase its future subsidiaries' market share, the Company will seek
to acquire or partner with other companies that are deemed to have
important products and synergies with existing company operations.
The following discussion should be read in conjunction with the
Consolidated Financial Statements of the Company included in this
annual report.
(1) INTERIM PERIODS
------------------------
Result of Operations
--------------------
For the nine months ended October 31, 2000.
-------------------------------------------
For the nine month period ended October 31, 2000, the Company has
seen operating revenues increase plus growing demand for its products
and services as evidenced by year over year growth in its Work In
Progress (WIP) backlog. The current value of WIP contracts is
approximately $504,000. Operating revenues include only the sales
activities completed during the period as the Company books its revenue
only on the completion of a contract. Revenues from operations
increased to $253,210 for the period with Gross Margins of 22%, an
increase from 17% in the same period of 1999.
The Company incurred a net loss of $225,424 from operations,
exclusive of Interest and Amortization, for the nine-month period ended
October 31, 2000. During the period, General and Administrative costs
were impacted by extra-ordinary costs associated with the development
and launch of ActiveRMS and ActiveCommerce. In addition, all
professional fees, compliance reporting and restructuring expenses
related to the ongoing administration of the public company are
included in this amount along with the sales, general and
administrative costs of the Company's operating subsidiaries.
17
<PAGE>
During the same period in 1999, the Company had a net profit of
$233,979. This was largely impacted by the interest and penalty income
of $455,321 related to the Promissory Note the Company holds on the
sale of its previously owned operating subsidiary Mega Blow Moulding
Ltd. ("Mega Blow"). The Company has not reported any interest and
penalty income from the Note, in the current year, as the Note is
currently in default.
Liquidity and Capital Resources
-------------------------------
The Company's management believes it has developed a sound plan to
capture a growing segment of the global E-commerce, E-business and
Database Publishing markets. As a technology solutions provider and
content service provider the future for Treasury is related to its
ability to capitalize on emerging technologies that link trading
partners in end-to-end enterprise commerce solutions. The plan details
the Company's entry into new and emerging e-commerce initiatives
through Compelis Corporation, Retailport.com, Inc. and Webco-ops.com,
Inc, each a wholly owned subsidiary.
Current assets totaled $985,189 at October 31, 2000 and consist of
trade receivables from operations, marketable securities and interest
due on the Promissory Note the Company holds relating to the sale of
Mega Blow in November 1998. The interest portion due from the Note is
$602,481 as reported in the audited financial statements from the year
ended January 31, 2000.
Current liabilities totaled $611,354 as of October 31, 2000
compared to $407,730 at January 31, 2000. This change in the Company's
current liabilities consists of an increase in trade payables from
operations and increases to the current portion of longterm debt held
by private investors of the Company.
The Company intends to sustain current operations through to the
year ending January 31, 2001. The primary sources of liquidity for the
Company are cash generated from operations, outside private sources of
financings, the continuing sale of common stock and/or the sale of
Company assets. If the funds available from these activities, together
with its current cash and cash equivalents are not sufficient to meet
the Company's needs, the Company may, from time to time, seek to raise
capital from additional sources, including establishing lending
facilities, project-specific financings, public or private debt and
equity financings. The Company has not been able to collect the funds
to have been generated from the sale of Mega Blow. There can be no
assurance that the Company will be successful in its attempt to collect
this debt or to raise sufficient capital to meet its operating
requirements, to repay its debts and to deliver on its business plan.
18
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K. None
SIGNATURES
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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.
TREASURY INTERNATIONAL, INC.
Dated: December 12, 2000 By /s/ Dale Doner
--------------------------------------
Dale Doner, President
Dated: December 12, 2000 By /s/ Marlin Doner
--------------------------------------
Marlin Doner, Chief Financial Officer
19
