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 April 30, 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.
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(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)
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(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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<PAGE>2
As of April 30, 2000, 91,796,677 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 April 28, 2000 was $17,880,533. Shares
of Common Stock held by each executive officer and director and by each person
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.
<PAGE>3
PART I Financial Information
ITEM 1. Financial Statements
<PAGE>4
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 sheets of
Treasury International, Inc. as at April 30, 2000, and the interim consolidated
statements of operations, and cash flows for the years 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.
/s/ BROMBERG & ASSOCIATE
CHARTERED ACCOUNTANTS
TORONTO, CANADA
June 20, 2000
<PAGE>5
TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED BALANCE SHEET
AS AT APRIL 30, 2000
(UNAUDITED)
ASSETS
<TABLE>
<S> <C> <C>
April 30, 2000 January 31, 2000
-------------- ----------------
CURRENT
Accounts receivable 687,952 662,531
Due from Wexcap Group, LLC 3,000 3,000
Marketable Securities (Note 7) 128,753 -
Sundry assets 29,961 2,607
-------------- ----------------
849,666 668,138
Promissory Note Receivable (Note 3) 2,649,398 2,649,398
Goodwill (Notes 2b & 4) 179,655 381,929
Research & Development Costs (Notes 2c & 5) 222,809 160,002
Capital Assets (Notes 2d &6) 20,947 14,925
Long Term Investments (Note 7) 38,220 -
-------------- ----------------
$ 3,960,695 $ 3,874,392
============== ================
LIABILITIES
CURRENT
Bank Indebtedness $ 36,240 $ $ 56,547
Accounts payable and accrued liabilities 142,547 153,839
Current portion of long-term debt (Note 8) 335,515 197,344
-------------- ----------------
514,302 407,730
Long Term Debt (Note 8) 477,003 45,903
Loan Payable - 43,772
-------------- ----------------
991,305 $ 497,405
============== ================
SHAREHOLDERS' EQUITY
SHARE CAPITAL
Authorized
100,000,000 common shares at $.0001
Issued
91,796,677 common shares (Note 9) 9,179 9,510
Contributed surplus (Note 10) 4,711,854 4,896,694
Deficit (1,751,643) (1,529,217)
-------------- ----------------
2,969,390 3,376,987
-------------- ----------------
Total Liabilities & Shareholders Equity $ 3,960,695 $ 3,874,392
============== ================
</TABLE>
<PAGE>6
TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENT OF DEFICIT
For the THREE MONTH period ENDED APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C> <C>
April 30, 2000 April 30, 1999
-------------- --------------
Balance, beginning of period $(1,529,217) $ (908,328)
Net Loss for the period (222,426) (60,979)
-------------- --------------
Balance, end of period $(1,751,643) $ (969,307)
============== ==============
</TABLE>
<PAGE>7
TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
For the THREE MONTH PERIOD ENDED APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C> <C>
April 30, 2000 April 30, 1999
-------------- --------------
REVENUE $ 57,410 $ -
COST OF GOODS SOLD 46,696 -
-------------- -------------
GROSS PROFIT 10,714 -
-------------- -------------
EXPENSES
General and administrative 222,667 60,979
-------------- -------------
LOSS from operations before under noted items 211,953 60,979
-------------- -------------
Interest Expense 10,473 -
-------------- -------------
NET LOSS $ 222,426 $ 60,979
============== =============
Earnings per share $ 0.00 $ 0.00
============== =============
Weighted average number of common shares outstanding 92,070,591 88,320,677
============== =============
</TABLE>
<PAGE>8
TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENT OF
CHANGES IN SHAREHOLDERS' EQUITY
For the THREE MONTH PERIOD ENDED APRIL 30, 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
------------- --------- -------------
Balance-April 30, 2000 91,796,677 $ 9,179 $ 4,711,854
============= ========= =============
</TABLE>
<PAGE>9
TREASURY INTERNATIONAL, INC.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
For the THREE MONTH PERIOD ENDED APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C> <C>
April 30, 2000 April 30, 1999
-------------- ---------------
Cash flows from operating activities
Net loss $ (222,426) $ (60,979)
Adjustment to reconcile net loss to net cash used in
operating activities
Amortization 37,125 347
Increase in accounts receivable (25,421) -
Decrease (Increase) in sundry assets (27,354) 1,328
Increase in Marketable Securities (128,753)
Increase (decrease) in accounts payable (11,292) 46,055
Increase in amount due from Wexcap Group - 3,000
-------------- ---------------
Net cash used for operating activities (378,121) (16,249)
-------------- ---------------
Cash flows from financing activities
Loan Payable (43,772) -
Long-term debt 569,271 -
Proceeds on issue of common shares (185,171) -
-------------- ---------------
Cash provided by financing activities 340,328 -
-------------- ---------------
Cash flows from investing activities
Goodwill 200,000 -
Purchase of capital assets (13,933) -
Research & Development Costs (89,747) -
Long Term Investments (38,220) -
-------------- ---------------
Cash provided by investing activities 58,100 -
-------------- ---------------
Decrease (Increase) in bank indebtedness 20,307 (16,249)
Cash (bank indebtedness), beginning of period (56,547) 19,956
-------------- ---------------
Cash (bank indebtedness), end of period $ (36,240) $ 3,707
============== ===============
</TABLE>
<PAGE>10
TREASURY INTERNATIONAL, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AS AT APRIL 30, 2000
1. Nature of business
Treasury International, Inc. is a holding company which through its wholly
owned subsidiary, Compelis Corporation and Retailport.com, Inc., is
involved in the development of E-Commerce and 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, its
wholly owned subsidiary.
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.
<PAGE>11
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.
3. Promissory Note Receivable
The promissory note receivable arose on the sale of the company's
subsidiary, Mega Blow Moulding Limited on November 30, 1998.
4. Goodwill
<TABLE>
<S> <C> <C> <C>
April 30, 2000 January 31, 2000
------------------------------------------------------------------- ---------------------
Accumulated Net book
Cost Amortization value Net book value
------------------- ------------------- -------------- ---------------------
$196,809 $17,154 $179,655 $381,929
=================== =================== ============== =====================
5. Research & Development Costs
April 30, 2000 January 31, 2000
------------------------------------------------------------------- ---------------------
Accumulated Net book
Cost Amortization value Net book value
------------------- ------------------- -------------- ---------------------
$323,287 $100,478 $222,809 $160,002
================== =================== =============== ====================
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
6. Capital assets
April 30, 2000 January 31, 2000
-------------------------------------------- -------------------
Accumulated Net book Net book
Cost Amortization value value
----------- ----------------- ----------- -------------------
Office equipment $21,715 $15,059 $6,656 $8,320
Computer equipment 35,252 20,961 14,291 6,483
Leasehold improvements 1,407 1407 - 122
----------- ----------------- ----------- -------------------
$58,374 $37,427 $20,947 $14,925
=========== ================= =========== ===================
</TABLE>
<PAGE>12
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 $335,515 12% - 15%
July 20, 2005 $477,003 12%
---------------
Total $812,518
---------------
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 April 30, 2000 are as follows:
<TABLE>
<S> <C> <C> <C>
Year Granted Expiry Date Price Range No. of Shares
---------------------------- ------------------------- --------------- -----------------
November 1, 2000 October 31, 2001 $ 0.11 485,000
November 1, 2001 October 31, 2002 $0.11 410,000
---------------------------- ------------------------- -------------- -----------------
Total Outstanding 895,000
-----------------
</TABLE>
b) As at April 30, 2000, 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 April 30, 2000 the company had a net operating loss carryover of
approximately $2,448,000 expiring in various years through 2015.
<PAGE>13
ITEM 2. Management's Discussion and Analysis or Plan of Operation
Overview
The information contained in Item 2, 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.
Treasury is an asset management company in the business of development and
acquisition of proprietary assets that offer significant growth potential.
Treasury's mandate is to enhance shareholder value through an asset management
and acquisition strategy that targets companies where Treasury's management,
shareholders and corporate structure can be leveraged to improve strategic
market position, asset productivity and growth potential.
Operating Plan
The Company, through its operating subsidiaries, is involved in the
development of Internet-based Enterprise management and communication solutions.
The Company's operating activities include Compelis Corporation, Retailport.com,
Inc. and Webco-ops.com, Inc. and 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.
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
<PAGE>14
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 and 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.
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 application hosting, 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
<PAGE>15
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.
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
key competitors or companies having 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 three months ended April 30, 2000.
During the three months period ended April 30, 2000 the Company, through
its wholly owned subsidiary Compelis Corporation, has seen its year over year
Work In Progress (WIP) backlog increase by in excess of 200% to $456,600.
Revenues for the period include only sales activities completed during the
period as the Company books its revenue only on the completion of the contract.
<PAGE>16
The Company experienced a net loss of $222,426 during the three month
period ended April 30, 2000, compared to a net loss of $60,979 in the three
month period ended April 30, 1999. In order to deliver ActiveRMS and
ActiveCommerce in their version 1 release during this quarter, the Company
incurred extraordinary costs associated with development. 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 general and administrative costs of Compelis Corporation, the
Company's operating subsidiary.
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 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, its wholly owned subsidiary and its newly formed operating
companies Retailport.com, Inc. and Webco-ops.com, Inc.
Current assets totalled $849,666 at April 30, 2000 and consist of trade
receivables from operations, marketable securities and interest due from the
Promissory Note the Company holds from the purchasers of Mega Blow Moulding Ltd.
("Mega Blow") in November 1998.
Current liabilities totalled $514,302 at April 30, 2000 compared to
$407,730 at January 31, 2000. This change in the Company's current liabilities
consist of a small decrease in trade payables and has increased principally from
notes payable to private investors and officers of the Company.
The Company believes it will generate sufficient positive cash flow from
operations to meet its operating requirements for the next twelve months. The
primary sources of liquidity for the Company are the funds generated from the
sale of Mega Blow. However, there can be no assurance that the Company will be
able to realize on its promissory note and therefore be able to repay its debts.
If the funds available after the existing promissory note, together with its
current cash and cash equivalents are not sufficient to meet the Company's cash
needs, the Company may, from time to time, seek to raise capital from additional
sources, including establishing lending facilities, project-specific financings
and additional public or private debt or equity financings.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) Reports on Form 8-K. None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TREASURY INTERNATIONAL, INC.
Dated: June 21, 2000 By /s/ DALE DONER
------------------------------------
Dale Doner, President
Dated: June 21, 2000 By /s/ MARLIN DONER
-------------------------------------
Marlin Doner, Chief Financial Officer
