[As adopted in Release No. 34-32231, April 28, 1993, 58 F.R. 26509]
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission file number 0-27580
Hi, Tiger International, Inc.
(Exact name of small business issuer as
specified in its charter)
Utah 87-0378021
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
350 West 300 South, Salt Lake City, UT 84101
(Address of principal executive offices)
(801) 322-1221
Issuer's telephone number
Not Applicable
(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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the
Exchange Act after the distribution of securities under a plan
confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practical date:
July 22, 1996 2,433,300
Transitional Small Business Disclosure Format (check one).
Yes ; No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND JUNE 30, 1996
(Unaudited)
ASSETS 06/30/96 09/30/95
Current Assets
Cash $ 24,883 $ 17,267
Note Receivable - Related Party - 46,000
Interest Receivable - 9,310
Accounts Receivable(Net of Allowance
for Doubtful Accounts of $2,739) 23,173 19,336
Total Current Assets 48,056 91,913
Fixed Assets
Equipment 134,418 115,642
Equipment Lease 10,730 10,730
Furniture & Fixtures 6,866 6,866
Less Accumulated Depreciation (61,895) (30,237)
Total Fixed Assets 90,119 103,001
Total Assets $ 138,175 $ 194,914
The accompanying notes are an integral part of these financial
statements.<PAGE>
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND JUNE 30, 1996
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY 06/30/96 09/30/95
Current Liabilities
Accounts Payable, Trade $ 72,569 $ 44,980
Interest Payable - 41,892
Accrued Liabilities 5,423 8,494
Lease Obligation - Current Portion 4,304 4,620
Notes Payable - Related Party - 26,900
Other Payable - Related Party 75,000 75,000
Total Current Liabilities 157,296 201,886
Long Term Liabilities
Lease Obligation - Long Term Portion - 2,884
Total Liabilities 157,296 204,770
Minority Interest 19,030 16,184
Stockholder' Equity
Common Stock (Par Value $.001),
50,000,000 share authorized,
2,333,300 and 2,292,300 shares
issued and outstanding June 30, 1996
and September 30, 1995, respectively 2,333 2,292
Paid in Capital in Excess of Par 434,729 410,270
Retained Deficit (475,213) (438,602)
Total Stockholders' Equity (38,151) (26,040)
Total Liabilities and
Stockholders' Equity $ 138,175 $ 194,914
The accompanying notes are an integral part of these financial
statements<PAGE>
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For The For The For The For The
3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
06/30/96 06/30/95 06/30/96 06/30/95
REVENUES
Sales $ 84,104 $ 90,590 $ 216,645 $ 109,430
Cost of Sales 16,099 12,438 48,977 15,951
Gross Margin 68,005 78,152 167,668 93,479
EXPENSES
General &
Administrative 60,104 91,919 194,623 121,905
Bad Debt Expense 2,576 984 4,362 1,399
Total Expenses 62,680 92,903 198,985 123,304
Other Income (Expense)
Interest Income - 2,744 1,196 4,255
Misc. Income - 129 867 129
Interest Expense (773) (2,740) (4,510) (6,056)
Net Other
Income (Expense) (773) 133 (2,447) (1,672)
Minority Income (4,611) 600 (2,847) 2,536
Net Income (Loss) $ (59) $ (14,018) $ (36,611) $ (28,961)
Earnings (Loss)
Per Common Share $ (0.00) $ (0.01) $ (0.02) $ (0.01)
Weighted Average
Shares Outstanding 2,333,300 2,253,967 2,312,800 2,156,189
The accompanying notes are an integral part of these financial statements.
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For The For The
9 Months 9 Months
Ended Ended
06/30/96 06/30/95
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (36,611) $ (28,961)
Adjustments Used to Reconcile
Net Loss to Net Cash
Minority Income 2,847 2,536
Provided by (Used In)
Operating Activities:
Compensation Expense from
Stock Options - -
(Increase) Decrease in
Accounts Receivable (3,837) (18,038)
(Increase) Decrease in
Interest Receivable 9,309 (4,255)
Increase (Decrease) in
Payables 24,518 (9,898)
Increase (Decrease) in
Interest Payable (41,892) 5,188
Depreciation and amortization 31,658 18,920
Net Adjustments 22,603 (5,547)
Net Cash Used in Operating Activities (14,008) (34,508)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Equipment (18,776) (11,568)
Net Cash Used in Investing Activities (18,776) (11,568)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds From Capital Stock Issued 24,500 59,340
Proceeds From Loans 46,000 -
Proceeds From Borrowings on Notes Payable - 2,500
Cash Payments on Notes Payable (26,900) -
Cash payments on Capital Leases (3,200) (2,437)
Net Cash Provided by Financing Activities 40,400 59,403
Net Increase (Decrease) in Cash and
Cash Equivalents 7,616 13,327
Cash and Cash Equivalents at Beginning
of Period 17,267 11,210
Cash and Cash Equivalents at End
of Period $ 24,883 $ 24,537
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For The For The
9 Months 9 Months
Ended Ended
06/30/96 06/30/95
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Interest $ 46,402 $ 868
Income Taxes $ 200 $ 200
The accompanying notes are an integral part of these financial
statements.
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED JUNE 30, 1996
(Unaudited)
1. Interim Reporting
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles and with Form 10-QSB requirements. Accordingly,
they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included.
Operating results for the nine month period ended June 30, 1996,
are not necessarily indicative of the results that may be expected
for the year ended September 30, 1996. For further information,
refer to the financial statements and footnotes thereto included in
the Company's annual report on Form 10-SB for the year ended
September 30, 1995.
Item 2. Management's Discussion and Analysis or Plan of Operation.
General
The following discusses the financial position and results
of operations of the Company and its consolidated subsidiary, The
Friendly Net (a Utah Limited Liability Company), which have been
combined and accounted for as a purchase using the recorded value
of the net assets of the seller due to the related party
relationship.
Liquidity and Capital Resources
The Company requires working capital principally to fund
its current operations and accounts receivable. Generally the
Company has adequate funds for its activities, from time to
time in the past the Company has relied on short-term borrowings
and the issuance of restricted common stock to fund current
operations. There are no formal commitments from banks or
other lending sources for lines of credit or similar short-term
borrowings, but the Company has been able to borrow any additional
working capital that has been required. From time to time
in the past, required short-term borrowings have been obtained from
a principal shareholder or other related entities. It is
anticipated that the current operations will expand and the funds
generated will exceed the Company's working capital requirements
for the foreseeable future and that it will no longer seek loans
from principal shareholders.
The increase in liquidity and capital resources during the
past two years reflects the increases attributable to the
acquisition of The Friendly Net and the partial year of operations.
The Company generates and uses cash flows through three activities:
operating, investing, and financing. During the nine months ended
June 30, 1996, operating activities used cash of $14,000 as
compared to net cash used of $35,000 for the nine months ended June
30, 1995.
Cash flows used in investing activities for the nine months
ended June 30, 1996 is due to the acquisition of $19,000 of
computer equipment for The Friendly Net Operations as compared to
$12,000 for June 30, 1995.
Financing activities provided $40,000 for the nine months
ended June 30, 1996 and $59,000 for June 30, 1995. The decrease in
cash flow from financing activities in 1996 is the net result of
collecting loans of $46,000, paying off notes of $27,000, payments
on lease obligations of $3,000 and the proceeds from the sale of
restricted stock of $25,000 for 1996, as compared to borrowings of
$2,500, payments on lease obligations of $2,000 and the proceeds
from the sale of restricted stock of $59,000 for 1995.
Management believes that the Company's current cash and
funds available will be sufficient to meet capital requirements and
short term and long term working capital needs in the fiscal year
ending September 30, 1996 and beyond, unless a significant
acquisition or expansion is undertaken. The Company is constantly
searching for potential acquisitions and/or expansion
opportunities.
Results of Operations
As of June 30, 1996, the Company's have only been in
operations since January 1995. The revenues and gross margins for
the fiscal year ended September 30, 1995 are not necessarily
indicative of the results that may be expected for a full year.
During the preceding year (fiscal 1995), customers with repeat
business accounted for a majority of the revenues generated.
Although the Company's subsidiary has performed work for it's
customers with repeat business, there is no assurance that such
customers will maintain or increase the level of volume of
business of the Company. Since the acquisition of The Friendly
Net, general and administrative expenses have increased more than
the gross margin generated by the operations resulting in a
loss from operations of $37,000 for the nine months ended June 30,
1996 compared to $29,000 loss in the nine months ended June 30,
1995. For the nine months ended June 30, 1996 the increased
general and administrative expenses was a result of increased
activity in the search for potential acquisition and the expenses
resulting from staffing and training personnel for the operations
of The Friendly Net, while the volume of revenues generated had not
reached a point where the gross margin generated was sufficient to
offset the cost of the initial start-up expenses. General and
Administrative costs are expected to remain fairly stable; although
there may be some increases in technical support personnel costs as
the customer base grows.
Inflation and Regulation
The Company's operations have not been, and in the near
term are not expected to be, materially affected by inflation or
changing prices. The Company encounters competition from
a variety of firms offering Internet services in its market area.
Many of these firms have long standing customer relationships and
are well-staffed and well financed. The Company believes
that competition in the Internet service industry is based on
competitive pricing, although the ability, reputation and technical
support of a concern is also significant. The Company does not
believe that any recently enacted or presently pending proposed
legislation will have a material adverse effect on its results of
operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
The Company did not file a report on Form 8-K during the
nine months ended June 30, 1996.
<PAGE>
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.
Hi, Tiger International, Inc.
(Registrant)
DATE: August 13, 1996 By: /s/
Paul G. Begum,
President
(Principal financial
and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF HI, TIGER INTERNATIONAL, INC. AS OF JUNE 30, 1996 AND THE RELATED
STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE NINE MONTHS THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 25
<SECURITIES> 0
<RECEIVABLES> 26
<ALLOWANCES> 3
<INVENTORY> 0
<CURRENT-ASSETS> 48
<PP&E> 152
<DEPRECIATION> 62
<TOTAL-ASSETS> 138
<CURRENT-LIABILITIES> 157
<BONDS> 0
0
0
<COMMON> 2
<OTHER-SE> (21)
<TOTAL-LIABILITY-AND-EQUITY> 138
<SALES> 217
<TOTAL-REVENUES> 217
<CGS> 49
<TOTAL-COSTS> 199
<OTHER-EXPENSES> 3
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> (37)
<INCOME-TAX> 0
<INCOME-CONTINUING> (37)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (37)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
