FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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 0-25825
EPROMO.COM
(Formerly known as Tiberon Resources Limited)
(Exact name of registrant as specified in its charter)
Nevada 91-1921237
------ ------------
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
19000 Von Karman, Fourth Floor, Irvine, CA 92612
(Address of principal executive office) (Zip Code)
(949) 622-5453
(Registrant's telephone number, including area code)
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 each of Issuer's classes of common equity as
of November 20, 2000.
Common Stock, par value $.001 16,428,590
----------------------------- ----------
Title of Class Number of Shares
Transitional Small Business Disclosure Format yes_____ no X
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EPromo.comForm 10-QSB Quarterly ReportSeptember 30, 2000
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
(1) Financial Statements Page
Consolidated Balance Sheet at September 30, 2000 3
Consolidated Statements of Operations for the three months ended
September 30, 2000 and 1999, the nine months ended September 30,
2000, the period from inception (February 10, 1999) to
September 30, 1999 and the period from inception (February 10, 1999)
to September 30, 2000 4
Consolidated Statements of Cash Flows for the nine months ended
September 30, 2000, the period from inception (February 10, 1999)
to September 30, 1999 and the period from inception (February 10, 1999)
to September 30, 2000 5
Notes to Unaudited Financial Statements 6
(2) Management's Discussion and Analysis or
Plan of Operation 9
PART II. OTHER INFORMATION 11
SIGNATURES 12
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PART 1 - FINANCIAL INFORMATION
ePROMO.COM
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)
September 30,
2000
ASSETS
CURRENT ASSETS
Cash and equivalents $ 16,252
Prepaid value added tax 11,539
Other current assets 17,580
Total current assets 45,371
PROPERTY AND EQUIPMENT, net 109,073
OTHER ASSETS 44,864
LIABILITIES AND SHAREHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 140,441
NOTES PAYABLE 404,398
SHAREHOLDERS' (DEFICIT)
Preferred stock, $.01 par value, 1,000,000
undesignated shares authorized, none issued --
Common stock, $.001 par value, 50,000,000 shares
authorized; 16,428,590 shares issued and outstanding 161
Additional paid-in capital --
Deficit accumulated during the development stage (369,214)
(369,053)
Other comprehensive income:
Currency translation adjustment 23,522
(369,214)
$ 199,308
The accompanying condensed notes are an integral part of these financial
statements.
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ePROMO.COM
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Inception Inception
Nine Months (February 10, (February 10,
Three Months Three Months Ended 1999) through 1999) through
ended September ended September September 30, September 30, September 30,
30, 2000 30, 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
REVENUES $ 27,699 $ -- $ 47,509 $ -- $ 49,442
COST OF SALES 34,956 -- 36,105 -- 36,105
GROSS MARGIN (7,257) -- 11,404 -- 13,337
COSTS AND EXPENSES:
General & administrative 70,402 38,638 256,575 38,638 373,660
Depreciation 1,877 -- 8,103 -- 8,891
Total costs and expenses 72,279 38,638 264,678 38,638 382,551
NET (LOSS) FROM OPERATIONS (79,536) (38,638) (253,274) (38,638) (369,214)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment 11,136 (129) 23,801 (129) 23,522
COMPREHENSIVE (LOSS) $ (68,400) $ (38,767) $ (229,473) $ (38,767) $ (345,692)
NET (LOSS) PER COMMON SHARE $ (0.01) $ (0.00) $ (0.02) $ ( 0.00) $ (0.04)
WEIGHTED AVERAGE OUTSTANDING SHARES -
BASIC AND FULLY DILUTED 11,966,090 8,378,590 9,587,564 8,378,590 8,930,513
</TABLE>
The accompanying condensed notes are an integral part of these financial
statements.
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ePROMO.COM
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months
ended Inception to Inception to
September 30, September 30, September 30,
2000 1999 2000
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net cash used in operating activities $ (233,747) $ -- $ (271,370)
INVESTING ACTIVITIES:
Purchases of property and equipment (78,824) -- (116,776)
FINANCING ACTIVITIES:
Proceeds from notes payable 326,828 -- 404,398
INCREASE IN AND
EQUIVALENTS 14,257 -- 16,252
CASH AND CASH EQUIVALENTS,
Beginning of period 1,995 -- --
CASH AND EQUIVALENTS, end of period $ 16,252 $ -- $ 16,252
</TABLE>
The accompanying condensed notes are an integral part of these financial
statements.
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ePROMO.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
September 30, 2000
(UNAUDITED)
(1) DESCRIPTION OF BUSINESS
ePromo.com, a Nevada corporation (the "Company"), is a holding company which
currently has only one operating subsidiary, C.D. Promo Limited, a private
listed company formed under the laws of the United Kingdom ("CD Promo"). The
Company anticipates acquiring additional operating subsidiaries in the future.
CD Promo was formed in February 1999 with a mission to provide creative media
and marketing solutions to customers, primarily through the medium of compact
and digital video disks. CD Promo began operations in July of 1999. CD Promo's
main product, the CD-Promo Product Portfolio, is a unique marketing tool for
use in profiling both a company and its products. CD Promo believes that this
product will enable purchasers to present themselves and their company in a
number of different multi-media configurations all contained on custom shaped
CDs the size of a business card.
The Company currently has only limited sales and has not yet extensively
marketed its product.
(2) BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") for interim
financial information and Item 310(b) of Regulation S-B. They do not include
all of the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting only of
normal recurring adjustments) considered necessary for a fair presentation have
been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. For further
information, refer to the financial statements of ePromo.com as of December 31,
1999 and for the year then ended and the period from inception through December
31, 1998, including notes thereto included in the Company's Form 10-KSB. Also,
refer to the Company's Form 8-K, dated September 6, 2000, for the financial
statements and notes of CD Promo as of December 31, 1999 and for the period
from inception through December 31, 1999.
The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries. Intercompany transactions and balances have been
eliminated in consolidation.
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(3) EARNINGS PER SHARE The Company calculates net income (loss) per share as
required by SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share
is calculated by dividing net income (loss) by the weighted average number of
shares of the Company's common stock, $0.001 par value per share, outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of shares and dilutive common
stock equivalents outstanding. During the periods presented, common stock
equivalents, if any, were not considered as their effect would be
anti-dilutive.
(4) DISCLOSURE OF CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES The Company has
accumulated net losses of approximately $346,000 and negative working capital
of approximately $95,000 as of September 30, 2000. The Company's capacity to
operate as a going-concern is dependent on its ability to obtain adequate
financing to fund its operations until the Company is able generate commercial
revenues sufficient to fund ongoing operations. There can be no guarantee that
any additional financing will be available on terms favorable to the Company or
its shareholders, if at all. These factors, among others, 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 Company is also subject to various risks and uncertainties frequently
encountered by companies in early stage of development. Such risks and
uncertainties include, but are not limited to, its limited operating history
and the rapid change in the marketplaces in which the Company competes.
(5) STOCKHOLDERS' EQUITY On August 21, 2000, the Company consummated the
acquisition of CD Promo by exchanging 76,169 shares of the Company's common
stock for each issued and outstanding share of common stock of CD Promo. CD
Promo had a total of 110 issued and outstanding shares of common stock prior to
its acquisition by the Company. The total number of shares issued in the
acquisition was 8,378,590, resulting in the Company having approximately
16,428,590 shares of common stock outstanding after the acquisition. As a
result of the share exchange, (1) CD Promo is now a wholly-owned subsidiary of
the Company, and (2) the former shareholders of CD Promo now control
approximately 51% of the outstanding common stock and, therefore, control the
Company.
This transaction has been accounted for as though it were a recapitalization of
CD Promo and sale by CD Promo of 8,050,000 shares of common stock in exchange
for the net assets of the Company.
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(6) NOTES PAYABLE As of September 30, 2000, the Company's notes payable are
comprised of the following:
Balance
Interest free loan $ 96,788
Working capital advance 307,610
Total $ 404,398
The interest free loan, dated October 1999, matures in October 2002. The holder
of the note payable also owns approximately 1,523,000 shares of the Company's
common stock. The working capital advance has no specific terms other than it
shall be repaid out of future profits of the company. The Company anticipates
that it will be unlikely to make repayments on the advance within the next 12
months.
(7) COMMITMENTS AND CONTINGENCIES The Company is involved in various legal
actions rising in the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will not have a material
adverse effect on the Company's financial position or the results of its
operations.
(8) SUBSEQUENT EVENT On October 11, 2000, the Company terminated its original
letter of intent, dated September 14, 2000, to acquire Qvergent Radio Corp., a
Delaware corporation ("Qvergent"), and entered into a new non-binding letter of
intent with Qvergent pursuant to which the Company has agreed in principle to
purchase all of the outstanding shares of Qvergent for 4,189,295 shares of
restricted common stock of the Company. As an inducement to the Company and
Qvergent to enter into the merger, the former shareholders of CD Promo agreed
to surrender an aggregate of 4,189,295 shares of their common stock in the
Company. The Company anticipates executing a definitive merger agreement with
Qvergent by November 24, 2000.
(9) CHANGE IN TRADING SYMBOL ON THE OTC BULLETIN BOARD In connection with the
name change of the Company to "ePromo.com," the Company changed its trading
symbol on the OTC Bulletin Board from "TBRN" to "EPMO" effective July 31, 2000.
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ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company was originally formed on April 10, 1998, as a natural resource
company engaged in the acquisition of mineral properties, with its sole focus
in Canada. Management believes that diversifying the Company's business would
enhance the Company's stability and lessen its concentration of risks. The
Company changed its name to ePromo.com, and on May 11, 2000, the company
entered into a Share Exchange Agreement with C.D. Promo Limited ("CD Promo").
CD Promo is a corporation organized under the laws of England that intends to
produce compact disks (CDs) to be used as multi-media marketing configurations
for a variety of businesses. CD Promo also owns and holds the rights to a
significant number of registered domain names for use on the Internet.
Pursuant to the Share Exchange Agreement, the Company acquired CD Promo, by
exchanging 76,169 shares of the Company's Common Stock for each issued and
outstanding share of Common Stock of CD Promo. CD Promo had a total of 110
issued and outstanding shares of Common Stock. The shareholders of CD Promo
received 8,378,590 shares or approximately 51% of the shares then outstanding.
Despite a working capital deficiency of $95,000 at September 30, 2000,
management believes that it will have sufficient working capital to fund the
Company's operations by means of additional borrowings from related parties
and/or through an offering of Common Stock. The business of CD Promo will
require working capital, and management anticipates that in addition to a
possible offering of Common Stock, additional financing may be obtained through
long or short term loans, or through a joint venture or strategic alliance.
There can be no assurance that the Company will be able to obtain additional
funding, or obtain additional funding with terms favorable to the Company. The
failure to obtain additional financing could result in delay or indefinite
postponement of the Company's activities, and a complete loss of its
investment.
Since inception, the Company has generated approximately $49,000 in revenue, of
which approximately $28,000 was generated in the three month period ended
September 30, 2000 and approximately $48,000 was generated in the nine month
period ended September 30, 2000. For the nine months ended September 30, 2000,
the Company recorded a net loss from operations of approximately $253,000, as
compared to a net loss of approximately $39,000 for the corresponding prior
year period of inception through September 30, 1999. For the three months ended
September 30, 2000, the Company recorded a net loss from operations of
approximately $80,000 as compared to a net loss of approximately $39,000 for
the 3 months ended September 30, 1999.
For the nine months ended September 30, 2000, cash flow from operations reflect
a net cash used in operating activities of approximately $234,000, which was
offset by approximately $327,000 of cash proceeds from loans by private
investors. Since inception, the Company used approximately $271,000 in cash
from operations, which was offset by approximately $404,000 of cash proceeds
from loans by private investors. Since the Company currently has no significant
source of revenue, the Company's working capital will be depleted by operating
expenses and the Company will be dependent upon external sources of cash.
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From inception through September 30, 2000, the Company has incurred a net loss
from operations of approximately $369,000. At September 30, 2000, its working
capital deficiency was approximately $95,000. There are no assurances that the
Company will be able to successfully implement and develop the business of CD
Promo, or obtain any additional financing. The inability to obtain additional
financing when needed will have material adverse effect on the Company's
operating results.
Currency Risk
The Company is subject to risk in changes of foreign exchange rates for its
subsidiaries that use a foreign currency as their functional currency, or for
assets or liabilities that are foreign currency denominated and are translated
to U.S. dollars at each reporting period. The Company has made quarterly
currency translation adjustments (totaling $23,522 since inception) for its
foreign operations, recognized as a component of stockholder's deficiency. The
Company has not engaged in the purchase of forward contracts, or other hedging
techniques, to manage this foreign exchange risk to protect against earnings
and cash flow volatility resulting from changes in foreign exchange rates.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby
providing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made by
or on behalf of the Company herein or orally, whether in presentations, in
response to questions or otherwise. Any statements that express, or involve
discussions as to expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of words
or phrases such as "will result", "are expected to", "will continue", "is
anticipated", "estimated", "projection" and "outlook") are not historical facts
and may be forward-looking and, accordingly, such statements involve estimates,
assumptions, and uncertainties which could cause actual results to differ
materially from those expressed in the forward-looking statements. Such
uncertainties include, among other, the following: (i) the Company's ability to
obtain additional financing to implement its business strategy; (ii) conditions
beyond the control of the Company; (iii) the financial condition of the
Company's clients; (iv) imposition of new regulatory requirements affecting the
Company; (v) a downturn in general or local economic conditions (vi) the delay
or failure to properly manage growth and successfully integrate acquired
companies and operations; (vii) lack of geographic diversification; (viii)
effect of uninsured loss and (ix) other factors which are described in further
detail in the Company's filings with the Securities and Exchange Commission.
The Company cautions that actual results or outcomes could differ materially
from those expressed in any forward-looking statements made by or on behalf of
the Company. Any forward-looking statement speaks only as of the date on which
such statement is made, and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances
after the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for management to predict all of such factors. Further, management
cannot assess the impact of each such factor on the business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On August 21, 2000 the Company issued 8,378,590 shares of its
common stock in exchange for all of the issued and outstanding common stock of
CD Promo, Limited. These shares were not registered under the securities Act of
1933, as amended, because the subject transaction involved a non public
offering exempt from registration under Section 4(2) of the Securities Act of
1933, as amended.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
Not Applicable.
ITEM 5 OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
27.1 Financial Data Schedule (For SEC purposes only)
Reports on Form 8-K
8K filed August 21, 2000 reporting merger with CD Promo.
8K/A filed November 4, 2000 reporting details of merger with CD Promo
and audited financial statements of CD Promo.
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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.
EPROMO.COM
(Registrant)
Date: November 20, 2000 By: /s/ GREGORY BARELA
---------------------------
GREGORY BARELA, CEO
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