UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarter ended Commission file number
September 30, 1999 000-25523
Twin Faces East Entertainment Corporation
(Exact name of registrant as specified in its charter)
Nevada 22-3374562
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1850 E. Flamingo Rd., Suite 111-A
Las Vegas, Nevada 89119
(Address of principal executive offices) (Zip Code)
(702) 866-5858
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 No X
As of September 30, 1999, there were 4,159,349 shares of common stock
outstanding.
<PAGE>
TWIN FACES EAST ENTERTAINMENT CORPORATION
FOR THE QUARTER ENDED
SEPTEMBER 30, 1999
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of September 30, 1999 3
Statement of changes in stockholder's equity
for the three months ending September 30, 1999 4
Statement of changes in stockholder's equity
for the nine months ending September 30, 1999 5
Income Statement for the three months
ending September 30, 1999 6
Income Statement for the nine months
ending September 30, 1999 7
Statement of Cash Flow for the three months
ending September 30, 1999 8
Statement of Cash Flow for the nine months
ending September 30, 1999 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 10-12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults by the Company upon its
Senior Securities 13
Item 4. Submission of Matter to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports of Form 8-K 13
SIGNATURES 14
<PAGE>
<TABLE>
TWIN FACES EAST ENTERTAINMENT CORPORATION
BALANCE SHEET
SEPTEMBER 30, 1999
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ASSETS
<S> <C>
Current Assets
Regular Checking Account 3,940
-------------
Total Current Assets 3,940
Property and Equipment
Equipment 1,029
-------------
Total Property and Equipment 1,029
Other Assets 0
-------------
Total Other Assets 0
Total Assets $4,969
=============
</TABLE>
<TABLE>
LIABILITIES & CAPITAL
<S> <C>
Current Liabilities
Accrued Salary $180,248
Loan Payable - Smolanoff 3,072
Loan Payable - Teeple 98,363
-------------
Total Current Liabilities $281,683
Long-Term Liabilities
Total Long-Term Liabilities 0
-------------
Total Liabilities 281,683
Capital
Common Stock Issued 4,159
Additional Paid-In Capital 562,674
Accumulated Deficit (843,547)
-------------
Total Capital (276,714)
-------------
Total Liabilities & Capital $4,969
=============
</TABLE>
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<TABLE>
TWIN FACES EAST ENTERTAINMENT CORPORATION
SSTATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE THREE MONTHS ENDING SEPTEMBER 30, 1999
Common Stock Additional
Paid-In Accumulated
Capital Deficit
Par
Shares Value
--------- ------ ---------- -----------
<S> <C> <C> <C> <C>
Balance 6-30-99 3,465,460 3,465 144,412 (478,197)
Shares Issued To:
Officer/Directors for 80,000 80 100,672
services
Consultants for services 623,890 624 267,590
Cancelled Shares (10,000) (10)
Other cash 50,000
Offering Costs
Net (loss) (365,350)
--------- ------ ---------- -----------
Balance 9-30-99 4,159,349 4,159 562,674 (843,547)
========= ====== ========== ===========
</TABLE>
<PAGE>
<TABLE>
TWIN FACES EAST ENTERTAINMENT CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE NINE MONTHS ENDING SEPTEMBER 30, 1999
Common Stock Additional Accumulated
Paid-In Deficit
Capital
Shares Par
Value
--------- ------ ---------- -----------
<S> <C> <C> <C> <C>
Balance 12-31-98 3,411,060 3,411 208,022 (291,749)
Shares Issued To:
Officer/Directors for services 80,000 80 100,672
Consultants for services 678,290 678 289,606
Cancelled Shares (10,000) (10)
Other cash 50,000
Offering Costs (85,626)
Net (loss) (551,798)
--------- ------ ---------- -----------
Balance 9-30-99 4,159,349 4,159 562,674 (843,547)
========= ====== ========== ===========
</TABLE>
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<TABLE>
TWIN FACES EAST ENTERTAINMENT CORPORATION
INCOME STATEMENT
FOR THE THREE MONTH PERIOD ENDING
SEPTEMBER, 30 1999
1999
<S> <C>
Revenues
Other Income $ 32.40
--------------
Total Revenues $32.40
--------------
Cost of Sales 0.00
--------------
Total Cost of Sales 0.00
--------------
Gross Profit $32.40
--------------
Expenses
Total Expenses 365,381.75
--------------
Net Income (Loss) $(365,349.35)
==============
Loss Per Share (0.09)
==============
Number of shares outstanding 4,159,349
==============
</TABLE>
<PAGE>
<TABLE>
TWIN FACES EAST ENTERTAINMENT CORPORATION
INCOME STATEMENT
FOR THE NINE MONTH PERIOD ENDING
SEPTEMBER 30, 1999
1999
<S> <C>
Revenues
Other Income $ 132.35
------------
Total Revenues $132.35
------------
Cost of Sales 0.00
------------
Total Cost of Sales 0.00
------------
Gross Profit $132.35
Expenses
Total Expenses 551,930.15
-------------
Net Income (Loss) $(551,797.80)
=============
Loss Per Share (0.13)
=============
Number of shares outstanding 4,159,349
=============
</TABLE>
<PAGE>
<TABLE>
TWIN FACES EAST ENTERTAINMENT CORPORATION
STATEMENT OF CASH FLOW
FOR THE THREE MONTH PERIOD ENDING
SEPTEMBER 30, 1999
<S> <C>
Cash Flows from operating activities
Net Income (Loss) $ (365,349)
Adjustments to reconcile net income to net cash
provided by operating activities
Accrued Salary (50,352)
Accrued Expenses (20,609)
Loan Payable - Smolanoff 360
Loan Payable - Teeple 20,885
-------------
Total Adjustments (49,716)
-------------
Net Cash provided by Operations (415,065)
-------------
Cash Flows from investing activities Used For
Net cash used in investing 0
-------------
Cash Flows from financing activities
Proceeds From
Common Stock 704
Paid-in capital 418,622
Used For
Common Stock (10)
Paid-in capital (360)
-------------
Net cash used in financing 418,956
-------------
Net increase (decrease) in cash $ (3,891)
=============
Summary
Cash Balance at End of Period $ 3,940
Cash Balance at Beginning of Period (886)
-------------
Net Increase (Decrease) in cash $ (3,054)
=============
</TABLE>
<PAGE>
<TABLE>
TWIN FACES ENTERTAINMENT CORPORATION
STATEMENT OF CASH FLOW
FOR THE NINE MONTH PERIOD ENDING
SEPTEMBER 30, 1999
<S> <C>
Cash Flows from operating activities
Net Income (Loss) $ (551,798)
Adjustments to reconcile net income to net cash
provided by operating activities
Accrued Salary 47,448
Accrued Expenses 0
Loan Payable - Smolanoff 3,072
Loan Payable - Teeple 58,615
------------
Total Adjustments 109,134
------------
Net Cash provided by Operations (442,664)
------------
Cash Flows from investing activities Used For
Net cash used in investing 0
------------
Cash Flows from financing activities
Proceeds From
Common Stock 758
Paid-in capital 440,638
Used For
Common Stock (10)
Paid-in capital (360)
------------
Net cash used in financing 441,026
Net increase (decrease) in cash $ (1,638)
============
Summary
Cash Balance at End of Period $
3,940
Cash Balance at Beginning of Period (5,578)
------------
Net Increase (Decrease) in cash $ (1,638)
============
</TABLE>
<PAGE>
1. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-QSB instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of
September 30, 1999, the results of operations for the nine months ended
September 30, 1999 and the cash flows for the nine months ended September
30, 1999. These results have been determined on the basis of generally
accepted accounting principles and practices and applied consistently with
those used in the preparation of the Company's Audited Financials ending
December 31, 1998 as filed in Form 10SB.
Certain information and footnote disclosures included in the financial
statements presented in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that the
accompanying consolidated financial statements be read in conjunction with
financial statements and notes thereto incorporated by reference in the
Company's Audited Financials ending December 31, 1998 as filed in Form
10SB.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with
the Company's financial statements and the notes thereto contained
elsewhere in this filing.
Overview
The Company, TWIN FACES EAST ENTERTAINMENT CORPORATION, a Nevada
corporation (the "Company") is a development stage company formed in 1997.
The purpose of the company's activities is the commercial development of
its entertainment and educational properties. The Company products
essentially lie within 2 areas: 1- Feature film and television live and
animated film scripts awaiting funding to enter production; and 2-
Documentary quality film of Dr. Albert Einstein. The Company was
incorporated under the laws of the State of Delaware on December 5, 1997
and reincorporated under the laws of the State of Nevada on June 17, 1998.
The Company has implemented a dual commercialization strategy for its
products. The first element of this strategy entails the development of its
pages from a Rabbit Journal TV series for children. The second part of the
Company's strategy involves the implementation of the company's characters
for sale as a licensing vehicle for use in other markets. A kid's
prosthetic company has been licensed a logo for embedding in prosthetics
for kids.
The Company has ownership of extensive film footage of Einstein, which
has not been viewed by the public to date. The company has received
numerous requests for development of the footage into books, a documentary,
photo exhibits, and similar entertainment venues.
<PAGE>
Results of Operations for the three months ended September 30, 1999
Total operating expenses from continuing operations were $365,382 for
the three months ended September 30, 1999, as compared to the operating
expenses of $88,271 for the three months ended June 30, 1999. Utilizing
an average daily calculation of operating expenses of $3,972 for the period
ending September 30, 1999, and an average daily calculation of operating
expenses of $970 for the period ending June 30, 1999, this represented a
309% increase in average daily operating expenses.
The increase in expenses was primarily the result of the Company
increasing expenses in legal and consulting expenses during the period
ending September 30, 1999.
Results of Operations for the nine months ended September 30, 1999
Total operating expenses from continuing operations were $551,930 for
the nine months ended September 30, 1999, as compared to the operating
expenses of $291,794 for the period of December 5, 1997 through December
31, 1998 its year end. Utilizing an average daily calculation of
operating expenses of $2,022 for the period ending September 30, 1999, and
an average daily calculation of operating expenses of $746 for the period
ending December 31, 1998, this represented a 171% increase in average daily
operating expenses.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking
statements made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995. These forward looking statements are based
largely on the Company's expectations and are subject to a number of risks
and uncertainties, many of which are beyond the Company's control,
including, but not limited to, economic, competitive and other factors
affecting the Company's operations, markets, products and services,
expansion strategies and other factors discussed elsewhere in this report
and the documents filed by the Company with the Securities and Exchange
Commission. Actual results could differ materially from these forward-
looking statements. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained in this
report will in fact prove accurate. The Company does not undertake any
obligation to revise these forward-looking statements to reflect future
events or circumstances.
Liquidity and Capital Reserves
As of September 30, 1999 (Unaudited)
As of September 30, 1999, the Company's assets were $4,969 and its
liabilities were $281,683, resulting in an deficit of assets of ($276,714).
Cash was $3,940 at September 30, 1999 as compared to cash of $49 on June
30, 1999, a increase of $3,891. This represented a 7841% increase in
available cash.
<PAGE>
The Company has continued to fund its deficit cash flow from private
placements of the Company's common stock. It is anticipated that loans and
the sale of the Company's stock will continue until such time as the
Company generates sufficient revenues from its operations to cover
operating expenses.
Year 2000 Issues
Certain of the Company's computer systems and software may interpret
the year 2000 as some other date. The operating system generally employed
by the Company is Windows 95, which is year 2000 compliant. The networking,
general ledger and accounts payable and facility point-of-sale and software
programs require software updates or modifications to address the year 2000
problem. The Company is further addressing the matter by replacing certain
older computers and installing off-the-shelf and other third-party software
that is year 2000 compliant, at an estimated cost of less than $1,000. The
Company anticipates that installation of year 2000 compliant software and
hardware will be completed by the end of 1999. The Company does not believe
that the year 2000 problem will have a material affect on the Company's
operations, however, no assurance can be given that the software updates
and new computers will resolve the problem as scheduled or at all.
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
In an effort to avoid protracted litigation, Twin Faces East
Entertainment, Inc. ("the company") entered into a settlement agreement
with ReadSpeak, Inc. to end the litigation in ReadSpeak, Inc. vs. Twin
Faces East Entertainment (United States District Court, Southern District
of New York - Case No. 99 Civ. 8602 (DLC) (DFE)). The parties agreed to a
cross irrevocable and unconditional release of claims, counterclaims,
demands, damages, etc., in exchange for the Company; (i) paying the sum of
$5,000, (ii) the Company acknowledging that ReadSpeak, Inc. owns the patent
rights to US Patent No. 5,741,136, and ReadSpeak, Inc. has the sole and
exclusive rights to the trademark "ReadSpeak," (iii) that the Company
accepts the validity of the above patent, and (iv) the Company agrees to
the entry of a permanent injunction wherein the Company will not utilize
ReadSpeak technology.
Item 2. Changes in Securities.
None.
Item 3. Defaults by the Company upon its Senior Securities.
None.
Item 4. Submission of Matter to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports of Form 8--K.
8-K filed October 5, 1999
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
TWIN FACES EAST ENTERTAINMENT CORPORATION
(Registrant)
By:/s/Michael Smolanoff By:/s/ Stan Teeple
---------------------- ----------------------
Michael Smolanoff Stan Teeple
CEO, President Secretary/ Treasurer
Date: November 8, 1999 Date: November 8, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 3,940
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,029
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,969
<CURRENT-LIABILITIES> 281,683
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,969
<SALES> 0
<TOTAL-REVENUES> 132
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 551,930
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> (551,798)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (551,798)
<EPS-BASIC> (.13)
<EPS-DILUTED> (.13)
</TABLE>
