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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 and
Exchange Act of 1934.
For the quarterly period ended June 30, 2000.
( ) Transition report pursuant to Section 13 or 15(d) of the Exchange
Act for the transition period from _________________ to ____________ .
Commission File Number: 00-25645
SIXTH BUSINESS SERVICE GROUP, INC.
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(Exact name of registrant as specified in charter)
Florida 59-3651768
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(State of Incorporation) (I.R.S. Employer I.D. No)
2503 W. Gardner Ct., Tampa, FL 33611
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(Address of Principal Executive Offices)
(813) 831-9348
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(Registrant's Telephone Number, Including Area Code)
Check whether the registrant: (1) has filed all reports required to be filed by
Section 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 )
Indicate the number of shares outstanding of each of the issuer's classes of
stock as of July 31, 2000.
1,000,000 Common Shares
Transitional Small Business Disclosure Format:
YES ( ) NO (X)
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SIXTH BUSINESS SERVICE GROUP, INC.
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Balance Sheets as of June 30, 2000 and December 31, 1999....... 3
Statements of Operations for the three and six month periods
ended June 30, 2000 and the period March 15, 1999
(date of incorporation) to June 30, 1999 and 2000............. 4
Statement of Stockholders' Equity for the six months
ended Juen 30, 2000............................................ 5
Statement of Cash Flows for the three and six months ended
June 30, 2000 and the period March 15, 1999 (date of
incorporation) to June 30, 1999 and 2000..................... 6
Notes to Financial Statements.................................. 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations or Plan of Operations.................... 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 12
Item 2. Changes in Securities.......................................... 12
Item 3. Defaults Upon Senior Securities................................ 12
Item 4. Submission of Matters to a Vote of Securities Holders.......... 12
Item 5. Other Information.............................................. 12
Item 6. Exhibits and Reports on Form 8-K............................... 12
Signatures
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Sixth Business Service Group, Inc.
(A Development Stage Enterprise)
BALANCE SHEET
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June 30, December
2000 31, 1999
ASSETS (Unaudited)
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TOTAL ASSETS $ - $ -
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LIABILITIES AND STOCKHOLDERS' EQUITY
TOTAL LIABILITIES $ 750 $ 1,000
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STOCKHOLDERS' EQUITY:
Common stock - no par value: 50,000,000 shares
authorized; 1,000,000 shares issued and
outstanding 79 79
Preferred stock - no par value: 20,000,000
shares authorized; no shares issued and
outstanding - -
Additional paid in capital 7,000 4,000
Deficit accumulated during the development stage (7,829) (5,079)
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Total stockholders' equity ( 750) (1,000)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ -
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SEE NOTES TO FINANCIAL STATEMENTS.
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Sixth Business Service Group, Inc.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
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<TABLE>
<CAPTION>
Period Period
March 15, March 15,
Six Three 1999 (date 1999 (date
Months Months of of
Ended Ended incorporation) incorporation)
June 30, June 30, to June to June
2000 2000 30, 1999 30, 2000
--------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
EXPENSES:
Professional fees and expenses $ 2,750 $ 1,750 $ 3,000 $ 7,750
Organizational costs - - 79 79
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NET LOSS $ 2,750 $ 1,750 $ 3,079 $ 7,829
========= =========== ============= =============
NET LOSS PER SHARE $ 0.00 $ 0.00 $ 0.00 $ 0.01
========= =========== ============= =============
</TABLE>
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SEE NOTES TO FINANCIAL STATEMENTS.
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Sixth Business Service Group, Inc.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY
For the six months ended June 30, 2000
(Unaudited)
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<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid in Development
Shares Value Capital Stage Total
--------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balances,December 31, 1999 1,000,000 $ 79 $ 4,000 $ (5,079) $ (1,000)
Capital contribution - - 1,000 - 1,000
Capital Contribution of Services - - 2,000 - 2,000
Net loss for the six
months ended June 30, 2000 - - - (2,750) (2,750)
--------- -------- ---------- ------------ -----------
Balances June 30, 2000 1,000,000 $ 79 $ 7,000 $ (7,829) $ ( 750)
========= ========= ========== ============ ===========
</TABLE>
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SEE NOTES TO FINANCIAL STATEMENTS.
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Sixth Business Service Group, Inc.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
(Unaudited)
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<TABLE>
<CAPTION>
Period Period
March 15, March 15,
Six Three 1999 (date 1999 (date
Months Months of of
Ended Ended incorporation) incorporation)
June 30, June 30, to June to June
2000 2000 30, 1999 30, 2000
--------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,750) $ (1,750) $ (3,079) $ (7,829)
Adjustments to reconcile net loss to
cash used in operating activities:
Increase (decrease)in accrued expenses (250) 750 1,000 750
Contributed services and expenses 2,000 1,000 2,000 6,000
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NET CASH USED IN OPERATING ACTIVITIES (1,000) - (79) (1,079)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock - - 79 79
Capital Contribution 1,000 - - 1,000
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CASH PROVIDED BY FINANCING ACTIVITIES 1,000 - 79 1,079
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NET INCREASE IN CASH AND CASH EQUIVALENTS - - - -
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - - - -
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ - $ - $ - $ -
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ - $ - $ - $ -
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Taxes paid $ - $ - $ - $ -
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</TABLE>
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SEE NOTES TO FINANCIAL STATEMENTS.
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Sixth Business Service Group, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
Sixth Business Service Group, Inc. ("we", "us", "our") was incorporated under
the laws of the state of Florida on March 15, 1999. We are considered to be in
the development stage, as defined in Financial Accounting Standards Board
Statement No. 7. We intend to investigate and, if such investigation warrants,
engage in business combinations. Our planned principal operations have not
commenced, therefore accounting policies and procedures have not yet been
established.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Our accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principals for interim financial information
and the instructions to Form 10-QSB and Rule 10-1 of Regulation S-X of the
Securities and Exchange Commission (the"SEC"). Accordingly, these financial
statements do not include all of the footnotes required by generally accepted
accounting principals. In the opinion of management, all adjustments (consisting
of normal and recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the three and six months
ended June 30, 2000 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2000.
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. We have an accumulated deficit of
$7,829 as of June 30, 2000. We do not currently engage in business activities
that provide any cash flow, accordingly our ability to continue as a going
concern is dependent on our management's ability to fund our cash requirements
until a business combination is closed. These factors among others may indicate
that we will be unable to continue as a going concern for a reasonable period of
time.
The financial statements do not include any adjustments that might be necessary
if we are unable to continue as a going concern.
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NOTE C - INCOME TAXES
During the period March 15, 1999 (date of incorporation) to June 30, 2000, we
recognized losses for both financial and tax reporting purposes. Accordingly, no
deferred taxes have been provided for in the accompanying statement of
operations.
NOTE D - RELATED PARTY TRANSACTION
Our President, who is also a shareholder, has agreed, in writing, to fund all of
our expenses until such time as an acquisition transaction is closed. None of
these funds expended on our behalf will be reimbursable to our President,
accordingly these amounts will be reflected in our financial statements as
contributed capital.
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Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
balance sheet as of December 31, 1999 and the financial statements as of and for
the three and six-months ended June 30, 2000, and the period March 15, 1999
(date of inception) to June 30, 1999 and June 30, 2000 included with this Form
10-QSB. The Company did not have significant operations during the three months
ended June 30, 1999 or for the period March 15, 1999 (date of inception) to June
30, 1999 and as such this analysis does not include any additional discussion as
of and for such periods.
The following discussion and analysis should be read in conjunction with
financial statements as of and for the periods ended June 30, 2000 included with
this Form 10-QSB.
We are considered to be in the development stage as defined in Financial
Accounting Standards Board Statement No. 7, and have neither engaged in any
operations nor generated any revenues to date. We have no assets. Our expenses
from inception through June 30, 2000, all funded by capital contributions from
management, are $7,829.
Substantially all of our expenses that must be funded by management will be from
our effort s to identify a suitable acquisition candidate and close the
acquisition. Management has agreed in writing to fund our cash requirements
until an acquisition is closed. So long as management does so, we will have
sufficient funds to satisfy our cash requirements. This is primarily because we
anticipate incurring no significant expenditures. Before the closing of an
acquisition, we anticipate our expenses to be limited to accounting fees, legal
fees, telephone, mailing, filing fees and occupational license fees.
We do not intend to seek additional financing. At this time we believe that the
funds to be provided by management will be sufficient for funding our operations
until we find an acquisition and therefore do not expect to issue any additional
securities before the closing of a business combination.
Readers are referred to the cautionary statement, which addresses
forward-looking statements made by the Company.
PROPOSED MERGER
In April 1999, Mr. Nidal Zayed, Executive Vice President of Telesource
International contacted Venture Associates to inquire about the possibility of
locating a company such as Sixth Business Service Group to acquire Telesource
International in order that Telesource International could become an SEC
reporting company and thereafter secure a listing on the over the counter
bulletin board. Venture Associates referred Mr. Zayed to Longman & Associates,
Inc., which was retained by Telesource International in June 1999 for a fee of
$90,000 plus 300,000 shares of Telesource International common stock. Venture
Associates has agreed to act as an uncompensated finder in connection with the
acquisition transaction. The common stock that was to be paid to Longman &
Associates, Inc. is to be paid by SHBC. At the request of Mr. Zayed, in May
1999, Sixth Business Service Group sold Mr. Zayed 110,000 shares for aggregate
consideration of $100. Thereafter, there were numerous telephone conversations
between the companies relating to various aspects of the potential merger,
including in-depth discussions concerning the steps that needed to be taken to
formalize the merger.
Following these discussions, representatives of Sixth Business Service
Group and Telesource International negotiated the remaining basic structure,
terms and conditions of the merger. No formal, binding agreement existed
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concerning the merger until after having reached resolution on all open issues
in November, when a merger agreement was drafted and Telesource International
convened a special meeting of its board of directors at which the agreement of
merger and the other transactions required by the merger agreement were
discussed and reviewed. In connection with these discussions, SHBC agreed that
prior to closing the merger, it will surrender 210,000 shares of Telesource
International common stock for retirement and will assume Telesource
International's obligation to transfer 300,000 shares as described above. The
purpose of these actions is to reduce the number of shares of the surviving
corporation to be outstanding after the merger to 10,000,000 and to have SHBC
absorb the dilutive effect of the transaction in full. All Telesource
International shareholders other than SHBC and affiliates currently own 36.61%
of Telesource International stock and will own 36.61% of Sixth Business Service
Group, Inc. common stock after the merger as a result. Accordingly, no dilution
will occur to any Telesource International shareholder other than SHBC as a
result of the merger. Thereafter, on November 3, 1999, the board of directors of
Telesource International unanimously adopted and approved the agreement of
merger and the transactions required by the merger agreement.
On November 3, 1999, Michael T. Williams, as the sole director of Sixth
Business Service Group, approved the agreement of merger and the transactions
required by the merger agreement. As of November 3, 1999, the agreement of
merger was executed and delivered by each of the parties. On December 9, 1999
form S-4 was filed with the SEC.
In March 2000, Mr. Longman joined Harrison Douglas, an NASD broker/dealer. As a
condition of Mr. Longman's employment, Longman & Associates was required to
assign its contract to Harrison Douglas. Of the funds payable under the
agreement assigned to Harrison Douglas, $45,000 is being paid to us on behalf of
Telesource, which we are treating as a merger fee. Of this fee, $5,000 will be
paid to Mr. Williams as salary for acting as an executive officer and director
and signing this registration statement, and the remaining $40,000 will be paid
to Williams Law Group, P.A. as legal fees for preparation of this registration
statement. In addition, following a reverse split of our stock prior to the
closing of the merger, Mr. Williams through his blind trust will own 100,000
shares of the surviving company.
Neither of the respective boards of Directors of Sixth Business Service
Group or Telesource International requested or received, or will receive, an
opinion of an independent investment banker as to whether the merger is fair,
from a financial point of view, to Sixth Business Service Group and its
stockholders Telesource International and its shareholders.
CAUTIONARY STATEMENT
This Form 10-QSB, press releases and certain information provided periodically
in writing or orally by the Company's officers or its agents contain statements
which constitute forward-looking statements within the meaning of Section 27A of
the Securities Act, as amended and Section 21E of the Securities Exchange Act of
1934. The words expect, anticipate, believe, goal, plan, intend, estimate and
similar expressions and variations thereof if used are intended to specifically
identify forward-looking statements. Those statements appear in a number of
places in this Form 10-QSB and in other places, particularly, Management's
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Discussion and Analysis of Financial Condition and Results of Operations, and
include statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things: (i)
the Company's liquidity and capital resources; (ii) the Company's financing
opportunities and plans and (iii) the Company's future performance and operating
results. Investors and prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors. The factors that might cause such differences include, among others,
the following: (i) any material inability of the Company to successfully
identify, consummate and integrate the acquisition of radio stations at
reasonable and anticipated costs to the Company; (ii) any material inability of
the Company to successfully internally develop its products; (iii) any adverse
effect or limitations caused by Governmental regulations; (iv) any adverse
effect on the Company's continued positive cash flow and abilities to obtain
acceptable financing in connection with its growth plans; (v) any increased
competition in business; (vi) any inability of the Company to successfully
conduct its business in new markets; and (vii) other risks including those
identified in the Company's filings with the Securities and Exchange Commission.
The Company undertakes no obligation to publicly update or revise the forward
looking statements made in this Form 10-QSB to reflect events or circumstances
after the date of this Form 10-QSB or to reflect the occurrence of unanticipated
events.
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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 Securities Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
NONE
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.
August 14, 2000 /s/ Michael T. Williams
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Date Michael T. Williams, President
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