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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 2000
UNITED STATES
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, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from ------- to ------
Commission file number 0-27631
TMANGLOBAL.COM, INC.
(Exact name of small business issuer as specified in its charter)
FLORIDA 65-0782227
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1000 UNIVERSAL STUDIOS PLAZA, BUILDING 22A, ORLANDO, FL 32819-7610
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (407) 370-4460
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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 [ ]
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 [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: August 18, 2000: 6,222,567
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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TMANglobal.com, Inc.
PAGE
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Part I. - Financial Information
Item 1. Condensed Financial Statements:
Condensed Balance Sheet (Unaudited) as of June 30, 2000 2
Condensed Statements of Operations (Unaudited) for the nine
months ended June 30, 2000 and 1999 and the three months ended
June 30, 2000 and 1999 3
Condensed Statements of Cash Flows (Unaudited) for the nine months
ended June 30, 2000 and 1999 4
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Part II. - Other Information 9
Item 6. Exhibits: 27 Financial Data Schedule 9
Signatures 9
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TMANGLOBAL.COM, INC.
CONDENSED BALANCE SHEET
(UNAUDITED)
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ASSETS
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JUNE 30, 2000
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Current assets:
Cash $ 698
Accounts receivable, net 694
Current maturity of notes receivable 55,862
Due from affiliates 27,647
Prepaids and other current assets 1,547
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Total current assets 86,448
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Property and equipment, net 1,883
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Other assets:
Note receivable, net of current portion 17,999
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Total assets $ 106,330
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Accounts payable $ 95,170
Accrued expenses 58,075
Due to stockholders 2,200
Loans payable - other 20,000
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Total current liabilities 175,445
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Stockholder's deficit:
Common stock, $0.0001 par value; 20,000,000 shares
authorized; 6,197,554 shares issued and
outstanding 620
Additional paid-in capital 3,265,645
Subscriptions receivable (15,000)
Accumulated deficit (3,320,380)
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Total stockholders' deficit (69,115)
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Total liabilities and stockholders' equity $ 106,330
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See accompanying notes to condensed financial statements.
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<TABLE>
TMANGLOBAL.COM, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
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<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue $ 6,003 $ 4,283 $ 21,748 $ 6,235
Cost of sales (3,902) (4,454) (14,496) (4,454)
------------ ------------ ------------ ------------
Gross profit 2,101 (171) 7,252 1,781
------------ ------------ ------------ ------------
General and administrative expenses 52,025 187,286 260,547 275,398
------------ ------------ ------------ ------------
Income (loss) from operations (49,924) (187,457) (253,295) (273,617)
------------ ------------ ------------ ------------
Discontinued operations:
Loss from operations of discontinued subsidiary - (90,690) (49,929) (129,042)
Gain from disposal of subsidiary - - 168,891 -
------------ ------------ ------------ ------------
Net loss $ (49,924) $ (278,147) $ (134,333) $ (402,659)
============ ============ ============ ============
Loss per share - basic $ (0.01) $ (0.05) $ (0.02) $ (0.08)
============ ============ ============ ============
Loss per share - diluted $ (0.01) $ (0.05) $ (0.02) $ (0.08)
============ ============ ============ ============
Weighted average number of shares - basic 6,197,554 5,361,048 6,064,221 4,765,628
============ ============ ============ ============
Weighted average number of shares - diluted 6,197,554 5,361,048 6,064,221 4,765,628
============ ============ ============ ============
See accompanying notes to condensed financial statements.
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TMANGLOBAL.COM, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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NINE MONTHS NINE MONTHS
ENDED ENDED
JUNE 30, 2000 JUNE 30, 1999
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Net cash used in operating activities $ (86,636) $ (205,326)
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Cash flows from investing activities:
Purchase of property and equipment - (1,883)
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Cash flows from financing activities:
Issuance of common stock, net 15,000 330,290
Subscription receivable - (1,500)
Payments on loans receivable 14,819 -
Proceeds from long term debt 40,000 47,375
Payments on long term debt (21,363) (12,256)
Checks outstanding in excess of bank balance (8,592) 29,125
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Net cash provided by financing activities 39,864 393,034
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Net increase (decrease) in cash and equivalents (46,772) 185,825
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Cash at beginning of period 47,470 -
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Cash at end of period $ 698 $ 185,825
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See accompanying notes to condensed financial statements.
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TMANGLOBAL.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
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NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements of TMANglobal.com,
Inc. (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
for complete financial statements. In the opinion of management, all adjustments
necessary for a fair presentation of the results for the interim periods
presented have been included.
These results have been determined on the basis of generally accepted accounting
principles and practices applied consistently with those used in the preparation
of the Company's Annual Financial Statements for the year ended September 30,
1999. Operating results for the nine months ended June 30, 2000 are not
necessarily indicative of the results that may be expected for the year ending
September 30, 2000.
It is recommended that the accompanying condensed financial statements be read
in conjunction with the financial statements and notes for the year ended
September 30, 1999, found in the Company's Form 10-SB.
NOTE 2 - SALE OF SUBSIDIARY
On January 27, 2000, the Company sold its wholly-owned subsidiary, Financial
Standards Group, Inc. (FSG) to an unrelated party, FSG Holdings LLC (FSGH).
Under the terms of the sales agreement, the Company received $88,680 in the form
of three promissory notes receivable, due in June 2000 and January 2001. In
addition, FSGH assumed all outstanding receivables and payables and the balance
due of $36,571 on a promissory note created by FSG, Inc., currently held by
Total World Telecom, Inc. (TWT) - former parent company of FSG, Inc. The Company
also issued a warrant certificate to FSGH for 100,000 shares of restricted
common stock, with an exercisable price of $1.00 per share and a two (2) year
term.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
CERTAIN STATEMENTS CONTAINED HEREIN ARE NOT BASED ON HISTORICAL FACTS,
BUT ARE FORWARD-LOOKING STATEMENTS THAT ARE BASED UPON NUMEROUS ASSUMPTIONS
ABOUT FUTURE CONDITIONS THAT COULD PROVE NOT TO BE ACCURATE. ACTUAL EVENTS,
TRANSACTIONS AND RESULTS MAY MATERIALLY DIFFER FROM THE ANTICIPATED EVENTS,
TRANSACTIONS OR RESULTS DESCRIBED IN SUCH STATEMENTS. THE COMPANY'S ABILITY TO
CONSUMMATE SUCH TRANSACTIONS AND ACHIEVE SUCH EVENTS OR RESULTS IS SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE
NOT LIMITED TO, THE EXISTENCE OF DEMAND FOR AND ACCEPTANCE OF THE COMPANY'S
PRODUCTS AND SERVICES, REGULATORY APPROVALS AND DEVELOPMENTS, ECONOMIC
CONDITIONS, THE IMPACT OF COMPETITION AND PRICING, RESULTS OF FINANCING EFFORTS
AND OTHER FACTORS AFFECTING THE COMPANY'S BUSINESS THAT ARE BEYOND THE COMPANY'S
CONTROL. THE COMPANY UNDERTAKES NO OBLIGATION AND DOES NOT INTEND TO UPDATE,
REVISE, OR OTHERWISE PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO THESE
FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT FUTURE EVENTS OR
CIRCUMSTANCES.
THE FOLLOWING DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND
FINANCIAL CONDITION OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS
REPORT.
Overview
TMANglobal.com, Inc. ("TMAN"), a corporation formed under the laws of
the State of Florida, is the result of a merger between FSGI Corporation and The
Martial Arts Network On-Line, Inc. on December 21, 1998. In the fall of 1998,
management of The Martial Arts Network On-Line, Inc. decided that it wished to
expand its business model from that of being a purely educational and
informative resource to one that would capitalize on e-commerce over the
Internet.
TMAN offers goods and services to the martial arts, extreme sports, and
health and fitness markets, through its presence on the World Wide Web. TMAN
also provided credit unions with comprehensive and internal regulatory
compliance audit services, and related internal auditing, accounting and
managerial advisory services, through its wholly-owned subsidiary, Financial
Standards Group, Inc. ("FSG") until FSG's sale on January 27, 2000. TMAN is
currently traded in the "pink sheets." TMAN was formerly traded on the Nasdaq
OTC Bulletin Board under the symbol "CHOP" (and later, in November 1999,
"CHOPE") until it was delisted on December 1, 1999 for failure to comply with
the Bulletin Board's revised eligibility rules. As soon as practicable, TMAN
will apply to be reinstated for trading on the OTC Bulletin Board. TMAN's
principal executive offices are at 1000 Universal Studios Plaza, Building 22A,
Orlando, Florida 32819-7610. Its telephone number is (407) 370-4460.
The unaudited report of the Company's independent certified public
accountant relating to the quarter ended June 30, 2000 has been prepared
assuming that the Company will continue as a going concern. The Company
experienced a net loss of $3,176,835 during the year ended September 30, 1999,
and a net loss of $134,333 for the nine months ended June 30, 2000, and had
negative cash flows from operations for the year ended September 30, 1999 and
the nine months ended June 30, 2000. Moreover, management expects that the
Company will continue to experience losses during the current fiscal year. These
matters raise doubt regarding the ability of the Company to continue as a going
concern. The ability of the Company to continue as a going concern is dependent
on the Company attaining profitable operation and obtaining additional capital.
The Company intends to obtain loans from its majority shareholders and officers
to meet its working capital needs; and the Company intends to attempt to raise
capital in a private equity placement later in the 2000 calendar year. There can
be no assurance that the Company's efforts will be successful.
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RESULTS OF OPERATIONS - THREE-MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
During the three-month period ended June 30, 2000, TMAN's revenues were
$6,003 compared to $4,283 for the similar period in 1999. This small increase
was attributable to the e-commerce sales beginning to increase as more Net users
became aware of the website. Cost of sales were $3,902 for the three-month
period ended June 30, 2000, compared to $4,454 for the three-month period ended
June 30, 1999, a decrease of $552. As the Company starts to market its product
`Supermall', it believes that this will substantially affect the revenues and
costs reflected in the Company's future financial statements.
General and administrative expenses for the three-month period ended
June 30, 2000 were $52,025 compared to $187,286 for the three-month period ended
June 30, 1999. The difference is a result of the Company spending less on its
infrastructure once it's website was up and running. The Company also realized a
$90,690 loss for the three-month period ended June 30, 1999 from operations of
its discontinued subsidiary, FSG. As a result, the Company generated a net loss
of $ (49,924) or ($ .01 per share) during the three-month period ended June 30,
2000 compared to a net loss of $ (278,147) or ($ .05 per share) for the similar
period in 1999.
RESULTS OF OPERATIONS - NINE-MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
Operating results for the nine-month periods ended June 30, 2000 and
1999 are difficult to compare to each other due to changes in the operations of
TMAN. On December 21, 1998, TMAN acquired FSG as a wholly-owned subsidiary.
During the nine month period ended June 30, 2000, TMAN, through FSG, was
offering accounting and financial services to credit unions. On January 27,
2000, TMAN made the decision to discontinue its operations in the accounting and
financial services industry and sold FSG to FSG Holdings, LLC (FSGH). FSGH was
an independent party that did not have a material relationship with the Company,
any affiliate of the Company, any director or officer of the Company or any
associate of any officer or director of the Company. The selling price of
$88,650 in the form of three promissory notes receivable and the assumption of
outstanding receivables and payables and the balance due of $36,571 on a
promissory note created by FSG was determined based upon arm's length
negotiations between the parties. Following the sale of FSG on January 27, 2000,
the Company's revenues were solely derived from its e-commerce business, Charter
Membership Program and its Entertainment Agency. Revenues for TMAN increased
from $6,235 in the nine-month period ended June 30, 1999 to $21,748 in the
nine-month period ended June 30, 2000. Costs of revenues increased from $4,454
in the nine months ended June 30, 1999, to $14,496 for the comparable period in
2000.
Selling, general and administrative expenses decreased from $275,398 in
the nine months ended June 30, 1999 to $260,547 in the nine-month period ended
June 30, 2000. The increase of revenues, costs of revenues and other selling
expenses were due primarily to the fact that TMAN was in its initial period of
development in the prior period and incurred many expenses related to the
development of its e-commerce site in the current period. The net loss decreased
from $402,659 in the nine-month period ended June 30, 1999 to $134,333 in the
six month period ended March 31, 2000 due to the fact that there was a gain in
the sale of FSG, whereby FSGH, the acquirer of FSG, acquired both FSG's payables
and receivables.
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LIQUIDITY AND CAPITAL RESOURCES
As a result of continuing losses, the Company has been unable to fund
its cash flow needs through cash generated by its operations. Contributing to
this situation is the cyclical nature of the business, as well as the expenses
normally related to the start-up and running of an Internet operation. The
Company's liquidity shortfalls form operations during the nine months ended June
30, 2000 have been funded through several transactions with principal
shareholders and others, as well as the periodic suspension of compensation to
its officers. The Company intends to continue to seek alternative means of
financing to enable it to continue as an on-going concern, although there is no
guarantee that it will be successful in finding additional funds to continue
present operations.
As of June 30, 2000, the Company's cash balance was $698 and total
assets, including promissory notes from FSGH, was $106,330. Operating activities
during the nine-month period ended June 30, 2000 accounted for the use of
$86,636, as compared to $205,326 used in nine-month period ended June 30, 1999.
The Company expects that its working capital resources and the cash flow that it
expects to receive from operations will not be sufficient to fund its working
capital needs during the twelve months following the date hereof. While
previously the Company was able to use funds available under the Credit
Agreement discussed below, the sale of FSG eliminated the Credit Agreement as a
source of funds after the sale of FSG on January 27, 2000, and there can be no
assurance that the Company's capital resources will now be adequate. During the
nine-month period ended June 30, 2000, the Company realized a net loss of
$134,333. As of that same date, the Company's cash balance was $698. The Company
expects to continue to operate at a loss through the fiscal year ended September
30, 2000. The ability of the Company to fund its working capital needs during
the next twelve months will largely be dependent on its ability to obtain
additional debt and equity financing. The Company intends to seek loans from its
controlling shareholder and from certain of its officers, as well as the
placement of debt or equity to third parties in a private offering. There can be
no assurance that such financing will be available to the Company. If available,
such financing would likely result in substantial dilution to the existing
shareholders of the Company.
In May 1998, FSGI Corporation entered into a Credit Agreement with Bank
Atlantic consisting of a $50,000 Loan and a $50,000 Line of Credit
collateralized by the assets of FSG, Inc., for its financial services
operations. The Loan had an interest rate of 11.05% and became due on May 13,
2000. The Loan was assumed by the acquiring corporation, FSGH, upon the sale of
FSG on January 27, 2000. As of March 31, 2000, the balance due on the Loan was
$9,095. The Line of Credit provided for borrowings of up to $50,000 at the prime
rate plus 2% (10.75% at March 31, 2000), collateralized by the assets of FSGI
Corporation. The Line of Credit was assumed by the acquiring corporation, FSGH,
upon the sale of FSG on January 27, 2000. As of March 31, 2000, the balance due
under the Line of Credit was $50,000. The Line of Credit terminated on May 13,
2000.
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PART II - OTHER INFORMATION
Item 6. Exhibits
A. Exhibits: 27 Financial Data Schedule
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.
TMANglobal.com, Inc.
By: /s/ Tony Interdonato
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Tony Interdonato
Chief Executive Officer
Date: August 23, 2000
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