SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For Quarter Ended: June 30, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No.000-28883
Halifax International, Inc.
(Exact name of registrant as specified in its charter)
Nevada 58-2212465
(State of incorporation) (I.R.S. Employer
Identification No.)
7 Piedmont Center, Suite 500
Atlanta, Georgia 30305
(404) 816-6100
(Address and telephone number of principal executive offices and principal
place of business)
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 [ ]
As of July 28, 2000, the Registrant had a total of 8,596,221 shares of
common stock issued and outstanding.
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TABLE OF CONTENTS
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements.............................................3
Item 2: Management's Discussion and Analysis or Plan of Operations.......8
PART II: OTHER INFORMATION
Item 2: Changes in Securities.............................................9
Item 5: Other Information ................................................9
Item 6: Exhibits and Reports filed on Form 8-K ..........................9
Signatures................................................................10
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PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
HALIFAX INTERNATIONAL, INC.
Balance Sheet
June 30, 2000
ASSETS
-------
Current Assets
--------------
Cash $ -
Other Assets
------------
Deposits 60,000
------------
Total Other Assets 60,000
TOTAL ASSETS $ 60,000
============
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------
Current Liabilities
-------------------
Bank Overdraft 176,630
Notes Payable 1,015,750
------------
Total Current Liabilities $ 1,192,380
Stockholders' Equity
---------------------
Common Stock - 20,000,000 shares authorized, $ 3,735,699
8,368,721 issued and outstanding
Retained earnings (4,868,079)
------------
Total Stockholders' Equity $(1,132,380)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 60,000
============
2
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HALIFAX INTERNATIONAL, INC.
Statement of Income and Expense
For the Six Months Ended June 30, 2000
Income
-------
Fees $ -
Expenses
--------
Acquisition expenses 63,000
Automobile expenses 10,438
Bank charges 1,488
Consulting fees 305,151
Contributions 710
Entertainment and promotion 14,627
Miscellaneous 1,003
Office supplies 385
Professional fees 158,798
Rent 41,964
Subscriptions 70
Telephone 2,304
Travel 268,266
Total Expenses 868,204
Net Income $ (868,204)
---------- ===========
3
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HALIFAX INTERNATIONAL, INC.
Statement of Retained Earnings
For the Six Months Ended June 30, 2000
Retained Earnings - January 1, 2000 $ (3,999,875)
-----------------------------------
Net Income (868,204)
---------- -----------------
Retained Earnings - June 30, 2000 $ (4,868,079)
--------------------------------- =================
4
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HALIFAX INTERNATIONAL, INC.
Statement of Cash Flows
For the Six Months Ended June 30, 2000
Cash Flows From Operating Activities
------------------------------------
Net Income $ (868,204)
---------------
Net cash used by operating activities (868,204)
Cash Flows From Financing Activities
------------------------------------
Issuance of Common Stock 1,005,060
---------------
Net cash provided by financing activities 1,005,060
Net Increase (Decrease) In Cash 136,856
Cash - Beginning of Period (313,486)
--------------------------- ---------------
Cash - End of Period $ (176,630)
-------------------- ===============
5
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HALIFAX INTERNATIONAL, INC.
Notes to Financial Statements
June 30, 2000
NOTE 1 - PLAN OF REORGANIZATION AND ACQUISITION
------------------------------------------------
On February 26, 1999, Halifax International, Inc. (formerly Silver Strike
Mining Company, "the Company") acquired Christopher Partners, Inc. through the
issuance of 5,414,111 shares of common stock. Shareholders of Silver Strike
Mining Company received a total of 1,022,500 shares of Halifax International,
Inc. common stock and $125,000. The Company also authorized a name change to
Halifax International, Inc. upon the effective date of the merger. This merger
is treated as a reverse acquisition and, therefore, all historical information
is that of the accounting survivor Christopher Partners, Inc.
NOTE 2 - CONSOLIDATION POLICY
-----------------------------
These consolidated financial statements include the books of Halifax
International, Inc. (formerly Silver Strike Mining Company) and its wholly
owned subsidiary Christopher Partners, Inc. All intercompany transactions and
accounts have been eliminated.
NOTE 3 - RELATED PARTY TRANSACTIONS
-----------------------------------
Fees and expenses paid to related parties (officers and shareholders) for the
six months ended June 30, 2000 consisted of the following:
Payee Amount
------------ -----------
Victor J. Hinojosa $ 238,126
Philip E. Lundquist 87,504
Lundquist Advisory Corporation 32,122
6
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In this report references to "Halifax," "we," "us," and "our" refer to
Halifax International, Inc.
FORWARD LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-QSB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended
to identify forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not within
Halifax's control. These factors include but are not limited to economic
conditions generally and in the industries in which Halifax may participate;
competition within Halifax's chosen industry, including competition from much
larger competitors; technological advances and failure by Halifax to
successfully develop business relationships.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
We have had no revenues and have experienced losses from inception.
Since inception, we have primarily financed our operations through the sale of
our common stock. As of June 30, 2000, we had no cash on hand and $60,000 in
total assets. Our total current liabilities were $1,192,382 with $1,015,750
of that amount represented by notes payable. Net cash provided by financing
activities was $1,005,060 for the six months ended June 30, 2000. These funds
came from the sale of our common stock through a Rule 505 private placement.
Net cash used by operating expenses was $868,204 for the six month period
ended June 30, 2000 and management anticipates that we will need to raise
additional funds within the next twelve months to fund our operations.
Currently our material commitments consist of approximately $26,570 for office
space for the next twelve months. During the second quarter we reduced our
bank overdraft from $233,926 to $176,630 and we remain obligated for
promissory notes totaling $1,015,750 which are payable on demand. We intend
to pay these commitments with cash raised from private placements of our
common shares and through debt financing.
On June 14, 2000, we formed a wholly-owned subsidiary, Truscom, Inc., a
Japanese corporation, and opened a Tokyo office for that entity. Truscom was
formed to enter into an exclusive distributorship agreement with XTec
Incorporated, a Florida corporation. At this time we have not finalized this
agreement with XTec and shareholders and potential investors must realize that
we may be unable to consummate this agreement. XTec sells Internet technology
using tamper resistant Mediametric Secure Application Modules which are
designed for use in Internet banking and for e-commerce privacy and security.
In addition, management is currently negotiating a business alliance
with another company to distribute and sell a cash debit card. At this time,
we have not entered into any firm agreements with any person in regards to
this endeavor.
We believe that our current cash needs for at least the next twelve
months can be met by sales of our common shares and/or loans from our
directors, officers and shareholders. Management anticipates that we will
continue private placements of our common stock. We have no plans to make a
public offering of our common stock at this time. However, we cannot assure
that private placements will provide sufficient funds needed for search and
development of new business opportunities. We also note that if we issue more
shares of our common stock our shareholders may experience dilution in the
value per share of their common stock.
If we fail to raise necessary funds through stock sales, we anticipate
we will require debt financing. We have investigated the availability, source
and terms for external financing but have not entered in to any agreements at
this time for such financing. We can not assure that funds will be available
from any source, or, if available, that we will be able to obtain the funds on
terms agreeable to us. Any additional debt could result in a substantial
portion of our cash flows from operations, if any, being dedicated to the
payment of principal and interest on the indebtedness, and could render us
more vulnerable to competitive and economic downturns.
8
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Our management intends to actively pursue business opportunities and
alliances during the next twelve months. Potential investors must recognize
that because of our limited capital available for investigation we may not
discover or adequately evaluate adverse facts about any business opportunity
to be acquired or business alliance. Also, we intend to concentrate our
acquisition efforts on properties or businesses that we believe to be
undervalued or that we believe may realize a substantial benefit from being
publicly owned. Investors should expect that any acquisition candidate may
have little or no operating history, or a history of losses or low
profitability.
It is emphasized that our management may effect transactions having a
potentially adverse impact upon our shareholders pursuant to the authority and
discretion of our management to complete acquisitions without submitting any
proposal to the stockholders for their consideration.
PART II: OTHER INFORMATION
ITEM 2: CHANGES IN SECURITIES
From March 31 to July 31, 2000, we issued an aggregate of 843,000
common shares to twenty-one investors for cash or services. These common
shares were valued at $843,000 and were issued in a private placement to
eighteen accredited investors and three non-accredited investors. The
aggregate offering was for $5 million in a twelve month period. The services
provided in consideration for the shares were legal and financial consulting.
This offering was exempt from the registration requirements of the Securities
Act of 1933 by reasons of Section 3(b) and Regulation D as a Rule 505 limited
offering.
ITEM 5: OTHER INFORMATION
On July 5, 2000, the full Board of Directors appointed Yoshihiko
Komatsubara as a director of Halifax and appointed him President and C.E.O. of
Truscom, Inc. Mr. Komatsubara is 37 years of age and was formerly the
Executive Director of the Derivative Products Group of Morgan Stanley Japan
Limited. Prior to November 1996 he had served as a Vice President and an
Associate of the Derivative Products Group of Morgan Stanley Japan Limited.
He has over 12 years experience in the investment banking arena including
employment with Goldman Sachs (Japan) Corporation. He earned a Masters of
Engineering from Waseda University in 1988.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Part I Exhibits.
Exhibit Description
------- ------------
27 Financial Data Schedule
(b) Reports on Form 8-K.
None.
9
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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 who are duly authorized.
Halifax International, Inc.
8/1/00 /s/ Victor Hinojosa
Date: _____________ By: ______________________________________
Victor Hinojosa, President
7/31/00 Philip Lundquist
Date: _____________ By: _______________________________________
Philip Lundquist, Secretary/Treasurer,
Chairman of the Board
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