United States Securities and Exchange Commission
Washington, D.C. 20549
Amended Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000.
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ___________
Commission file number : 0-29509
Environmental Oil Processing Technology Corporation
(formerly TMI Holding Corporation)
(Exact name of business issuer in its charter)
Utah 82-0520055
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2801 Brandt Avenue, Nampa, Idaho 83687
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (208)-463-0063 Fax: (208) 463-7601
--------------------------------------------------------------------------------
(Former Address)
The number of shares of common stock outstanding as of June 30, 2000, is
34,841,935.
Transitional Small Business Disclosure Format. Yes ___, No _X_.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The following financial statements are filed as part of this report:
The corrected Consolidated Financial Statements of the Company for the
three months and six months ended of June 30, 2000, reviewed by HJ & Associates,
certified public accountants.
Item 2. Management's Discussion and Plan of Operation:
Results of Operations:
Management of Environmental Oil Processing Technology, Inc. (EOPT) focused
their activity in the first and second quarters of year 2000 in developing
operating procedures for the oil refining plant, testing the operating
parameters of the plant, exploring the adjustments needed for producing diesel
and naphtha more efficiently and in general experimenting with the refinery.
Management established that the plant will operate at an efficiency level of 85%
or above with respect to the percentage of usable product that can be produced
from the feed-oil, and established a market for all of the product that the
plant will produce. With the potential of producing "spec" fuel, the revenue
projections are substantially higher and Management is changing its operating
plan from the sale-lease of refining plants to other customers to constructing
domestic plants for company operation. Management is developing a detailed
business plan incorporating the construction of domestic company owned plants
and the leasing plants to international customers.
Operations in the second quarter resulted in revenues from EOPT (sales of
used oil and some production from the plant) in the amount of $167,699.
Operating losses by EOPT in the second quarter (including depreciation) were
$945,269. Continued testing and fine tuning of the refining plant resulted in
reduced revenues and increased costs for modifications of the plant during the
second quarter, some of which expenses will continue into the third quarter.
Management anticipates that the operating results for the third quarter will
continue at a loss because of the continued testing and modifications of the
plant and some planned replacement of parts. Continuous operation of the
refining plant is projected to begin in September which is expected to increase
revenues for the third quarter as a result of selling production from the plant.
However, production revenues in the third quarter will not be sufficient to
overcome the losses as a result of modifications of the plant.
The engineering subsidiary Project Development Industries, LLC, (PDI) had
revenues in the 2nd quarter of $757,333 with expenses of $730,181 with an
operating income of $27,152 when adjusted for other expenses resulted in an
operating income of $19,899. Management anticipates that PDI will continue to be
profitable in the 3rd quarter. PDI is currently engineering the fabrication of
refining plants on skids for modular construction in both domestic and foreign
refining plant transactions.
Funding and Capital Resources:
Management anticipates that additional capital reserves will be required to
sustain operations through the 3rd quarter which is expected to come from
Private Placement investors. By the end of the 3rd quarter Management
anticipates that revenues from the sale of refinery product and from the
sale/lease of refining plants will generate the revenues for profitable
operations and continued activity of EOPT. Management is presently investigating
and
2
<PAGE>
negotiating with substantial funding sources to finance the development and
fabrication of the refining plants for both domestic company operated operations
and the sale/lease of international refining plant facilities.
Plan of Operation:
Management presently plans to pursue the completion of what it believes to
be the last major modifications of the refining pilot plant in order to commence
continuous refining operations and production of petroleum products during the
4th quarter. Concurrently, PDI is presently investigating sites for constructing
domestic company owned facilities and Management is continuing negotiations for
the sale/lease of facilities in other countries. In addition, the refining
capacity of the pilot plant is approximately double the capacity of the present
oil collecting facilities, and Management has located sources and is negotiating
the purchase of additional used lubricating oil for meeting the requirements of
the refining plant.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None
Item 2. Changes in Securities.
a. Effective upon filing an amendment to the Articles of Incorporation,
on July 25th, 2000, the issued and outstanding shares were split 2 for
1, effectively doubling the number of shares of each shareholder.
c. On June 30, 2000, the registrant received an additional $125,934 from
an existing shareholder Randy Boyce for the purchase of 125,934
"restricted" shares of common stock at the price of $1.00 per share.
The transaction was exempt from registration under the provisions of
Section 4(2) of the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. None
Item 5. Other Information.
By written action of a majority of the shareholders effective July 3, 2000,
the Articles of Incorporation were amended (i) to change the name of TMI Holding
Corporation to Environmental Oil Processing Technology Corporation, (ii) to
increase the authorized capital of the Company to 200,000,000 shares of no par
common stock, and (iii) to declare a 2 for 1 forward split of the issued and
outstanding common stock. The Articles of Amendment were filed with the
Secretary of State, Division of Corporations, of the State of Utah on July 25,
2000, and became effective on that date.
Item 6. Exhibits and Reports on form 8-K.
(a) Attached is the Articles of Amendment to the Articles of
Incorporation.
(b) No Form 8K filings
3
<PAGE>
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Environmental Oil Processing Technology Corporation
(Formerly TMI Holding Corporation)
(Registrant)
Date: October 31, 2000 By /s/
------------------------------
N. Tod Tripple, President and CEO
4
<PAGE>
TMI HOLDING CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000 and December 31, 1999
<PAGE>
TMI HOLDING CORPORATION AND SUBSIDIARIES
Balance Sheets
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 646,292 $ 193,007
Trade accounts receivable, less allowance for
for doubtful accounts of $118,514 and $23,000,
respectively 409,589 404,056
Inventories 6,464 6,464
Other current assets 11,547 9,541
----------- -----------
Total Current Assets 1,073,892 613,068
----------- -----------
PROPERTY, PLANT AND EQUIPMENT 2,280,476 2,204,153
Less accumulated depreciation (402,579) (198,954)
----------- -----------
Property, Plant and Equipment, Net 1,877,897 2,005,199
----------- -----------
OTHER ASSETS
Goodwill, net 3,107,258 3,284,912
----------- -----------
Total Other Assets 3,107,258 3,284,912
----------- -----------
TOTAL ASSETS $ 6,059,047 $ 5,903,179
=========== ===========
</TABLE>
<PAGE>
TMI HOLDING CORPORATION AND SUBSIDIARIES
Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Current portion of notes payable $ 39,171 $ 45,659
Accounts payable 181,789 256,206
Accrued expenses 533,374 443,654
Line of credit 400,000 400,000
Notes payable - related parties 836,338 239,838
Deferred revenue -- 21,457
------------ ------------
Total Current Liabilities 1,990,672 1,406,814
------------ ------------
LONG TERM DEBT
Notes payable - related parties -- 650,000
Notes payable 101,413 99,407
------------ ------------
Total Long-Term Debt 101,413 749,407
------------ ------------
Total Liabilities 2,092,085 2,156,221
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, no par value; 100,000,000
shares authorized; 35,730,058 and 34,841,935
shares issued and outstanding, respectively 12,497,277 11,443,277
Stock subscription receivable (69,066) (400,000)
Accumulated deficit (8,461,249) (7,296,319)
------------ ------------
Total Stockholders' Equity 3,966,962 3,746,958
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,059,047 $ 5,903,179
============ ============
</TABLE>
<PAGE>
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET SALES $ 923,814 $ 402,326 $ 2,393,262 $ 472,416
COST OF GOODS SOLD -- -- -- 76,457
------------ ------------ ------------ ------------
GROSS MARGIN (DEFICIT) 923,814 402,326 2,393,262 395,959
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,445,582 539,854 3,540,092 612,637
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (521,768) (137,528) (1,146,830) (216,678)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest expense (10,740) (3,327) (29,246) (3,327)
Interest income 10 606 11,146 606
------------ ------------ ------------ ------------
Total Other Income (Expense) (10,730) (2,721) (18,100) (2,721)
------------ ------------ ------------ ------------
INCOME TAX EXPENSE -- -- -- --
------------ ------------ ------------ ------------
NET LOSS $ (532,498) $ 140,249) $ (1,164,930) $ (219,399)
============ ============ ============ ============
BASIC LOSS PER COMMON SHARE $ (0.03) $ (0.01) $ (0.05) $ (0.01)
============ ============ ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 34,841,935 13,197,688 34,841,935 20,852,156
============ ============ ============ ============
</TABLE>
<PAGE>
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Common Stock Stock
------------------------------- Subscription Accumulated Stockholders'
Shares Amount Receivable Deficit Equity
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance, June 1, 1997 13,197,688 $ 1,858,973 $ -- $ -- $ 1,858,973
Net loss for the year ended
May 31, 1998 -- -- -- (1,040,340) (1,040,340)
------------ ------------ ------------ ------------ ------------
Balance,
May 31, 1998 13,197,688 1,858,973 -- (1,040,340) 818,633
Forgiveness of note payable
as contribution of capital -- 487,077 -- -- 487,077
Common stock issued
for cash 14,605,187 372,563 -- -- 372,563
Net loss for the year ended
May 31, 1999 -- -- -- (438,797) (438,797)
------------ ------------ ------------ ------------ ------------
Balance,
May 31, 1999 27,802,875 2,718,613 -- (1,479,137) 1,239,476
Purchase of subsidiary 3,500,000 3,500,000 -- -- 3,500,000
Common stock issued
for cash 1,202,810 1,029,200 (400,000) -- 629,200
Common stock issued
for services 3,996,064 3,996,064 -- -- 3,996,064
Common stock issued
for debt 4,000 4,000 -- -- 4,000
Common stock issued
for equipment 212,500 212,500 -- -- 212,500
Common stock returned and
canceled by officer (4,676,314) -- -- -- --
Common stock issued in
recapitalization 2,800,000 -- -- -- --
Stock offering costs -- (17,100) -- -- (17,100)
Net loss for the
seven months ended
December 31, 1999 -- -- -- (5,817,182) (5,817,182)
------------ ------------ ------------ ------------ ------------
Balances,
December 31, 1999 34,841,935 $ 11,443,277 $ (400,000) $ (7,296,319) $ 3,746,958
------------ ------------ ------------ ------------ ------------
</TABLE>
<PAGE>
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
Common Stock Stock
------------------------------- Subscription Accumulated Stockholders'
Shares Amount Receivable Deficit Equity
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balances,
December 31, 1999 34,841,935 $ 11,443,277 $ (400,000) $ (7,296,319) $ 3,746,958
Performance on stock
subscription (unaudited) -- -- 400,000 -- 400,000
Fractional shares issued
(unaudited) 58 -- -- -- --
Common stock issued for
cash (unaudited) 888,065 888,065 (69,066) -- 818,999
Forgiveness of note payable
as contribution of capital -- 165,935 -- -- 165,935
Net loss for the six months
ended June 30, 2000
(unaudited) -- -- -- (1,164,930) (1,164,930)
------------ ------------ ------------ ------------ ------------
Balance, June 30, 2000
(unaudited) 35,730,058 $ 12,497,277 $ (69,066) $ (8,461,249) $ 3,966,962
============ ============ ============ ============ ============
</TABLE>
<PAGE>
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (532,498) $ (140,249) $(1,164,930) $ (219,399)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 207,027 6,423 381,279 6,423
Changes in operating assets and liabilities:
Accounts receivable (28,512) (2,467) (5,533) (6,467)
Inventories -- 20,010 -- (2,183)
Other assets (919) (1,138) (2,006) (1,138)
Accounts payable and accrued expenses (34,783) (11,158) (6,154) 11,716
----------- ----------- ----------- -----------
Net Cash (Used) by Operating Activities (389,685) (128,579) (797,344) (211,048)
----------- ----------- ----------- -----------
CASH FLOWS USED IN INVESTING ACTIVITIES
Capital expenditures (36,138) (3,775) (76,323) (22,899)
----------- ----------- ----------- -----------
Net Cash Provided (Used) by Investing Activities (36,138) (3,775) (76,323) (22,899)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from Company officer 121,530 -- 670,500 158,800
Payments on long-term debt (6,972) (17,837) (4,482) (24,485)
Proceeds from sale of common stock 660,934 429,820 660,934 429,820
----------- ----------- ----------- -----------
Net Cash Provided by Financing Activities 775,492 411,983 1,326,952 564,135
----------- ----------- ----------- -----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 349,669 279,629 453,285 330,188
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 296,623 81,603 193,007 31,044
----------- ----------- ----------- -----------
CASH AND EQUIVALENTS, END OF PERIOD $ 646,292 $ 361,232 $ 646,292 $ 361,232
=========== =========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 10,740 $ 933 $ 29,246 $ 1,866
Cash paid for taxes $ -- $ -- $ -- $ --
</TABLE>
<PAGE>
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
SUPPLEMENTAL DISCLOSURE OF
NON-CASH FINANCING ACTIVITIES:
</TABLE>
Six Months ended June 30, 2000:
The president of the Company forgave a $165,935 note payable to him as a
contribution of capital to the Company.
Common stock issued for stock subscription receivable, valued at $69,066.
Note payable - related party converted to common stock, valued at $158,065.
Note payable - related party converted to pay for stock subscription
receivable, valued at $400,000.
Year ended December 31, 1999:
The President of the Company forgave a $487,077 note payable to him as a
contribution of capital to the Company.
Seven months ended December 31, 1999:
Purchase of subsidiary for common stock valued at $3,500,000.
Common stock issued for debt valued at $4,000.
Common stock issued for equipment valued at $212,500.
<PAGE>
TMI HOLDING CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
June 30, 2000 and December 31, 1999
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at June 30, 2000 and 1999 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 1999 audited
consolidated financial statements. The results of operations for the
periods ended June 30, 2000 and 1999 are not necessarily indicative of
the operating results for the full years.
