SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED September 30, 1999
COMMISSION FILE NO. 2-70345-NY
TimeOne, Inc.
(Exact name of Registrant as specified in its Charter)
Nevada 88-0182534
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
631 N. Stephanie Street, #378, Henderson, Nevada 89014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 456-8070
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filled 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.
(1) Yes: X No:
(2) Yes: X No:
Number of Shares Outstanding at the End of the Fiscal Quarter:
8,266,300 shares of common stock
(Indicate Number of Shares Outstanding of Each Class of Common
Stock as of the end of the Quarter
1
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB
TimeOne, Inc. ("Registrant" or "Company") files herewith an unaudited balance
sheet of the Registrant as of September 30, 1999 and the related statements of
income and cash flows for the three and nine month periods ended September 30,
1999 and September 30, 1998. The unaudited financial statements included in this
report on Form 10-QSB have been prepared by the Company and have not been the
subject of independent review. In the opinion of the management of the Company,
the financial statements fairly present the financial condition of the Company.
2
<PAGE>
TimeOne, Inc.
Consolidated Balance Sheet
September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
Current Assets
<S> <C>
Cash $ 1,242,057
Receivables 389
Marketable Securities 902,904
-----------------
Total Current Assets 2,145,350
Other Assets
Security Deposits 2,501
Montana Property 56,590
-----------------
Total Other Assets 59,091
-----------------
TOTAL ASSETS $ 2,204,441
=================
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable (overpayments) $ (3,255)
-----------------
Total Current Liabilities (3,255)
Stockholders Equity
Capital Stock, Common 826
Additional paid-in capital 1,229,336
Retained Earnings 977,534
-----------------
Total Stockholders Equity 2,207,696
-----------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 2,204,441
=================
</TABLE>
3
<PAGE>
TimeOne, Inc.
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
------------- ------------- -------------- -------------
Revenues
<S> <C> <C> <C> <C>
Gain on Sale of Securities $ 55,728 $ 31,747 $ 557,021 $ 153,724
Interest and Dividends 12,749 2,374 31,255 6,839
Gain on Property Sale 6,746 0 6,746 5,315
Miscellaneous Income 0 0 102 0
Unrealized Gain (loss) on Securities (211,118) 0 (26,895) 0
------------- ------------- -------------- -------------
Total Revenue (135,895) 34,121 568,229 165,878
Costs and Expenses
Interest 1,236 0 8,663 0
Professional Fees 26,860 27,164 107,247 64,587
Legal 1,961 0 3,210 0
Office and Travel 20,575 0 61,021 0
------------- ------------- -------------- -------------
Total Cost And Expenses 50,632 27,164 180,141 64,587
------------- ------------- -------------- -------------
NET INCOME BEFORE TAXES (186,527) 6,957 388,088 101,291
Income Taxes 62 1,875 77 13,104
------------- ------------- -------------- -------------
NET INCOME FROM CONTINUING OPERATIONS (186,589) 5,082 388,011 88,187
NET GAIN (LOSS) FROM
DISCONTINUED OPERATIONS 0 43,806(2) 21,375(1) 41,021(2)
------------- ----------- --------------- --------------
NET INCOME $ (186,589) $ 48,888 $ 409,386 $ 129,208
============= ============= ============== =============
</TABLE>
(1) Adjustment to income taxes previously accrued.
(2) Operation of car wash sold, October 20, 1998.
4
<PAGE>
TimeOne, Inc.
Consolidated Statement of Cashflows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
------------- ------------- -------------- -------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net Income (Loss) $ (186,589) $ 48,888 $ 409,386 $ 129,208
Adjustments to reconcile net income to net cash
provided by operating activities:
Joint Venture 0 2,051 0 54,637
Depreciation and Amortization 0 36,831 0 113,195
Unrealized (Gain) loss on Marketable Securities 211,118 0 26,895 0
(Increase) Decrease in Receivables 0 9,547 300,000 12,754
(Increase) Decrease in Prepaid Expenses 0 904 0 (50,597)
(Increase) Decrease in Inventory 0 (1,122) 0 3,238
Increase (Decrease) in Accounts Payroll & Payroll Tax (12,915) (4,536) (12,915) 49,152
------------- ------------- -------------- -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 11,614 92,563 723,366 311,587
INVESTING ACTIVITIES
Cost of Montana Lot Sold 18,863 0 18,863 (22,863)
Cost of Securities Sold 672,013 13,679 3,284,673 175,057
Purchase of Securities (531,032) (57,628) (3,407,253) (362,784)
Decrease in Deposits 0 (425) 0 0
Purchase Property and Equipment 0 (511) 0 (1,939)
------------- ------------- -------------- -------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES 159,844 (44,885) (103,717) (212,529)
FINANCING ACTIVITIES
Repayment of Loans and Leases 0 (10,364) 0 (42,466)
------------- ------------- -------------- -------------
NET CASH USED BY FINANCING ACTIVITIES 0 (10,364) 0 (42,466)
INCREASE IN CASH & CASH EQUIVALENTS 171,458 37,314 619,649 56,592
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,070,599 289,493 622,408 270,215
------------- ------------- -------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,242,057 $ 326,807 $ 1,242,057 $ 326,807
============= ============= ============== =============
</TABLE>
5
<PAGE>
TimeOne, Inc.
Consolidated Statement of Stockholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid-in Earnings
Shares Amount Capital (Deficit)
------------------ ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Balances at December 31, 1995 6,113,900 $ 611 $ 1,120,692 $ 121,417
Stock issued for assets 2,000,000 200 124,800
Restricted stock issued to employees 350,000 35 32,776
Net Income for year ended
December 31, 1996 107,831
------------------ ----------------- ----------------- ------------------
Balances at December 31, 1996 8,463,900 846 1,278,268 229,248
Cancel Treasury stock (109,000) (11) (48,941)
Net Income for year ended
December 31, 1997 64,209
------------------ ----------------- ----------------- ------------------
Balances at December 31, 1997 8,354,900 835 1,229,327 293,457
Net Income for year ended
December 31, 1998 274,691
------------------ ----------------- ----------------- ------------------
Balances at December 31, 1998 8,354,900 835 1229,327 568,148
Cancel Company stock (88,600) (9) 9
Net Income for nine months ended
September 30, 1999 409,386
------------------ ----------------- ----------------- ------------------
Balances at September 30, 1999 8,266,300 $ 826 $ 1,229,336 $ 977,534
================== ================= ================= ==================
</TABLE>
6
<PAGE>
TimeOne, Inc.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE A - Summary of Significant Accounting Policies
Revenue Recognition
Interest income is accrued as earned. Gains or losses on the sale of securities
are recorded as of the trade date.
Depreciation
Depreciation on office equipment and furniture is provided over the estimated
useful life of five to ten years using an accelerated method and depreciation on
the office building is being provided over the estimated useful life of 30 to
31.5 years using the straight line method.
Marketable Securities
Marketable securities, as a group, are carried at market value in accordance
with FAS 115. Prior to January 1, 1994, the securities were carried at the lower
of cost or market. At September 30, 1999, a decrease of $(211,118) was made to
adjust to market.
Income Taxes
Federal income taxes in the amount of $198,625 were due for the year ended
December 31, 1998. Those taxes were paid during the quarter ended March 31,
1999. Due to the variable nature of the stock valuations, no accrual has been
made for the quarter.
Cash and Cash Equivalents
For financial statement purposes, the company considers all highly liquid
investments with an original maturity of three months or less when purchased to
be cash equivalents.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues, and expenses
during the reporting period. Estimates also affect the disclosure of contingent
assets and liabilities at the date of the financial statements. Actual results
could differ from these estimates. Such estimates of significant accounting
sensitivity are allowance for doubtful accounts and reserves for obsolete
inventory.
NOTE B - DEFERRED TAX ASSET
In February, 1992, the Financial Account Standards board adopted Statement of
Financial Accounting Standards No. 109 Accounting for Income Taxes, which
supersedes substantially all existing authoritive literature for accounting for
income taxes and requires deferred tax balances to be adjusted to reflect the
tax rates in effect when those amounts are expected to become payable or
refundable. The Statement was applied in the Company's financial statements for
the calendar year commencing January 1, 1993 by recognizing the cumulative
effect of the change during 1993.
7
<PAGE>
TimeOne, Inc.
Notes to Consolidated Financial Statements (continued)
(Unaudited)
NOTE C - RECEIVABLES
Receivables at September 30, 1999 and 1998 consisted of the following:
September 30,
1999 1998
Trade accounts receivable $ 389 $ 38,917
========== =============
NOTE D - RELATED PARTY TRANSACTIONS
During 1994, Daniel Pentelute, the major shareholder of the Company, purchased
21 acres of land in Montana and three (3) days later sold a one-half interest to
the Company at his cost. The other one-half interest is owned by Desert Land
Enterprises, whose sole shareholder is Daniel Pentelute.
In January of 1999, the Board of Directors of the Company entered into an
agreement with Desert Land Enterprises, Inc., whose sole shareholder is Daniel
Pentelute, President and majority shareholder of the Company, to provide certain
services to the Company on a monthly basis for a fee of $4,500 per month, plus
all out of pocket expenses. These services include telephone and fax service,
all necessary secretarial services, financial tracking of all of the Company's
brokerage accounts and investments, research into possible investments, and
access to various financial publications, websites, and sources. This agreement
was approved by the directors having no financial interest in the agreement and
is believed to be at or below the prevailing rates for similar services from
independent sources.
In January, 1999 the Company entered into a retainer agreement with Roy E.
Molina Certified Public Accountant, Inc., to provide all in-house accounting
services, tax advice, and other miscellaneous accounting services for a monthly
fee of $4,000, including all expenses. Mr. Molina is a director and officer of
the Company. This agreement was approved by the directors having no financial
interest in the agreement and is believed to be at or below the prevailing rates
for similar services from independent sources.
8
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
OPERATING RESULTS
Changes in Financial Condition
As of September 30, 1999, the Company had current assets of $2,145,350 compared
to $1,967,709 as of December 31, 1998. Cash increased $619,649 for the nine
months ended September 30, 1999. The increase is due to sales of securities and
profit from selling a lot in Montana. Current liabilities as of September 30,
1999 were $(3,255) compared to $247,353 as of December 31, 1998. The decrease is
due to an overpayment of income taxes due, and repayment of debt owed to Desert
Land Enterprises, Inc.
Changes In The Results of Operations
The Company is no longer in the carwash business, so comparing operating results
from previous quarters are not meaningful. The Company currently derives all
revenue from sales of securities, interest, and dividends earned. The Company's
revenues for the three months ended September 30, 1999 were $(135,895). The
negative revenue is due to unrealized losses on securities held.
The Company had incurred costs and expenses of $50,632 for the three months
ended September 30, 1999. The majority of these expenses consisted of office
expenses, travel, and consulting fees.
The Company posted a loss of $186,589 for the three months ended September 30,
1999. Net loss per share was $.02.
Revenue for the nine months ended September 30, 1999 were $568,229. Costs and
expenses for the nine month period were $180,141. The majority of these expenses
were for office, consulting fees and travel.
The Company posted a net income of $409,386 for the nine months ended September
30, 1999. Net income per share was $.05 for the nine months ended September 30,
1999.
During the quarter ended September 30, 1999 the Company and Desert Land
Enterprises, Inc. sold one of the lots in Montana. The Company realized $25,609
as its half of the proceeds, and earned a profit of $6,745 on the sale.
As of September 30, 1999, the Company had cash and cash equivalents of
$1,242,057. The current ratio was 381.58 as of September 30, 1999. Long term
liabilities were $0 as of September 30, 1999.
Management will continue to keep the Company's assets in liquid form such as
cash, money market funds and marketable securities. Management is continuing to
evaluate other business opportunities.
PART II.
ITEM 1. LEGAL PROCEEDINGS
During the reporting period the Company was not party to any legal proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
9
<PAGE>
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Registrant has no securities which are reportable under this item.
ITEM 4. MATTERS SUBMITTED TO A VOTE OF THE COMPANY'S SHAREHOLDERS
No matters were submitted to a vote of the Company's shareholders during this
quarter.
ITEM 5. OTHER MATTERS
In January of 1999, the Board of Directors of the Company entered into an
agreement with Desert Land Enterprises, Inc., whose sole shareholder is Daniel
Pentelute, President and majority shareholder of the Company, to provide certain
services to the Company on a monthly basis for a fee of $4,500 per month, plus
all out of pocket expenses. These services include telephone and fax service,
all necessary secretarial services, financial tracking of all of the Company's
brokerage accounts and investments, research into possible investments, and
access to various financial publications, websites, and sources. This agreement
was approved by the directors having no financial interest in the agreement and
is believed to be at or below the prevailing rates for similar services from
independent sources.
In January, 1999 the Company entered into a retainer agreement with Roy E.
Molina Certified Public Accountant, Inc., to provide all in-house accounting
services, tax advice, and other miscellaneous accounting services for a monthly
fee of $4,000, including all expenses. Mr. Molina is a director and officer of
the Company. This agreement was approved by the directors having no financial
interest in the agreement and is believed to be at or below the prevailing rates
for similar services from independent sources.
SIGNATURE
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.
TimeOne, Inc.
Date: November 1, 1999 By:
--------------------------
Yolanda Oyler
Secretary and Director
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
TimeOne, Inc. September 30, 1999 financial statements and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000350133
<NAME> TimeOne, Inc.
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1.00
<CASH> 1,242,057
<SECURITIES> 902,904
<RECEIVABLES> 389
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,145,350
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,204,441
<CURRENT-LIABILITIES> (3,255)
<BONDS> 0
0
0
<COMMON> 826
<OTHER-SE> 2,206,870
<TOTAL-LIABILITY-AND-EQUITY> 2,204,441
<SALES> 0
<TOTAL-REVENUES> 568,229
<CGS> 0
<TOTAL-COSTS> 180,141
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,663
<INCOME-PRETAX> 388,088
<INCOME-TAX> 77
<INCOME-CONTINUING> 388,011
<DISCONTINUED> 21,375
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 409,386
<EPS-BASIC> .05
<EPS-DILUTED> .05
</TABLE>
