UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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: February 29, 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: 000-17058
PHOENIX INTERNATIONAL INDUSTRIES, INC.
--------------------------------
(Exact name of small business issuer as specified in its charter)
Florida 59-2564162
------- ----------
(State or other jurisdiction of (IRS Employer incorporation or
organization) Identification No.)
1750 Osceola Drive, West Palm Beach, FL 33409
----------------------------------------
(Address of principal executive offices)
(561) 688-0440
-------------------------
(Issuer's telephone number)
--------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Exchange Act during the past 12 months ( or for such shorter
period that the registrant was required to file such report (s), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Common Stock, $.001 par value 18,593,847 shares outstanding as of February 29,
2000.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
CONSOLIDATED BALANCE SHEETS AS OF FEBRUARY
29, 2000 AND FEBRUARY 28, 1999
CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE THREE MONTHS AND NINE MONTHS ENDED FEBRUARY
29, 2000 AND FEBRUARY 28, 1999
CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
DEFICIT FOR THE NINE MONTHS ENDED FEBRUARY 29, 2000
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE NINE MONTHS ENDED FEBRUARY 29, 2000 AND
FEBRUARY 28, 1999
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS.
PART II: OTHER INFORMATION
SIGNATURE
<PAGE>
<TABLE>
<CAPTION>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
February 29, 2000 and February 28, 1999
(UNAUDITED)
ASSETS
(000's omitted)
February 29, 2000 February 28, 1999
---------------------- ----------------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 89 $ 218
Accounts receivable net of allowance for
doubtful accounts of $8,000 and $12,000 273 4
Other current assets 640 381
---------------------- ----------------------
TOTAL CURRENT ASSETS 1,002 603
---------------------- ----------------------
Property and equipment, net 642 21
Goodwill, net - 157
Other Assets - 19
---------------------- ----------------------
TOTAL ASSETS $ 1,644 $ 800
====================== ======================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 870 $ 26
Accrued and other liabilities 197 109
---------------------- ----------------------
TOTAL CURRENT LIABILITIES 1,067 135
NOTE PAYABLE, RELATED PARTY 1,380 539
---------------------- ----------------------
TOTAL LIABILITIES 2,447 674
---------------------- ----------------------
STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value: 5,000
shares authorized: no shares outstanding - -
Common stock, $0.001 par value; 20,000,000
shares authorized: 18,593,847 & 11,093,402
shares issued and outstanding 18 10
Additional paid-in-capital 6,486 6,330
Accumulated deficit (7,307) (6,214)
---------------------- ----------------------
TOTAL STOCKHOLDERS' DEFICIT (803) 126
---------------------- ----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,644 $ 800
====================== ======================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months and nine months ended February 29, 2000 and February 28, 1999
(UNAUDITED)
(000's omitted) (000's omitted)
Three Months Ended Nine Months Ended
------------------------------------- ------------------------------------
February 29, 2000 February 28, 1999 February 29, 2000 February 28, 1999
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
REVENUES $ 501 $ 8 $ 1,266 $ 54
OPERATING EXPENSES
Selling, general and administrative 1,116 804 2,302 1,214
Operating Loss (615) (796) (1,036) (1,160)
INCOME TAX BENEFIT (PROVISION) -- -- -- --
LOSS FROM CONTINUING
OPERATIONS (615) (796) (1,036) (1,160)
DISCONTINUED OPERATIONS
Income (loss) from
discontinued operations -- -- (65) 60
NET LOSS $ (615) $ (796) $ (1,101) $ (1,100)
======== ======== ======== ========
LOSS PER SHARE
Loss from continuing operations $ (0.03) $ (0.07) $ (0.07) $ (0.13)
======== ======== ======== ========
Net loss $ (0.03) $ (0.07) $ (0.08) $ (0.13)
======== ======== ======== ========
Weighted average common shares 18,594 11,093 13,979 8,833
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
For the nine months ended February 29, 2000
(UNAUDITED)
Common Stock
--------------------------
Additional Total
Number of Par Paid-In Accumulated Stockholder's
Shares Value Capital Deficit Deficit
--------- --------- ---------- ----------- -------------
(000's omitted)
<S> <C> <C> <C> <C> <C>
Balance,
May 31, 1999 12,139 $ 12 $ 5,996 $(6,206) $ (198)
Shares issued 6,455 6 490 (1,101) --
Net Loss -- -- -- -- (605)
--------- --------- ---------- ----------- -------------
Balance,
February 29, 2000 18,594 $ 18 $ 6,486 $(7,307) $ (803)
========= ========= ========== =========== =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended February 29, 2000 and February 28, 1999
(UNAUDITED)
(000's omitted)
Nine Months Ended
----------------- -----------------
February 29, 2000 February 28, 1999
----------------- -----------------
<S> <C> <C>
NET CASH USED BY OPERATING ACTIVITIES $(1,479) $(1,115)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (11) (2)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of loan payable, related party (14) (23)
Proceeds from loan payable, related party 786 --
Issuance of common stock 496 1,357
Proceeds from new borrowings 194 --
Other loans paid (11) --
--------- ---------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 1,451 1,334
--------- ---------
NET INCREASE (DECREASE) IN CASH (39) 217
CASH AT BEGINNING OF YEAR 128 1
--------- ---------
CASH AT END OF YEAR $ 89 $ 218
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM I: FINANCIAL STATEMENTS
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
February 29, 2000 and February 28, 1999
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND GENERAL MATTERS
ORGANIZATION
During the year ended May 31, 1999, Phoenix International Industries, Inc. and
subsidiaries (the Company) provided computer consulting and investment services
through its wholly-owned subsidiaries HDX 9000, Inc. (HDX) and Mic Mac
Investments, Inc. (Mic Mac) to entities located primarily in the southeastern
United States. HDX and Mic Mac were acquired during the year ended May 31, 1998.
Mic Mac discontinued operation in the fiscal year ended May 31, 1999 and HDX
discontinued operations in June 1999. The remaining assets, liabilities, equity
and investment in these subsidiaries were written off in the periods they ceased
operations. These companies are unconsolidated subsidiaries in the period
presented.
The Company acquired the Telephone Company of Central Florida, Inc. in July
1999, see Note 4.
CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All intercompany transactions and
balances have been eliminated in consolidation.
NOTE 2 - BASIS OF PRESENTATION
The Company's unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting of normal recurring
accrual adjustments, considered necessary for a fair presentation have been
included. Operating results for the six-month period ended February 29, 2000 are
not necessarily indicative of the results that may be expected for the year
ended May 31, 2000.
These financial statements and notes should be read in conjunction with the
Company's audited financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended May 31, 1999.
NOTE 3 - FINANCIAL RESULTS
The accompanying unaudited financial statements have been prepared assuming the
Company will continue as a going concern. The Company has accumulated losses of
approximately $7,000,000 and has insufficient working capital. In connection
with the acquisition of TCCF, the Company will continue to incur selling,
general and administrative expenses. Realization of certain assets is dependent
upon the Company's ability to meet its future financing requirements, the
success of future operations and the continued funding of the parent Company's
operations by its chief executive officer. These conditions raise substantial
doubt about the Company's ability to continue as a going concern. While the
Company believes that these acquisitions will become profitable in the future
and that, with its prospective acquisitions, it will generate future cash flows
and return to profitability, there can be no assurance that this will occur.
Also, the Company believes it will be able to raise the funds necessary to
complete the aforementioned acquisition in the foreign equity markets. In
addition, the Company's chief executive officer has committed to continue to
provide working capital to fund the selling, general and administrative expenses
of the parent company.
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM I: FINANCIAL STATEMENTS
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
February 29, 2000 and February 28, 1999
(UNAUDITED)
NOTE 4 - BUSINESS COMBINATIONS
Phoenix International Industries, Inc. (the Company) acquired the common stock
of the Telephone Company of Central Florida, Inc. (TCCF), a reorganized debtor,
on July 27, 1999. TCCF was incorporated in the State of Florida in December 1995
for the purpose of purchasing wholesale long distance and local
telecommunication services and to resell these services throughout the United
States. TCCF is also a provider of telecommunication services to the debit card
(prepaid telephone card) industry. TCCF filed a petition for relief under
Chapter 11 of the Bankruptcy code on May 26, 1998. On December 17, 1998, the
Company issued a letter of intent to TCCF setting forth the terms and conditions
under which it is willing to acquire 100% of the issued and outstanding common
voting stock of TCCF as a reorganized debtor. The terms and conditions of the
purchase by the Company of TCCF coincided with the plan of reorganization
submitted to the Bankruptcy Court by TCCF. A summary of the terms and conditions
of the purchase and the reorganization plan are as follows:
1. The Company will pay all administrative claims and expenses, not to
exceed $570,000, within ten days off the effective date.
2. The Company will pay all priority claims and taxes, not to exceed
$300,000, in $25,000 installments starting within ten days of the
effective date over a period of six years with interest payable at 8%.
3. The Company will deposit $500,000 into a creditor trust fund. The
initial deposit of $100,000 to the trust fund will be made at the
Confirmation Order and the balance will be deposited in four
consecutive semi-annual installments of $100,000.
The effective date of the closing is ten days after the Order of Confirmation is
issued by the Bankruptcy Court. The Order of Confirmation was issued on June 9,
1999 and TCCF began operating as a reorganized debtor on July 27, 1999.
The following are the condensed balance sheets of TCCF at May 31, 1999 and at
July 28, 1999 using fresh-start accounting and the statement of operations for
the twelve-month period ending May 31, 1999. Entities that adapt fresh-start
reporting shall allocate the reorganization value to the company's assets in
conformity with the procedures for transactions reported on the purchase method
basis. If any portion of the reorganization value cannot be attributed to
specific tangible or identified intangible assets of the emerging entity, such
amounts should be reported as the intangible asset identified as "reorganization
value in excess of amounts allocable to identifiable assets." Additionally, the
effects of the adjustments on the reported amounts of individual assets and
liabilities resulting from the adoption of fresh-start reporting and the effects
of the forgiveness of debt are reflected in the predecessor entity's final
statement of operations. Adopting fresh-start reporting results in a new
reporting entity with no beginning retained earnings or deficit.
<TABLE>
<CAPTION>
TCCF
(Fresh-start reporting)
TCCF July 28, 1999
May 31, 1999 (unaudited)
------------------------- -------------------------
<S> <C> <C>
Cash $ 250 $ 18,222
Accounts receivable, net 479,237 367,133
Property and equipment, net 334,527 700,000
Other assets 104,648 103,528
Reorganization value in excess of
amounts allocable to identifiable assets - 190,218
------------------------- -------------------------
Total Assets $ 918,662 $ 1,379,101
========================= =========================
</TABLE>
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM I: FINANCIAL STATEMENTS
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
February 29, 2000 and February 28, 1999
(UNAUDITED)
NOTE 4 - BUSINESS COMBINATIONS (CONTINUED)
<TABLE>
<CAPTION>
TCCF
(Fresh-start reporting)
TCCF July 28, 1999
May 31, 1999 (unaudited)
------------------------- -------------------------
<S> <C> <C>
Accounts payable $ 790,776 $ 787,802
Other liabilities 340,582 41,314
Liabilities subject to compromise 1,338,668 -
------------------------- -------------------------
Total Liabilities 2,470,026 829,116
Common stock - 5,000
Paid-in capital - 544,985
Retained deficit (1,551,364) -
------------------------- -------------------------
Total Liabilities and Stockholder's Deficit $ 918,662 $ 1,379,101
========================= =========================
<CAPTION>
STATEMENT OF OPERATIONS
For the year ended May 31, 1999
<S> <C>
Revenue $ 8,269,978
Cost of Sales 6,537,800
-------------------------
Gross Profit 1,732,178
-------------------------
Operating Expenses
Salaries, wages and payroll costs 690,347
Depreciation and amortization 126,850
General and administrative 805,781
-------------------------
Total Operating Expenses 1,622,978
-------------------------
Income From Operations 109,200
Reorganization Expense (369,000)
-------------------------
Net Loss $ (259,800)
=========================
</TABLE>
The Company issued 50,000 shares of its common stock to TCCF as a good faith
deposit.
The operations of TCCF from the date of acquisition are included in the
consolidated unaudited financial statements of the Company at February 29, 2000
using fresh start accounting from the date of acquisition.
<PAGE>
PHOENIX INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION
ITEM I: FINANCIAL STATEMENTS
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
February 29, 2000 and February 28, 1999
(UNAUDITED)
NOTE 5 - RESCISSION OF BUSINESS COMBINATION
In December, 1998 the Company signed an agreement to acquire 100% of the
outstanding common stock of Cambridge Holdings, LLC., a Delaware limited
liability company (Cambridge), and Merrimac Shipping limited, a Liberian
corporation (Merrimac) for two million shares of Phoenix and two million
dollars, both payable at closing, and an additional three million dollars
payable with terms through June 30, 2000. Cambridge and Merrimac owned all of
the outstanding shares of Cambridge Gas and Transport Company (CGTC). The
Company paid Cambridge and Merrimac $200,000 at closing. The exchange of stock
between Cambridge and Merrimac and the Company did not take place, but the
respective shares of all companies were held in trust by their respective
attorneys. During the Company's fourth quarter, year ending May 31, 1999, and
subsequent to that date, unspecified problems arose regarding the purchase of
Cambridge and Merrimac. An agreement to rescind the acquisition between
Cambridge and Merrimac and the Company had been written but not signed by the
parties. Cambridge and Merrimac subsequently sold 100% of their ownership
interest in CGTC to another purchaser in August 1999. The Company is negotiating
for the repayment of the $200,000 deposit paid at the closing. The $200,000 is
reflected as a refundable deposit in the accompanying financial statements. The
financial statements at the Company's year-end, May 31, 1999, reflect no
transactions between Cambridge and Merrimac and the Company. The February 28,
1999 unaudited consolidated financial statements have been restated to reflect
the rescission of this transaction.
NOTE 6 - PROPOSED BUSINESS ACQUISITION
The Telephone Company of Central Florida, Inc., (TCCF) a wholly owned subsidiary
of Phoenix International Industries, Inc., signed a letter of intent dated
January 28, 2000 to acquire 100% of the outstanding stock of Moye & Associates,
Inc. (Best Net). Best Net is primarily an internet service provider (ISP) in
addition to providing retail sales of computer and computer parts and computer
repairs. The proposed terms of the agreement calls for $50,000 to be paid at
closing, $50,000 to be paid within nine months, and approximately $75,000,
$112,500 and $112,500 worth of Phoenix International Industries, Inc.'s common
stock to be issued at closing, nine months after closing and 18 months after
closing, respectively. The following is a condensed statement of assets,
liabilities, and stockholder's equity (income tax basis), and statement of
revenues and expenses (income tax basis) of Best Net at November 30, 1999 and
for the 11 months then ended.
ASSETS
Unaudited
--------------
Other current assets $ 200
Plant and equipment, net 26,448
--------------
Total Assets $ 26,648
==============
LIABILITIES AND STOCKHOLDER'S EQUITY
Note payable $ 26,500
Accounts payable and bank overdraft 22,448
--------------
Total Current Liabilities 48,948
Stockholder's Equity (Deficit) (22,300)
--------------
Total Liabilities and Stockholder's Equity $ 26,648
==============
REVENUES AND EXEPNESES
Revenues $ 305,395
Cost of Sales 159,038
--------------
Gross Profit 146,357
Operating Expenses 173,450
--------------
Excess Expenses Over Revenues $ (27,093)
==============
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Except for the historical information herein, the matters discussed in
this quarterly report includes forward-looking statements that may involve a
number of risks and uncertainties. Actual results may vary based upon a number
of factors, including, but not limited to, risk in product availability, product
technology changes, market acceptance of new products and services, questions of
continuing demand, the impact of competitive products and pricing, changes in
economic conditions and other risk factors contained in the Company's most
recent filings with the Securities and Exchange Commission ("SEC").
RESULTS OF OPERATIONS
Phoenix International Industries, Inc.(the "Company") is a development
stage company. The disclosure in the quarterly report should be read in
conjunction with the Company's annual report on Form 10-KSB for its year ended
May 31, 1999, which was filed with the SEC.
During the Company's three month period ended February 29, 2000, the
Company incurred net losses of $615,000 compared to net losses of $796,000 for
the comparable three month period for the preceding year, and net losses for the
nine month period ended February 29, 2000 of $1,101,000 compared to $1,100,000
for the same period the preceding year.
The Company reported revenues of $501,000 for the three month period
ended February 29, 2000 compared to sales revenues of $8,000 for the three month
period ended February 28, 1999 and revenues for the nine month period ended
February 29, 2000 of $1,266,000 compared to $54,000 for the same period the
preceding year. These revenues resulted from telecommunication service sales
generated by Phoenix's newly acquired affiliate Telephone Company of Central
Florida, Inc.("TCCF"), and miscellaneous revenue, as disclosed in the combined
financial statement which is included in this filing.
The Company, during the three month period ended February 29, 2000
executed a letter of intent to acquire 100% of "The Best Net" a Georgia
Corporation based on St. Simons Island. The Best Net is an Internet Service
Provider (ISP) with 2,500 customers, a computer sales and service company and
also has an e-commerce site on the Internet. Details of the purchase are still
being worked out, but it has been agreed that the method of payment will be
comprised of both cash and stock.
The Company, based upon the representations received from TCCF,
believes that prior to the end of fiscal 2000, TCCF will continue to generate
increasing revenues from operations, as it increases its subscriber base for its
telecommunications business. The acquisition of companies like The Best Net is
an excellent example of how TCCF's customer base can be expanded. TCCF and The
Best Net have already begun "cross-selling" their respective services to each
others customers.
The Company, during the coming year, will continued to pursue efforts
to add additional affiliates or attractive joint ventures, primarily in the
telecommunications industry in order to generate additional revenue streams.
<PAGE>
Although still wholly owned by the Company, the Company has ceased to
operate HDX 9000, Inc.,as their primary product was related to solving the Y2K
computer problem and they have not been able to successfully adapt their other
methodologies to a readily marketable format. HDX President, Timothy Palmer, has
agreed to return the 500,000 shares of the company's stock, which was issued to
purchase HDX 9000, to the company for cancellation. Mr. Palmer will continue to
serve as a Director of the company and act as a consultant on an "as needed"
basis. Final disposition of HDX 9000 has yet to be decided.
The Company's net losses for the nine month period ended February 29,
2000, continue to be the result of expenses involved with supporting the day to
day operation of TCCF, the expenses of expanding its sales operation during the
period and the continued expenses associated with continuing to operate and
maintain its offices, professional fees and expenses associated with being a
reporting public company, which include: legal, accounting and EDGAR/printing
preparation, and the write off of its $152,000 investment in HDX. The Company
incurred non-cash expenses associated with the issuance of 50,000 shares of
restricted stock to TCCF as a "good faith deposit" toward its acquisition. Said
stock will be returned to The Company's treasury during the next quarter.
In order for the Company to pay its operating expenses, including office
rents, communication expenses, accounting and bookkeeping fees, printing and
EDGAR preparation costs, publication costs, and other general and administrative
expenses, the Company was dependent upon the funds provided by non-interest
bearing loans from the Company's executive officer, director and shareholders.
Again, during this reporting period as it has previously, the company
has raised a portion of its operating capital through the sale of restricted
stock, however in future there can be no assurance of any additional sale of
restricted stock. Further, there can be no assurance, based upon present market
price of the shares, that it will be able to raise additional private placement
funding, at terms and conditions satisfactory to the Company.
The Company continues to be dependent upon the willingness of the
Company's executive officers/directors and its consultants to accept shares as
compensation for continued services to the Company, which services the Company
considers to be valuable and necessary to its continued operations.
During the period ended November 30, 1999 The company entered into
negotiations which led to a letter of intent to sell its wholly owned
subsidiary, TCCF, to Atlanta based Avana Corporation, a wholly owned subsidiary
of Grace Development Corporation ("GCDV" on the OTCBB) for approximately
$2,000,000 cash and 3,000,000 of GCDV.(See the Press Release dated October 15,
1999, under Item 5 in this filing.) The anticipated sale was never concluded,
due to the fact that Avana abruptly backed our of the deal, giving no
satisfactory reason to the Company.(See Press Release dated January 6, 2000,
under Item 5 of this filing.
LIQUIDITY AND CAPITAL RESOURCES
The Company, at February 29, 2000 had current assets of $1,002,000
compared to current assets of $603,000 at February 29, 1999. To assist the
Company in its cash flow requirements the Company may determine, depending upon
the prevailing stock price of its shares, to seek subscriptions from the sale of
securities to private investors, although there can be no assurance that it will
be successful in securing any investment from private investors at terms and
conditions satisfactory to the Company, if at all.
<PAGE>
Based upon the Company's present liquid resources, its present
operating expenses, and the commitment of its executive officers to continue to
defer most or all of their salaries, and if no revenues are generated from
operations or other sources, the Company will be able to operate for a minimum
of three months. However, in the near term, the Company does anticipate receipt
of increased operating revenues as a result the business developments by TCCF.
The Company's monthly operating expenses during the nine month period
ended February 29, 2000, does not reflect any salary to Gerard Haryman or Thomas
Donaldson, the Company's executive officers, who's salaries have been accrued,
but not paid, at the rate of $20,833 and $8,600 per month respectively. The
Company does not contemplate commencing full salary payments to Messrs. Haryman
and Donaldson unless and until it begins to generate positive cash flow from
operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
During the period ended February the company was served with a
lawsuit filed on behalf of the pervious owners of Mic-Mac, Inc. (formerly a
wholly owned subsidiary of the Company) the lawsuit demanded the release of the
restrictions placed on the 220,000 stock which was received in payment for
Mic-Mac, Inc. Additionally, the lawsuit demanded that the contingent balance of
the purchase price (250,000 shares of restricted stock) be issued. The Company
has taken the position that the previous owners are not entitled to any stock as
the performance clauses in the purchase agreement were not met. The litigation
is in progress and has of yet not been decided. The balance of legal proceedings
involving the Company are as Reported in the company's 10-KSB of May 31, 1999
and incorporated herein by reference.
Item 2. Changes in Securities
NONE
Item 3. Defaults upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
<PAGE>
Item 5. Other Information
Press Releases
(1). January 6, 2000
FOR IMMEDIATE RELEASE
PHOENIX EXPANDS CONTRACT WITH AT&T ENABLING AFFILIATE, TCCF, TO INCREASE REVENUE
BY 50%
West Palm Beach, Florida
Phoenix International Industries, Inc. (PHXU on the OTCBB) in a move which will
enable its wholly owned subsidiary, the Telephone Company of Central Florida,
Inc. ("TCCF") to increase its monthly revenue by more than 50%, announced that
it had expanded its long distance service agent contract with AT&T.
Phoenix had entered into a letter of intent to sell TCCF to Grace Development
Corporation (trading symbol "GCDV") of Atlanta, Ga., by Dec. 1, 1999, but Grace
announced last Thursday that it no longer had an interest in purchasing the
company. According to Gerard Haryman, President of Phoenix, the announcement
came as a surprise to Phoenix. Haryman said, "We were not, and are still not,
aware of any fault by Phoenix for the sale not going through. GCDV was provided
with the audited financial statements of TCCF, as well as full and complete due
diligence. Based on discussions and attempts by GCDV to renegotiate, it is our
belief they could not afford the acquisition as originally contemplated."
With the exception of historical facts, the matters discussed in this press
release include forward-looking statements that may involve a number of risks
and uncertainties. Actual results may vary based upon a number of factors,
including, but not limited to, risks in product and technology development,
market acceptance of new products and continuing demand, the impact of
competitive products and pricing, and changing economic conditions.
For additional information contact:
Phoenix International Industries, Inc.
Thomas Donaldson
561-688-0440
Item 6. Exhibits and Reports on Form 8-K
NONE
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PHOENIX INTERNATIONAL INDUSTRIES, INC..
(Registrant)
April 18, 2000 By:/s/ GERARD HARYMAN
-------------------------------------------
Gerard Haryman
President, Chief Executive Officer and
(acting)Chief Financial Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
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27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET (AUDITED) AS OF 5/31/1999 AND THE STATEMENT OF OPERATIONS
(UNAUDITED) FOR THE NINE MONTHS ENDED 02/29/00
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS
<FISCAL-YEAR-END> MAY-31-2000 MAY-31-1999
<PERIOD-END> FEB-29-2000 MAY-31-1999
<CASH> 89,000 127,776
<SECURITIES> 0 0
<RECEIVABLES> 640,000 220,256
<ALLOWANCES> 12,000 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 1,002,000 8,000
<PP&E> 0 19,251
<DEPRECIATION> 0 (5,906)
<TOTAL-ASSETS> 1,644,000 456,164
<CURRENT-LIABILITIES> 1,067,000 653,911
<BONDS> 0 0
0 0
0 0
<COMMON> 0 12,139
<OTHER-SE> 0 (209,886)
<TOTAL-LIABILITY-AND-EQUITY> 1,644,000 456,164
<SALES> 501,000 30
<TOTAL-REVENUES> 501,000 30
<CGS> 0 0
<TOTAL-COSTS> 1,116,000 1,165,403
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 (1,165,403)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (615,000) (1,165,403)
<DISCONTINUED> 0 73,417
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (615,000) (1,091,986)
<EPS-BASIC> (.03) (.11)
<EPS-DILUTED> (.03) 0
</TABLE>
