UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHNAGE ACT OF 1934
For the transition period from N/A to N/A
Commission File No. 33-1986-LA
STEIN'S HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Nevada, USA 88-022660
(State of Incorporation) (IRS Employer Identification No.)
21800 Oxnard Street, #440, Woodland Hills, California 91367
(Address of principal executive offices)
Registrant's Telephone Number, (818) 598-8888
TELEMALL COMMUNICATIONS, INC., 5030 Paradise Road, #C-213, Las Vegas, NV 89119
- ------------------------------------------------------------------------------
(Former name, former address and fiscal year, if changed since last report)
Indicate by check mark if 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 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
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 |_| No
APPLICABLE ONLY TO CORPORATE ISSUERS
State number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding at September 30, 1997
Common Stock, $.001 8,875,105 shares
par value ---------------
Outstanding Securities
Transitional Small Business Disclosure Format (check one): Yes |_| No |X|
<PAGE>
STEIN'S HOLDINGS, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TELEMALL COMMUNICATIONS, INC.
(formerly Vegas Ventures, Inc.)
(a development stage company)
BALANCE SHEETS
(unaudited)
ASSETS
Current Assets SEPTEMBER 30, 1997 December 31, 1996
- -------------- ------------------ -----------------
Aristocrat Mutual Fund (note 8) 500,000 500,000
Inventory (Notes 1 and 7) 3,101,061 3,101,061
Total Current Assets 3,601,061 3,601,061
--------- ---------
Investment in Stock (Note 5) 0 0
--------- ---------
Other Assets
Aristocrat Mutual Fund (Note 8) 1,500,000 0
Total Other Assets 1,500,000 1,500,000
--------- ---------
Total Assets 5,101,061 5,101,061
--------- ---------
<PAGE>
TELEMALL COMMUNICATIONS, INC.
(formerly Vegas Ventures, Inc.)
(a development stage company)
BALANCE SHEETS
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities SEPTEMBER 30, 1997 December 31, 1996
- ------------------- ------------------ -----------------
Accounts Payable 290,687 290,687
Notes Payable (Note 9) 41,000 41,000
Total Current Liabilities 331,687 331,687
------- -------
Stockholders' Equity
Convertible preferred stock: 10,000,000
Shares authorized at $10.00 stated
value per share, issued and
outstanding 510,000 shares at
September 30, 1997, 510,000 shares
at December 31, 1996 5,100,000 5,100,000
Common stock - 50,000,000 shares
authorized at $.001 per share par value;
issued and outstanding 8,875,105 shares
at September 30, 1997 and December 31, 1996 8,875 8,875
Paid in capital (Note 2) 1,167,885 1,167,885
Deficit accumulated during the
Development stage (1,507,386) (1,507,386)
--------- ---------
Total Stockholders' Equity (Deficit) 4,769,374 4,769,374
--------- ---------
Total Liabilities and
Stockholders' Equity 5,101,061 5,101,061
--------- ---------
<PAGE>
TELEMALL COMMUNICATIONS, INC.
(formerly Vegas Ventures, Inc.)
(a development stage company)
STATEMENTS OF OPERATIONS
(unaudited)
For the Three Year to
Months Ended Date
September 30 September 30
------------- -----------
1997 1996 1997 1996
---- ---- ---- ----
Revenue: 0 121,546 0 177,743
Operating
Expenses:
Selling, general and
Administrative expenses 0 421,995 0 476,109
Depreciation 0 2,412 0 3,216
Amortization 0 1,084 0 2,710
-------- -------- ------ ------
Total Operating Expenses: 0 426,033 0 482,035
-------- -------- ------ ------
Operating Income 0 (304,487) 0 (304,292)
Interest Expense 0 (1,000) 0 (2,000)
-------- --------- ------ -------
Net Income (Loss) 0 (305,487) 0 (306,292)
======== ======== ====== ========
Per share calculations are nil per share
<PAGE>
TELEMALL COMMUNICATIONS, INC.
(formerly Vegas Ventures, Inc.)
(a development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM INCEPTION (NOVEMBER 3, 1986) TO SEPTEMBER 30, 1997
Deficit
Accumulated
Common Stock During the Total
----------------- Paid in Development Stockholders'
Issued Amount Capital Stage Equity (Deficit)
------ ------ ------- ----- ----------------
Shares of common
stock issued
in November 1986
in exchange for
cash ($.08 per
share):
Officers and
directors 75,000 75 5,925 -- 6,000
Related
parties 5,000 5 395 -- 400
Net loss for
period -- -- -- (163) (163)
--------- -------- -------- ------- --------
Balance at
December 31,
1986 80,000 80 6,320 (163) 6,237
Shares of common
Stock issued in
public stock
offering at $1.00
per share in
September 1987
(net of offering
costs of
$66,512) 201,000 201 134,287 -- 134,488
Shares of common
Stock issued in
October 1987
for services in
connection with
public stock
offering 750,000 750 (750) -- --
Net Loss for
the year -- -- -- (3,128) (3,128)
--------- -------- -------- ------- --------
<PAGE>
Balance at
December 31,
1987 1,031,000 1,031 139,857 (3,291) 137,597
Net Loss for
the year -- -- -- (137,557) (137,557)
--------- -------- -------- ------- --------
Balance at
December 31,
1988 1,031,000 1,031 139,857 (140,848) 40
Shares of
common stock
issued in
April 1989
for cash $.22
per share) 45,000 45 9,955 -- 10,000
Shares of
common stock
issued in
July 1989 for
services 760,000 760 (760) -- --
Net Loss for
the year -- -- -- (9,745) (9,745)
--------- -------- -------- ------- --------
Balance at
December 31,
1989 1,836,000 1,836 149,052 (150,593) 292
Shares of
common stock
issued in
January 1990
for services 3,155,000 3,155 (3,155) -- --
Net Loss for
the year -- -- -- (500) (500)
--------- -------- -------- ------- --------
Balance at
December 31,
1990 4,991,000 4,991 145,897 (151,096) (208)
Net Loss for
the year -- -- -- (4,363) (4,363)
--------- -------- -------- ------- --------
Balance at
December 31,
1991 4,991,000 4,991 145,897 (155,459) (4,571)
Shares of common
Stock issued in
August 1992 to
Related parties
For consulting
Services ($.01
Per share) 1,470,000 1,470 18,830 -- 20,000
<PAGE>
Shares of common
Stock issued in
August 1992
in exchange
for unimproved
real estate
($.41 per
share) 6,400,000 6,400 2,627,395 -- 2,633,795
Net Loss for
the year -- -- -- (59,049) (59,049)
--------- -------- -------- ------- --------
Balance at
December 31,
1992 12,861,000 12,861 2,791,822 (214,508) 2,590,175
--------- -------- -------- ------- --------
Shares of
common stock
issued March
30, 1993 in
exchange for
services 250,000 250 (250) -- --
Net loss for
the year -- -- -- 0 0
--------- -------- -------- ------- --------
Balance at
December 31,
1993 13,111,000 13,111 2,791,572 (214,508) 2,590,175
Net (loss)
for the year -- -- -- (1,011,466) (1,011,466)
--------- -------- -------- ------- --------
Balance at
December 31,
1994 13,111,000 13,111 2,791,572 (1,225,974) 1,578,709
Shares of common
Stock issued
October 1,
1995 in exchange
for services 1,850,000 1,850 (1,850) -- --
Net Loss for
the year -- -- -- 0 0
--------- -------- -------- ------- --------
Balance at
December 31,
1995 14,961,000 14,961 2,789,722 (1,225,974) 1,578,709
<PAGE>
<TABLE>
<CAPTION>
Deficit Total
Common Stock Preferred Stock Paid In Accumulated During Stockholders
Shares Amount Issued Amount Capital Development Stage Equity (Deficit)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1995 14,961,000 14,961 2,789,922 (1,225,974) 1,578,709
Return of
Company shares
In exchange for
Investment shares
distributed
to
shareholders (6,400,000) (6,400) (1,573,600) -- (1,580,000)
---------- ------ --------- ---------- ---------
8,561,000 8,561 1,216,122 (1,225,974) (1,291)
Reverse 10
for 1 split (7,704,900) (7,705) 7,705 -- --
---------- ------ --------- ---------- ---------
856,100 856 1,223,827 (1,225,974) (1,291)
Issuance of
common stock
for
acquisition
of TeleMall
Network,
Inc. 2,933,000 2,933 (55,942) -- (53,009)
Issuance of
Common Stock
For cash 5,086,005 5,086 -- -- 5,086
Preferred
stock issued
by TeleMall
Network,
Inc. 510,000 5,100,000 5,100,000
Net Loss
for the year (281,412) (281,412)
---------- ------ ------- --------- --------- ---------- ---------
Balance,
Dec. 31,
1996 8,875,105 8,875 510,000 5,100,000 1,167,885 (1,507,386) 4,769,374
Net Profit to
Sept. 30,
1997 -- -- -- -- -- -- --
Balance, Sept
30, 1997 8,875,105 8,875 510,000 5,100,000 1,167,885 (1,507,386) 4,769,374
</TABLE>
<PAGE>
TELEMALL COMMUNICATIONS, INC.
(formerly Vegas Ventures, Inc.)
(a development stage company)
STATEMENTS OF CASH FLOWS
(unaudited)
For the nine Months Ended
September 30,
-------------------------
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) 0 (306,292)
Adjustments to reconcile net (loss) to
net cash (used) by operating activities
Depreciation and Amortization 0 5,926
(Increase) in trademark costs 0 (22,539)
(Increase) in inventory 0 (3,101,061)
Increase in accounts payable 0 230,378
Increase in accrued expenses 0 19,797
(Increase) in tape production costs 0 (22,416)
(Increase) in distribution costs 0 (79,440)
(Increase) in prepaid expenses 0 (10,876)
---- ---------
NET CASH (USED) BY OPERATING ACTIVITIES 0 (3,286,523)
---- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in investment in stock 0 1,580,000
(Increase) in office furniture and equipment 0 (55,154)
(Increase) in mutual fund 0 (2,000,000)
---- ---------
CASH PROVIDED (USED) IN INVESTING ACTIVITIES 0 (475,154)
---- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in notes payable 0 291,000
Increase in capital leases 0 6,165
Surrender of common shares for investment stock 0 (1,580,000)
Increase in preferred stock 0 5,100,000
Issuance of common shares for acquisition of
TeleMall Network, Inc. 0 (53,009)
NET CASH PROVIDED FROM FINANCING ACTIVITIES 0 3,764,156
---- ---------
NET INCREASE (DECREASE) IN CASH 0 2,479
---- ---------
CASH BALANCE, BEGINNING OF PERIOD 0 0
---- ---------
CASH BALANCE, END OF PERIOD 0 2,479
---- ---------
<PAGE>
TELEMALL COMMUNICATIONS, INC.
(formerly Las Vegas Ventures, Inc.)
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTMBER 30, 1997
(unaudited)
Note 1 Summary of Significant Accounting Policies:
This summary of significant accounting policies of TELEMALL COMMUNICATIONS, INC.
("Telemall" or the "Company"), formerly Vegas Ventures, Inc., a development
stage Company, is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management, which is responsible for their integrity and objectivity.
Management represents that these financial statements and the accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
(a) Organization and Business Nature:
The Company was incorporated in the State of Nevada on November 3,
1996 as Ed-Phills, Inc. Since inception, the Company has been
engaged in organizational activities. The Corporation changed its
name from Ed-Phills, Inc. on August 24, 1992 to Vegas Ventures, Inc.
Vegas Ventures, Inc. changed its name to TeleMall Communications,
Inc., effective June 4, 1996.
(b) Inventory:
Inventory is stated at the lower cost or market and includes
$3,100,000 of artwork, stored in a warehouse in Jenkintown,
Pennsylvania (see note 7).
(c) Fiscal Year:
The Company operates on a calendar year basis.
(d) Basis of Operation:
The Company prepares its financial statements and federal income
taxes on the accrual basis of accounting.
Note 2 Acquisitions:
Effective June 4, 1996 the Company exchanged 2,933,000 shares of its common
stock for all the outstanding common shares of TeleMall Network Incorporated
("TNI"). TNI was incorporated in Nevada on May 12, 1994 and its main business
activity was merchandising products over television.
<PAGE>
TELEMALL COMMUNICATIONS, INC.
(formerly Vegas Ventures, Inc.)
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(unaudited)
(continued)
Note 3 Options, Warrants and Preferred Stock Conversion Features:
There are no options or warrants outstanding against the common stock of the
Company. The convertible preferred stock provides for the exchange of one share
of preferred stock for two shares of common stock of TeleMall Communications,
Inc. at the option of the shareholders. The conversion option provides for
redemption release stages over time with no expiration date as to the conversion
option.
Note 4 Divided Policy:
The Company has not yet adopted a policy regarding dividends.
Note 5 Investment in Stock:
On March 31, 1992, the Company entered into an agreement to acquire a 5/6
interest in three parcels of unimproved real property located in the Las Vegas,
Nevada metropolitan area in exchange for 6,400,000 shares of the Company's
common stock. The three parcels were appraised at $3,157,555 for the 5/6
interest and were subject to two loans totaling $466,635 plus accrued interest
of $35,541, and unpaid property taxes of $9,862.
On August 16, 1993 the Company filed for relief for Chapter XI Federal
Bankruptcy, the United States Bankruptcy Court, District of Nevada, case number
BK-S- 93-21874-LBR.
Effective January 4, 1994 the Company was successful in providing a plan of
reorganization which primarily provided for the sale of the 5/6 interest in the
three parcels of unimproved real estate for 395,000 shares of preferred voting
stock of C.E.C., a public company. The buyer of the vacant parcels also assumed
the debt associated with the unimproved parcels.
The Company was subsequently successful in obtaining a dismissal from the
Chapter XI proceedings.
In May 1996 the 395,000 shares of C.E.C. stock held by the Company was exchanged
for the 6,400,000 shares originally issued for the vacant parcels. The Company
then cancelled all of the 6,400,000 shares.
<PAGE>
TELEMALL COMMUNICATIONS, INC.
(formerly Vegas Ventures, Inc.)
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(unaudited)
(continued)
Note 6 Common Stock:
On August 24, 1992, the Company approved a 10 to 1 reverse stock split. All
references in the Financial Statements to shares of common stock and per share
data reflect the August 24, 1992 changes.
In May, 1996 the Company approved a 10 to 1 reverse split and the corresponding
effect is reflected in the current period in order to relate to the stock
activity for the pre and post acquisition transaction.
Note 7 Artwork:
Inventory of Len Garon Artwork was acquired from Cable Print Network Marketing
in exchange for 310,000 shares of TeleMall Network, Inc. Redeemable Convertible
Preferred Stock valued @ $10/share.
Total valuation $3,101,061
In the event the preferred shares or their equivalent in common shares do not
have a market price of at least $3,100,000 within two years, the Company, at its
option, shall return the artwork or issue additional shares to compensate for
the deficiency.
Note 8 Securities:
Investment in Aristocrat Endeavor Fund consists of 100,000 shares at $20/share
which was exchanged for 200,000 shares of TeleMall Network, Inc. Convertible
Preferred Stock valued @ $10/share.
The investment is in the form of a Mutual Fund held in the British Virgin
Islands. The Company's may redeem up to $500,000 of shares after the redemption
period which is anytime after August 1, 1996. The redemption fee is five percent
(5%) of the amount redeemed and the fee decreases each year thereafter.
Note 9 Notes Payable:
Officer and director - demand note $16,000
Officer and director - demand note 25,000
Total Notes Payable $41,000
<PAGE>
TELEMALL COMMUNICATIONS, INC.
(formerly Vegas Ventures, Inc.)
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(unaudited)
(continued)
Note 10 Income Taxes:
At December 31, 1996, the Company has federal operating loss carryforward of
$1,507,386 for financial accounting and federal income tax purposes. Utilization
of the net operating loss in any taxable year during the carryforward period may
be subject to an annual limitation due to the ownership change limitations
imposed by the tax law.
The net operating losses will expire at various dates commencing in the year
2006 through 2011.
The deferred tax asset consists of the future benefit of net operating loss
carryforwards. A valuation allowance limits the recognition of the benefit of
deferred tax assets until realization is reasonably assured by future
profitability.
The following is a summary of deferred taxes:
Deferred asset 417,145
Valuation allowance (417,145)
Total 0
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The Registrant, formerly known as Vegas Ventures, Inc. and Telemall
Communications, Inc., acquired 100% of TeleMall Network, Inc. in June, 1996,
pursuant to which the Registrant's name was changed to TeleMall Communications,
Inc. The directors of Vegas Ventures resigned and were replaced by the slate of
directors of TeleMall Network, Inc. and TeleMall Communications, Inc. (now the
Registrant) continued to operate the business as a public entity.
The Registrant filed a Form 8-K on June 27, 1996 and attached its Audited
Financial Statements for TeleMall Network, Inc. as of May 31, 1996 and for
TeleMall Communications, Inc. as of June 5, 1996.
The increase in Assets is the result of the exchange of 310,000 shares of $10.00
par value Series A Convertible, Redeemable Preferred Stock of the Registrant,
which replaces the TeleMall Network Series A Preferred Stock, issued in exchange
for an inventory of Len Garon Artwork, of $3,100,000, as set forth in Footnote 7
to the "Notes to Financial Statements"; and the exchange of 200,000 shares of
said Series A Convertible Redeemable Preferred Stock of the Registrant's
Preferred Stock in exchange for said 200,000 shares of the TeleMall Network
Series A $10.00 par value Preferred Stock; which were issued for 100,000 shares
at $20 per share of Aristocrat Endeavor Fund (British Virgin Islands) resulting
in an addition to assets of $2,000,000. A contemplated redemption of $500,000
formerly anticipated to occur in August 1996 (subject to a 5% redemption fee)
did not occur. Subsequently, in March, 1999, the Series A Convertible,
Redeemable Preferred Stock were canceled and the transactions rescinded.
Management was unable to implement the business activities of each of its three
Divisions since it was unsuccessful in completing its proposed private offering
and unable to raise the necessary capital necessary to proceed with its proposed
operations. Additionally, the Registrant did not go forward with its planned
secondary offering due to the market conditions at the time which were not
favorable to offerings for businesses such as Registrant. The Registrant was not
successful in raising the capital to completely and fully fund each division and
in March, 1997, laid off its employees and closed its offices. From that time
until Spring, 1999, the Company was dormant. In May, 1999, the Company issued
4,000 (post-split) shares of its common stock to its former landlord to satisfy
claims that the former landlord had asserted against the Company for unpaid rent
and other charges. In March, 1999, the Company issued 12,500 (post-split) shares
of its common stock to its former attorney as compensation for past services.
Also in March, 1999, the Company also issued 50,000 (post-split) shares of its
common stock to an officer in cancellation of $41,000 in promissory notes due to
him from the Company and as cancellation of certain other debts and obligations
the Company owed him.
In April, 1999, the Company acquired a private company, Multi-Source Capital
Ltd. ("MSC"), a Colorado corporation, by issuing 4,247,754 (post-split) shares
of its common stock to MSC's shareholders in exchange for the transfer of assets
worth $531,594. As part of this transaction, the Company's former officers and
directors resigned and a new slate of officers and directors were elected and
appointed. As part of this acquisition, the shareholders of the Company approved
a 200-for-1 stock split and the name of the Company was changed to Stein's
Holdings, Inc. At this time, the Company assumed an agreement previously entered
into by MSC to acquire College Connection, Inc. d.b.a. Stein's Bakery, a
wholesale and retail bakery operation located in Dallas, Texas. The proposed
acquisition of Stein's Bakery requires the Company to raise approximately
$1,200,000 to pay off certain indebtedness of Stein's Bakery as well as the
issuance of 1,000,000 shares of the Company's common stock to the sole
shareholder of Stein's Bakery. As of the date of this report, the proposed
acquisition of Stein's Bakery has not occurred and the Company has been unable
to raise the $1,200,000 needed to consummate this transaction. It is doubtful as
to whether or not Company will be able to complete this transaction. The
president of Stein's Bakery is Randy Sutton, former CEO and director of the
Company.
As a consequence of its acquisition of MSC, the Company became the majority
shareholder of another publicly traded company, 20/20 Web Design, Inc. ("20/20
Web"), a Nevada corporation formerly known as Trump Oil Corporation. 20/20 Web
merged with MSC's wholly owned subsidiary and MSC received eighty percent of the
issued and outstanding shares of 20/20 Web as a result of that merger.
PART II OTHER INFORMATION
Items 1, 2, 3 and 4 are Inapplicable
Item 5. Other Matters.
Resignation of Officers and Directors.
On or about February 4, 1997, the Registrant accepted the resignations of Thomas
Wells (Director, President and Chief Operating Officer), Kenneth Johanning
(Director and Senior Vice President - Retail Stores) and Robert Lawrence
(Director). In March of 1997, Rick Sullivan, CEO of the Company, resigned. A new
board of directors was appointed, comprised of Rex A. Morden, Thomas Wells and
Eric Savage. This Board served until April, 1999 when Messrs. Wells and Savage
resigned and were replaced by Randy Sutton, Irving Einhorn, James Smith and
Christopher Burnell as part of the acquisition of MSC. Mr. Sutton was appointed
CEO, Mr. Morden was appointed CFO and Mr. Burnell was appointed COO. In
February, 2000, Mr. Sutton resigned and was replaced by Shahram Khial, Ph.D.
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed for the relevant period.
<PAGE>
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.
Stein's Holdings, Inc. f.k.a.
TeleMall Communications, Inc.
Date March 8, 2000 /s/ Shahram Khial
-----------------------------------------
Shahram Khial, Ph.D., CEO
/s/ Rex Morden
-----------------------------------------
Rex Morden, Chief Financial Officer
