U. S. 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 the quarter ended September 30, 1999
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 033-20344-LA
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O. T. S. HOLDINGS, INC.
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(Name of Small Business Issuer in its Charter)
COLORADO 84-1077242
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3046 E. Brighton Place
Salt Lake City, Utah 84121
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 947-1270
4535 W. Sahara, Suite #200
Las Vegas, Nevada 89102
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(Former address of Principal Executive Offices)
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 Company 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 No X
--- --- --- ---
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has 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 the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
March 6, 2000
Common - 72,697*
Preferred - 331,950
* See Part II, Item 2, regarding a 100 for one reverse split
effected on March 2, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
NONE.
Transitional Small Business Issuer Format Yes X No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Company required to be filed with
this 10-QSB Quarterly Report consist of the Company's audited Financial
Statements for the years ended December 31, 1999 and 1998, together with
related Notes. The Company has not had any revenues from operations since
December 31, 1995, and accordingly, quarterly Financial Statements are not
deemed to be material.
<PAGE>
O.T.S. HOLDINGS, INC.
FINANCIAL STATEMENTS AND REPORT
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
December 31, 1999
<PAGE>
Andersen Andersen & Strong, L.C. [letterhead]
Board of Directors
O.T.S. Holdings, Inc.
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of O.T.S. Holdings, Inc.
(development stage company) at December 31, 1999 and the related statement of
operations, stockholders' equity, and cash flows for the years ended December
31, 1999 and 1998 and the period from January 1, 1996 (date of inception of
development stage) to December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall balance sheet
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of O.T.S. Holdings, Inc. at
December 31, 1999, and the results of operations, and cash flows for the
years ended December 31, 1999 and 1998 and the period from January 1, 1996
(date of inception of development stage) to December 31, 1999, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company will need additional
working capital for its planned activity, which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are described in Note 6. These financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/Andersen Andersen & Strong
March 6 , 2000
Salt Lake City, Utah
<PAGE>
<TABLE>
O.T.S. HOLDINGS, INC.
BALANCE SHEET
December 31, 1999
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ -
Total Current Assets -
OTHER ASSETS
Securities - available for sale - Note 3 8,000
$ 8,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $1,376,486
Accrued interest payable - preferred stock 396,713
Total Current Liabilities 1,773,199
STOCKHOLDERS' EQUITY
Preferred stock
10,000,000 shares authorized at $0.10 par value;
331,950 issued and outstanding 33,195
Common stock
100,000,000 shares authorized at no par value;
72,697 issued and outstanding 1,288,094
Capital in excess of par value 4,155,910
Accumulated deficit - Note 1 (7,242,398)
Total Stockholders' Equity (1,765,199)
$ 8,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
O.T.S. HOLDINGS INC.
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1999 and 1998
and the Period January 1, 1996
(date of inception of development stage) to December 31, 1999
<CAPTION>
Period
Dec 31, Dec 31, Jan 1, 1996
1999 1998 to Dec 31, 1999
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES 31,347 31,347 314,036
NET LOSS - before other income
and losses (31,347) (31,347) (314,036)
OTHER INCOME AND LOSSES
Loss of assets - - (4,608,767)
NET PROFIT (LOSS) $ (31,347) $ (31,347) $ (4,922,803)
NET PROFIT (LOSS) PER COMMON
SHARE
Basic $ (0.43) $ (0.43)
Diluted $ (0.08) $ (0.08)
AVERAGE OUTSTANDING
SHARES
Basic 72,697 72,697
Diluted 404,647 404,647
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
O.T.S. HOLDINGS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period January 1, 1996 (date of inception of development stage) to
December 31, 1999
<CAPTION>
Preferred Stock Common Stock Excess of Accumulated
Shares Amount Shares Amount Par Value Deficit
<S> <C> <C> <C> <C> <C> <C>
Balance
January 1, 1996 331,950 $ 33,195 67,714 $1,267,161 $4,155,910 $(2,319,595)
Issuance of
common stock
for services at
$4.20-1996 - - 4,983 20,933 - -
Net operating
loss for the year
ended December 31,
1996 - - - - - (4,748,837)
Net operating loss
for the year ended
December 31, 1997 - - - - - (111,272)
Net operating loss
for the year ended
December 31, 1998 - - - - - (31,347)
Net operating loss
for the year ended
December 31, 1999 - - - - - (31,347)
Balance
December 31, 1999 331,950 $33,195 72,697 $1,288,094 $4,155,910 $(7,242,398)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
O.T.S. HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1999 and 1998
and the period January 1, 1996 (date of inception of development stage) to
December 31, 1999
<CAPTION>
Period
Dec 31, Dec 31, Jan 1, 1996
1999 1998 to Dec 31, 1999
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net profit (loss) $ (31,347) $ (31,347) $ (4,922,803)
Adjustments to reconcile
net loss to net cash
provided by operating
activities
Change in accounts payable 31,347 31,347 293,103
Issuance of common stock
for expenses - - 20,933
Loss of assets - - 4,608,767
Net Cash From (Used)
in Operations - - -
CASH FLOWS FROM INVESTING
ACTIVITIES
- - -
CASH FLOWS FROM FINANCING
ACTIVITIES
- - -
Net Increase (Decrease) in Cash - - -
Cash at Beginning of Period - - -
Cash at End of Period $ - $ - $ -
NON CASH OPERATING ACTIVITIES
Issuance of 4,983 shares common stock for services - 1996 $ 20,933
</TABLE>
The accompanying notes are an integral part of these financial statements.
O.T.S. HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated on August 15, 1986 under the laws of the state of
Colorado, with the name "Vates Corp." with authorized common stock of
100,00,000 shares with no par value and authorized preferred stock of
10,000,000 shares with a par value of $0.10. On January 4, 1988, the name was
changed to "Graystone Ventures, Inc.", and on December 18, 1989 to "American
Jet Holdings, Inc." On June 6, 1991, the name was changed to "O.T.S. Holdings,
Inc."
Since inception, the Company has completed several acquisitions in
connection with three reverse stock splits resulting in its present
capitalization.
This report has been prepared reflecting these after stock split shares from
inception.
After 1995 the Company ceased all operations, lost its remaining assets, and
became inactive and is considered to be in the development stage after that
date.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On December 31, 1999, the Company had a net operating loss carry forward of
$7,242,398. The tax benefit from the loss carry forward has been fully offset
by a valuation reserve because the use of the future tax benefit is doubtful
since the Company has no operations and there has been a substantial change in
its stockholders. The loss carryover expires in the years from 2001 through
2020.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing the financial statements.
Financial Instruments
The carrying amounts of financial instruments, including the securities and
the accounts payable, are considered by management to be their estimated fair
values.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding, after the stock splits.
Diluted net income (loss) per share amounts are computed using the weighted
average number of common shares and common equivalent shares outstanding as if
shares had been issued on the exercise of the preferred share rights.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130. The
adoption of this standard had no impact on the total stockholder's equity on
December 31, 1999.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
3. SECURITIES - AVAILABLE FOR SALE
Securities available for sale consisted of 8,660,000 shares of CEC. The
amount shown in the balance sheet is considered by management to be its fair
market value on December 31, 1999. During January 2000, the stock was traded
to a related party for the assumption of debt.
4. RELATED PARTY TRANSACTIONS
Related parties will have acquired 75% of the common stock issued by the
Company after the events shown in note 7.
5. BANKRUPTCY
On April 23, 1997 the Company entered a petition in bankruptcy to clear its
debt, however, on December 23, 1999, the court terminated the petition with
no action because of a no asset report by the trustee.
6. GOING CONCERN
The Company intends to acquire interests in various business opportunities
which, in the opinion of management, will provide a profit to the Company,
however there is insufficient working capital for any future planned activity.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through additional
equity funding and long term debt which will enable the Company to conduct
operations for the coming year.
There can be no assurance that they may be successful in this effort.
7. SUBSEQUENT EVENTS
During January and February 2000 the Company authorized the issuance of
112,000 common shares for cash of $25,000 and services, 43,925 common shares
for the redemption of 331,950 shares of preferred stock, 1,515,924 common
shares for the settlement of $1,765,232 in debt.
On February 18, 2000, the Company, pursuant to a tentative Agreement and Plan
of Reorganization between the Company, and Thin Battery, Inc., a Nevada
corporation, agreed to issue 15,000,000 post split shares, or an amount of
securities to represent not less than approximately 90% of the post tentative
agreement outstanding shares of the Company, following the reverse spit of the
outstanding stock (note 1) of the Company of 100 for one while retaining the
present authorized capital, with appropriate adjustments to the stated capital
accounts of the Company.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
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The last revenues produced by the Company were during the year ended
December 31, 1995, from the sale of specialty food products by its then
wholly-owned subsidiary, All Pure Foods, Inc., a Nevada corporation ("All Pure
Foods"). These operations ceased in 1995, and this subsidiary was abandoned.
The Company recommenced its developmental stage in calendar 1996.
OTS filed bankruptcy proceedings on April 23, 1997, which were
dismissed without any formal proceedings on the No Asset Report of the Trustee
on December 23, 1999.
On February 18, 2000, the Company, pursuant to a tentative Agreement
and Plan of Reorganization (the "Tentative Agreement") between the Company and
Thin Battery, Inc., a Nevada corporation ("Thin Battery"), agreed to issue
15,000,000 post-split shares or an amount of securities to represent not less
than approximately 90% of the post-Tentative Agreement outstanding shares of
the Company, following a reverse split of the outstanding securities of the
Company of 100 for one, while retaining the present authorized capital, with
appropriate adjustments to the stated capital accounts of the Company. The
Company intends to negotiate the completion of this Tentative Agreement and
thereafter develop and market the "Thin Film Battery" and related patents
which comprise the material assets underlying this Tentative Agreement. A
copy of this Tentative Agreement is attached to the Company's 10-KSB Annual
Report for the year ended December 31, 1999, which has been simultaneously
filed with the Securities and Exchange Commission, and is incorporated herein
by reference.
If and until these negotiations are completed, the Company will not
be in a position to finalize its business plan and funding requirements for
the coming year.
Results of Operations.
- ----------------------
The Company had no revenues or operations during fiscal 1999 or
1998, with accrued expenses of $31,347 for interest in each year, resulting in
losses in these amounts for each of these years.
Cash assets were nil, with marketable securities valued at $8,000.
These securities were transferred to a related party in 2000 for cancellation
of debt.
Total liabilities were $1,773,119 for fiscal 1999.
Liquidity.
- ----------
The Company had no cash or liquid resources during fiscal 1998 or
1999.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
Effective March 2, 2000, the Company effected a reverse split of its
outstanding securities on a basis of 100 for one, while retaining the present
authorized capital, with appropriate adjustments to the capital accounts of
the Company. All computations herein take into account this reverse split.
Item 3. Defaults Upon Senior Securities.
The Company is in default on the payment of interest due on the
331,950 outstanding shares of the Company's preferred stock; however, as of
the date of this Report, the Company was in the process of resolving this
default by the issuance of post-split "restricted securities" (common stock")
of the Company and the cancellation of these shares of preferred stock; and
issuing other similar post-split "restricted securities" (common stock) in
settlement of other obligations. See Note 7, Subsequent Events, of the
Financial Statements attached hereto and incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the Company's security holders
during the two previous calendar years which are covered by the Financial
Statements accompanying this Report.
Item 5. Other Information.
Effective January 6, 2000, Mark Meriwether became the sole director
and executive officer of the Company. See the 8-K current Report dated
January 6, 2000, which has been previously filed with the Securities and
Exchange Commission and which is incorporated herein by reference. See Part
II, Item 6. Gerald Levine and Marie A. Levine resigned as directors and
executive officers of the Company on January 6, 2000.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10-KSB Annual Report for the year ended December 31, 1999,
which is incorporated herein by reference.
Exhibits:
10 Tentative Agreement
(b) Reports on Form 8-K.
8-K Current Report dated January 6, 2000, which is incorporated
herein by reference.
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.
O. T. S HOLDINGS, INC.
Date: By
------- --------------------------------------
Mark Meriwether
President, Secretary/Treasurer and
Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated:
O. T. S HOLDINGS, INC.
Date: By
------- --------------------------------------
Mark Meriwether
President, Secretary/Treasurer and
Director
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8000
<CURRENT-LIABILITIES> 1773199
<BONDS> 0
0
33195
<COMMON> 1288094
<OTHER-SE> (3086488)
<TOTAL-LIABILITY-AND-EQUITY> 8000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 31347
<LOSS-PROVISION> 0
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<INCOME-CONTINUING> (31347)
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<NET-INCOME> (31347)
<EPS-BASIC> (0.43)
<EPS-DILUTED> (0.08)
</TABLE>
