SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 2000.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to .
Commission file number:33-24108D
TRSG CORPORATION
(Exact name of small business issuer as specified in its charter)
DELAWARE 87-045382
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 East Cheyenne Ave., North Las Vegas, Nevada 89030
(Address of principal executive office) (Zip Code)
(702) 399-4328
(Issuer's telephone number)
Professional Wrestling Alliance Corporation
268 West 400 South, Suite #300, Salt Lake City, Utah 84101
(Former name or address, if changed since last report) (Zip Code)
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 reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes XX No
The number of outstanding shares of the issuer's common stock, $0.001
par value (the only class of voting stock), as of November 17, 2000 was
2,355,342.
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS..................................................1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............2
PART II
ITEM 1. LEGAL PROCEEDINGS.....................................................4
ITEM 5. OTHER INFORMATION.....................................................4
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................4
SIGNATURES.....................................................................5
INDEX TO EXHIBITS..............................................................6
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to TRSG Corporation, a Delaware
corporation, formerly known as Professional Wrestling Alliance Corporation
(whose name was changed on October 27, 2000), and its subsidiaries and
predecessors unless otherwise indicated. Consolidated, unaudited, condensed
interim financial statements including a balance sheet for the Company as of the
quarter ended September 30, 2000 and statements of operations, and statements of
cash flows for the interim period up to the date of such balance sheet and the
comparable period of the preceding year are attached hereto as Pages F-1 through
F-4 and are incorporated herein by this reference.
[THIS SPACE LEFT BLANK INTENTIONALLY]
1
<PAGE>
<TABLE>
Professional Wrestling Alliance Corporation
Interim Consolidated Condensed Balance Sheet
<CAPTION>
September 30, 2000
(unaudited)
------------------------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ -
Prepaid expense -
Other -
-----------
Total current assets -
Property, Plant & Equipment (net of depreciation) 32,175
-----------
TOTAL ASSETS $ 32,175
===========
LIABILITIES AND STOCK HOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 7,116
Judgement Payable 618,970
Convertible Notes Payable -
-----------
Total current liabilities 626,086
-----------
Stockholders' equity
Preferred stock ($.001 par value, 5,000,000
shares authorized; no share issued and
outstanding -
Common stock $.001 par value shares, 200,000,000 shares authorized;
47,106,832 shares issued and outstanding September 30, 2000 47,107
Additional paid in capital 325,859
Accumulated (Deficit) (966,877)
-----------
Total stockholders' equity (593,911)
-----------
TOTAL LIABILITIES AND EQUITY $ 32,175
===========
</TABLE>
See notes to financial statements
F-1
<PAGE>
<TABLE>
Professional Wrestling Alliance Corporation
Interim Unaudited Consolidated Condensed Statements of Operations
<CAPTION>
Three Months Ended Nine Months Ended
September September September September
30, 2000 30, 1999 30, 2000 30, 1999
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
REVENUE
Interest and other income $ - $ - $ - $ -
Investment income - - - -
--------------- --------------- --------------- --------------
Total Revenue - - - -
--------------- --------------- --------------- --------------
EXPENSES
Interest expense 15,097 13,343 44,904 40,036
Selling, general and administrative 1,999 - 56,950 -
--------------- --------------- --------------- --------------
Total Expenses 17,096 13,343 101,854 40,036
NET LOSS (from continuing operations) $ (17,096) $ (13,343) $ (101,854) $ (40,036)
--------------- --------------- --------------- --------------
Income taxes - - - -
NET (LOSS) $ (17,096) $ (13,343) $ (101,854) $ (40,036)
--------------- --------------- --------------- --------------
BASIC & DILUTED (LOSS) PER
COMMON SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.01)
--------------- --------------- --------------- --------------
BASIC & DILUTED WEIGHTED
AVERAGE SHARES
OUTSTANDING 55,490,000 3,893,943 66,668,000 3,893,943
=============== =============== =============== ==============
</TABLE>
See notes to financial statements
F-2
<PAGE>
<TABLE>
Professional Wrestling Alliance Corporation
Unaudited Interim Consolidated Condensed Statements of Cash Flows
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
2000 1999
----------------- ------------------
----------------- ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATION ACTIVITIES
Net loss $ (101,854) $ (40,036)
----------------- ------------------
Adjustments to reconcile net loss to net cash provided (used) by operating
activities:
Decrease (increase) in valuation of fixed assets 447,825
Decrease (increase) in accounts receivable - -
Increase (decrease) in accounts payable (31,418) -
Increase (decrease) in convertible notes payable (205,000) -
Cancellation of common stock (170,928)
Increase in judgement payable 44,904 40,036
----------------- ------------------
Total adjustments 85,383 40,036
----------------- ------------------
Net Cash Provided (Used) by Operating Activities (16,471) -
----------------- ------------------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
Net Cash Provided (Used) by Investing Activities - -
----------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net Cash Provided (Used) by Financing Activities - -
----------------- ------------------
NET INCREASE (DECREASE) IN CASH EQUIVALENTS (16,471) -
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 16,471 -
----------------- ------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ - $ -
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Stock issued for land purchase $ 480,000 $ -
Cancellation of issued & outstanding stock 170,928
Cancellation of convertible notes payable 205,000
Write down of fixed asset valuation (447,825)
Cash paid during the period for interest - -
----------------- ------------------
408,103 -
================= ==================
</TABLE>
See notes to financial statements
F-3
<PAGE>
Professional Wrestling Alliance Corporation
Notes to Unaudited Interim Consolidated Condensed Financial Statements
September 30, 2000
1. Basis of Presentation
The accompanying unaudited interim consolidated condensed financial statements
have been prepared by management in accordance with the instructions in Form
10-QSB and, therefore, do not include all information and footnotes required by
generally accepted accounting principles and should, therefore, be read in
conjunction with the Company's Annual Report to Shareholders on Form 10-KSB for
the fiscal year ended December 31, 1999. These statements do include all normal
recurring adjustments which management believes necessary for a fair
presentation of the statements. The interim operations results are not
necessarily indicative of the results for the full year ended December 31, 2000.
2. Divesture of Subsidiaries
On July 27, 2000, the Company separated itself from its subsidiary The
Professional Wrestling Alliance, Inc., a Nevada corporation. As a result of that
transaction, the receivables, cash, convertible nots payable and a significant
amount of the accounts payable were eliminated as they went with the divested
company. In addition, 25,150,000 shares of common stock were canceled as they
were held by the management and other related parties of the subsidiary
corporation.
3. Write down of Land
The Company has reevaluated the book value of the 2.145 acres of land held in
Oasis, Nevada. When compared to recent sales in the area and other extenuating
circumstances, the company felt that the value on the books was too high and has
subsequently written down the value of the land in conjunction with the
divestiture mentioned above. The amount of the write down was $447,825 and was
offset by gains from the divestiture and settlement of debts.
4. Settlement of Judgment
Subsequent to the end of the period, the Company has entered into negotiations
with the Insurance Commissioner for the Commonwealth of Pennsylvania to settle
the judgment held against the Company. The negotiations are not final at the
time of this filing, and thus the details are not provided. At the time of a
final agreement, it is anticipated that the Company may book a gain on the
settlement of debt of approximately $550,000.
5. Additional footnotes included by reference
Except as indicated in Notes above, there have been no other material changes in
the information disclosed in the notes to the financial statements included in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999.
Therefore, those footnotes are included herein by reference.
F-4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS
General
As used herein the term "Company" refers to TRSG Corporation, a Delaware
corporation, formerly known as Professional Wrestling Alliance Corporation
(whose name was changed on October 27, 2000), its subsidiaries and predecessors,
unless the context indicates otherwise. The Company was originally incorporated
in the State of Delaware on January 11, 1988, under the name Jutland
Enterprises, Inc. The Company carried on the business authorized by its charter
until March 1, 1995, at which time its charter became inoperative and void for
non-payment of taxes. Furthermore, the Company was unable to transact any
business because no known officer or director retained their position with the
Company until April of 1999. In April 1999, the Company was reinstated and began
seeking to acquire an operating business. On November 23, 1999, the Company
acquired an operating subsidiary, The Professional Wrestling Alliance, Inc., a
Nevada corporation, which promoted and produced professional wrestling events.
The Company later divested itself of this subsidiary on or about August 8, 2000.
Plan of Operation
From November 23, 1999 to August 8, 2000 (when the Company's Board of Directors
was replaced), the Company's plan of operation was to promote and produce
professional wrestling events, combining musical acts and wrestling matches for
live audiences and television, including pay per view events, through its wholly
owned subsidiary, The Professional Wrestling Alliance, Inc., a Nevada
corporation ("PWA").
Due to a lack of sufficient operating capital, the Company had to cancel four of
its scheduled Rock & Wrestling events as follows: Oakland Sports Arena (December
18, 1999); L.A. Sports Arena (February 10, 2000); Imperial Palace, Las Vegas
(February 27, 2000); and the L.A. Sports Arena (April 16, 1999). Additionally,
as a result of the Company's lack of funding, no other events or productions
were scheduled.
Based largely on the lack of sufficient capital to fund these events, the
Company's 2 major shareholders, Barry Vichnick and Allen Nelson, agreed that
their shares could be canceled pursuant to a Separation Agreement dated July 27,
2000 (a copy of which is attached to the Form 8-K filed with the SEC on August
11, 2000 and incorporated herein by this reference). Their shares, amounting to
a combined total of 23,500,000 shares, were deemed to be legally canceled
effective the same day. As part of this separation of interests, the Company and
its new majority shareholder, World Alliance Consulting, Inc., replaced the
Board of Directors on August 8, 2000.
Also as a result of the July 27, 2000 Separation Agreement, the Company changed
its plan of operations to that of a shell company in search of a suitable merger
or acquisition candidate. The major thrust of the Separation Agreement was that
Mr. Vichnick and Mr. Nelson relinquished their shares in the Company (allowing
them to be canceled) in exchange for taking back all assets, liabilities, and
financial interests in the subsidiary Nevada Corporation, The Professional
Wrestling Alliance. As a result of this Separation Agreement, the Company no
longer has any right or interest in the former subsidiary, and all relations
with it have been dissolved.
To further separate the business of the former subsidiary from the current shell
of the Company, the Company's new Board of Directors passed a unanimous
resolution on August 14, 2000 proposing to change the name of the Company to
Webtech International Corporation. Neither a Certificate of Amendment nor
shareholder approval of this particular name change took place, as the Company
found another acquisition candidate before this name change could be completed.
On October 12, 2000 the Company executed an agreement to acquire a network
marketing company named Gateway Distributors, Ltd., which sells nutritional,
health and dietary supplements throughout North America and
2
<PAGE>
Japan. The details of the Gateway acquisition are set forth in the Form 8-K
filed with the SEC on October 17, 2000, and incorporated here by reference.
Thus, the Company's new business plan as of October 12, 2000 is to sell
nutritional, health and dietary supplements through its network marketing
company.
As part of its plan to acquire Gateway, the Company officially changed its name
to "TRSG Corporation" on October 30, 2000, when it filed a Certificate of
Amendment with the State of Delaware. The Board of Directors unanimously
approved the name change on October 27, 2000, and the majority shareholder of
the Company, World Alliance Consulting, Inc. executed its written consent to the
name change on the same day.
Results of Operations
Sales
The Company has not generated any revenues from operations for the periods
covered by this Form 10-QSB.
Losses
Net losses for the quarter ended September 30, 2000, were $17,096 as compared to
$13,343 for the quarter ended September 30, 1999. The change was attributable to
an increase in accrued interest on the judgment and $1,999 in stock transfer,
audit, and agent fees.
Expenses
Selling, general and administrative expenses for the quarter ended September 30,
2000 were $1,999 as compared to $0 for the quarter ended September 30, 1999. The
increase in selling, general and administrative expenses was due to costs
relating to ongoing audit requirements not existent in the previous year, as
well as costs relating to stock transfers.
Liquidity and Capital Resources
Cash used by operations was $293,368 for the nine months ended September 30,
2000, compared to $0 for the nine months ended September 30, 1999.
Cash flows generated from investing activities were $447,825 for the nine months
ended September 30, 2000 as compared to $0 for the nine months ended September
30, 1999.
Cash flows used by financing activities were $170,928 for the nine months ended
September 30, 2000 as compared to $0 for the nine months ended September 30,
1999.
Capital Expenditures
The Company wrote down the value of its land holdings in Oasis, Nevada by
$447,825 to a value of $32,175 during the quarter ended September 30, 2000.
Income Tax Expense (Benefit)
The Company's income tax benefits are limited to the loss sustained in 1999 due
to the reverse merger of PWA into the Company during 1999.
3
<PAGE>
Impact of Inflation
The Company believes that inflation has had a negligible effect on operations
over the past three years. The Company believes that it can offset inflationary
increases in the cost of materials and labor by increasing sales and improving
operating efficiencies.
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company entered into a settlement agreement on October 4, 2000 regarding the
judgment against it for $618,970. The Pennsylvania Insurance Commissioner's
office agreed to settle this debt for a total of $50,000 cash, payable in the
following manner: $5,000 on or before October 11, 2000; $5,000 on or before
November 10, 2000, and the remaining $40,000 on or before December 31, 2000.
Upon the timely receipt of these amounts, the insurance commissioner agreed to
cause the judgment to be satisfied. To date, however, none of the agreed
payments have been made by the Company, and it is unclear whether this agreement
can be revived or renegotiated. A copy of this agreement is attached as an
Exhibit to this Form 10-QSB.
ITEM 5. OTHER INFORMATION
On October 30, the Company authorized a 1:20 reverse split of its common stock,
so that 20 shares before the split will be reduced to 1 share after the split.
On the same date, the Company also changed its name to "TRSG Corporation." Both
of these changes are reflected in the Form 8-K filed with the SEC on November 1,
2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibits required to be attached by Item 601 of Regulation S-B
are listed in the Index to Exhibits on page 6 of this Form 10-QSB, and
are incorporated herein by this reference.
(b) Reports on Form 8-K. One report was filed on Form 8-K during the
quarter. On August 11, 2000 a Form 8-K was filed (with amendments
thereto filed on August 25, 2000 and October 18, 2000) detailing a
change in control of the Company and also a change in the Company's
management.
After the end of the quarter, two additional Forms 8-K were filed for
subsequent events. On October 17, 2000, a Form 8-K was filed detailing
the Company's acquisition agreement with Gateway Ltd., by which all of
Gateway's assets were acquired in exchange for 85% of the Company's
stock. On November 1, 2000, a Form 8-K was filed detailing the
Company's name change to "TRSG Corporation" and a 1:20 reverse split of
the Company's common stock.
Shareholders and other interested parties are encouraged to read
carefully these Forms 8-K, which are incorporated herein by this
reference.
[THIS SPACE LEFT BLANK INTENTIONALLY]
4
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, this 17th day of November 2000.
TRSG Corporation
November 17, 2000
By: /s/ Rick Bailey
-----------------------
Rick Bailey
Its: President
5
<PAGE>
INDEX TO EXHIBITS
Exhibit. Page
No. No. Description
3(i) * Articles of Incorporation of the Company (incorporated
herein by reference to the Company's Form S-18 as filed with
the Securities and Exchange Commission on December 6,
1988).
3(ii) * Bylaws of the Company, as amended (incorporated herein by
reference to the Company's Form S-18 as filed with the
Securities and Exchange Commission on December 6, 1988).
3(iii) * Certificate of Amendment of Articles of Incorporation
Changing the Company's Name From Jutland Enterprises, Inc.
to Professional Wrestling Alliance Corporation and
increasing the number of authorized shares of stock dated
November 15, 1999. (Incorporated herein by reference to the
Company's Form 8-K filed with the Securities and Exchange
Commission on December 3, 1999).
4(i) * Form of certificate evidencing shares of "Common Stock" in
the Company (incorporated herein by reference to from
Exhibit 4(a) to the Company's Form S-18 as filed with the
Securities and Exchange Commission on December 6, 1988).
10(i) 7 Letter Agreement of October 4, 2000 re: settlement of
judgment with Pennsylvania Insurance Commissioner.
27 Financial Data Schedule "CE"
6
