U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File No. 0-20598
e Personnel Management.com
(formerly Definition, Ltd.)
(exact name of registrant as specified in its charter)
NEVADA 75-2293489
------ ----------
(State or other jurisdiction of (IRS Employer
incorporation organization) Identification No.)
120 St. Croix Avenue, Cocoa Beach, FL 32931
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(Address of principal executive offices, including zip code)
(321) 799-3842
--------------
(Issuer's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 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 [x] No [ ]
The number of shares of the registrant's common stock, $0.001 par value, as
of August 9, 2000: 21,835,225.
<PAGE>
E Personnel Management.com
FORM 10-QSB, QUARTER ENDED JUNE 30, 2000
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheet as of June 30, 2000...................... 1
Consolidated Statement of Operations for the Three and Six
Months Ended June 30, 2000.......................................... 2
Consolidated Statement of Cash Flows for the Six Months Ended
June 30, 2000....................................................... 3
Notes to Interim Consolidated Financial Statements.................. 4
All schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
Item 2 - Management's Discussion and Analysis....................... 5
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings......... ................................ 6
Item 2 - Changes in Securities...................................... 6
Item 3 - Defaults Upon Senior Securities............................ 6
Item 4 - Submission of Matters to a Vote of Security Holders........ 6
Item 5 - Other Information.......................................... 6
Item 6 - Exhibits and Reports on Form 8-K........................... 6
Signatures.......................................................... 6
PART I
Item 1. Financial Statements.
E PERSONNEL MANAGEMENT.COM, INC.
CONSOLIDATED BALANCE SHEET
JUNE 30, 2000 (unaudited) AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, December 31,
ASSETS 2000 1999
-------- ------------
Current Assets
Cash and Cash Equivalents $ 45,064 $ 406
Accounts Receivable 5,064 0
Prepaid Expenses 34,701 0
------ -----
Total Current Assets 84,829 406
Fixed Assets, Net (Note 3) 11,759 0
Other Assets
Note Receivable 3,000,000 3,000,000
Other Advances 1,150 1,150
--------- ---------
Total Other Assets 3,001,150 3,001,150
--------- ---------
Total Assets $3,097,738 $3,001,556
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable, Trade $ 74,186 $ 40,000
Accrued Liabilities 46,399 23,700
Due to Related Party 123,883 105,784
------- -------
Total Current Liabilities 244,468 169,484
Stockholders' Equity
Preferred Stock: Authorized $0.01
Par Value, 5,000,000 Shares; Issued
and Outstanding, 175,000 1,750 1,750
Common Stock: Authorized $0.001
Par Value, 50,000,000 Shares; Issued
and Outstanding, 21,834,225 and
12,351,227 21,834 12,351
Additional Paid In Capital 19,416,195 16,489,181
Retained Earnings (Deficit) (16,586,509) (13,670,960)
----------- ----------
Total Stockholders' Equity 2,853,270 2,832,072
---------- ----------
Total Liabilities and Stockholders' Equity $ 3,097,738 $3,001,556
========== ==========
</TABLE>
1
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E PERSONNEL MANAGEMENT.COM, INC.
STATEMENT OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, 2000 June 30,1999 June 30, 2000 June 30,1999
------------- ------------ ------------- ------------
Revenues $ 174,837 $ 41,733 $ 174,837 $ 78,952
Cost of Revenues 173,388 29,839 173,388 73,749
-------- ------ ------- ------
Gross Margin 1,449 11,894 1,449 5,203
Operating Expenses
General and
Administrative 2,720,187 165,110 2,909,588 1,983,741
--------- ------ --------- ---------
Operating Loss (2,718,738) (153,216) (2,908,139) (1,978,538)
Other Income (Expense)
Interest Expense 0 0 0 (2,008)
Interest Income 593 0 593 0
----- ------- --------- ----------
Total Other Income
(Expense) 593 0 593 (2,008)
Net Loss Before
Cumulative Effect
of Change in
Accounting
Principle (2,718,145) (153,216) (2,907,546) (1,980,546)
Cumulative Effect
of Accounting
Change (8,003) 0 (8,003) 0
---------- -------- --------- ---------
Net Loss Available
to Common
Stockholders $(2,726,148) $ (153,216) $2,915,549) $(1,980,546)
========== ======== ========= ==========
Basic Loss Per
Common Share:
Loss Before Cumulative
Effect of Accounting
Change $ (0.14) $ (0.01) $ (0.17) $ (0.23)
===== ===== ===== ======
Net Loss $ (0.14) $ (0.01) $ (0.17) $ (0.23)
===== ===== ===== ======
Basic Weighted
Average Common
Shares
Outstanding 20,184,225 10,607,500 16,760,226 8,686,250
========== ========== ========== =========
</TABLE>
2
<PAGE>
E PERSONNEL MANAGEMENT.COM, INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended June 30: 2000 1999
---- ----
Cash Flows From Operating Activities
Net Loss $(2,915,549) $ (1,980,546)
Adjustments to Reconcile Net Loss to
Net Cash Used in Operating Activities
Depreciation and Amortization 303 286,065
Common Stock Issued for Services 2,759,570 1,609,405
Write-Off Start Up Expenses 8,003 0
Changes in Assets and Liabilities
(Increase) Decrease in Prepaid Expenses (1,923) 0
Increase (Decrease)in Accounts Payable, Trade 12,683 (12,560)
Increase (Decrease) in Accrued Liabilities 4,479 0
Increase (Decrease) in Checks Issued
in Excess of Cash 0 3,857
--------- ---------
Total Adjustments 2,783,115 1,886,767
--------- ---------
Net Cash Used In Operating Activities (132,434) (93,779)
Cash Flows From Investing Activities
Cash Acquired in Acquisition of Subsidiary 7,509 -
Purchase of Fixed Assets (8,516) -
-------
Cash Flows Used in Investing Activities (1,007) -
Cash Flows From Financing Activities
Principal Payment on Mortgage Payable - (897)
Capital Contributions 160,000 -
Advances From Related Party 18,099 63,532
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Net Cash Provided By Financing Activities 178,099 62,635
------- ------
Increase (Decrease) in Cash and Cash Equivalents 44,658 31,144
Cash and Cash Equivalents, Beginning of Period 406 31,144
------- ------
Cash and Cash Equivalents, End of Period $ 45,064 $ 0
====== ======
Supplemental Disclosure of Cash Flow Information:
Cash paid for:
Interest $ 0 $ 2,008
Income taxes - -
Supplemental Schedule of Noncash Investing
and Financing Activities:
Issuance of Common Stock for Services Rendered $ 2,759,570 $1,609,405
========= =========
Conversion of Debt to Equity - $ 11,975
======
Acquisition of Subsidiary:
(Issuance of 400,000 shares of common
stock in exchange for subsidiary)
Assets Acquired $ 56,851
Liabilities Assumed 39,675
------
Net Book Value of Company $ 17,176
======
</TABLE>
3
<PAGE>
E PERSONNEL MANAGEMENT.COM, INC.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1. Statement of Information Furnished
The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with Form 10QSB instructions and in the opinion
of management contains all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of June
30, 2000, the results of operations for the three and six months ended June
30, 2000, and the statement of cash flows for the six months ended June 30,
2000. These results have been determined on the basis of generally accepted
accounting principles and practices and applied consistently with those used
in the preparation of the Company's 1999 Annual Report on Form 10-KSB.
Certain information and footnote disclosure normally included in the
financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
the accompanying consolidated financial statements be read in conjunction
with the accompanying consolidated financial statements and notes thereto
incorporated by reference in the Company's 1999 Annual Report on Form 10-KSB.
NOTE 2. Significant Accounting Policies
As of June 1, 2000, the Company's subsidiary operates in the PEO industry
segment. See segment information in Note 5.
NOTE 3. Fixed Assets
Fixed assets consists furniture and fixtures at June 30, 2000:
Cost $ 17,496
Accumulated Depreciation (5,737)
-----
Net Book Value $ 11,759
======
Depreciation charge to operations for the six months ended June 30, 2000,
was $303.
NOTE 4. Acquisition of Subsidiary
On June 1, e Personnel issued 400,000 shares of common stock in exchange for
100% ownership in General Personnel Management, Inc.(GPM) Assets acquired,
$56,851, exceeded liabilities assumed, $39,675, for at net book value of
$17,176. Cash acquired in the acquisition was $7,509. E Personnel retains
this company as a subsidiary. GPM is in the Professional Employment
Organization industry.
NOTE 5. Segment Information
During the first two quarters of 2000, the Company was an acquisition-seeking
company. During the second quarter, the Company acquired a subsidiary in
the PEO industry. The Company maintains subsidiary books separately.
Management did not allocate any corporate, selling , administrative or
overhead expenses to this subsidiary. Segment information is as follows
at June 30, 2000:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Subsidiary Corporate Total
---------- ------------- ------------
Revenues $ 174,837 $ 0 $ 174,837
Operating Income (Loss) $ 2,857 $ (2,910,996) $ (2,908,139)
Total Assets $ 58,822 $ 3,038,916 $ 3,097,738
Capital Expenditures $ 8,980 $ 8,516 $ 17,496
Depreciation $ 0 $ 303 $ 303
</TABLE>
4
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
When used in this discussion, the words "believes", "anticipates", "expects",
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to certain risks and uncertainties, which could
cause actual results to differ materially from those projected. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no
obligation to republish revised forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events. Readers are also urged to carefully review and
consider the various disclosures made by the Company which attempt to advise
interested parties of the factors which affect the Company's business, in
this report, as well as the Company's periodic reports on Forms 10-KSB,
10QSB and 8-K filed with the Securities and Exchange Commission.
(1) Results of Operations
Revenues. E Personnel's revenues for the three and six months ended June
30, 2000, represent one month of revenues recognized from its subsidiary
operations, General Personnel Management, Inc., (GPM). a professional
employment agency. E Personnel acquired this subsidiary on June 1, 2000,
as part of its acquisition-seeking efforts in the Professional Employment
Organization (PEO) industry. GPM revenues are anticipated to approximate
$2,000,000 per year. To date, the Company has not relied on revenues for
funding.
Costs of revenues for the three and six months ended June 30, 2000 were
$173,388 for a gross margin of $1,449. Revenues and costs of revenues for
the corresponding periods of the prior year were derived from e Personnel's
television subsidiary operations, discontinued in June 1999, which has helped
to lighten the financial drain on the Company.
General and Administrative Expenses. During the three and six months ended
June 30, 2000 and 1999, general and administrative expenses were $2,720,187
and $165,110, respectively, and $2,909,588 and $1,983,741, respectively.
General and administrative expenses primarily consist of common stock issued
for consulting services as compensation for providing investor relations,
locating funding sources, legal expenses, acquisition efforts, and other
services needed to develop e Personnel into a viable company.
Provision for Income Taxes. As of June 30, 2000, the Company's accumulated
deficit was approximately $17,000,000. Accordingly, the Company has recorded
a full valuation allowance against any income tax benefit to date.
(2) Liquidity
During the six months ended June 30, 2000, e Personnel received a capital
contributions of $160,000. During the six months ended June 30, 1999, e
Personnel received advances from a stockholder of $18,100 to help fund
working capital operations.
Due to the "start-up" nature of the Company's business and our mission to
seek and acquire other more profitable companies, the Company expects to
incur losses as it expands its business. The Company has been dependent
upon funds advanced from stockholders to support its working capital needs.
The Company may raise additional funds through public or private equity
investments in order to expand the range and scope of its business
operations, but there is no assurance that such additional funds will be
available for the Company to finance its operations on acceptable terms, if
at all.
The Company has recently redirected its business efforts back into the film
industry and will be focusing on the acquisition of other distribution
companies. The recent acquisition of MEDIA CLASSICS GROUP, INC. (MGI)
by e Personnel has brought a new light to corporate profits. MGI has
recently acquired Nevada Media Partners, Inc., a foreign distribution
company, with sales in excess of $1.5 million for the last three years.
Colleen Meeker, president of Nevada Media Partners, Inc., will be retained
by MGI as vice-president of foreign sales. MGI has opened an office in
Minneapolis, Minnesota under the direction of Steven Gallagher,
vice-president of domestic sales.
The PEO business will be operated as a separate division and will grow
internally as opposed to acquiring additional PEO's. On March 14, 2000,
e Personnel acquired 75% of Interstate Management Services Company (IMSC)
and issued 750,000 shares of e Personnel common stock. The acquisition went
sour and both companies have decided to go their separate ways. The
operations of IMSC have not been included in e Personnel's statement of
operations for the six months ended June 30, 2000. As part of the
acquisition, $160,000 cash was received by e Personnel, which has been
treated as a capital contribution.
Originally, e Personnel was awaiting the audited financial statements of
IMSC so it could record the acquisition of IMSC at net book value. However,
since the acquisition has been rescinded but the shares issued not canceled,
e Personnel has valued the shares issued at the fair market value of the
common stock on the date of issuance, less a discount for nontradeability
due to its restricted status.
5
<PAGE>
PART II
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
As detailed in the financial statements, the Company issued 7,592,998
shares of its common stock during the six months ended June 30, 2000, as
follows:
1. 140,000 shares of common stock for services at $0.15 per share, or $21,000.
2. 1,000,000 shares of common stock for services at $0.63 per share, or
$630,000.
3. 750,000 shares of common stock issued for 75% in acquisition of
subsidiary at $0.34 per share, or $255,000. (See md&a)
4. 250,000 shares of common stock for services at $0.23 per share, or $57,400.
5. 199,998 shares of common stock for services at $0.24 per share, or $48,090.
6. 4,468,000 shares of common stock for services at $0.22 per share, or
$977,375.
7. 400,000 shares of common stock issued for 100% acquisition of
subsidiary at net book value of subsidiary, or $17,176.
8. 975,000 shares of common stock for services at $0.16 per share, or $159,705.
9. 1,300,000 shares of common stock for services at $0.47 per share, or
$611,000.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
On May 11, 2000, we filed a Form 8-K to change our name to e personnel
management.com, Inc.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
e Personnel Management.com
By: _____________________________
/s/ Donna Anderson, President and
Chief Executive Officer
Dated: August 15, 2000
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.
