<PAGE>
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 March 31, 2000
or
/ / Transition Report Pursuant To Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File No. 333-07727
TAKEOUTMUSIC.COM HOLDINGS CORP.
(Exact Name of small business issuer as specified in its charter)
Washington 98-0138706
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
381 Broadway, Suite 201
New York, New York 10013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 871-0714
Indicate by check mark whether 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 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 No X
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, $0.01 Par Value 12,579,677
(Class) (Outstanding at April 30, 2000)
<PAGE>
TAKEOUTMUSIC.COM HOLDINGS CORP.
FORM 10-Q
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements:
Condensed Consolidated Balance Sheets as at March 31, 1
2000 and December 31, 1999
Condensed Consolidated Statements of Operations for 2
the three months ended March 31, 2000 and the period
from inception (April 12, 1999) to March 31, 2000
Condensed Consolidated Statement of Stockholders' 3
Equity for the three months ended March 31, 2000 and
the period from inception (April 12,1999) to December 31,
1999
Condensed Consolidated Statement of Cash Flows for 4
the three months ended March 31, 2000 and the period from
inception (April 12, 1999) to March 31, 2000
Notes to Financial Statements 5
Item 2 - Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
PART II. Other Information
<PAGE>
takeoutmusic.com Holdings Corp.
(a development stage company)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS December March 31,
31, 1999 2000
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,105,898 $ 1,179,922
Certificate of deposit 300,000 -
Other current assets 4,932 21,640
----------- -----------
Total current assets 1,410,830 1,201,562
FIXED ASSETS, net 81,619 98,934
OTHER ASSETS 5,707 5,707
----------- -----------
Total assets $ 1,498,156 $ 1,306,203
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 92,514 $ 251,778
Notes payable - 42,500
Obligations under capital leases - current portion 12,869 13,775
----------- -----------
Total current liabilities 105,383 308,053
OTHER LIABILITIES
Notes payable to shareholders - 183,000
Deferred revenue - 7,167
Obligations under capital leases, less current
portion 9,033 4,571
----------- -----------
Total other liabilities 9,033 194,738
----------- -----------
Total liabilities 114,416 502,791
STOCKHOLDERS' EQUITY
Common Stock; $0.01 par value; 100,000,000 shares
authorized, 12,579,677 issued and outstanding at
March 31, 2000 100,464 124,852
Additional paid in capital 1,643,579 1,355,002
Deferred compensation (34,312) (37,968)
Accumulated deficit (325,991) (638,474)
----------- -----------
Total stockholders' equity 1,383,740 803,412
----------- -----------
Total liabilities and stockholders' equity $ 1,498,156 $ 1,306,203
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
1
<PAGE>
takeoutmusic.com Holdings Corp.
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Three From Inception
Months Ended (April 12, 1999) to
March 31, 2000 March 31, 2000
-------------- -------------------
<S> <C> <C>
REVENUE $ 2,972 $ 2,972
OPERATING EXPENSES:
General and administration 184,248 356,728
Selling and marketing 40,330 82,871
Business development 94,186 157,957
Non-cash compensation expense 6,844 10,032
----------- -----------
Total operating expenses 325,608 607,588
----------- -----------
Loss from operations (322,636) (604,616)
INTEREST INCOME 10,153 17,845
----------- -----------
Loss before provision for income
taxes (312,483) (586,771)
PROVISION FOR INCOME TAXES - -
----------- -----------
Net loss $ (312,483) $ (586,771)
=========== ===========
LOSS PER SHARE (BASIC AND DILUTED) $ (0.03) $ (0.07)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING (BASIC AND DILUTED) 12,485,233 $ 7,899,494
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
takeoutmusic.com Holdings Corp.
(a development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM APRIL 12,1999 (INCEPTION) TO MARCH 31, 2000
<TABLE>
<CAPTION>
Common Stock
---------------------- Additional Deferred Accumulated
Shares Amount Paid in Capital Compensation Deficit Total
----------- -------- --------------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at April 12, 1999 - $ - $ - $ - $ - $ -
Issuance of stock to founders, April 5,750 58 - - (8) 50
12, 1999
Stock Split - 900 to 1 5,169,250 51,693 - - (51,693) -
Proceeds from issuance of common
stock in connection with private
placement, net of issuance costs
of $15,668 1,725,004 17,250 77,082 - - 94,332
Proceeds from issuance of common
stock in connection with private
placement net of issuance costs of
$263,508 3,146,340 31,463 1,528,997 - - 1,560,460
Issuance of options to consultants
for services rendered - - 37,500 (37,500) - -
Amortization of deferred compensation - - - 3,188 - 3,188
Net loss for the year ended December
31, 1999 - - - - (274,290) (274,290)
----------- -------- ---------- ---------- --------- ----------
Balance at December 31, 1999 10,046,344 100,464 1,643,579 (34,312) (325,991) 1,383,740
Acquisition of common stock as a
result of merger 2,438,889 24,388 (299,077) - - (274,689)
Exercise of warrants - - - - - -
Issuance of options - - 10,500 (10,500) - -
Amortization of deferred compensation - - - 6,844 - 6,844
Net loss for the period ended March
31, 2000 - - - - (312,483) (312,483)
----------- -------- ---------- ---------- --------- ----------
Balance at March 31, 1999 12,485,233 $124,852 $1,355,002 $ (37,968) $(638,474) $ 803,412
=========== ======== ========== ========== ========= ==========
</TABLE>
The accompanying notes are an integral part of these statements
3
<PAGE>
takeoutmusic.com Holdings Corp.
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three From Inception
Months Ended (April 12, 1999) to
March 31, 2000 March 31, 2000
-------------- -------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (312,483) $ (586,771)
Adjustments to reconcile net loss to net cash
used in operating activities-
Depreciation and amortization 8,539 14,583
Non-cash compensation expense 6,844 10,032
Increase in accounts receivable (16,708) (16,708)
Increase in other assets - (10,639)
Increase in accounts payable and accrued
expenses 126,578 219,092
Decrease in notes payable (25,000) (25,000)
Increase in deferred revenue 7,167 7,167
----------- -----------
Net cash used in operating activities (205,063) (388,244)
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in short term investments 300,000 -
Capital expenditure (14,065) (49,929)
Capitalization of web-site development costs (11,789) (37,959)
Cash acquired through merger 8,499 8,497
Payment of capital lease liabilities (3,558) (7,285)
----------- -----------
Net cash used in investing activities 279,087 (86,676)
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions on initial capitalization - 50
Proceeds from exercise of warrants - -
Proceeds from private placement - 1,654,792
----------- -----------
Net cash provided by financing activities - 1,654,842
Net increase in cash and cash equivalents 74,024 1,179,922
CASH AND CASH EQUIVALENTS, beginning of period 1,105,898 -
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,179,922 $ 1,179,922
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
takeoutmusic.com Holdings Corp.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
1. THE COMPANY
takeoutmusic.com Holdings Corp. (the "Company" or "takeoutmusic.com"), a
Washington corporation, was incorporated on December 28, 1993. The Company is in
the development stage and is engaged in the business of developing and marketing
musical recordings, and offering such recordings by direct file transfer, or
"downloading" to consumers over the Internet on its websites. The sites employ a
record industry accepted technology licensed from Liquid Audio that allows
downloads of samples and full songs directly from its website to PC player
programs, CD recorder devices, and portable digital music players. The company
also undertakes internet and traditional marketing activities for third party
companies. The Company operates within one industry segment.
2. BASIS OF PRESENTATION
In the opinion of management, the unaudited consolidated condensed financial
statements included herein have been prepared on a basis consistent with prior
periods reported financial statements and include all material adjustments,
consisting of normal recurring adjustments, necessary to fairly present the
information set forth therein.
Certain information and footnote disclosures normally included in the financial
statements have been condensed or omitted pursuant to rules and regulations of
the Securities and Exchange Commission, although the Company believes that the
disclosures in the unaudited interim financial statements are adequate to ensure
that the information presented is not misleading. The results of operations for
the interim reporting periods presented herein are not necessarily indicative of
any future operating results.
The financial information as of December 31, 1999 is derived from the Company's
Current Report on Form 8-K for the period from inception (April 12, 1999) to
December 31, 1999 as filed with the Securities Exchange Commission and the
Company's Annual Report on Form 10KSB for the year ended December 31, 1999. The
interim financial statements presented herein should be read in conjunction with
the financial statements and the notes thereto included in the Form 10-KSB and
the Form 8K.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ materially from those estimates.
3. NET LOSS PER COMMON SHARE
The weighted average shares used to compute basic net loss per share include
outstanding shares of common stock from the date of issuance. The calculation of
diluted net loss per share for all periods presented excludes shares of common
stock issuable upon exercise of employee stock options and stock options issued
to Advisors and Consultants as their effect would be antidilutive. Therefore,
the weighted average number of shares used in the calculation of basic and
dilutive net loss per common share is the same.
5
<PAGE>
takeoutmusic.com Holdings Corp.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
The Company had 781,304 outstanding warrants outstanding as of March 31, 2000
which were excluded from the above calculation as their effect would be
antidilutive for the purposes of the calculation of diluted earnings per share.
Comprehensive Net Loss
There are no differences between the Company's net loss as reported for any of
the periods reported herein and the Company's comprehensive loss, as defined by
Statement of Financial Accounting Standards No. 130, for each of these
respective periods.
4. MERGER WITH SHAMPAN LAMPORT HOLDINGS LIMITED
On February 4, 2000, TOMCI Acquisition Corp., ("MergerSub"), a Delaware
corporation and a wholly owned subsidiary of Shampan Lamport Holdings Limited
("Shampan" or the "Company"), a Washington corporation, merged with and into
takeoutmusic.com, Inc., a Delaware corporation ("takeoutmusic.com"), pursuant to
an Agreement and Plan of Merger dated January 26, 2000 (the "Merger Agreement").
takeoutmusic.com was the surviving corporation in the merger. In connection with
the Merger, Shampan changed its name to takeoutmusic.com Holdings Corp.
Pursuant to the terms of the Merger Agreement, Shampan issued 10,046,344 shares
of its authorized but previously unissued common stock to the former holders of
takeoutmusic.com common stock based on a conversion ratio of 1.15 shares of
Shampan's common stock for each share of takeoutmusic.com common stock issued
and outstanding as of the effective time of the Merger. The shares issued to the
former takeoutmusic.com stockholders represent approximately 80.5% of the
outstanding common stock of Shampan following the Merger, and the shareholders
of Shampan prior to the Merger represent approximately 19.5% of the outstanding
Common Stock of Shampan following the Merger. The merger was accounted for as a
capital transaction which is equivalent to the issuance of stock by
takeoutmusic.com for Shampan's net liabilities of approximately $275,000,
accompanied by a recapitalization of takeoutmusic.com. All share and per share
information included in these financial statements has been adjusted to
retroactively reflect the recapitalization.
In addition, all outstanding options and warrants to purchase takeoutmusic.com
common stock were converted into options and warrants to purchase common stock
of Shampan. The sole outstanding warrant to purchase an aggregate of 273,598
shares of takoutmusic.com common stock at an exercise price of $0.67 was
converted into a warrant to purchase an aggregate of 314,638 shares of Shampan
common stock at an exercise price of $0.58. takeoutmusic.com employee stock
options to purchase an aggregate of 733,000 shares of takeoutmusic.com common
stock at an exercise price of $.067 per share were converted into options to
purchase 842,950 shares of Shampan common stock at an exercise price of $0.58
per share.
In addition, the 1999 Incentive Compensation Plan (the "Plan") to grant options
to purchase takeoutmusic.com common stock was converted into the 1999 Incentive
Plan to purchase common stock of Shampan.
6
<PAGE>
takeoutmusic.com Holdings Corp.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
5. Notes Payable
(a) Notes Payable to Shareholder
March 31, 2000
--------------
Note payable to Shareholder (i) 128,000
Note payable to Shareholder (ii) 55,000
--------
183,000
========
(i) Note payable to Shareholder - On February 13, 1997 the Company
issued a note payable in connection with a proposed private
placement of debt securities in the amount of $750,000. The Company
was advanced the sum of $100,000 under the Note. The Note is
secured by the assets of the Company and bore interest at 10% per
annum. On February 3, 2000 the Note was amended to include accrued
interest through December 31, 1999 of $28,000; commencing six
months from the closing of the Merger, the automatic conversion
into common stock at $3.50 per share, if the market price of the
common stock is equal to or in excess of $7 per share for a period
of 10 consecutive trading days; and accrue interest at 8% per annum
payable on conversion or maturity. If not converted, the Note
matures three years from the closing date of the Merger.
(ii) Note payable to Shareholder - On May 1, 1998, the Company issued a
note payable in connection with the receipt of $50,000. The Note is
unsecured and bears interest at the fixed rate of 10% per annum.
The Shareholder advanced the further sum of $5,000 in 1999. On
February 3, 2000, the Note was amended to include, commencing six
months from the closing of the Merger, the automatic conversion
into common stock at $3.50 per share, if the market price of the
common stock is equal to or in excess of $7.00 per share for a
period of 10 consecutive trading days. If not converted the Note
matures three years from the closing date of the Merger.
Both of the above notes include a beneficial conversion feature that will result
in an interest charge if and when the price of the Company's stock exceeds $7.00
per share. Such charge will be imputed based on the difference between $3.50 and
the then current par value of the Company's stock.
7
<PAGE>
takeoutmusic.com Holdings Corp.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
(b) Note Payable
March 31, 2000
--------------
Note payable 42,500
------
Note payable, due November 4, 1998. The Note is unsecured and non-interest
bearing.
6. SUBSEQUENT EVENTS
Fulfillment Center Agreement
In April, 2000, takeoutmusic.com entered into an agreement with Baker & Taylor,
Inc. ("B&T"), a third party service organization whereby B&T provides
takeoutmusic.com with drop ship distribution services in support of
takeoutmusic.com's retail operations, for an initial period of one year,
renewable annually for a total of five years. All aspects relating to
fulfillment of customer orders are handled by B&T following receipt of customers
orders from takeoutmusic.com, including processing of customer orders and
shipment of merchandise.
In consideration for performance of the services provided by B&T during the
contract term, takeoutmusic.com paid an initial start- up fee and will be
charged on a fee-for-service basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS.
The following discussion should be read in conjunction with the
financial statements of the Company and related notes included elsewhere in this
Report on in the Company's Form 10-K for the year ended December 31, 1999. All
statements contained herein (other than historical facts) including, but not
limited to, statements regarding the Company's future development plans, the
Company's ability to generate cash from its operations and any losses related
thereto, are based upon current expectations. These statements are forward
looking in nature and involve a number of risks and uncertainties. Actual
results may differ materially from the anticipated results or other expectations
expressed in the Company's forward looking statements. Generally, the words
"anticipate," "believe," "estimate," "expects," and similar expressions as they
relate to the Company and/or its management, are intended to identify forward
looking statements. Among the factors that could cause actual results to differ
materially are the following: the inability of the Company to obtain additional
financing to meet its capital needs and general business and economic conditions
as well as technological developments.
Overview
8
<PAGE>
The Company has a limited history of operations and no history of
profitability. It was incorporated as Allegiant Technologies Inc. on December
28, 1993 and thereafter until the cessation of operations developed for sale
various software products primarily for the Macintosh platform. On May 31, 1998
the Company sold its technology assets and product inventory to an arms length
purchaser, commenced a reorganization of its capital and thereafter remained
dormant in search of a new line of business.
On December 9, 1999 the Company announced and reported on Form 8-K that
it entered into a letter of intent to merge with takeoutmusic.com, Inc. The
merger was completed on February 4, 2000.
As of March 31, 2000 the Company had a total accumulated deficit of
$638,474.
See Notes to the Financial Statements for a description of the Company's
significant accounting policies.
Results of Operations
Financial results for the three-month period ended March 31, 1999
consisted entirely of the results of the predecessor company whose operations
were discontinued in 1999 and which were in an entirely different field of
business. Results for the three months ended March 31, 2000 are solely the
results of the music business conducted by the Company, which is a development
stage company. Therefore, comparing the results of operations for the two
periods would be without meaning, and could be misleading, to achieving an
understanding of the Company's current operations and business plans.
As reported in the Form 10-Q filed by the Company's predecessor for the
three months ended March 31, 1999 net revenue for those three months was $46,833
resulting in a net loss of $25,897. The Company's results for the quarter ended
March 31, 2000 show net revenue of $2,972 and a net loss of $312,483.
Liquidity and Capital Resources
As of March 31, 2000 the Company had a cash balance of $1,179,922, down
from a total of $1,405,898 of cash and short-term investments at December 31,
1999. Working capital decreased from the calendar 1999 year-end total of
$1,305,447 to $893,509 as at March 31, 2000. The Company's total accumulated
deficit also rose from the 1999 year-end balance of $325,991 to $638,474 at
March 31, 2000.
The $183,000 included in Company long-term debt is represented by two
notes, one for $128,000, with interest at 8%, and one for $55,000, without
interest. Both notes mature on February 3, 2003. Both notes, however,
automatically convert into common stock at $3.50 per share (requiring the
issuance of 52,285 shares) if the market price of the common stock is $7.00 per
share or more for a period of ten consecutive trading days. See item 6 under
"Capital Reorganization" below.
The Company believes its cash on hand and cash from operations will be
sufficient to meet its cash requirements over the next 12
9
<PAGE>
months. However, if the Company should need to obtain additional capital by the
sale of equity or debt securities there can be no assurance that such capital or
borrowings could be obtained on terms favorable to the Company, or at all.
Capital Reorganization
The Company completed the following reorganization of its capital prior
to its merger with takeoutmusic.com, Inc.:
1. During the years ended December 31, 1998 and 1997, former principals of the
Company surrendered for cancellation 166,666 escrowed shares of common stock.
(2,000,000 shares adjusted for reverse share splits described below).
2. On July 21, 1998 the Company completed a four for one reverse split of its
common stock and changed its name from Allegiant Technologies Inc. to Shampan,
Lamport Holdings Limited.
3. On January 15, 1998, the Company issued 1,200,000 shares of common stock at a
deemed price of $0.45 per share, adjusted for reverse share splits, and a
non-transferable warrant to purchase 94,444 shares of common stock at $0.5175
per share until October 15, 1999, in full settlement and satisfaction of debts
of the Company amounting to $540,000. The term of the warrant was subsequently
extended to October 15, 2000.
4. On January 15, 1998, the Company issued 466,666 Units at $0.45 per unit,
adjusted for reverse splits, for aggregate proceeds of $210,000. Each Unit
consisted of one share of common stock and one non- transferable warrant to
purchase one additional share of common stock at $0.5175 per share until October
15, 1999. The term of the warrant was subsequently extended to October 15, 2000.
The proceeds of the private placement were primarily used to fund the settlement
of trade debts of the Company.
5. On May 31, 1998, the Company sold its technology assets and product inventory
for $40,000. The proceeds were used to fund the settlement of trade debts of the
Company.
6. During May 1998, the Company borrowed $55,000 from a director of the Company.
The proceeds were used to fund certain ongoing obligations of the Company. In
addition, during May 1998, the Company negotiated new terms of payment on an
outstanding secured promissory note in the amount of $100,000, which was in
default as a result of the Company having failed to make timely interest
payments. Subsequent to the year ended December 31, 1999, these notes were
amended such that the principal together with accrued interest in the amount of
$28,000 ($183,000 in total) are automatically converted into common stock of the
Company at $3.50 per share if the market price of the Company's common stock is
equal to or in excess of $7.00 per share for a period of ten consecutive trading
days at anytime after August 4, 2000 and before February 4, 2003.
7. On December 20, 1999 the Company completed a three for one reverse split of
its common stock and on February 9, 2000 changed its name
10
<PAGE>
from Shampan, Lamport Holdings Limited to takeoutmusic.com Holdings Corp. in
connection with the announced merger with takeoutmusic.com, Inc.
8. In July 1999 the Company issued 1,500,003 shares of its common stock in a
private placement receiving net proceeds of $94,332 (after issuance costs of
approximately $16,000).
9. In December 1999 the company issued 2,735,948 shares of its common stock in a
private placement receiving net proceeds of $1,560,460 (after issuance costs of
approximately $264,000).
10. As of February 4, 2000 the Company issued 10,046,344 shares of its common
stock in connection with the merger described above under "Recent Merger."
YEAR 2000
Some currently installed computer systems are not capable of
distinguishing 21st century dates from 20th century dates or have been
programmed with default dates ending in 99, the common two-digit reference for
1999. As a result, as the Company continues its transition from the 20th century
to the 21st century, computer systems and software used by some companies and
organizations in a wide variety of industries will produce erroneous results or
fail unless they have been modified or upgraded to process date information
correctly. Significant uncertainty exists concerning the scope and magnitude of
problems associated with the year 2000 issue but press reports indicate only a
minimal number of problems in this area.
Through April 2000 the Company has experienced no malfunctions in its
information technology systems as the result of the Year 2000 date change. The
Company could experience future malfunctions but the Company believes that these
future malfunctions, if any, will not have a material impact on the Company's
results of operations or financial condition.
The Company is in part dependent on third party suppliers. Through April
2000, the Company's key third party suppliers have not reported any significant
Year 2000 compliance problems. However, because the Company's continued Year
2000 compliance is in part dependent on the continued compliance of third
parties, there can be no assurance that problems with third party suppliers will
not have an adverse affect on the Company's results of operations or financial
condition.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
The Company does not hold derivative or speculative financial
instruments and substantially all cash and cash equivalent balances are
11
<PAGE>
invested in money market accounts with floating interest rates, therefore the
Company is not subject to significant interest rate risk.
Currency Exchange Rate Risk
To date all of the Company's revenues and expenses have been denominated
in U.S. dollars. As a result, the Company has not incurred any realized or
unrealized currency exchange rate gains or losses. The Company does not expect
to incur any significant gains and losses during the next twelve months. The
Company has not engaged in foreign currency hedging activities to date.
PART II - OTHER INFORMATION
Item 2 Changes in Securities and Use of Proceeds
In connection with the Merger effected February 4, 2000, the Company issued an
aggregate of 10,046,344 shares of Common Stock to the former common stock
holders of takeoutmusic.com, Inc. The issuance was made pursuant to Section 4(2)
of the Securities Act of 1933, as amended (for further information regarding the
merger, see "Note 1 to Financial Statements - Recent Merger").
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27.1
(b) Reports on Form 8-K.
During the period commencing last quarter of the period covered by this
Report to date, the following reports on Form 8-K were filed by the Registrant:
<TABLE>
<CAPTION>
DATE OF REPORT ITEM REPORTED DESCRIPTION OF ITEM
-------------- ------------- -------------------
<S> <C> <C>
February 18, Item 1. Change in Control. The Company reported the merger of
2000 Item 2. Acquisition or TOMCI Acquisition Corp., a
Disposition of Assets. wholly-owned subsidiary of the
Item 5. Other Events Company, with and into
Item 7. Exhibits takeoutmusic.com, Inc. and the new
board of directors of the Company.
February 1, 2000 Item 5. Other Events The Company announced the execution
of an Agreement and Plan of Merger to
acquire Takeoutmusic.com, Inc. in
exchange for approximately 10.0
million shares of Common Stock of the
Company.
</TABLE>
12
<PAGE>
SIGNATURE
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.
takeoutmusic.com Holdings Corp.
Dated: May 18, 2000 By: /s/ Mori S. Ninomiya
--------------------------------
Mori S. Ninomiya
President and Chief Executive Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF TAKEOUTMUSIC.COM HOLDINGS, CORP
FOR THE THREE MONTHS ENDED MARCH 31, 2000
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,179,922
<SECURITIES> 0
<RECEIVABLES> 21,640
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,201,562
<PP&E> 113,517
<DEPRECIATION> 14,583
<TOTAL-ASSETS> 1,306,203
<CURRENT-LIABILITIES> 308,053
<BONDS> 0
0
0
<COMMON> 124,852
<OTHER-SE> 678,560
<TOTAL-LIABILITY-AND-EQUITY> 1,306,203
<SALES> 2,972
<TOTAL-REVENUES> 2,972
<CGS> 0
<TOTAL-COSTS> 325,608
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (312,483)
<INCOME-TAX> 0
<INCOME-CONTINUING> (312,483)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (312,483)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
