Form 10Q-SB for TS&B Holdings Inc
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 333-29903
TS&B Holdings, Inc.
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(Exact name of small business issuer as specified in its charter)
Utah 30-0123229
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Citrus Center 255 South Orange Ave. Suite 1501, Orlando, Florida 32801
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(Address of principal executive offices)
Registrant's telephone no., including area code: (407) 649-8325
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 [X] 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.
Class Outstanding as of March 31, 2003
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Common Stock, $.001 par value 31,859,700
TS&B HOLDINGS, INC.
CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
TS&B HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
MARCH 31, 2003
ASSETS
CURRENT ASSETS
Cash $ 1,208
Accounts receivable, net 241,786
Due from former employee 60,000
Prepaid expenses and other current assets 1,100
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TOTAL CURRENT ASSETS 304,094
OFFICE EQUIPMENT, LESS ACCUMULATED
DEPRECIATION OF $2,066 6,197
OTHER ASSETS - DEPOSITS 4,150
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$ 314,441
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 203,795
Notes payable to stockholders 187,548
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TOTAL CURRENT LIABILITIES 391,343
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COMMITMENTS AND CONTINGENCIES -
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STOCKHOLDERS' EQUITY (DEFICIT)
Common stock $.001 par value,
100,000,000 shares authorized,
31,859,700 shares issued and
outstanding 31,860
Additional paid-in capital 14,223,272
Stock subscription receivable ( 1,250,000)
Accumulated deficit (13,082,034)
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( 76,902)
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$ 314,441
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The accompanying notes to consolidated financial
statements are an integral part of this financial statement.
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TS&B HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
MARCH 31, 2003 AND 2002
Three-months ended
2003 2002
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REVENUES $ 10,000 $ 213,806
COST OF REVENUES - 44,001
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GROSS PROFIT 10,000 169,805
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OTHER EXPENSES
General and administrative 26,324 206,204
Professional fees 7,879 1,811,260
Marketing - 18,260
Depreciation and amortization 413 1,025
Loss on impairment of long-lived
assets - 855,006
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34,615 2,891,755
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NET LOSS FROM OPERATIONS ( 24,615) ( 2,721,950)
OTHER INCOME (EXPENSE)
Interest, net 16,372 4,589
Other 12,720 43,472
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29,092 48,061
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NET INCOME (LOSS) $ 4,477 $( 2,673,889)
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INCOME (LOSS) PER COMMON SHARE $ - $( .209)
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WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 31,859,700 12,799,922
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The accompanying notes to consolidated financial
statements are an integral part of these financial statements.
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TS&B HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
MARCH 31, 2003 AND 2002
Nine-months ended
2003 2002
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REVENUES $ 10,000 $ 409,249
COST OF REVENUES - 107,809
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GROSS PROFIT 10,000 301,440
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OTHER EXPENSES
General and administrative 110,132 390,214
Professional fees 426,857 1,818,149
Marketing 5,806 41,790
Depreciation and amortization 1,239 79,530
Salaries 675,000 66,687
Loss on impairment of long-lived
assets - 855,006
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1,219,034 3,251,376
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NET LOSS FROM OPERATIONS ( 1,209,034) ( 2,949,936)
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OTHER INCOME (EXPENSE)
Loss on investment in equity
securities - ( 288,390)
Interest, net 50,375 17,632
Other income (expense) 12,720 84,486
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63,095 ( 186,272)
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NET LOSS $( 1,145,939) $( 3,136,208)
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LOSS PER COMMON SHARE $( .041) $( .270)
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WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 28,082,328 11,598,389
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The accompanying notes to consolidated financial
statements are an integral part of these financial statements.
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TS&B HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
MARCH 31, 2003 AND 2002
2003 2002
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CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from operating revenues $ 10,000 $ 243,921
Cash paid for costs of sales - ( 75,304)
Cash paid for expenses (163,462) (322,118)
Interest ( 195) ( 27,931)
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Net cash used by operating
activities (153,657) (181,432)
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CASH FLOWS FROM INVESTING ACTIVITIES
Decrease (increase) in note
receivable 800 (138,158)
Increase in advance to employee ( 60,000) -
Proceeds from sale of investments - 40,610
Purchase of fixed and other assets - ( 23,009)
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Net cash used by investing
activities ( 59,200) (120,557)
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CASH FLOWS FROM FINANCING ACTIVITIES
Capital contribution - 50
Proceeds from note payable 214,369 299,669
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Net cash provided by financing
activities 214,369 299,719
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NET INCREASE (DECREASE) IN CASH 1,512 ( 2,270)
CASH, BEGINNING OF PERIOD ( 304) 4,070
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CASH, END OF PERIOD $ 1,208 $ 1,800
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The accompanying notes to consolidated financial
statements are an integral part of these financial statements.
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TS&B HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED
MARCH 31, 2003 AND 2002
2003 2002
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RECONCILIATION OF NET LOSS TO
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS $(1,145,939) $(3,136,208)
RECONCILING ADJUSTMENTS
Depreciation and amortization 1,239 79,532
Loss on impairment of long-lived
assets - 855,006
Loss on investment in equity securities - 288,390
Increase in accounts receivable, net ( 56,300) ( 165,328)
Decrease in inventory - 32,505
Increase in prepaid expenses and
other assets - ( 37,811)
Increase in accounts payable
and accrued expenses 20,843 72,432
Stock issued for services 1,026,500 1,830,050
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CASH FLOWS FROM OPERATING ACTIVITIES $( 153,657) $( 181,432)
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NONCASH INVESTING AND FINANCING ACTIVITIES
ISSUANCE OF STOCK FOR SERVICES $ 1,026,500 $ 1,830,050
CONTRIBUTION TO CAPITAL BY REDUCTION OF
NOTE PAYABLE $ 32,552 $ -
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The accompanying notes to consolidated financial
statements are an integral part of these financial statements.
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TS&B HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
The information presented herein as of March 31, 2003, and for the three months
and nine months ended March 31, 2003 and 2002, is unaudited.
NOTE A - BASIS OF PRESENTATION
The accompanying consolidated financial statements of TS&B Holdings,
Inc.(formerly known as Ammonia Hold, Inc.) (the Company) have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to the Securities and Exchange
Commission's Form 10-QSB and item 310(b) of Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal required adjustments)
considered necessary for a fair presentation have been included.
Operating results for the nine month period ended March 31, 2003, are not
necessarily indicative of the results that may be expected for the year ending
June 30, 2003. For further information, refer to the June 30, 2002, financial
statements and footnotes included in the Company's annual filing with the
Securities and Exchange Commission.
NOTE B -NET LOSS PER COMMON SHARE
Net loss per common share is computed in accordance with the requirements of
Statement of Financial Accounting Standards No. 128.
NOTE C - BUSINESS ACQUISITIONS
The Company is in process of negotiating purchases of operating companies. In
some cases, letters of intent to purchase have been executed between the Company
and seller. Generally, each of these letters of intent contain provisions which
detail closing requirements. Further, each acquisition is subject to regulations
of the Securities and Exchange Commission.
Through May 15, 2003, the Company has not closed nor met the requirements to
close, on the purchase of any operating companies.
NOTE D - OPERATING RESULTS
As noted in the accompanying financial statements, the Company has sustained
substantial net operating losses. Its ability to continue as a going concern and
realize its assets is dependent upon generating sufficient profitable revenues
and obtaining funding to support operations and fund acquisitions.
Management is in process of seeking funds to support continuing operations and
fund acquisitions. Management is confident they will be successful in their
negotiations and will obtain the necessary funding.
Through May 15, 2003, the Company has not obtained the funding necessary to
support acquisitions.
The accompanying financial statements have been prepared on the basis the
Company will continue as a going concern and will realize its assets.
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TS&B HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
NOTE E - IMPAIRMENT OF LONG-LIVED ASSETS
During the quarter ended March 2002, the Company evaluated the continued
marketability of its Ammonia Hold product line and determined that this future
operations would not fully utilize the existing long-lived assets related to
this business. As such, in accordance with SFAS 121, Impairment of Long-Lived
Assets, management evaluated the impairment of Company assets associated with
the production, packaging and selling of Ammonia Hold products. The Company has
initiated a plan to dispose of these assets and has determined that the carrying
values of these assets exceed their current fair values. Accordingly, the
following loss has been recorded and is included in operating income in the
accompanying statements of operations.
Description Carrying value Fair value Impairment loss
Patents $ 304,533 $ - $ 304,533
Manufacturing equipment 650,473 100,000 550,473
$ 955,006 $ 100,000 $ 855,006
The fair values have been determined by the Company's management based upon the
net selling price expected in an active market.
NOTE F - STOCK ISSUED FOR COMPENSATION AND CONSULTING SERVICES
During the nine month period ended March 31, 2003, the Company issued 11,250,000
shares of common stock for employee and officer compensation and for consulting
services as follows:
Employee and officer compensation $ 675,000
Consulting services 351,500
$ 1,026,500
The quoted fair market value of the Company's stock was used to value the shares
issued above.
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Management's Discussion and Analysis or Plan of Operations
TS&B continues to undergo a general restructuring into a holding company with
three operating subsidiaries. The Company currently has two subsidiaries, TS&B
Financial Services, Inc. providing financial services and TS&B Investment
Services, LLC providing direct commercial real estate financing and investment
opportunities.
TS&B Holdings Inc. and its Financial Services subsidiary are headquartered in
Orlando, Florida with offices in Naples and Tavernier, Florida.
Management continues with its goal to develop the Company into a real estate
development and financial services firm.
Management continues to look at and explore acquisition opportunities as they
present themselves.
Planned Acquisition
On April 15, 2002, the Company entered into an acquisition agreement, subject to
final audit, with PDG LLC ("PDG"), a Florida LLC, which provides and engages in
real estate development and management. PDG currently has ownership in
developments in Naples, Florida known as The Chase Preserve at Lely Resort and
Sunstone on the Fairways at Lely Resort.
In late 2002 PDG sold all undeveloped lots in the Chase Preserve. PDG retained
ownership of two Townhouse Villa's at The Chase Preserve at Lely Resort, one of
which was sold in early 2003.
The Chase Preserve at Lely Resort is located along a 34+- acre natural Cypress
Preserve surrounded by shimmering lakes and emerald fairways. The Chase Preserve
at Lely Resort has been designed so homeowners can enjoy two of life's most
precious commodities, privacy and beauty.
All twin villas have beautifully laid out floor plans on first and second living
floors. These spacious floor plans provide comfort, convenience and the same
luxury of a single-family home. All villas are three bedrooms; three baths and
the innovative designs feature large master suites, unique master baths with
luxurious appointments, open kitchens, great rooms, dining and two-car garages
with separate storage.
Chase Preserve residents enjoy a neighborhood recreation area with a 20-by-40
foot heated swimming pool surrounded by an expansive sundeck and a poolside
cabana with facilities including a wet bar, a perfect spot for neighborhood
gatherings and special events.
Sunstone on the Fairways at Lely Resort is located on the Mustang Golf Course
surrounded by emerald fairways. All units have beautifully laid out floor plans
on first or second floors. These floor plans provide comfort, convenience and
the same luxury of a single-family home. Units are either two or three bedrooms
with two baths. Innovative designs features include comfortable master suites
with master baths,open kitchens, great rooms, dining and one-car garages with
separate storage.
Sunstone on the Fairways residents enjoy a neighborhood recreation area with a
20-by-40 foot heated swimming pool and a poolside cabana with facilities
including a wet bar, a perfect spot for neighborhood gatherings and special
events.
PDG LLC competes against mid-sized real estate land developers.
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Results of Operation
Gross profit for the third quarter ended March 31, 2002 ("third quarter" of
fiscal 2003) decreased 94% compared to the same 2002 fiscal period, due to
divesture of Ammonia Hold and Super Dry. General and Administrative expenses
decreased by 72% from the same quarter last year due to general restructuring of
the Company's operations. Professional fees decreased by 426% from the previous
fiscal years quarter due to outside consulting fees. Marketing expense decreased
by 700% from the previous fiscal years quarter due to restructuring and
redirection of the Company's marketing efforts. Salaries and related cost
increased by 1000% from the previous fiscal years quarter due to general
restructuring of the Company's operations.
The Company recorded a net gain for the quarter of $4,477 or $0.00014 per share
as compared to a net loss of $2,673,889 or $0.209 per share for the same quarter
last year. The Company continues to hold securities. When the securities are
sold, the company will record the appropriate gain, if any. It is uncertain if
the value of these securities will increase.
Liquidity and Capital Resources
For the past two fiscal years, the Company's working capital needs have been
satisfied by sales revenues and from the sale of securities. At March 31,
2003 the Company had a net working capital deficit of $87,249, a 30% decrease
from the deficit of $124,691 at December 31, 2002. The decrease in the working
capital deficit is primarily attributed to a decrease in short-term debt. At
March 31, 2003, the Company had total assets of $314,441 and total
stockholders' deficit of ($76,902), compared to total assets of $300,705 and
total stockholders' equity of ($113,931) at December 31, 2002.
Net cash used by operating activities through the third quarter of fiscal year
2003 was $153,657 compared to $181,432 for the corresponding 2002 period. The
Company used $59,200 of cash for investing activities through the third quarter
of fiscal year 2003 as compared to $120,557 provided by investing activities in
the corresponding period of fiscal year 2002. The Company realized $214,369 cash
from financing activities through the third quarter of fiscal year 2003,
compared to $299,719 in the corresponding period of fiscal year 2002.
The Company anticipates meeting its working capital needs during 2003 fiscal
year primarily with revenues and debt financing.
In the opinion of management, inflation has not had a material effect on the
operations of the Company.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. The Company
wishes to advise readers that actual results may differ substantially from such
forward-looking statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in or implied by the statements, including, but not limited to, the
following: the ability of the Company to generate working capital, the
development of the Company's existing and new products, the potential market for
the Company's products, competitive factors, and other risks detailed in the
Company's periodic report filings with the Securities and Exchange Commission.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TS&B Holdings, Inc.
Date: May 20, 2003 By: /s/ JAMES E. JENKINS
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JAMES E. JENKINS
Chief Executive Officer
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CERTIFICATIONS
I, James E. Jenkins, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of TS&B Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to
us by others, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors;
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 20, 2003
/s/ James E. Jenkins
Chief Executive Officer
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CERTIFICATIONS
I, Charles Giannetto, certifies that:
1. I have reviewed this quarterly report on Form 10-QSB of TS&B Holdings Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to
us by others, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors;
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 20, 2003
/s/ Charles Giannetto
Chief Financial Officer