FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
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 0-29751
Winmax Trading Group, Inc.
(Exact name of registrant as specified in its charter)
Florida 65-0702554
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
Suite 150 - 530 S. Federal Highway, Deerfield Beach, Florida 33441
(Address of principal executive office) (Zip Code)
888 - 533 - 4555
(Registrant's telephone number, including area code)
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 X No ___
The number of shares outstanding of each of Issuer's classes of common equity as
of June 30, 2001.
Common Stock, par value $.001 3,296,000
Title of Class Number of Shares
Transitional Small Business Disclosure Format yes_____ no___X_
Winmax Trading Group, Inc.
Index
Part I
Page
Index 1
Item 1. Financial Statements
Balance Sheet as of June 30, 2001 2
Statements of Operations for the Three and
Six Months Ended June 30, 2001 and 2000 3
Statements of Cash Flows for the Six Months
Ended June 30, 2001 and 2000 4
Notes to Financial Statements 5 & 6
Item 2. Management's discussion and analysis or
plan of operation 7 & 8
Part II
Other information 9
Signatures 10
Page 1
Winmax Trading Group, Inc.
Balance Sheet
June 30, 2001
(Unaudited)
Assets
Current assets
Prepaid expenses $ 278,283
Intangible asset 700,000
$ 978,283
=====================
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 21,900
Due to shareholder 2,470
24,370
Stockholders' Equity
Preferred stock, $1.00 par value,
1,000,000 shares authorized,
no shares issued or outstanding --
Common stock, $.001 par value,
50,000,000 shares authorized,
3,296,000 shares issued and outstanding 3,296
Additional paid-in capital 2,461,479
Accumulated deficit (1,510,863)
953,912
$ 978,282
=====================
See the accompanying notes to the Financial statements.
Page 2
Winmax Trading Group, Inc.
Statements of Operations
Three Months and Six Months Ended June 30, 2001 and 2000
(Unaudited)
Three Months Six Months
-----------------------------------------------------------
2001 2000 2001 2000
-----------------------------------------------------------
Revenue:
Fees, commissions and interest $ -- $ 25,213 $ -- $ 25,213
Operating Costs and Expenses:
General and administrative 685,207 85,311 718,041 262,023
Net (loss) $ (685,207) $ (60,098) $ (718,041) $ (236,810)
============ ============ ============ ============
Per Share Information - basic
and fully diluted:
Weighted average common shares
outstanding 724,335 370,433 1,072,667 368,000
============ ============ ============ ============
(Loss) per share $ (0.95) $ (0.16) $ (0.67) $ (0.64)
============ ============ ============ ============
See the accompanying notes to the financial statements.
Page 3
Winmax Trading Group, Inc.
Statements of Cash Flows
Six Months Ended June 30, 2001 and 2000
(Unaudited)
2001 2000
---- ----
Cash flows from operating activities:
Net cash (used in) operating activities $ (41,009) $ (242,452)
Cash flows from investing activities:
Net cash provided by (used in)
investing activities -- 82,392
Cash flows from financing activities:
Net cash provided by financing activities 39,268 250,060
Increase (decrease) in cash and cash equivalents (1,741) 90,000
Cash and cash equivalents, beginning of period 1,741 --
Cash and cash equivalents, end of period $ -- $ 90,000
================== ==================
Supplemental cash flow information:
Cash paid for interest $ -- $ --
Cash paid for income taxes $ -- $ --
See the accompanying notes to the financial statements.
Page 4
WINMAX TRADING GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2001
(UNAUDITED)
(1) Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP") for interim financial
information and item 310(b) of Regulation SB. They do not include all of the
information and footnotes required by GAAP for complete financial statements. In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. For further
information, refer to the financial statements of the Company as of December 31,
2000 and for the two years then ended, including notes thereto included in the
Company's Form 10-KSB.
(2) Organization
The Company was incorporated under the laws of the State of Florida on September
26, 1996. The Company had been in the business of operating and managing an
investment fund, the Winmax Alpha Fund Limited Partnership (Alpha), for which it
was the general partner. The incentive fees, commissions and interest derived
from the operation and management of this fund accounted for substantially all
of the Company's operating revenue during the prior year.
Alpha was a Delaware limited partnership formed to trade, invest in, buy, sell
or otherwise acquire, hold or dispose of futures contracts, options on futures
contracts, and all rights and interests pertaining thereto.
During October 2000 the Company terminated Alpha in accordance with the terms of
the Limited Partnership Agreement and returned the limited partners'
investments. Effective with the termination of Alpha the Company had no
significant business operations.
(3) Earnings Per Share
The Company calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. During the periods presented common stock
equivalents, if any, were not considered as their effect would be anti dilutive.
Page 5
WINMAX TRADING GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2001
(UNAUDITED)
(4) Stockholders' Equity
On March 19, 2001 the Company effected a reverse stock split in a ratio of 1:25.
All share and per share amounts have been adjusted to give effect to this split
except that the post split common share still retains a par value of $0.001.
During the quarter ended June 30, 2001 an officer of the Company contributed
$3,000 in unpaid salary to the capital of the Company.
During the period ended June 30, 2001 the Company issued 920,000 shares of its
common stock pursuant to Form S-8 registration statements and a further
2,000,000 shares were issued and held pursuant to rule 144 as per the 8-K filied
wth the SEC. The 2,920,00 shares in aggregate were valued at $1,669,500. The
shares were issued for legal services rendered, for future legal services and to
settle a shareholder's compensation and loan. The shares were valued at the fair
market value of the common stock on the dates it was agreed that the shares were
to be issued. Amounts expensed aggregated $659,950; amounts included as prepaid
expenses aggregated $278,750; amounts for settlement of the shareholder's loan
aggregated $30,800; and amount capitalized as intangible assets aggregated
$700,000.
(5) Other--Various lawsuits and claims
A motion for default judgement has been filed against the company and its past
President (Ralph Pistor). Although the outcome of these matters cannot be
predicted with certainty, management believes that their disposition will not
have materially adverse effects on the Company's consolidated results of
operations or financial position.
Page 6
Item 2. Management's Discussion and Analysis or Plan of Operations.
The following discussion and analysis covers material changes in financial
condition since December 31, 2000 and material changes in the results of
operations for the six months ended June 30, 2001. This discussion and analysis
should be read in conjunction with "Management's Discussion and Analysis or Plan
of Operation" included in the Company's Form 10-KSB for the year ended December
31, 2000.
Results of Operations
As reported in the December 31, 2000 notes to the Consolidated Financial
Statements: effective with the termination of ALPHA, the company had no
significant business operations or any revenue.
Cash outlays for general and administrative expenses decreased during the 2nd
quarter, this was attributable to a reduction in travel expenses. However, total
general and administrative expenses increased by way of shares issued to;
compensate an officer $569,200; a further $90,750 was expensed for agreements as
filed in the S-8's with the SEC to secure legal services.
To enhance and integrate its corporate systems and profile the company entered
into agreements to implement a world wide web (internet) website and creation of
an interactive CD rom to introduce the the company's product for $700,000, the
cost of which has been offset by the issue of common shares. These shares were
issued pursuant to the S-8's filed with the SEC.
Direction and Focus of Operations and Management Changes
On June 12, 2001 Mr. Gerald Sklar was appointed to the Company's Board of
Director's. Mr. Ralph Pistor resigned his position as President, Chief Executive
Officer and Director. Mr. Gerald Sklar agreed to act as interim President,Chief
Executive Officer, and Director until the next Annual General Meeting.
The new directors of the Company are presently investigating the feasability of
changing the company's direction through acquisitions of various enterprises.
Directors Resolution to Issue Further Shares.
The directors have resolved to issue 330,000 shares of common stock to acquire
professional services in connection with its current legal requirements needed
to investigate the company's current proposed acquisitions. The directors have
further resolved to register 3,000,000 shares of common stock pursuant to a
stock option plan. These resolutions will be noted on S-8's registration
statements to be filed with the SEC.
Liquidity and Capital Resources
The Company has no material commitments for capital expenditures at June 30,
2001.
As advised in the 10QSB filed with the SEC for the quarter ended March 31, 2001,
the Company has financed its operations principally through equity investments
and revenues derived from its management of Alpha. Effective with the
termination of Alpha the Company had no significant business operations.The
Company will need additional capital to continue its operations for the next
twelve months and may raise funds through the sale of equity shares or debt
financing or loans from Directors and Officers. There can be no assurance that
additional private or public financing, including debt or equity financing, will
be available as needed, or on terms favorable to the Company. Any additional
equity financing may be dilutive to shareholders and these additional equity
securities may have rights, preferences or privileges that are senior to those
of the Company's Common Stock. Furthermore, debt financing, if available, will
require payment of interest and may involve restrictive covenants that could
impose limitations on the operating flexibility of the Company. The failure of
the Company to obtain additional funding may jeopardize the Company's ability to
continue its business and operations.
Page 7
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby
providing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made by
or on behalf of the Company herein or orally, whether in presentations, in
response to questions or otherwise. Any statements that express, or involve
discussions as to expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of words or
phrases such as "will result", "are expected to", "will continue", "is
anticipated", "estimated", "projection" and "outlook") are not historical facts
and may be forward-looking and, accordingly, such statements involve estimates,
assumptions, and uncertainties which could cause actual results to differ
materially from those expressed in the forward-looking statements. Such
uncertainties include, among other, the following: (i) the Company's ability to
obtain additional financing to implement its business strategy; (ii) imposition
of new regulatory requirements affecting the Company; (vii) a downturn in
general economic conditions; (iii) the delay or failure to properly manage
growth and successfully integrate acquired companies and operations; (iv) lack
of diversification; (v) effect of uninsured loss and (vi) other factors which
are described in further detail in the Company's filings with the Securities and
Exchange Commission.
The Company cautions that actual results or outcomes could differ materially
from those expressed in any forward-looking statements made by or on behalf of
the Company. Any forward-looking statement speaks only as of the date on which
such statement is made, and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for management to predict all of such factors. Further, management
cannot assess the impact of each such factor on the business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
Page 8
Part II: Other Information
Item 1: Legal Proceedings
A motion for default judgement has been filed against the company and its
past President (Ralph Pistor).seeking damages for $222,324. No judgement has
been entered. Although the outcome of these matters cannot be predicted with
certainty, management believes that their disposition will not have materially
adverse effects on the Company's consolidated results of operations or financial
position
Item 2: Changes in Securities
On March 19, 2001 the Company effected a reverse stock split in a ratio of
1:25. The rights accruing to the holders of the securities have not changed
Except that the post split common share still retains a par value of $0.001. All
share and per share amounts have been adjusted to give effect to this split.
Item 4: Submission of Matters to a Vote of Security Holders
None
Item 5: Other information
None
Item 6: Exhibits and Reports on Form 8-K
A. Exhibits
None
B. Reports on Form 8-K
By reference - of 8-K dated March 7, 2001 Filed with
the SEC on May 7, 2001, as of May 4, 2001
Re: (a) Reverse Split
(b) Issuance of post split shares to its
then president Ralph Pistor.
Page 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
WINMAX TRADING GROUP, INC.
Date: July 31, 2001 By:/s/ Gerald Sklar
President
(Principal Financial Officer)
Page 10
