FORM 10-QSB Amendment #1 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 September 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 of incorporation or organization) Identification No.) 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 September 30, 2001. Common Stock, par value $.001 3,881,003 ----------------------------- --------- Title of Class Number of Shares Transitional Small Business Disclosure Format yes____ no X 1Winmax Trading Group, Inc. Index Part I ------ Index Item 1. Financial Statements Balance Sheet as of September 30, 2001 F-1 Statements of Operations for the Three and Nine Months Ended September 30, 2001 and 2000 F-2 Statements of Cash Flows for the Nine Months Ended September 30, 2001 and 2000 F-3 Notes to Financial Statements F-4 - F-5 Item 2. Management's discussion and analysis or plan of operation 3 Part II ------- Other information 7 Signatures 8 2 Winmax Trading Group, Inc. Consolidated Balance Sheet September 30, 2001 (Unaudited) Assets Current assets Cash $ 9,395 ----------- Total current assets 9,395 ----------- Property and equipment, net 940 ----------- $ 10,335 =========== Liabilities and Stockholders' (Deficit) Current liabilities Accounts payable $ 52,712 Due to shareholder 101,140 ------------ Total current liabilities 153,852 ============ Stockholders' (deficit) 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, 3,881,003 shares issued and outstanding 3,881 Additional paid-in capital 2,859,644 Accumulated (deficit) (2,575,350) Common shares issued for deferred services (432,000) Other comprehensive income: Currency translation adjustment 308 ----------- (143,517) ----------- $ 10,335 =========== See the accompanying notes to the consolidated financial statements. F-1 Consolidated Statements of Operations Three Months and Nine Months Ended September 30, 2001 and 2000 (Unaudited) Three Months Nine Months ------------------------------- ----------------------------- ------------------------------- ----------------------------- 2001 2000 2001 2000 Revenue: Fees, commissions and interest $ 4,114 $ 10,854 $ 4,114 $ 36,067 ----------- ----------- ----------- ----------- Operating Costs and Expenses: Non cash stock compensation 974,850 - 1,642,250 - General and administrative 93,752 158,394 144,393 420,417 ----------- ----------- ----------- ----------- 1,068,602 158,394 1,786,643 420,417 ----------- ----------- ----------- ----------- (Loss) from operations (1,064,488) (147,540) (1,782,529) (384,350) Other income (expense): Realized (loss) on marketable securities - (9,462) - (9,462) ----------- ----------- ----------- ----------- Net (loss) $ (1,064,488) $ (157,002) $(1,782,529) $ (393,812) =========== =========== =========== =========== Per Share Information - basic and fully diluted: Weighted average common shares outstanding 3,796,000 376,000 2,379,889 376,000 =========== =========== =========== =========== (Loss) per share $ (0.28) $ (0.42) $ (0.75) $ (1.05) =========== =========== =========== =========== See the accompanying notes to the consolidated financial statements. F-2 Winmax Trading Group, Inc. Consolidated Statements of Cash Flows Nine Months Ended September 30, 2001 and 2000 (Unaudited) 2001 2000 Cash flows from operating activities: Net cash (used in) operating activities $ (93,254) $ (310,756) ----------- ------------ Cash flows from investing activities: Net cash provided by (used in) investing activities (232) 97,248 ----------- ------------ Cash flows from financing activities: Net cash provided by financing activities 101,140 249,304 ----------- ------------ Increase in cash and cash equivalents 7,654 35,796 Cash and cash equivalents, beginning of period 1,741 - ----------- ------------ Cash and cash equivalents, end of period $ 9,395 $ 35,796 =========== ============ Supplemental cash flow information: Cash paid for interest $ - $ - Cash paid for income taxes $ - $ - See the accompanying notes to the consolidated financial statements. F-3 WINMAX TRADING GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2001 (UNAUDITED) (1) Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and Item 310(b) of Regulation SB. They do not include all of the information and footnotes for complete financial statements as required by GAAP. In management's opinion, 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 Company's financial statements as of December 31, 2000 and for the two years then ended, including notes thereto included in the Company's Form 10-QSB. (2) Organization The Company was incorporated under the laws of the State of Florida on September 26, 1996. The Company, as General Partner of an investment fund, Winmax Alpha Fund Limited Partnership ("Alpha"), had been in the business of operating and managing Alpha. The Company's operating revenue during the prior year consisted almost solely of the incentive fees, commissions and interest derived from the operation and management of this fund. 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; the Company then 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 are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share are 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. (4) Stockholders' (Deficit) During March 2001 the Company declared a 25 for 1 reverse split of its common stock. All share and per share amounts have been adjusted to give effect to this split. During the quarter ended March 31, 2001 an officer of the Company contributed $3,000 in unpaid salary to the capital of the Company. F-4 WINMAX TRADING GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2001 (UNAUDITED) During the period ended September 30, 2001 the Company issued 1,505,000 shares of its common stock pursuant to Form S-8 registration statements and 2,000,000 unregistered shares of its common stock valued at $2,074,250. The shares were issued for services rendered aggregating $1,642,250 and for future services aggregating $432,000. 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. (5) Other--Various lawsuits and claims ELO Associates II, Ltd v. Winmax Trading Group, Inc. and Ralph Pistor (Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida; Case No. 01-04868 (14)). On October 9, 2001, a default judgment was issued on the issue of our liability, with the issue of damages to be decided by a bench trial. The Company was never served with a copy of the summons or complaint in this matter and never otherwise received a copy of the Complaint; however, the Company's best information is that the lawsuit makes claims for breach of a lease agreement, including alleged damages of $222,324. The Company intends to appeal the judgment for failure to affect service of process of the summons and the Complaint upon the Company and to file appropriate defenses to the claims. Although the Company intends to vigorously appear and otherwise defend this matter, its outcome cannot be predicted. Should the Court order a judgment in the full amount of the alleged damages and the Company exhausts all of its appeals, such payment would have a materially adverse affect on the Company's consolidated results of operations or financial position, unless such payment was made by a member of the Company's management. (6) Basis of Presentation The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced significant losses from operations. For the period ended September 30, 2001 the Company incurred a net loss of $1,782,529. In addition, the Company has a working capital deficit of $144,457, an accumulated deficit of $2,575,350 and a stockholders' deficit of $143,517 at September 30, 2001. The Company's ability to continue as a going concern is contingent upon its ability to expand its operations and secure additional financing. The Company is pursuing financing for its operations and seeking to expand its operations. Failure to secure such financing or expand its operations may result in the Company not being able to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern (7) Subsequent events During the period from October 1, 2001 through November 19, 2001 the Company Issued 4,000,000 shares of unregistered common stock in exchange for services and other non cash consideration. These shares were valued at the approximate fair market value of the common stock on the dates it was agreed that the shares would be issued of $1,400,000, In addition, the Company issued 2,265,000 shares of common stock pursuant to Form S-8 Registration statements for services and other non-cash consideration. These shares were valued at the approximate fair market value of the common stock on the dates it was agreed that the shares would be issued of $1,134,000. F-5 The following discussion and analysis provides information that the Company believes is relevant to an assessment and understanding of its consolidated results of operations and financial condition. This discussion and analysis covers material changes in financial condition since December 31, 2000 and material changes in the results of operations from the nine months ended September 30, 2001. This discussion and analysis should be read in conjunction with the Company's Form 10 - KSB for the year ended December 31, 2000, including the Company's financial statements contained therein. Item 2. Management's Discussion and Analysis or Plan of Operations. A. Overview of Operations. In June of 2001, we appointed new Board of Directors and Management Team and adopted a new corporate strategy and business to engage in: (a) the web development and Internet business; and (b) the production, processing and Internet marketing of the precious and semi-precious gemstone and jewelry industry, particularly the colored gemstone and jewelry industry. Our business plan also contemplates conducting testing and exploration activities. We remain dependent upon our ability to expand our web development and Internet services and secure additional financing. We will attempt to generate revenues from the sales of gemstones. Although we are pursuing financing for our continued and planned expansion of our operations, our failure to secure such financing or expand our operations may result in our not being able to continue as a going concern. B. Results of Operations The Company's Directors, Gerald Sklar, Tony Miller, David Young and Elain Probert, have decided that the Company's interests are best served by changing the Company's business plan to: (a) establishing a web development design, web casting, Internet solution and e-commerce business; and (b) engage in mining operations. As reported in the December 31, 2000 notes to the Company's Consolidated Financial Statements, effective with the termination of Alpha, the Company has had no significant business operations or revenue. Cash Outlays for general and administrative expenses continued to decrease during the third quarter. This decrease is attributable to the Company's failure to conduct business operations. General and administrative expenses, however, continued to be a major expense of the Company. C.Liquidity and Capital Resources The Company has no material commitments for capital expenditures at September 30, 2001. The Company has no significant business operations. The Company will need additional capital to continue its operations for the next twelve months. The Company may have to seek financing through the sale of its shares, a debt offering, or loans from its Officer or Directors, which are subject to the following significant risks: (a) 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; (b) equity financing may dilute the ownership interests of shareholders; (c) additional equity securities may have rights and preferences or privileges that are senior to the Company's Common Stock; (d) debt financing would require payment of principal and interest that may pose an undue financial strain on the Company's operations; and (e) debt financing may involve restrictive covenants that could impose obligations on the Company's operating flexibility to continue its business and operations. 6 Part II: Other Information Item 1: Legal Proceedings See Note 5 to Consolidated Financial Statements (unaudited) ending September 30, 2001 contained herein. Item 2: Changes in Securities Not Applicable. Item 4: Submission of Matters to a Vote of Security Holders Not Applicable. Item 5: Other Information Not Applicable. Item 6: Exhibits and Reports on Form 8-K A. Exhibits None B. Reports on Forms 8-K None 7 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: June 14, 2002 By:/s/ Gerald Sklar Gerald Sklar President (Principal Financial Officer)
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10QSB/A Filing
Winmax Trading (WNMX) Inactive 10QSB/A2001 Q3 Quarterly report (small business) (amended)
Filed: 18 Jun 02, 12:00am