SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: April 30, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________ to _______________
Commission File Number:333-86031
TANGO INCORPORATED
(Exact name of Small Business Issuer as specified in its Charter)
FLORIDA 98-0198225
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
620-1207 11th Ave SW, Calgary Alberta T2C 0M5
(Address of principal executive offices)
(403) 228-6962
(Issuer's telephone number)
N/A
(Former Name, former address and former fiscal year,
if changed since last Report.)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 8,081,519 shares of Common
Stock and 12,000,000 Class B shares as of June 3, 2003
Transitional Small Business Disclosure Format: Yes [ ] No [X]
1
INDEX
Page
PART I - FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS April 31, 2003...........................F-1
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT....................F-2
CONSOLIDATED STATEMENTS OF CASH FLOWS................................F-3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.....................F-4 - F-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS...................................2
PART II - OTHER INFORMATION:
ITEM 1. LEGAL PROCEEDINGS......................................................4
ITEM 2. CHANGES IN SECURITIES..................................................4
ITEM 3. DEFAULTS UPON SENIOR SECURITIES........................................4
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS...................4
ITEM 5. OTHER EVENTS...........................................................4
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.......................................4
SIGNATURE......................................................................5
CERTIFICATION..................................................................6
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
TANGO INCORPORATED
(Formerly Environmental Strategies and Technologies International Inc.)
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2003
(Stated in U.S. Dollars)
TANGO INCORPORATED
(Formerly Environmental Strategies and Technologies International Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
(Stated in U.S. Dollars)
APRIL 30 JULY 31
2003 2002
- ---------------------------------------------------------------------------- -------------------- -------------------
ASSETS
Current
Cash $ 12,272 $ -
Accounts receivable 14,686 -
-- ----------------- -- ----------------
26,958 -
Advance Receivable (Note 3) 110,000 -
-- ----------------- -- ----------------
$ 136,958 $ -
============================================================================ == ================= == ================
LIABILITIES
Current
Accounts payable and accrued liabilities $ 115,694 $ 266,095
Due to related parties 210,387 255,249
-- ----------------- -- ----------------
326,081 521,344
-- ----------------- -- ----------------
STOCKHOLDERS' DEFICIENCY
Capital Stock
Authorized:
40,000,000 common shares, par value $0.001
12,000,000 Class B voting common shares, par value $0.00, each
share having 10 votes
20,000,000 preferred shares, par value $0.001
Issued and outstanding
6,781,519 common shares at April 30, 2003 and
1,879,051 common shares at July 31, 2002 6,782 1,879
12,000,000 Class B common shares at April 30, 2003 and July 31,
2002
375,000 preferred shares at April 30, 2003 and
Nil preferred shares at July 31, 2002 375 -
Additional paid-in capital 16,778,260 14,090,755
Deficit (14,906,220) (14,235,363)
Other (267,964) (378,615)
Consideration Of Potential Acquisition (Note 3) (1,800,000) -
-- ----------------- -- ----------------
(189,123) (521,344)
-- ----------------- -- ----------------
$ 136,958 $ -
============================================================================ == ================= == ================
See accompanying notes to financial statements.
F-1
TANGO INCorporated
(Formerly Environmental Strategies and Technologies International Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
(Stated in U.S. Dollars)
INCEPTION
MARCH 19
THREE MONTHS ENDED NINE MONTHS ENDED 1996 TO
APRIL 30 APRIL 30 APRIL 30
2003 2002 2003 2002 2003
- -------------------------------------- ----------------- ------------------ ------------------ ------------------ ------------------
Revenue $ 30,500 $ - $ 30,500 $ - $ 58,354
-- -------------- --- -------------- -- --------------- -- --------------- --- --------------
Expenses
Advertising and promotion - 12,513 13,125 55,638 1,243,603
Amortization of intangibles - 81,500 - 244,500 978,000
Amortization of convertible
note discount - - - - 787,382
Bank charges and interest 1,947 - 1,947 30 28,834
Contract cancellation - - - - 842,500
Consulting 3,266 - 139,766 - 304,016
Office and sundry 200 610 275 812 19,662
Professional fees 10,809 14,914 77,008 27,914 662,598
Rent and utilities 6,969 9,210 6,969 9,210 16,179
Software support - - - - 132,000
Telephone 2,805 2,995 5,948 2,995 10,699
Transfer agent and filing fees
3,369 2,853 5,877 5,003 51,128
Travel - 2,950 7,400 2,950 41,892
Salaries and benefits 143,683 140,075 443,042 235,283 7,419,097
-- -------------- --- -------------- -- --------------- -- --------------- --- --------------
173,048 267,620 701,357 584,335 12,537,590
-- -------------- --- -------------- -- --------------- -- --------------- --- --------------
Loss From Continuing Operations 142,548 267,620 670,857 584,335 12,479,236
-- -------------- --- -------------- -- --------------- -- --------------- --- --------------
Gain On Disposition Of Subsidiaries - - - - (199,459)
Loss (Gain) On Discontinued
Operations - 2,736 - (105,170) 2,231,933
-- -------------- --- -------------- -- --------------- -- --------------- --- --------------
Net (Gain) Loss On Discontinued
Operations - 2,736 - (105,170) 2,032,474
-- -------------- --- -------------- -- --------------- -- --------------- --- --------------
Loss For The Period $ 142,548 $ 270,356 $ 670,857 $ 479,165 $ 14,511,710
====================================== == ============== === ============== == =============== == =============== === ==============
Loss Per Share $ 0.03 $ 0.19 $ 0.18 $ 0.04
====================================== == ============== === ============== == =============== == ===============
Weighted Average Number Of Shares
Outstanding 6,128,070 1,452,042 3,775,856 13,259,158
====================================== == ============== === ============== == =============== == ===============
See accompanying notes to financial statements.
F-2
TANGO INCORPORATED
(Formerly Environmental Strategies and Technologies International Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
INCEPTION
MARCH 19
THREE MONTHS ENDED NINE MONTHS ENDED 1996 TO
APRIL 30 APRIL 30 APRIL 30
2003 2002 2003 2002 2003
- ------------------------------------------ ----------------- ---------------- ----------------- ---------------- -------------------
Cash Flows Used In Operating Activities
From Continuing Operations $ (142,548) $ (267,620) $ (670,857) $ (584,335) $ (12,479,236)
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Adjustments To Reconcile Loss From
Continuing Operations To Net Cash
Used By Operating Activities
Stock issued for other than cash 24,212 201,805 289,212 226,805 9,101,033
Amortization - 81,500 - 244,500 978,000
Change in accounts payable and
accrued liabilities 21,861 (33,956) 183,600 (5,268) 448,925
Change in accounts receivable (14,686) - (14,686) - (14,686)
Change in due to related parties 86,794 116,601 298,364 136,146 553,613
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Total Adjustments 118,181 365,950 756,490 602,183 11,066,885
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Net Cash Provided By (Used In) Operating
Activities From Continuing Operations (24,367) 98,330 85,633 17,848 (1,412,351)
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Cash Flows Provided By Financing
Activities
Subscriptions received 16,639 - 16,639 - 16,639
Common stock issued 20,000 - 20,000 - 2,005,723
Stock issue costs - - - - (157,920)
Convertible notes issued - - - - 1,337,250
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Net Cash Provided By Financing Activities 36,639 - 36,639 - 3,201,692
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Cash Flows Used In Investing Activities
Change in advance receivable - - (110,000) - (110,000)
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Net Cash Used In Discontinued Operations - 98,330 - (17,848) (1,667,069)
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Net Increase In Cash 12,272 - 12,272 - 12,272
Cash, Beginning Of Period - - - - -
-- -------------- -- ------------- --- ------------- -- ------------- --- ---------------
Cash, End Of Period $ 12,272 $ - $ 12,272 $ - $ 12,272
========================================== == ============== == ============= === ============= == ============= === ===============
See accompanying notes to financial statements.
F-3
TANGO INCORPORATED
(Formerly Environmental Strategies and Technologies International Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2003
(Stated in U.S. Dollars)
1. BASIS OF PRESENTATION
The unaudited consolidated financial statements as of April 30, 2003 included
herein have been prepared without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with United States generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. It is suggested that these
consolidated financial statements be read in conjunction with the July 31, 2002
audited consolidated financial statements and notes thereto.
During the three month period ended April 30, 2003, the Company incorporated a
wholly-owned subsidiary, Tango Equity Inc., an Alberta corporation.
2. SHARE CAPITAL
During the three month period ended April 30, 2003, the Company:
a) consolidated its share capital on a twenty old for one new basis;
b) issued 1,245,000 common shares for services provided and to be provided at a
value of $146,300, accordingly, $12,812 was charged to operations;
c) issued 115,000 common shares to directors at a value of $11,400 for services
rendered;
d) issued 200,000 common shares at a price of $0.10 per share for cash proceeds
of $20,000;
e) received $16,639 as a subscription for 166,390 common shares of the Company.
3. PROPOSED ACQUISITION
On October 9, 2002, the Company entered into a stock purchase agreement (as
amended) to acquire 100% of the issued and outstanding shares of Tango Equity
Inc. (formerly Engineering Acquisition Inc.), a Delaware corporation, in
consideration of the issuance of 25,000 Class A convertible preferred shares
(issued) at a value of $1,800,000. The 25,000 preferred shares are convertible
into 4,500,000 common shares. As at April 30, 2003, 6,250 has been converted
into 1,125,000 common shares.
In addition, the Company advanced $110,000 to Tango Equity Inc.
F-4
TANGO INCORPORATED
(Formerly Environmental Strategies and Technologies International Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2003
(Stated in U.S. Dollars)
3. PROPOSED ACQUISITION (Continued)
By a settlement agreement dated June 13, 2003, the Company will redeem all the
preferred and common shares issued under the agreement dated October 9, 2002.
The Company will also receive a total of $10,000, in monthly instalments of
$2,500 commencing June 30, 2003, as consideration for entering into the
settlement agreement.
The Company will convert $100,000 of the amount advanced to Tango Equity Inc.
into 471,500 common shares, which represents 25% of the issued and outstanding
shares of Tango Equity Inc.
On June 30, 2002, the Company granted an option to Tango Equity Inc. and to a
principal of that company to purchase its 25% interest for $200,000 up to June
30, 2005, and for $250,000 before June 30, 2007.
4. RELATED PARTY TRANSACTION
During the three month period ended April 30, 2003, directors' compensation
totalled $97,500 (2002 - $130,625).
5. SUBSEQUENT EVENTS
a) On May 28, 2003, the Company entered into an agreement to acquire 100%
interest of Pacific Print Works LLC, an Oregon corporation, in consideration
of the issuance of 3,000,000 common shares, and cash payments totalling
$600,000 to be paid in monthly instalments of $50,000 commencing on September
15, 2003.
b) On May 21, 2003, the Company issued 100,000 common shares at a value of
$25,000 for services provided and to be provided over one year.
c) On May 30, 2003, the Company issued 200,000 common shares at a value of
$68,000 for services provided and to be provided over one year.
F-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Section and elsewhere in this report
regarding matters that are not historical facts are forward-looking statements.
Because such forward-looking statements include risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements. All statements, which address operating performance,
events or developments that management expects or anticipates to incur in the
future, including statements relating to sales and earnings growth or statements
expressing general optimism about future operating results, are forward-looking
statements. The forward-looking statements are based on management's current
views and assumptions regarding future events and operating performance. Many
factors could cause actual results to differ materially from estimates contained
in management's forward-looking statements. The differences may be caused by a
variety of factors, including, but not limited to, adverse economic conditions,
competitive pressures, inadequate capital, unexpected costs, lower revenues, net
income and forecasts, the possibility of fluctuation and volatility of the
Company's operating results and financial condition, inability to carry out
marketing and sales plans and loss of key executives, among other things.
2
RESULTS OF OPERATIONS
THREE MONTHS ENDED APRIL 30, 2003 COMPARED TO THREE MONTHS ENDED APRIL 30, 2002
For the three months ended April 31, 2003, we generated revenues of 30,500 as
compared to revenues of Nil for the corresponding three months period of 2002.
For the quarter, the net loss of decreased to $(142,548) or approximately $(.03)
per share, compared to a net loss of $(270,356) or approximately $(.19) per
share a net decrease of for the corresponding quarter in 2002. The reduction in
our net loss was $(127,808)
Expenses of $173,048 for the quarter ended April 31, 2003 reflect a decrease
of expenses from $94,572 incurred during the quarter ended April 31, 2002.
LIQUIDITY, CAPITAL RESOURCES AND PLAN OF OPERATIONS
As of April 30, 2003 and 2002, our auditors indicated in their audit report
that our net loss and working capital deficit raised substantial doubt that we
would be able to continue as a going concern.
3
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES.
As described in notes to the Financials
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
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.
None.
4
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 as duly authorized officers of the Registrant.
Tango Incorporated
By: /s/ Todd Violette
---------------------------------------
Todd Violette, COO
By: /s/ Sameer Hirji
----------------------------------------
Sameer Hirji, CEO
DATED: June 23, 2003
5
CERTIFICATION
We, Todd Violette and Sameer Hirji, certify that:
1. We have reviewed this quarterly report on Form 10-Q of Tango Incorporated;
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 annual report;
4. The registrant's other certifying officers and us 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 have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, 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 officers 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 (or persons performing the equivalent
functions):
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 officers and I have indicated in this
quarterly report whether 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: June 23, 2003
By: /s/ Todd Violette
--------------------------
Todd Violette, COO
(on behalf of the Board of Directors)
By: /s/ Sameer Hirji
--------------------------
Sameer Hirji, CEO
(on behalf of the officers of the
corporation)
Tango Inactive
Filed: 3 Jul 03, 12:00am