United States Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[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.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ___________
Commission file number : 0-29509
TMI Holding Corporation
(Exact name of business issuer in its charter)
Utah 82-0520055
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2801 Brandt Avenue, Nampa, Idaho 83687
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (208)-463-0063 Fax: (208) 463-7601
- --------------------------------------------------------------------------------
(Former Address)
The number of shares of common stock outstanding as of March 31, 2000, is
34,841,935.
Transitional Small Business Disclosure Format. Yes ___, No X .
TMI Holding Corporation
10-QSB (Mar 31, 2000) 1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The following financial statements are filed as part of this report:
The Consolidated Financial Statements of the Company for the three months
ended of March 31, 2000, reviewed by HJ & Associates, certified public
accountants.
Item 2. Management's Discussion and Plan of Operation:
Results of Operations:
Management of Environmental Oil Processing Technology, Inc. (EOPT) focused
their activity in the first quarter of year 2000 in developing operating
procedures for the oil refining plant, testing the operating parameters of the
plant, exploring the adjustments needed for producing diesel and naphtha more
efficiently and in general experimenting with the refinery. Management
established that the plant will operate at an efficiency level of 85% or above
with respect to the percentage of usable product that can be produced from the
feed-oil, and established a market for all of the product that the plant will
produce. Management is of the opinion that the plant will produce "spec" fuel
for road use by vehicles, whereas previously marketing estimates were made on
the basis of "off road" fuel which brought a lower price in the market. With the
potential of producing "spec" fuel, the revenue projections are substantially
higher and Management is changing its operating plan from sale-lease plants to
other customers to constructing domestic plants for company operation.
Management is currently exploring and developing a detailed business plan
incorporating the construction of both domestic company owned plants and leasing
plants to international customers.
Operations in the first quarter resulted in revenues from EOPT (sales of
used oil and some production from the plant) in the amount of $386,046 as
compared with revenues of $70,090 during the first quarter of 1999. Operating
losses by EOPT from the first quarter were $535,045 which when added to the
depreciation and amortization losses, brought the total losses of EOPT to
$962,045. Management anticipates that the operating results for the second
quarter will continue at a loss because of the continued testing and
modifications of the plant.
The engineering subsidiary Project Development Industries, LLC, (PDI) had
revenues in the 1st quarter of $1,083,402 with expenses of $1,132,465 with an
overall operating loss of $49,063.
Management anticipates that second quarter revenues for EOPT will be
reduced because of storing used oil for refining purposes (rather than selling
same) and that expenses will be reduced because of fewer modifications in the
plant, more experienced personnel in operating the plant and less training
expense. The second quarter revenues for PDI are expected to be less with an
approximately same results of operations.
Funding and Capital Resources:
Management anticipates that additional capital will be required to sustain
operations through the 2nd and 3rd quarters which is expected to come from
Private Placement investors. By the end of the 3rd quarter Management
anticipates that revenues from the sale of refinery product and from the
sale/lease of refining plants will generate the revenues for profitable
operations and
TMI Holding Corporation
10-QSB (Mar 31, 2000) 2
continued activity of EOPT. Management is presently investigating and
negotiating with substantial funding sources to finance the development and
fabrication of the refining plants for both domestic company operated operations
and the sale/lease of international facilities.
Plan of Operation:
Management presently plans to pursue the completion of what it believes to
be the last modifications of the refining pilot plant in order to commence
continuous refining operations and production of product during the 3rd quarter.
Concurrently, PDI is presently investigating sites for constructing domestic
company owned facilities and Management is continuing negotiations for the
sale/lease of facilities in other countries. In addition, the refining capacity
of the pilot plant is approximately double the capacity of the present oil
collecting facilities, and Management has located sources and is negotiating the
purchase of additional used lubricating oil for meeting the requirements of the
refining plant.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders.
A majority of the shareholders signed a "Written Consent" which was
effective July 3, 2000, to amend the Articles of Incorporation of TMI Holding
Corporation (a) to change the name to "Environmental Oil Processing Technology
Corporation", (b) to increase the authorized capital of the corporation from
100,000,000 shares of no par common stock to 200,000,000 shares of no par common
stock, and (c) to effect a forward 2 for 1 common stock split on all issued and
outstanding shares of stock.. There were a total of 21,206,009 shares (61%)
represented by the Written Consent, and notice of the action was mailed to the
remaining shareholders. Articles of Amendment were prepared and executed on July
14, 2000, and have been submitted to the Department of Commerce, Division of
Corporations for the State of Utah for filing.
Item 5. Other Information. None
Item 6. Exhibits and Reports on form 8-K.
(a) No exhibits
(b) No Form 8K filings
TMI Holding Corporation
10-QSB (Mar 31, 2000) 3
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TMI Holding Corporation
(Registrant)
Date: July 31, 2000 By /s/
---------------------------------
N. Tod Tripple, President and CEO
TMI Holding Corporation
10-QSB (Mar 31, 2000) 4
TMI HOLDING CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000 and December 31, 1999
INDEPENDENT REVIEW REPORT
To the Board of Directors
TMI Holding Corporation and Subsidiaries
Nampa, Idaho
We have reviewed the accompanying consolidated balance sheet of TMI Holding
Corporation and Subsidiaries (a development stage company) as of March 31, 2000
and the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the periods ended March 31, 2000 and 1999. These
consolidated financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
consolidated financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of TMI Holding
Corporation and Subsidiaries (a development stage company) as of December 31,
1999, and the consolidated related statements of operations, stockholders'
equity (deficit), and cash flows for the year then ended (not presented herein)
and in our report dated March 30, 2000, we expressed an unqualified opinion on
those consolidated financial statements.
HJ & Associates, LLC
Salt Lake City, Utah
June 28, 2000
TMI HOLDING CORPORATION AND SUBSIDIARIES
Balance Sheets
ASSETS
March 31, December 31,
2000 1999
----------- -----------
(Unaudited)
CURRENT ASSETS
Cash $ 296,623 $ 193,007
Trade accounts receivable, less allowance for
for doubtful accounts of $118,514 and $23,000,
respectively 381,077 404,056
Inventories 6,464 6,464
Other current assets 10,628 9,541
----------- -----------
Total Current Assets 694,792 613,068
----------- -----------
PROPERTY, PLANT AND EQUIPMENT 2,244,338 2,204,153
Less accumulated depreciation (284,424) (198,954)
----------- -----------
Property, Plant and Equipment, Net 1,959,914 2,005,199
----------- -----------
OTHER ASSETS
Goodwill, net 3,196,130 3,284,912
----------- -----------
Total Other Assets 3,196,130 3,284,912
----------- -----------
TOTAL ASSETS $ 5,850,836 $ 5,903,179
=========== ===========
TMI HOLDING CORPORATION AND SUBSIDIARIES
Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
2000 1999
------------ ------------
(Unaudited)
CURRENT LIABILITIES
Current portion of notes payable $ 46,143 $ 45,659
Accounts payable 193,578 256,206
Accrued expenses 556,368 443,654
Line of credit 400,000 400,000
Notes payable - related parties 1,438,808 239,838
Deferred revenue -- 21,457
------------ ------------
Total Current Liabilities 2,634,897 1,406,814
------------ ------------
LONG TERM DEBT
Notes payable - related parties -- 650,000
Notes payable 101,413 99,407
------------ ------------
Total Long-Term Debt 101,413 749,407
------------ ------------
Total Liabilities 2,736,310 2,156,221
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, no par value; 100,000,000
shares authorized; 34,841,935 shares issued
and outstanding, respectively 11,443,277 11,443,277
Stock subscription receivable (400,000) (400,000)
Accumulated deficit (7,928,751) (7,296,319)
------------ ------------
Total Stockholders' Equity 3,114,526 3,746,958
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,850,836 $ 5,903,179
============ ============
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
March 31,
------------------------------
2000 1999
------------ ------------
NET SALES $ 1,469,448 $ 70,090
COST OF GOODS SOLD -- 76,457
------------ ------------
GROSS MARGIN (DEFICIT) 1,469,448 (6,367)
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 2,094,510 72,783
------------ ------------
LOSS FROM OPERATIONS (625,062) (79,150)
------------ ------------
OTHER INCOME (EXPENSE)
Interest expense (18,506) --
Interest income 11,136 --
------------ ------------
Total Other Income (Expense) (7,370) --
------------ ------------
INCOME TAX EXPENSE -- --
------------ ------------
NET LOSS $ (632,432) $ (79,150)
============ ============
BASIC LOSS PER COMMON SHARE $ (0.02) $ (0.01)
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 34,841,935 13,197,688
============ ============
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Common Stock Stock
------------------------------ Subscription Accumulated Stockholders'
Shares Amount Receivable Deficit Equity
------------ ------------ ------------ ------------ ------------
Balance, June 1, 1997 13,197,688 $ 1,858,973 $ -- $ -- $ 1,858,973
Net loss for the year ended
May 31, 1998 -- -- -- (1,040,340) (1,040,340)
------------ ------------ ------------ ------------ ------------
Balance,
May 31, 1998 13,197,688 1,858,973 -- (1,040,340) 818,633
Forgiveness of note payable
as contribution of capital -- 487,077 -- -- 487,077
Common stock issued
for cash 14,605,187 372,563 -- -- 372,563
Net loss for the year ended
May 31, 1999 -- -- -- (438,797) (438,797)
------------ ------------ ------------ ------------ ------------
Balance,
May 31, 1999 27,802,875 2,718,613 -- (1,479,137) 1,239,476
Purchase of subsidiary 3,500,000 3,500,000 -- -- 3,500,000
Common stock issued
for cash 1,202,810 1,029,200 (400,000) -- 629,200
Common stock issued
for services 3,996,064 3,996,064 -- -- 3,996,064
Common stock issued
for debt 4,000 4,000 -- -- 4,000
Common stock issued
for equipment 212,500 212,500 -- -- 212,500
Common stock returned and
canceled by officer (4,676,314) -- -- -- --
Common stock issued in
recapitalization 2,800,000 -- -- -- --
Stock offering costs -- (17,100) -- -- (17,100)
Net loss for the
seven months ended
December 31, 1999 -- -- -- (5,817,182) (5,817,182)
------------ ------------ ------------ ------------ ------------
Balances,
December 31, 1999 34,841,935 11,443,277 (400,000) (7,296,319) 3,746,958
Net loss for the three months
ended March 31, 2000
(unaudited) -- -- -- (632,432) (632,432)
------------ ------------ ------------ ------------ ------------
Balance, March 31, 2000
(unaudited) 34,841,935 $ 11,443,277 $ (400,000) $ (7,928,751) $ 3,111,526
============ ============ ============ ============ ============
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months
Ended March 31,
---------------------
2000 1999
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(632,432) $(114,687)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 174,252 --
Changes in operating assets and liabilities:
Accounts receivable 22,979 (4,000)
Inventories -- (22,193)
Other assets (1,087) --
Accounts payable and accrued expenses 28,629 22,874
--------- ---------
Net Cash (Used) by Operating Activities (407,659) (118,006)
--------- ---------
CASH FLOWS USED IN INVESTING ACTIVITIES
Capital expenditures (40,185) (19,124)
--------- ---------
Net Cash Provided (Used) by Investing Activities (40,185) (19,124)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from Company officer 548,970 158,800
Payments on long-term debt -- 6,648
Proceeds from long-term debt 2,490 --
--------- ---------
Net Cash Provided by Financing Activities 551,460 152,152
--------- ---------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 103,616 15,023
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 193,007 31,044
--------- ---------
CASH AND EQUIVALENTS, END OF PERIOD $ 296,623 $ 46,067
========= =========
TMI HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Three Months
Ended March 31,
-----------------------
2000 1999
------- -------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $18,506 $ --
Cash paid for taxes $ -- $ --
SUPPLEMENTAL DISCLOSURE OF
NON-CASH FINANCING ACTIVITIES:
Year ended December 31, 1999:
The President of the Company forgave a $487,077 note payable to him as a
contribution of capital to the Company.
Seven months ended December 31, 1999:
Purchase of subsidiary for common stock valued at $3,500,000. Common stock
issued for debt valued at $4,000. Common stock issued for equipment valued at
$212,500.
TMI HOLDING CORPORATION AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at March 31, 2000 and 1999 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 1999 audited
consolidated financial statements. The results of operations for the
periods ended March 31, 2000 and 1999 are not necessarily indicative
of the operating results for the full years.