This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933, as amended. The date of this
documents is September 26, 2002.
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2002.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to _____________
Commission file number 333-81722.
Easy Money Holding Corporation
(Name of registrant as specified in its Charter)
Virginia 54-1875786
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
5295 Greenwich Road, Suite 108
Virginia Beach, VA 23462
757-499-1126
(Address and telephone number of principal executive offices)
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 and 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
------- -------
As of May 28, 2002, there were 10,635,000 shares of common stock, par value of
$.01 per share, issued and outstanding.
EASY MONEY HOLDING CORPORATION
2001 FORM 10-QSB
TABLE OF CONTENTS
PART I-Financial Information
Item 1 Financial Statements................................................ 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 9
PART II-Other Information
[Items 1-5 Omitted]
Item 6. Exhibits and Reports on Form 8-K.................................... 13
Signatures................................................................... 14
2
Part I-Financial Information
Item 1. Financial Statements
Easy Money Holding Corporation
Balance Sheet and Income Statement
(In thousands except share data)
EASY MONEY HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
March 31, December 31,
Assets 2002 2001
-------- ------------
Current assets
Cash $ 189 $ 190
Amounts due from customers for advances, net 2,542 2,970
Prepaid expenses and other current assets 578 532
-------- -----------
Total current assets 3,309 3,692
Property and equipment, net 954 988
Receivable from related party 135 245
Goodwill, net 187 196
-------- -----------
Total assets $4,585 $5,121
======== ===========
Liabilities and Stockholders' Deficit
Current liabilities
Line of credit facilities - short term $1,133 $1,613
Current installments of long-term debt 346 438
Current installments of capital lease obligations 240 242
Accounts payable 647 769
Accrued salaries and benefits 279 282
Other accrued liabilities 80 92
Payables to related parties 113 105
Payables to officers 1,621 1,655
--------- -----------
Total current liabilities 4,459 5,196
Long term debt 240 263
Capital lease obligations, excluding current installments 150 180
-------- -----------
Total liabilities 4,849 5,639
-------- -----------
Stockholders' deficit
Common stock, $.01 par value. Authorized 50,000,000
shares; issued and outstanding 10,000,000
shares in 2000 and 2001 100 100
Additional paid-in capital 579 579
Accumulated deficit (943) (1,197)
-------- -----------
Total stockholders' deficit (264) (518)
Commitments and contingencies
-------- -----------
Total liabilities and stockholders' deficit $4,585 $5,121
======== ===========
3
EASY MONEY HOLDING CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Income
For the three months ended March 31, 2001 and 2002
(Unaudited)
2002 2001
------ -------
Revenues
Fees and other income $2,685 $2,628
Other 7 86
------ -------
2,692 2,714
------ -------
Expenses
Provision for credit losses 73 285
Salaries and benefits 967 1,014
Other operating expenses 1,279 1,284
Interest expense 161 197
Other - 22
Related Party management fees (42) (306
------ -------
2,438 2,496
------ -------
Net income $ 254 $ 218
====== =======
Net income as reported $ 254 $ 218
Pro forma income tax expense 102 87
------ -------
Pro forma net income $ 152 $ 131
====== =======
Pro forma net income per share-basic $ 0.02 $ 0.01
====== =======
Pro forma net income per share-diluted $ 0.01 $ 0.01
====== =======
4
Consolidated Condensed Statements of Cash Flows
For the three months ending March 31, 2001 and 2002
(Unaudited)
2002 2001
---- ----
Cash flows from operating activities:
Net income $ 254 $ 218
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for credit losses 73 285
Depreciation and amortization 84 88
Loss on disposal of property and equipment - 12
Equity in income (loss) of joint ventures - 28
Changes in assets and liabilities increasing (decreasing)
cash flows from operations:
Amounts due from customers for advances 355 484
Prepaid expenses and other current assets (47) 72
Accounts payable and accrued expenses (84) (248)
------ ---------
Net cash provided by operating activities 635 939
------ ---------
Cash flows from investing activities:
Additions to property and equipment (6) -
------ ---------
Net cash used in investing activities (6) -
------ ---------
Cash flows from financing activities:
Net repayments under line of credit facilities (591) (840)
Net borrowings from related parties 118 88
Net borrowings from (repayments to) officers (34) 25
Principal repayments on long-term debt (57) (174)
Repayments of obligations under capital leases (66) (96)
Net cash used in financing activities (630) (997)
------ ---------
Net decrease in cash (1) (58)
Cash at beginning of period $ 190 $ 570
------ ---------
Cash at end of period $ 189 $ 512
====== =========
Supplemental disclosures:
Cash paid during the period for interest $ 161 $ 197
====== =========
Supplemental noncash investing and financing activities:
Assets acquired under capital leases $ 35 -
====== =========
5
Easy Money Holding Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements,
including the notes thereto, include the accounts of Easy Money Holding
Corporation (the "Company") and its wholly owned subsidiaries. Such unaudited
consolidated financial statements are condensed and do not include all
disclosures and footnotes required by generally accepted accounting principles
for complete financial statements. Such interim period financial statements
should be read in conjunction with the Company's consolidated financial
statements which are included in the Company's December 31, 2001 Annual Report
on Form 10-KSB. All significant intercompany accounts and transactions have been
eliminated in consolidation. The consolidated financial statements as of March
31, 2002 and for the periods ended March 31, 2002 and 2001 are unaudited, but in
management's opinion, include all adjustments (consisting of only normal
recurring adjustments) considered necessary to present fairly the financial
position, results of operations and cash flows for such interim periods.
Operating results for the period ended March 31, 2002 are not necessarily
indicative of the results that may be expected of the full fiscal year.
Note 2 - Debt
The Company currently maintains a credit line facility that permits us to
borrow up to an advance limit, which as of March 31, 2002, was $1,300,000. The
lender may increase or decrease the advance limit in its discretion. Borrowings
under the line of credit bear interest at a base rate (as specified by the
lender), plus 10%, payable monthly. We collateralized these borrowings by a
security interest in funds due from customers for advances and our property and
equipment and general intangibles. The financing agreement, among other things,
requires the consent of the lender for mergers, consolidations and acquisitions,
restricts changes in the nature of our business, allows the lender to terminate
the agreement and accelerate the debt at any time, restricts stockholder
distributions to amounts related to state and federal income taxes owed by them
and restricts repayment of principal on the loans made to us by our
shareholders. Outstanding borrowings under the line of credit as of March 31,
2002, amounted to $1,043,000.
On March 20, 2002, the Company amended this financing agreement to reduce
the line of credit facility advance limit to $1,300,000 with a subsequent
reduction of $54,167 each month for a successive twenty-four (24) month period
commencing on July 1, 2002 and terminating on June 1, 2004.
The Company also maintains a second financing agreement with a commercial
bank that permitted the Company to borrow up to $400,000. During 2001 this line
of credit facility's outstanding balance was refinanced through a term note
payable that at March 31, 2002 had a balance of approximately $330,000. As of
March 31, 2002, the Company paid down approximately $32,000 related to this
financing agreement. Over the remainder of the year, the Company is obligated to
pay approximately $90,000 related to this financing agreement.
Note 3 - Earnings Per Share
Net income per basic share is computed based on the average common shares
outstanding during the period. Net income per diluted share is computed based on
the average common shares outstanding during the period adjusted for the effect
of
6
potential common stock equivalents. The computation for basic and diluted net
income per share is as follows for the three months ended March 31, 2001 and
2002:
2002 2001
---- ----
Pro forma net income $ 152 $ 131
------- -------
Average common shares outstanding
Basic 10,000 10,000
Dilutive securities- warrants 924 -
------- -------
Diluted 10,924 10,000
======= =======
Proforma net income per share:
Basic $ 0.02 $ 0.01
======= =======
Diluted $ 0.01 $ 0.01
======= =======
Note 4 - Initial Registration with the SEC
On April 1, 2002, the Company became effective through a registration with
the SEC under the Securities Act of 1933 to become a public company for the
purpose of creating a market to sell shares to the public. The offering is on a
best efforts basis. There is no underwriter. The Company, selling shareholders
and consultants are selling shares of common stock at a price of $2.50 per
share. The Company has set a 180-day deadline to sell a minimum of 100,000
shares from the effective date of the registration statement filed April 1,
2002. The proceeds of the sale will be deposited into an escrow account until
the minimum is sold. If the Company does not sell the minimum number of shares
with in 180 days, the proceeds will be returned without interest.
Note 5 - Contingencies
In certain states, the Company's operations are regulated under state
laws, which establish, among other things, maximum loan, advance and fee amounts
that may be charged. The Company believes that its procedures conform to the
applicable laws and regulations in all states in which it operates.
The Company has been named in four lawsuits that allege that the
Company engaged in deferred presentment transactions, which violate the Federal
Racketeering Influenced and Corrupt Organizations Act and various state statutes
and regulations. Class certification has been obtained in one of these suits.
The range of loss on this suit is zero to the plaintiff's demand of $40 million.
Although there is a possibility of a loss in the remaining suits, management is
unable to estimate the range of loss due to the procedural status of these cases
and given the absence of precedent related to significant rulings on cases of
this nature. The Company intends to vigorously defend these claims. No accrual
of a loss contingency has been recorded by the Company related to these lawsuits
because the Company believes that it is not probable that a loss will be
incurred related to these lawsuits.
Additionally, the Company is, from time to time, a defendant (actual or
threatened) in certain other lawsuits encountered in the ordinary course of its
business, the resolution of which, in the opinion of management, should not
7
have a material adverse effect on the Company's financial position, results of
operations or cash flows.
The Company has granted to certain non-employees and one employee, in
exchange for services they have and will provide to the Company, the right to
receive shares of the Company's stock in the event that the Company is
successful in becoming a public company registered with the Securities and
Exchange Commission. Because of the issuance of shares is contingent on the
occurrence of a future event, no cost has been recognized in these financial
statements for these transactions. The terms of these agreements are described
below.
In July 1998, in connection with an employee's employment agreement,
the Company agreed that if it were successful in becoming a public company
registered with the Securities and Exchange Commission, it would grant the
employee the option to purchase up to 25,000 shares at $1.00 per share. The
agreement further provided that in the event the value of the shares is less
than $4.00, the employee will be paid the difference. Compensation cost of at
least $75,000 will be recognized immediately subsequent to the completion of a
public registration. The employee recently exercised the option, and he loaned
$75,000 back to the Company under a note bearing interest at a rate of 18%. The
note is payable on demand.
In May 2000, the Company entered into consulting agreements with three
unrelated third parties that agreed to provide certain services to the Company.
On April 1, 2002 these parties received a total of 600,000 shares of stock. An
expense will be measured and recognized immediately subsequent to the completion
of a public registration based on the market price of the stock at that date.
Based on an estimated market price of $2.50 per share, an expense of $1,500,000
will be recorded.
In August 2000, the Company entered into an agreement with an unrelated
third party which agreed to loan the Company $50,000. In addition, if the
Company is successful in becoming a public company registered with the
Securities and Exchange Commission, this party would receive shares of stock
with a value of $50,000. In January 2002, the Company renegotiated this
agreement such that this party will receive shares of stock with a value of
$25,000. The Company recently issued 10,000 shares and satisfied its $50,000
debt to the third party. An expense of $25,000 will be recognized immediately
subsequent to the completion of a public registration.
8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward looking Information
This report contains "forward-looking statements" as defined in Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
and Exchange Act of 1934, as amended, and is subject to the safe harbor created
by such acts. Any statements contained in this report that are not statements of
historical fact are forward-looking statements. Without limiting the foregoing,
the words "believes," "anticipates," "plans," "expects," "seeks" and similar
expressions are intended to identify forward-looking statements. Although the
Company believes that the expectations reflected in forward-looking statements
are reasonable; there can be no assurances that such expectations will prove to
be accurate. Generally, these statements relate to business plans, strategies,
anticipated strategies, levels of capital expenditures, liquidity and
anticipated capital funding needed to effect the business plan. All phases of
the Company's operations are subject to a number of uncertainties, risks and
other influences, many of which are outside the control of the Company and
cannot be predicted with any degree of accuracy. Factors such as changes in
regional or national economic conditions, changes in governmental regulations,
unforeseen litigation, changes in interest rates or tax rates, future business
decisions and other uncertainties may cause results to differ materially from
those anticipated by some of the statements made in this report. In light of the
significant uncertainties inherent in the forward-looking statements made, the
inclusion of such statements should not be regarded as a representation of the
Company or any other person that the objectives and plans of the Company will be
achieved. Security holders are cautioned that such forward-looking statements
contained this report speak only as of the date of the report and the Company
expressly disclaims any obligation or undertaking to release any updates or
revisions to any such statement to reflect any change in the Company's
expectations or any change in events, conditions or circumstance on which any
such statement is based.
General
Easy Money Holding Corporation provides specialty financial services by
advancing cash to customers and obtaining an authorization to draft their
personal checking account and agreeing to delay the draft until they redeem
their contract with us or until a short holding period has expired, which on
average is 18 days. We target customers who are currently employed and have an
active checking account. In exchange for our service, we receive a fee ranging
from approximately 15% to 30% of the amount of cash advanced to the customer. In
addition, through a limited number of our branches we also provide check cashing
services, money orders, Western Union payments and title advances that are
secured by the borrower's car title. We recently introduced an electronic
advance program that enables us to initiate and service a customer's cash
advance so that the customer need not go to a store. As of March 31, 2002 the
Company operated 52 stores in the following states: California (1 store), Kansas
(1 store), Louisiana (34 stores), New Mexico (9 stores), Nevada (5 stores),
Tennessee (1 store) and Utah (1 store).
We have made a significant investment in our electronic systems and
funding methodologies over the past 18 months. These investments have translated
into more sophisticated and efficient management systems. Based on first Quarter
credit losses in 2002 compared to 2001, our systems are having a dramatic effect
on our underwriting and collection mechanisms. In addition, due to the
historical investment in our Information Systems, we are now in a position to
further leverage these technologies without the need for additional resources.
Management believes that substantial economies of scale can be obtained by
directing additional capital in our core business.
9
Beginning in 2000, we established a centralized processing center that
initiates and services various products without the need for a storefront
location. If a customer meets our flexible underwriting requirements, a contract
is sent electronically and the transaction is complete. The customer has two
options; he or she can opt for an "Easy Money" debit card or we can deposit the
advance directly into their personal checking account. This innovation has
allowed us to enter markets that have not previously been served and therefore,
we have encountered little or no competition. The lack of competition has
allowed us to aggressively price our services and strengthen underwriting
guidelines. This has resulted in an increase in fee revenues, reduced overhead
and profit margins.
Results of Operations
This table sets forth, for the periods indicated, the components of our
consolidated condensed statements of income expressed as a percentage of
revenues:
Three Months Ended
March 31,
2002 2001
-------------------
100.00% 100.00%
======== ========
Revenues
Expenses:
Provision for credit losses 2.73% 10.83%
Salaries and benefits 36.01% 38.60%
Other operation expenses 47.65% 48.86%
Interest expense 5.99% 7.49%
Other 0.00% 0.83%
Related party management fee (1.56)% (11.62)%
-------- --------
90.80% 94.99%
-------- --------
Net income 9.20% 5.01%
Pro forma income tax expense 3.68% 2.00%
-------- --------
Pro forma net income 5.52% 3.01%
======== ========
Three Months Ended March 31, 2001 Compared to March 31, 2002
Revenues: Revenues increased 2.1% or $57,000 from $2,628,000 in 2001 to
$2,685,000 in 2002. Despite a reduction in stores from 58 at March 31, 2001 to
52 at March 31, 2002, we managed to increase our comparative revenues. This was
a result of a company wide focus on maintaining existing store revenues and a
continued growth within the electronic division. The decrease of 6 stores was in
low volume or low profit margin locations and areas where statutory changes
limited our business practices. Average revenues per store, excluding the
electronic division, for the quarter ended March 31, 2001 and March 31, 2002
were $41,800 and $41,100, respectively. Revenues for our electronic division
increased 342% from $160,000 to $548,000 for March 31, 2001 and 2002
respectively.
Provision for Credit Losses: For the three months ended March 31, 2001
our provision for credit losses was approximately $285,000 (10.8% of revenues)
compared to $73,000 (2.7% of revenues) for the three months ended March 31,
10
2002. The decrease was a result of a continued reengineering of our collections
systems to take advantage of technological and software improvements within our
industry and a management focus on strict compliance with underwriting
guidelines. Our net charge-offs as a percentage of gross advances for the March
31, 2002 period as compared to the March 31, 2001 period was .52% versus 2.06%
respectively. The percentage of our allowance for credit losses as compared to
our total advances outstanding at March 31, 2002 versus March 31, 2001 was 5.05%
compared to 5.5% respectively. The decrease from March 31, 2001 to March 31,
2002 was a result of better controls in our systems and a stronger performing
portfolio at March 31,2002.
Salaries and Benefits: Salaries and benefits decreased approximately
$48,000 for the period ended March 31, 2002 as compared to March 31, 2001.
Salaries and benefits were $ 1,014,000(38.6% of revenues) for the three months
ended March 31, 2001 and $967,000 (36.0% of revenues) for the three months ended
March 31, 2002. This decrease is a result of fewer stores, manual processes
being replaced by technology and a company wide focus to increase individual
productivity.
Interest Expense: Interest expense decreased $36,000 during 2002
compared to 2001 primarily due to better collections and underwriting guidelines
resulting in a reduction of the credit line.
Related Party Management Fee: Related Party Management fee decreased by
$263,000 to $42,000 during the three months ended March 31, 2002 as compared to
$305,000 for the three months ended March 31, 2001. This reduction is largely
due to the substantial reduction in business conducted by related parties.
Management does not anticipate generating significant fees in future periods as
compared to historical periods. The absence of these fees in 2001 would have
resulted in an operating loss of approximately $88,000 for the period ending
March 31, 2001 compared to operating income of $212,000 for the period ending
March 31, 2002.
Net Income and Pro Forma Net Income: We had net income of $254,000 for
the three months ended March 31, 2002, compared to net income of $218,000 for
the three months ended March 31,2001. After a pro forma income tax expense of
$102,000 and $87,000 in 2002 and 2001, respectively, we had pro forma 2002 net
income of $152,000 compared to pro forma 2001 net income of $131,000. The
increase in income from 2001 to 2002 was primarily due to (1) a stronger
portfolio as discussed in the provision for credit losses, (2) and the continued
growth of our electronic program. The pro forma income tax rate remained
consistent at 40.2% for the quarter ended March 31, 2002 as compared to 40.0%
for the quarter ended March 31,2001.
Liquidity, Capital Resources and Financial Condition
We use our cash to fund advances to customers, operating costs for
payroll, occupancy, general and administrative expenses, and investments in
capital equipment primarily to upgrade our system capabilities. Our sources of
cash are funds generated by our operations and borrowings from financial
institutions.
Cash Flows from Operating Activities: During the three months ended
March 31, 2001 net cash provided by operating activities was $939,000. For the
three months ended March 31, 2002 we had net cash provided by operating
activities of $635,000. This decrease in net cash provided by operating
activities was the result of increased customer retention in the first quarter
of 2002 as compared to 2001. Management believes this was the result of targeted
advertising campaigns and a company wide focus on customer retention.
11
Cash Flows from Financing Activities: During the three months ended
March 31, 2001 we had net cash used in financing activities of $997,000. During
the three months ended March 31, 2002 we had net cash used in financing
activities of $630,000. This reduction in cash used in financing activities is
due to less capital utilized for purposes of reducing our lines of credit in
2002.
We currently maintain a credit line facility that permits us to borrow
up to an advance limit, which as of March 31, 2002, was $1,300,000. The lender
may increase or decrease the advance limit in its discretion. Borrowings under
the line of credit bear interest at a base rate (as specified by the lender),
plus 10%, payable monthly. We collateralized these borrowings by a security
interest in funds due from customers for advances and our property and equipment
and general intangibles. The financing agreement, among other things, requires
the consent of the lender for mergers, consolidations and acquisitions,
restricts changes in the nature of our business, allows the lender to terminate
the agreement and accelerate the debt at any time, restricts stockholder
distributions to amounts related to state and federal income taxes owed by them
and restricts repayment of principal on the loans made to us by our
shareholders. Outstanding borrowings under the line of credit as of March 31,
2002, amounted to $1,043,000.
On March 20, 2002, we amended this financing agreement to reduce the
line of credit facility's advance limit by $54,167 each month for a successive
twenty-four(24) month period commencing on July 1, 2002 and terminating on June
1, 2004.
We also maintain a second financing agreement with a commercial bank
that permitted us to borrow up to $400,000. During 2001 this line of credit
facility's outstanding balance was refinanced through a term note payable that
at March 31, 2002 had a balance of approximately $330,000. As of March 31, 2002,
we paid down approximately $32,000 related to this financing agreement. Over the
remainder of the year, we are obligated to pay approximately $90,000 related to
this financing agreement.
We have a deficiency in working capital of $1,149,000. Nonetheless,
we believe that by limiting payments to shareholders for paydown of shareholder
debt (as of March 2002, the amount of shareholder debt was $1,621,000) and our
agreed paydown of our line of credit facilities ($56,167 per month beginning
July 2002) and reinvesting current and future period earnings, that we will have
sufficient cash flow to meet our working capital needs. Our working capital and
customer growth plans beyond the next 12 months may require additional debt
and/or equity financing. The estimate of the time that our funding sources will
be sufficient to meet our current needs is a forward-looking statement that is
subject to risks and uncertainties. Actual results and working capital needs may
differ materially from our estimates.
Contingencies
In certain states, our operations are regulated under state laws, which
establish, among other things, maximum loan, advance and fee amounts that may be
charged. We believe that our procedures conform to the applicable laws and
regulations in all states in which we operate.
We have been named in four lawsuits that allege that we engaged in
deferred presentment transactions, which violate the Federal Racketeering
Influenced and Corrupt Organizations Act and various state statutes and
regulations. Class certification has been obtained in one of these suits. The
range of loss on this suit is zero to the plaintiff's demand of $40 million.
Although there is a possibility of a loss in the remaining suits, management is
unable to estimate the range of loss due to the procedural status of these cases
and given the absence of precedent related to significant rulings on
12
cases of this nature. We intend to vigorously defend these claims. No accrual
of a loss contingency has been recorded by the Company related to these
lawsuits because we believe that it is not probable that a loss will be incurred
related to these lawsuits.
Additionally, we are, from time to time, a defendant (actual or
threatened) in certain other lawsuits encountered in the ordinary course of its
business, the resolution of which, in the opinion of management, should not have
a material adverse effect on our financial position, results of operations or
cash flows.
We have granted to certain non-employees and one employee, in exchange
for services they have and will provide to the Company, the right to receive
shares of the Company's stock in the event that we are successful in becoming a
public company registered with the Securities and Exchange Commission. Because
of the issuance of shares is contingent on the occurrence of a future event, no
cost has been recognized in these financial statements for these transactions.
The terms of these agreements are described below.
In July 1998, in connection with an employee's employment agreement, we
agreed that if we were successful in becoming a public company registered with
the Securities and Exchange Commission, we would grant the employee the option
to purchase up to 25,000 shares at $1.00 per share. The agreement further
provided that in the event the value of the shares is less than $4.00, the
employee would be paid the difference. Compensation cost of at least $75,000
will be recognized immediately subsequent to the completion of a public
registration. The employee recently exercised the option, and he loaned $75,000
back to the Company under a note bearing interest at a rate of 18%. The note is
payable on demand.
In May 2000, we entered into consulting agreements with three unrelated
third parties that agreed to provide certain services to the Company. On April
1, 2002, these parties received a total of 600,000 shares of stock. An expense
will be measured and recognized immediately subsequent to the completion of a
public registration based on the market price of the stock at that date. Based
on an estimated market price of $2.50 per share, an expense of approximately
$1,500,000 will be recorded.
In August 2000, we entered into an agreement with an unrelated third
party which agreed to loan the Company $50,000. In addition, if we are
successful in becoming a public company registered with the Securities and
Exchange Commission, this party would receive shares of stock with a value of
$50,000. In January 2002, we renegotiated this agreement such that this party
will receive share of stock with a value of $25,000. We recently issued 10,000
shares and satisfied our $50,000 debt to the third party. An expense of $25,000
will be recognized immediately subsequent to the completion of a public
registration.
PART II-Other Information
Item 6. Exhibits and Reports on Form 8-K
None.
13
SIGNATURES
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 thereunto duly authorized.
(Registrant)
Easy Money Holding Corporation
By: /s/David Greenberg May 28, 2002
-------------------------------------
David Greenberg, President
By: /s/ David M. Kilby May 28, 2002
-------------------------------------
David M. Kilby, Chief Financial
Officer (principal financial and
accounting officer)
14