UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 Or 15(d) of the Securities Exchange
Act of 1934; For the quarterly period ended: June 30, 2003
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 000-08835
TAURUS ENTERTAINMENT COMPANIEES, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0736215
(State or other jurisdiction IRS Employer
of incorporation or organization) Identification No.)
19901 Southwest Freeway, Suite 209
Sugar Land, Texas 77479
(Address of principal executive offices, including zip code)
(281) 207-5484
(Registrant's telephone number, including area code)
APPLICABLE ONLY TO CORPORATE ISSUERS
As of August 15, 2003, there were 10,208,004 shares of common stock, $.01
par value, outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
TAURUS ENTERTAINMENT COMPANIES, INC. FORM 10-QSB
For the Third Quarter Ended June 30, 2003
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
a. Consolidated Balance Sheet as of June 30, 2003
b. Consolidated Statements of Operations for the three month period
ended June 30, 2003 and the period from Inception, March 18, 2003
through June 30, 2003
c. Consolidated Statements of Cash Flows for the period from
Inception, March 18, 2003 through June 30, 2003
d. Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Controls and Procedures
PART II. OTHER INFORMATION
Item 2. Changes in Securities
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
CERTIFICATIONS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Forward Looking Information
Various forward-looking statements have been made in this Form 10-QSB.
Forward-looking statements may also be in the Company's other reports filed
under the Securities Exchange Act of 1934, in its press releases and in other
documents. In addition, from time to time, the Company, through its management,
may make oral forward-looking statements.
Forward-looking statements are only expectations, and involve known and unknown
risks and uncertainties, which may cause actual results in future periods and
other future events to differ materially from what is currently anticipated.
Certain statements in this Form 10-QSB, including those relating to the
Company's expected results, the accuracy of data relating to, and anticipated
levels of, its future revenues, gross margins and earnings, its anticipated cash
requirements and sources, are forward-looking statements. Such statements
involve risks and uncertainties, which may cause results to differ materially
from those set forth in these statements. Factors which may cause actual results
in future periods to differ from current expectations include, among other
things, the continued availability of sufficient working capital, the
availability of adequate sources of capital, the successful integration of new
employees into existing operations, the continued desirability and customer
acceptance of existing and future products, the success of competitive products,
the success of the Company's programs to strengthen its operational and
accounting controls and procedures. In addition to these factors, the economic
and other factors identified in this Form 10-QSB, including but not limited to
the risk factors discussed herein and in the Company's previously filed public
documents could affect the forward-looking statements contained in herein and
therein.
Forward-looking statements generally refer to future plans and performance, and
are identified by the words "believe", "expect", "anticipate", "optimistic",
"intend", "aim", "will" or the negative thereof and similar expressions. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of which they are made. The Company undertakes
no obligation to update publicly or revise any forward-looking statements.
Financial Statements and Notes
In the opinion of management, the accompanying unaudited financial statements
included in this Form 10-QSB reflect all adjustments necessary for a fair
presentation of the results of operations for the periods presented. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the full year.
TAURUS ENTERTAINMENT COMPANIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
June 30, 2003
(Unaudited)
ASSETS
Current assets
Cash $ 18
==========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Accounts payable $ 3,000
Notes payable 130,000
----------
Total current liabilities 133,000
----------
STOCKHOLDER'S DEFICIT:
Common stock, $.001 par value, 20,000,000 shares
authorized, 10,208,004 shares issued and outstanding 10,208
Additional pain in capital 150,687
Deficit accumulated during the development stage (293,877)
----------
Total Stockholder's Deficit (132,982)
----------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT $ 18
==========
TAURUS ENTERTAINMENT COMPANIES, INC.
(A DEVELOPMENT STAGE COMPANY)
Three Months Ended June 30, 2003 and Period from
Inception, March 18, 2003, Through June 30, 2003
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Inception
Ended through
June 30, 2003 June 30, 2003
--------------- ---------------
General and administrative $ 43,877 $ 43,877
Transaction costs 250,000 250,000
--------------- ---------------
Net loss $ (293,877) $ (293,877)
=============== ===============
Net loss per share:
Basic and diluted $ (.03)
===============
Weighted average shares outstanding:
Basic and diluted 9,761,601
===============
TAURUS ENTERTAINMENT COMPANIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Period from March 18, 2003 (Inception) Through June 30, 2003
(Unaudited)
Inception
through June 30,
2003
------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (293,877)
Adjustments to reconcile net loss to cash used in
activities:
Purchase price of Taurus financed by seller 130,000
Changes in current assets and
liabilities:
Accounts payable 3,000
------------------
NET CASH USED IN OPERATING (160,877)
------------------
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of common stock 160,895
NET INCREASE IN CASH 18
Cash, beg. of period -
------------------
Cash, end of period $ 18
==================
Supplemental information:
Income taxes paid $ -
==================
Interest paid $ -
==================
TAURUS ENTERTAINMENT COMPANIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Taurus Entertainment
Companies, Inc., ("Taurus") have been prepared in accordance with accounting
principles generally accepted in the United States of America and the rules of
the Securities and Exchange Commission ("SEC"), and should be read in
conjunction with the audited financial statements and notes thereto contained in
the Form 8-K/A filed with the SEC August 11, 2003. In the opinion of management,
all adjustments, consisting of normal recurring adjustments, necessary for a
fair presentation of financial position and the results of operations for the
interim periods presented have been reflected herein. The results of operations
for interim are not necessarily indicative of the results to be expected for the
full year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited financial statements in the Form 8-K/A
have been omitted.
Stock Options:
- --------------
The Company accounts for its stock-based employee compensation plans under
Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
to Employees. Statement of Financial Accounting Standard ("FAS") No. 148,
Accounting for Stock-Based Compensation-Transition and Disclosure, issued in
December 2002 requires pro forma net income (loss) and pro forma net income
(loss) per share to be disclosed in interim financial statements. For the period
ended June 30, 2003, Blue Star's pro form net loss and net loss per share are
equal to the net loss and net loss per share reported herein.
NOTE 2 - REVERSE ACQUISITION
On June 12, 2003, Taurus exchanged 9,650,000 shares of common stock for 100% of
the outstanding common stock of Bluestar Physical Therapy, Inc. ("Bluestar")
Ricks Cabaret International, Inc, the former parent company of Taurus, purchased
all of the assets and assumed all of the liabilities of Taurus that existed
immediately prior to the merger with Bluestar for $20,000. Rick's indemnified
Taurus for all of the liabilities that existed or that may arise in the future
related to the assets transferred to Rick's. Taurus agreed to pay $270,000 to
Rick's. Taurus paid $140,000, net of the $20,000 due from Rick's at closing,
with $60,000 due on July 15, 2003, and $70,000 due August 15, 2003. The majority
stockholder personally guaranteed the payment of the remaining $130,000.
For accounting purposes, the merger will be treated as an acquisition of Taurus
and a recapitalization of Bluestar. Following the merger, the stockholder of
Bluestar owns 9,650,000, or 95% of the outstanding common stock of Taurus.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
We are a development stage company with a limited operating history. In June
2003, we merged with Bluestar Physical Therapy which was accounted for as a
recapitalization of Bluestar. Bluestar is a development stage company which
intends to acquire, develop, and operate licensed outpatient physical therapy
clinics nationwide. The clinics will provide post-operative care and treatment
for a variety of orthopedic related disorders and sports-related injuries only
on an outpatient basis. Bluestar's growth strategy is to acquire and develop
outpatient physical therapy clinics initially in Texas and the South and later
to expand on a national basis.
We have a limited operating history on which to base an evaluation of our
business and prospects. Our prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stages of development, particularly companies in new and rapidly evolving
markets such as outpatient physical therapy. We will encounter various risks in
implementing and executing our business strategy. We can provide no assurance
that we will be successful in addressing such risks, and the failure to do so
could have a material adverse effect on our business.
From inception through June 30, 2003, we have utilized funds contributed by our
majority stockholder. We have not recorded any revenues and have incurred net
losses from operations totaling approximately $293,877 from inception through
June 30, 2003.
Our current cash forecast indicates that there will be negative cash flow from
operations for the foreseeable future. We are currently seeking short-term and
long-term debt or equity financing sufficient to fund working capital and
acquisitions of physical therapy clinics. However, we can provide no assurance
that we will be successful in raising funds, that the amount and terms of any
financing will be acceptable.
RESULTS OF OPERATIONS
The Company's loss for the three months ended June 30, 2003 and period from
inception through June 30, 2003 totaled $293,877. The Company was incorporated
in March 2003, however, we did not incur any expenses until May 2003. Expenses
consist of 250,000 paid to the seller of Taurus as well as legal, accounting and
consulting expenses.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2003 we had cash of $18. We will require significant working capital
in order to develop our business plan as intended.
We are currently seeking additional capital so we may increase our operations
and execute our business plan as intended. Although we have no current
commitments for capital, we may raise additional funds through: public offerings
of equity, securities convertible into equity or debt, private offerings of
securities or debt, or other sources.
Our investors should assume that any additional funding will cause substantial
dilution to current stockholders. In addition, we may not be able to raise
additional funds on favorable terms, if at all.
PART II OTHER INFORMATION
Item 2. Changes In Securities
During the three month period ended June 30, 2003, we issued
unregistered securities in a transaction summarized below.
The following transaction was effected on reliance upon exemptions from
registration under the Securities Act of 1933 as amended (the "Act") as provided
in Section 4(2) thereof or, upon exemptions from registration under the Act as
provided in Regulation D thereof. Each certificate issued for unregistered
securities contained a legend stating that the securities have not been
registered under the Act and setting forth the restrictions on the
transferability and the sale of the securities. No underwriter participated in,
nor did we pay any commissions or fees to any underwriter in connection with
this transaction.
In June 2003, we issued a total of 9,650,000 shares of our common stock to
Alfred Oglesby as part of the Stock Exchange Agreement with Bluestar Physical
Therapy, Inc, as reported in our Form 8-K filed on June 16, 2003. We issued
these securities in reliance on Section 4(2) of the Act. This transaction did
not involve a public offering. The investor was knowledgeable about our
operations and financial condition. We believe that the investor had knowledge
and experience in financial and business matters that allowed him to evaluate
the merits and risk of receipt of these securities
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 31.1 - Certification of Chief Executive Officer and Chief
Financial Officer of Taurus Entertainment Companies, Inc. required by Rule 13a -
14(1) or Rule 15d - 14(a) of the Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 -- Certification of Chief Executive Officer and
Chief Financial Officer of Taurus Entertainment Companies, Inc. pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63.
(b) Reports on Form 8-K
The Company filed Form 8-K relating to a Change of Control of
Registrant on June 16, 2003 containing Item 1 - Change of Control of Registrant,
Item 2 - Acquisition and Disposition of Assets, and Item 7 - Financial
Statements.
The Company filed Form 8-KA on August 11, 2003 containing Item 7
- - Financial Statement and Exhibits for the June 12, 2003 transaction.
The Company also filed Form 8-K relating to a change in auditors
on July 9, 2003 containing Item 4 - Changes in Registrant's Certifying
Accountant.
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 hereunto duly authorized.
TAURUS ENTERTAINMENT COMPANIES, INC.
Date: August 19, 2003 By: /s/ Alfred Oglesby
----------------------
Alfred Oglesby
Chief Executive Officer and
Chief Financial Officer