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 February 28, 2001
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1939 for the transition period ____ to______
COMMISSION FILE NUMBER: 0-22749
COMBINE CORP.
(Exact name of registrant as specified in its charter)
Delaware 87-0415594
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
129 Front St., Penthouse Suite, Hamilton HM12 Bermuda 441 296 4545
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices, including Registrant's zip code
and telephone number)
CTC Cosmetics Holdings Company, Inc.
- --------------------------------------------------------------
Former name, former address and former fiscal year, if changed
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 post 90 days. Yes [ ] No [X]
The number of shares of the registrant's common stock issued as of February 28,
2001, 6,477,114 shares.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
TABLE OF CONTENTS PAGE
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheets 3
(b) Statements of Operations 4
(c) Statements of Cash Flows 5
(d) Statement of Shareholders' Equity 6
(e) Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION 9
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults On Senior Securities
Item 4. Submission of Items to a Vote
Item 5. Other Information
Item 6.
(a) Exhibits
(b) Reports on Form 8K
SIGNATURES 10
2
COMBINE CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AS OF FEBRUARY 28, 2001 AND AUGUST 31, 2000
February 28, August 31,
2001 2000
------------ ------------
(UNAUDITED)
ASSETS
Cash $ -- $ --
------------ ------------
Total assets $ -- $ --
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 38,501 $ 32,882
Loans from shareholders 26,579 19,579
Accrued interest on debentures -- 52,127
------------ ------------
Total current liabililties 65,080 104,588
Shareholders' equity
Preferred stock, $.01 par value 10,000,000 shares
authorized, no shares issued and outstanding
Common stock (par value $.004) 50,000,000 shares authorized;
February 28, 2001 and August 31, 2000- 6,477,114 and 262,263
shares issued and outstanding respectively 25,908 1,049
Paid in capital 1,894,473 1,866,506
Accumulated deficit during development stage (1,985,461) (1,972,143)
------------ ------------
Total shareholders' equity (65,080) (104,588)
Total liabilities and shareholders' equity $ -- $ --
============ ============
The accompanying notes are an integral of part of these financial statements.
3
COMBINE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2001 AND 2000
AND CUMULATIVE FROM SEPTEMBER 1, 1997 TO FEBRUARY 28, 2001
(UNAUDITED)
Cumulative from
September 1,
Six months ended Six months ended 1997 to
February 28, February 28, February 28,
2001 2000 2001
------------ ------------ ------------
Expenses
Professional fees $ 12,619 $ 4,064 $ 44,613
Interest 699 1,944 55,126
------------ ------------ ------------
Total expenses 13,318 6,008 99,739
------------ ------------ ------------
Loss before income taxes and divestiture (13,318) (6,008) (99,739)
Income tax -- -- --
------------ ------------ ------------
Loss before divestiture (13,318) (6,008) (99,739)
Divestiture of CTC Cosmetics Holdings
Company, Inc. -- -- (1,885,722)
------------ ------------ ------------
Net (loss) $ (13,318) $ (6,008) $(1,985,461)
============ ============ ============
Net (loss) per share $ (0.003) $ (0.114) $ (0.451)
============ ============ ============
Weighted average number of shares
outstanding 4,405,497 262,263 4,405,497
============ ============ ============
The accompanying notes are an integral of part of these financial statements.
4
COMBINE CORP.
STATEMENTS OF CASH FLOWS
(A DEVELOPMENT STAGE COMPANY)
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2001 AND 2000
AND CUMULATIVE FROM SEPTEMBER 1, 1997 TO FEBRUARY 28, 2001
(UNAUDITED)
Cumulative from
September 1,
Six months ended Six months ended 1997 to
February 28, February 28, February 28,
2001 2000 2001
------------ ------------ ------------
CASH FLOW FROM OPERATING ACTIVITY
Net (loss) $ (13,318) $ (6,008) $(1,985,461)
Adjustments to reconcile net income to net cash
Divestiture of CTC Cosmetics Holdings
Company, Inc. -- -- 1,885,722
Shares issued for accrued interest 699 -- 72,826
Increase (decrease) in operating liabilities
Accrued interest -- 1,944 (17,700)
Accounts payable 5,619 (389) 18,034
------------ ------------ ------------
Net cash used in operating activity (7,000) 4,453 (26,579)
CASH FLOWS FROM FINANCING ACTIVITY
Increase in shareholder loans 7,000 4,453 26,579
------------ ------------ ------------
Net cash provided from (used for) all activities -- -- --
Cash balance at beginning of year -- -- --
------------ ------------ ------------
Cash balance at February 28 $ -- $ -- $ --
============ ============ ============
The accompanying notes are an integral of part of these financial statements.
5
COMBINE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY
FROM SEPTEMBER 1, 1997 TO FEBRUARY 28, 2001
(UNAUDITED)
Accumulated
Common Stock Addition deficit during
----------------------------- Paid-In development
Shares Amount Capital stage
------------ ------------ ------------ ------------
Balance at September 30, 1997 10,157,987 $ 64,467 $ 1,283,088 $(1,885,722)
Issued 10,667 shares of common stock in
for interest accrued 10,667 43 19,957
Net loss -- -- -- (42,900)
------------ ------------ ------------ ------------
Balance at August 31, 1998 10,168,654 64,510 1,303,045 (1,928,622)
Conversion of debentures to common stock 16,000,000 64,000 436,000
Net loss -- -- -- (13,686)
------------ ------------ ------------ ------------
Balance at August 31, 1999 26,168,654 128,510 1,739,045 (1,42,308)
Common stock reconstituted such that one new
share was issued for 100 old shares (25,906,391) (127,461) 127,461 --
Net loss -- -- -- (29,835)
------------ ------------ ------------ ------------
Balance at August 31, 2000 262,263 $ 1,049 $ 1,866,506 $(1,972,143)
Issued common stock for interest accrued on
October 31, 2000 at the conversion rate of
$0.0085 per share 6,214,851 24,859 27,967 --
Net loss -- -- -- (13,318)
------------ ------------ ------------ ------------
Balance at February 28, 2001 6,477,114 $ 25,908 $ 1,894,473 $(1,985,461)
============ ============ ============ ============
The accompanying notes are an integral of part of these financial statements.
6
COMBINE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2001 AND 2000
(UNAUDITED)
1. GENERAL
Combine Corp. (the "Company"), formerly known as CTC Cosmetics Holdings Company,
Inc., is a Delaware corporation, which was incorporated in the State of Delaware
in March 1997. The Company was acquired in share exchange transaction by CTC
Cosmetics Holdings (BVI) Co., Ltd., a British Virgin Islands corporation which
held an investment in Cao Tain Cosmetic Holdings Limited that developed,
manufactured and marketed skin and hair products, cosmetics, and cosmetic
related chemical ingredients. The Company changed its name to its current name
on September 18, 2000.
Concurrent with the March 21, 1997, Agreement and Plan of Reorganization, CTC
Cosmetics Holdings Company, Inc. sold $500,000 of 8% convertible debentures due
March 31, 1998 to Voyager Select IPO Fund, Ltd. ("Voyager"). The principal
amount of the debentures were convertible at any time, at the option of Voyager,
at a conversion price equal to the lower of 50% of the average closing bid price
of common stock for 5 business days immediately preceding the conversion date or
$2.50 per share. Voyager received warrants to purchase 50,000 shares of common
stock at the date of exercise. The warrants could be exercised at any time.
In September 1998, Voyager Select IPO Fund, Ltd. converted the outstanding
debentures in the principal amount of $500,000 acquiring 16,000,000 shares of
common stock based on the conversion price equal to the average bid and ask
prices of common stock ($.03125) as reflected on NASDAQ on August 31, 1998.
Subsequent to the signing of the Agreement and the exchange of 9,000,000 shares
for CTC Cosmetics Holding (BVI) Co. Ltd., the Board of Directors of the Company
breached their fiduciary duty to the shareholders of the Company by failing to
provide current financial information of the Company, failure to respond to
shareholders' inquiries and failure to comply with the disclosure requirements
of the Exchange act of 1934 by non-filing of the required periodic and annual
reports.
On January 21, 2000 Voyager, which held 61.3% of outstanding common stock of the
Company filed Schedule 14C with the Securities and Exchange Commission notifying
the shareholders that the Chinese directors would be removed and new directors
appointed by Voyager. On February 22, 2000 the Board of Directors comprised of
Chinese directors was removed and replaced by new directors appointed by
Voyager.
In May 2000, the Company approved 100-for-1 reverse stock split and issued one
new share for each one hundred old shares. For stockholders with less than 100
shares, 1 share was issued. The reverse stock split has been reflected in the
stockholders equity section. The paid in par value has been adjusted to reflect
the reverse stock split.
In October 2000, the Company issued 6,214,851 shares of common stock in payment
for interest accrued on the Voyager loan at ($0.0085) per share.
The Company after recognizing the loss on the forced divestiture in the fiscal
year ended August 31, 1997 had no operations and has had none since that date.
7
2. BASIS OF PRESENTATION
The financial statements have been prepared in a development stage company
format as from September 1, 1997 as the Company has had no operations since its
divestiture in 1997. Losses prior to August 31, 1997 have been accumulated as
loss on divestiture accumulated in development stage. Losses subsequent to
August 31, 1997 have been accumulated in their appropriate classification.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and attaining profitable operations in the future.
The principal stockholder has undertaken to make available adequate funds to the
Company as and when required to maintain the Company as a going concern. As a
result, the financial statements have been prepared in conformity with the
principles applicable to a going concern.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
The financial statements for the six months ended February 28, 2001 and 2000
should be read in conjunction with the audited financial statements and notes
thereto as of the year ended August 31, 2000 included in the Company's 10-KSB
filed with the Securities and Exchange Commission.
Certain reclassifications have been made in the financial statements of prior
periods in order to make them comparable with the current financial statement
presentation.
3. RELATED PARTY TRANSACTIONS
The loans from shareholder are non -interest bearing and currently payable.
The officers and directors represent the major shareholder. They receive no
compensation from the Company's activities and the Company has reflected no
expense in the statement of operations.
The office of the Company is contributed by the major shareholder at no cost to
the Company.
4. INCOME TAXES
The Company has a loss carry-forward of approximately $940,000 available to
offset future years' taxable income, most of which will expire by 2017.
The company has not recorded the tax benefit of these carry-forward losses since
realization is not certain.
8
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
THIS ANALYSIS CONTAINS FORWARD-LOOKING COMMENTS, WHICH ARE BASED ON CURRENT
INFORMATION. ACTUAL RESULTS IN THE FUTURE MAY DIFFER MATERIALLY.
As discussed in the notes to financial statements the Company at present has no
activity. Current management is working to establish a new direction for the
Company.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings NONE
Item 2. Changes in Securities and Use of Proceeds
There were 6,214,851 shares of common stock issued in payment of
interest accrued on October 31, 2000 to the members of Voyager.
Item 3. Defaults On Senior Securities NONE
Item 4. Submission of Items to a Vote NONE
Item 5. Other Information
The Company's name was changed on September 18, 2000.
Item 6.
(a) Exhibits NONE
(b) Reports on Form 8K NONE
9
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act
Of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Combine Corp.
Dated: March 18, 2002 By: /s/ Andrew K. Procter
---------------------------
Andrew K. Procter
Chief Financial Officer
10