FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to _______________________
Commission File Number 0-29751
Winmax Trading Group, Inc.
______________________________________________________
(Exact name of registrant as specified in its charter)
Florida 65-0702554
_______________________________ _______________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
429 Seabreeze Blvd. Suite 227 Fort Lauderdale, Florida 33316
______________________________________________________________
(Address of principal executive office)(Zip Code)
(954) 523-4500
_________________________________________________
(Registrant's telephone number, including area code)
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 past 90 days. Yes [ X ] No [ ]
The number of shares outstanding of each of Issuer's classes of common equity
as of October 31, 2000.
Common Stock, par value $.001 9,400,000
_________________________________ _________________
Title of Class Number of Shares
Transitional Small Business Disclosure Format yes [ ] no [X ]
Winmax Trading Group, Inc.
Index
Part I
Item 1. Financial Statements
Balance Sheet as of September 30, 2000 2
Statements of Operations for the Three Months
and Nine Months Ended September 30, 1999 and 2000 3
Statements of Cash Flows for the Nine Months
Ended September 30, 1999 and 2000 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II
Other information 9
Signatures 10
Winmax Trading Group, Inc.
Balance Sheet
September 30, 2000
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$ 35,796
---------------
Investments 870
---------------
Property and equipment, net 1,193
---------------
$ 37,859
===============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 4,950
---------------
Stockholders' equity
Preferred stock, $1.00 par value, 1,000,000
shares authorized, no shares issued or
outstanding -
Common stock, $.001 par value, 50,000,000
shares authorized, 9,400,000 shares issued
and outstanding 9,400
Additional paid-in capital 779,875
Accumulated deficit (756,366)
---------------
32,909
---------------
$ 37,859
===============
See the accompanying notes to the Financial statements.
Winmax Trading Group, Inc.
Statements of Operations
Three Months and Nine Months Ended September 30, 1999 and 2000
(Unaudited)
Three Months Nine Months
---------------------- -----------------------
1999 2000 1999 2000
--------- ----------- ----------- -----------
Revenue:
Fees and commissions
and interest $ 8,725 $ 10,854 $ 117,489 $ 36,067
Operating Costs and Expenses:
General and administrative 90,250 158,394 266,654 420,417
--------- ----------- ----------- -----------
Net (loss) from operations (81,525) (147,540) (149,165) (384,350)
--------- ----------- ----------- -----------
Other income (expense):
Realized loss on marketable
securities - (9,462) - (9,462)
--------- ----------- ----------- -----------
Net (loss) $ (81,525) $ (157,002) $ (149,165) $ (393,812)
========== =========== =========== ===========
Per Share Information - basic
and fully diluted
Weighted average common shares
outstanding 9,010,000 9,400,000 8,344,860 9,400,000
=========== =========== =========== ===========
(Loss) per share $ (0.01) $ (0.02) $ (0.02) $ (0.04)
=========== =========== =========== ===========
See the accompanying notes to the financial statements.
Winmax Trading Group, Inc.
Statements of Cash Flows
Nine Months Ended September 30, 1999 and 2000
(Unaudited)
1999 2000
------------- -------------
Cash flows from operations
Net cash (used in) operating activities $ (27,842) $ (310,756)
------------- -------------
Cash flows from investing activities:
Net cash provided by (used in) investing
activities (83,013) 97,248
------------- -------------
Cash flows from financing activities:
Net cash provided by financing activities 117,189 249,304
------------- -------------
Increase in cash and cash equivalents 6,334 35,796
Cash and cash equivalents,
beginning of period 332 -
------------- -------------
Cash and cash equivalents,
end of period $ 6,666 $ 35,796
============= =============
See accompanying notes to the financial statements.
WINMAX TRADING GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
(1) Basis Of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") for interim
financial information and Item 310(b) of Regulation SB. They do not include
all of the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting only of
normal recurring adjustments) considered necessary for a fair presentation
have been included. The results of operations for the periods presented are
not necessarily indicative of the results to be expected for the full year.
For further information, refer to the financial statements of the Company as
of December 31, 1999 and for the two years then ended, including notes thereto
included in the Company's Form 10-SB.
(2) Organization
The Company was incorporated under the laws of the State of Florida on
September 26, 1996. The Company is in the business of providing financial
consulting and management services. The Company's current business involves
operating and managing an investment fund, the Winmax Alpha Fund Limited
Partnership (Alpha), for which it is the general partner. The incentive fees,
commissions and interest income derived from the operation and management of
this fund account for substantially all of the Company's operating revenue.
The Winmax Alpha Fund Limited Partnership is a Delaware limited partnership
formed to trade, invest in, buy, sell or otherwise acquire, hold or dispose of
futures contracts, options on futures contracts, and all rights and interests
pertaining thereto.
(3) Earnings Per Share
The Company calculates net income (loss) per share as required by SFAS No.
128, "Earnings per Share." Basic earnings (loss) per share is calculated by
dividing net income (loss) by the weighted average number of common shares
outstanding for the period. Diluted earnings (loss) per share is calculated by
dividing net income (loss) by the weighted average number of common shares and
dilutive common stock equivalents outstanding. During the periods presented
common stock equivalents, if any, were not considered as their effect would be
anti dilutive.
(3) Investments
The Company is the general partner of Alpha of which it owned approximately 5%
at December 31, 1999. During the period ended September 30, 2000 the Company
liquidated approximatedy $98,000 of its December 31, 1999 investment in Alpha
which resulted in its ownership being reduced to $870 at September 30, 2000.
During October, 2000 the Company liquidated Alpha and returned the invested
balances to the limited partners.
WINMAX TRADING GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
(CONTINUED)
(4) Contingencies
During July, 1999 the Company entered into a lease agreement for office
facilities for a five year term commencing during December, 1999. The lease
provides for an initial base rent of approximately $4,020 per month plus the
Company's proportionate share of operating expenses. In addition, the lease
provides for annual adjustments to the base rent.
During December, 1999 the Company elected not to honor the terms of the new
lease and forfeited its $5,000 security deposit which has been charged to rent
expense during 1999. The new landlord has not indicated whether it will seek
to enforce the terms of the new lease. If the terms of the new lease were
enforced the Company could be liable for an amount up to the total of initial
base rent, adjusted as provided for in the lease and its proportionate share
of the operating expenses as provided for in the lease.
(5) Stockholders' Equity
During November, 1999 the Company began offering pursuant to a private
placement shares of its $.001 par value common stock at $1 per share. During
the period ended September 30, 2000 the Company issued 250,000 shares of its
common stock for cash aggregating $250,000. In addition, during July, the
Company issued 75,000 shares of its $.001 par value common stock for services
valued at $75,000.
Warrants
As of September 30, 2000 Company had warrants outstanding to purchase 75,000
shares of the Company's $.001 par value common stock at $1.00 per share. These
warrants expire on March 15, 2001.
Item 2. Management's Discussion and Analysis or Plan of Operations.
The following discussion and analysis covers material changes in
financial condition since December 31, 1999 and material changes in the
results of operations for the nine months and three months ended September 30,
2000, as compared to the same periods in 1999. This discussion and analysis
should be read in conjunction with "Management's Discussion and Analysis or
Plan of Operation" included in the Company's Form 10-SB for the year ended
December 31, 1999.
Results of Operations
The Company's revenues from operations are derived from its participation as
general partner and manager of the ALPHA Fund and are substantially dependent
upon achieving profits in its trading activities on the ALPHA Fund's behalf.
Although the Company has achieved revenues in each of the three month and
nine-month periods ending September 30 1999 and 2000, the Company has
operated at a net loss both periods. DISCUSS LIQUIDATION OF FUND.
The company has only a limited operating history and the revenue it has
experienced may not continue. The company generated revenue during the three
months and nine-months ended September 30, 1999 and 2000 of $8,725; $117,489
, $10,854 and $36,067 respectively. The decrease in revenue in the 2000
periods was caused by principally by two factors. Trading results of the
company's ALPHA fund during the first nine months were + during 1999
versus % during 2000 which resulted in virtually no incentive fees
generated through June 2000. Furthermore the company's ALPHA fund experienced
a net outflow (caused by it's negative earnings) of capital which further
reduced the company's revenue derived from interest and commission
participation.
The overall market conditions during the first nine months of 2000 created a
difficult trading environment with sporadic markets and very high volatility.
The company anticipates that as the market's volatility normalizes the trading
results of the company's ALPHA fund will resemble more the results which have
been historically achieved during the first 31 months of the fund's existence.
General and administrative expenses increased during the three month and nine
month periods in 2000 as compared to 1999 as a result of increases in overall
operating costs.
Liquidity and Capital Resources
The Company has no material commitments for capital expenditures at June 30,
2000.
To date, the Company has financed its operations principally through equity
investments and revenues derived from its management of Alpha. The Company
will need additional capital to continue its operations for the next twelve
months and may raise funds through the sale of equity shares or debt
financing.. There can be no assurance that additional private or public
financing, including debt or equity financing, will be available as needed, or
on terms favorable to the Company. Any additional equity financing may be
dilutive to shareholders and these additional equity securities may have
rights, preferences or privileges that are senior to those of the Company's
Common Stock. Furthermore, debt financing, if available, will require payment
of interest and may involve restrictive covenants that could impose
limitations on the operating flexibility of the Company. The failure of the
Company to obtain additional funding may jeopardize the Company's ability to
continue its business and operations.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby
providing cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made by
or on behalf of the Company herein or orally, whether in presentations, in
response to questions or otherwise. Any statements that express, or involve
discussions as to expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of words
or phrases such as "will result", "are expected to", "will continue", "is
anticipated", "estimated", "projection" and "outlook") are not historical
facts and may be forward-looking and, accordingly, such statements involve
estimates, assumptions, and uncertainties which could cause actual results to
differ materially from those expressed in the forward-looking statements.
Such uncertainties include, among other, the following: (i) the Company's
ability to obtain additional financing to implement its business strategy;
(ii) imposition of new regulatory requirements affecting the Company; (vii) a
downturn in general economic conditions; (iii) the delay or failure to
properly manage growth and successfully integrate acquired companies and
operations; (iv) lack of diversification; (v) effect of uninsured loss and
(vi) other factors which are described in further detail in the Company's
filings with the Securities and Exchange Commission.
The Company cautions that actual results or outcomes could differ materially
from those expressed in any forward-looking statements made by or on behalf of
the Company. Any forward-looking statement speaks only as of the date on
which such statement is made, and the Company undertakes no obligation to
update any forward-looking statement or statements to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and
it is not possible for management to predict all of such factors. Further,
management cannot assess the impact of each such factor on the business or the
extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking
statements.
Part II: Other Information
Item 1: Legal Proceedings
None
Item 2: Changes in 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
A. Exhibits
27.1 Financial Data Schedule (For SEC purposes only)
B. Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WINMAX TRADING GROUP, INC.
Date: November 27, 2000 By: /s/ Ralph Pistor
---------------------------
Ralph Pistor
President
(Principal Financial Officer)