SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 2001
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 No. 2-96366-A
AFFINITY INTERNATIONAL MARKETING, INC.
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(Exact name of registrant as specified in its charter)
Florida 59-2483405
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
2300 Glades Road, Suite 450, West Tower, Boca Raton, Florida 33431
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(Address of principal executive offices)
(531) 750-7535
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(Registrant's telephone number, including area code)
TREASURE AND EXHIBITS INTERNATIONAL, INC.
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(Former name, former address and formal fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 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 No X
As of May 15, 2001, 28,990,756 shares of Common Stock of the issuer
were outstanding.
AFFINITY INTERNATIONAL MARKETING, INC.
INDEX
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 2001
and December 31, 2000...............................................1
Consolidated Statements of Operations - For the three
months ended March 31, 2001 and March 31, 2000......................2
Consolidated Statements of Cash Flows - For the three
months ended March 31, 2001 and March 31, 2000......................3
Notes to Consolidated Financial Statements..........................4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.........................................5
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K....................................7
SIGNATURES....................................................................7
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
AFFINITY INTERNATIONAL MARKETING, INC.
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 2001 2000
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Current assets:
Cash and cash equivalents $ 11,169 $ 11,264
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Total current assets 11,169 11,264
Other assets 7,622 7,622
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Total assets $ 18,791 $ 18,886
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 324,145 $ 324,145
Notes and loans payable - related parties 580,384 580,384
Put option liability 1,044,407 1,044,407
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Total current liabilities 1,948,936 1,948,936
Stockholders' Deficiency:
Common stock $.0001 par value, 50,000,000
authorized, 28,990,756 shares
outstanding as of March 31, 2001
and December 31, 2000 2,899 2,899
Additional paid-in capital 2,111,706 2,111,706
Accumulated deficit (4,044,750) (4,044,655)
------------ ------------
Total stockholders' equity (1,930,145) (1,930,050)
------------ ------------
Total liabilities and stockholders' equity $ 18,791 $ 18,886
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The accompanying notes are an integral part of these financial statements
1
AFFINITY INTERNATIONAL MARKETING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
2001 2000
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Revenue:
Interest income $ 9 $ 76
General and administrative expenses 104 268
-------- ------------
Income (loss) from continuing operations
before income tax (expense) benefit (95) (192)
Income tax (expense) benefit 0 (0)
-------- ------------
Net Income (loss) from continuing operations (95) (192)
Basic income (loss) per share $ 0 $ (0)
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Weighted average shares outstanding 28,990,756 28,990,756
========== ===========
The accompanying notes are an integral part of these financial statements
2
AFFINITY INTERNATIONAL MARKETING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months
Ended March 31,
2001 2000
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Cash flows from operating activities:
Net income (loss) $ (95) $ (192)
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Net cash provided by (used in) operating activities (95) (192)
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Cash flows from investing activities:
Net cash provided by (used in) investing activities 0 0
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Cash flows from financing activities:
Net cash provided by financing activities 0 0
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Net (decrease) increase in cash and cash equivalents (95) (192)
Cash and cash equivalents, as of beginning of period 11,264 18,848
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Cash and cash equivalents, as of end of period $ 11,169 $ 18,656
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The accompanying notes are an integral part of these financial statements
3
AFFINITY INTERNATIONAL MARKETING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001
1. INTERIM PRESENTATION
The interim consolidated financial statements are prepared pursuant to
the requirements for reporting on Form 10-Q. These statements include
the accounts of Treasure AND Exhibits International, Inc. (the
"Company") and all of its wholly owned and majority owned subsidiary
companies. The December 31, 2000 balance sheet data was derived from
audited financial statements but does not include all disclosures
required by generally accepted accounting principles. The interim
financial statements and notes thereto should be read in conjunction
with the financial statements and notes included in the Company's Form
10-K for the year ended December 31, 2000. In the opinion of
management, the interim financial statements reflect all adjustments of
a normal recurring nature necessary for a fair statement of the results
for the interim periods presented. The current period results of
operations are not necessarily indicative of results which ultimately
will be reported for the full year ending December 31, 2001.
2. SIGNIFICANT RISKS AND UNCERTAINTIES
During 1999, the Company discontinued all of its business operations
and surrendered all of its remaining assets to First Capital Services,
Inc., an entity related by common control and ownership, in settlement
of outstanding loans payable, in lieu of foreclosure. Additionally the
Company is a defendant in several lawsuits, the outcome of which cannot
be determined. These factors raise substantial doubt as to the ability
of the Company to continue as a going concern.
4
Item 2. Management's Discussion And Analysis Of Financial Condition And Results
Of Operations
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of Securities Exchange
Act of 1934. Statements contained herein which are not historical facts are
forward-looking statements that involve risks and uncertainties. All phases of
the Company's operations are subject to a number of uncertainties, risks and
other influences. Therefore, the actual results of the future events described
in such forward-looking statements in this Form 10-Q could differ materially
from those stated in such forward-looking statements. Among the factors which
could cause the actual results to differ materially are the risks and
uncertainties described both in this Form 10-Q and the risks, uncertainties and
other factors set forth from time to time in the Company's other public reports,
filings and public statements. Many of these factors are beyond the control of
the Company, any of which, or a combination of which, could materially affect
the results of the Company's operations and whether the forward-looking
statements made by the company ultimately prove to be accurate.
Results of Operations
Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000
The Company has no ongoing business activities and has not had such
since 1999, except to seek an entity to acquire. Accordingly, its sole revenues
are interest income and its sole expenses are bank charges. Its office space is
being provided free of charge by a shareholder of the Company.
Financial Condition, Liquidity and Capital Resources
The Company had a cash balance of $11,169 and a working capital deficit
of $1,937,767 at March 31, 2001 compared to a cash balance of $11,264 and a
working capital deficit of $1,937,672 at December 31, 2000. The decrease in the
working capital deficit was attributable to the current period net operating
loss.
For the three months ended March 31, 2001 net cash used in operating
activities totaled $95 as compared to $192 used in operating activities for the
corresponding period of the prior year. This change resulted from an increase in
the net operation loss.
We received no cash from either investing or financing activities
during either the three months ended March 31, 2001, or March 31, 2000.
By December 1999 we had ceased all operations and had defaulted on our
master loan agreement with our affiliate First Capital Services, Inc. ("First
Capital") whereby we had acquired funds to purchase certain treasured artifacts
and lease a casino cruise ship, as well as a $750,000 note to First Capital
which we assumed in connection with the acquisition of an adult gaming facility.
At close of business of December 31, 1999, First Capital accepted the artifacts
and gambling machines and related assets as settlement of amounts due under both
the master loan agreement and the $750,000 note.
5
In January 2000, we entered into a letter of intent to acquire 100% of
Union IPO Corporation ("Union IPO"), a Nevada corporation in exchange for
15,000,000 shares of the Company's common stock. Union IPO is an investment firm
targeting labor resources and union based venture capital, and promoting union
friendly technology companies. This acquisition was never consumated because we
were unable to obtain audited financial statements of Union IPO and because of
outstanding litigation against the Company. We are dependent upon the efforts of
our President to seek out, and negotiate other business opportunities. Even if
we do not acquire an operating company, there can be no assurance that we will
ever operate at a profit.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
6
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
AFFINITY INTERNATIONAL MARKETING, INC.
By: /s/ Kenneth DeFillipo
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Kenneth DeFillipo
President, Chief Executive Officer and
Chief Financial Officer
Dated: May 16, 2001