UNITED STATES
SECURITIES AND EXCHANGE COMMSSION
WASHINGTON, D.C.
FORM 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2000
Commission file number: 0-28035
EMC GROUP, INC.
FLORIDA 05-9346551
State of incorporation (IRS Employer number)
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE:
346 Tanager Court
Lakeland, Florida 33803
Telephone: 863-619-6353
Check whether the issuer: (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 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]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
Common Stock, $0.0001 par value per share, 50,000,000 authorized ,
2,575,200 issued and outstanding as of May 31, 2000. Preferred
Non-Voting Stock, $0.0001 par value per share, 50,000,000 authorized ,
2,800,000 shares issued and outstanding as of May 31, 2000.
Transitional Small Business Disclosure Format (Check one): Yes [] No [X]
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements ............................Page No.
Balance Sheet (unaudited ................................... 3
Statements of Operations (unaudited)........................ 4
Statements of Cash Flows (unaudited)........................ 5
Item 2. Management's Discussion and Analysis of Plan
of Operation ....................................... 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................... 8
Item 2. Changes in Securities .............................. 8
Item 3. Defaults upon Senior Securities..................... 9
Item 4. Submission of Matters to a Vote of
Security Holders ................................... 9
Item 5. Other Information................................... 9
Item 6. Exhibits and Reports on Form 8-K.................... 9
Signatures. 10
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
EMC GROUP, INC.
BALANCE SHEETS
ASSETS
May 31,
February 29 2000
2000 (unaudited)
----------- ----------
Current assets:
Cash $ 39,148 29,464
Accounts receivable 3,173 1,955
Inventory 3,575 3,918
Prepaid expenses 828 3,748
----------- ---------
Total current assets 46,724 39.085
Property and Equipment:
Leasehold improvements 68,099 68,099
Equipment 43,018 43,458
----------- ---------
111,117 111,557
Less accumulated depreciation 35,454 37,454
----------- ---------
Net property and equipment 75,663 74,103
Other assets:
Organization costs, net of accumulated
amortization of $3,083 and $3,333 2,087 1,837
Marketing rights, net of accumulated
amortization of $307,125 and $341,250 2,422,875 2,388,750
Deposits 1,199 1,196
----------- ---------
$ 2,548,548 2,504,971
=========== =========
See accompanying notes to financial statements. (Continued)
EMC GROUP, INC.
BALANCE SHEETS - Continued
Liabilities and Stockholders' Equity
May 31,
February 29, 2000
2000 (Unaudited)
------------ -----------
Current liabilities:
Accounts payable $ 4,605 6,690
------------ ----------
Total current liabilities 4,605 6,690
Deposits 4,400 4,400
------------ ----------
Total liabilities 9,005 11,090
Stockholders' equity:
Preferred stock ($.0001 par value; 50 million shares 280 280
authorized; 2.8 million issued and outstanding)
Common stock ($.0001 par value; 50 million 258 258
shares authorized; 2,575,200 shares issued
and outstanding)
Additional paid-in capital 3,342,309 3,342,309
Stock subscriptions receivable (291,000) (291,000)
Accumulated deficit (512,304) (557,966)
------------ ----------
Total stockholders' equity 2,539,543 2,493,881
------------ ----------
$ 2,548,548 2,504,971
=========== ==========
See accompanying notes to financial statements
EMC GROUP, INC.
Statement of Operations
Three months ended
May 31
-----------------------
2000 1999
(Unaudited) Unaudited)
----------- ----------
Sales:
Food and beverage $ 47,893 44,511
Management fees 6,576 6,145
Store rent 7,334 7,334
----------- ----------
Total sales 61,803 57,990
Expenses:
Food and beverage 21,379 20,225
Retail store operating 26,216 28,357
General and administrative 23,601 26,796
Depreciation and amortization 36,375 37,343
----------- ----------
Total expenses 107,571 112,721
Operating loss (45,768) (54,731)
Interest income 106 39
----------- ----------
Net loss $ (45,662) (54,692)
=========== ==========
Loss per common share $ (.02) (0.14)
=========== ==========
Weighted number of common shares outstanding 2,209,367 380,200
=========== ==========
See accompanying notes to financial statements
EMC GROUP, INC.
Statements of Cash Flows
Three months ended
May 31
-----------------------
2000 1999
(Unaudited) (Unaudited)
----------- ----------
Cash flows used in operating activities:
Net loss $ (45,662) (54,692)
Adjustments to reconcile net loss to net
cash operating activities:
Depreciation and amortization 36,375 37,343
Net increase (decrease) in cash flow from
changes in:
Accounts receivable 1,218 (484)
Inventory (343) (599)
Prepaid expenses (2,917) -
Accounts payable 2,085 (35,564)
----------- ---------
Net cash used in operating activities (9,244) (53,996)
----------- ---------
Cash flows from investing activities:
Collection of principal on note receivable - (23,155)
Purchase of equipment (440) (1,095)
----------- ---------
Net cash provided (used) in investing
activities 440) (24,250)
----------- ----------
Cash flows from financing activities:
Issuance of common stock - 128,500
----------- ---------
Net cash provided by financing activities - 128,500
----------- ---------
Net increase (decrease) in cash (9,684) 50,253
Cash, beginning of period 39,148 4,590
----------- ---------
Cash at end of period $ 29,464 $ 54,843
=========== =========
Supplemental disclosure of cash flows information:
Cash paid during the year for interest $ - $ 280
========== =========
See accompanying notes to financial statements
EMC GROUP, INC.
Notes to Financial Statements
(A) Presentation of Unaudited Financial Statements
The unaudited financial statements have been prepared in accordance
with rules of the Securities and Exchange Commission and, therefore,
do not include all information and foot notes necessary for a fair
presentation of financial position, results of operations and cash
flows, in conformity with generally accepted accounting principles.
The information furnished, in the opinion of management, reflects all
adjustments (consisting only of normal recurring accruals) necessary to
present fairly the financial position as of May 31, 2000, and results
of operations and cash flows for the three month period ended
May 31, 2000 and 1999. The results of operations are not necessarily
indicative of results which may be expected for any other interim
period, or for the year as a whole.
(B) Sales to Major Customers
During the three months ended May 31, 2000 and 1999, no customer
accounted for more than 10% of total revenue.
(C) Subsequent Events
There are no subsequent events to report other than those reported
in this filing.
PART I. FINANCIAL INFORMATION
Item 2 Management's Discussion and Analysis or Plan of Operation
RESULTS OF OPERATIONS
FOR THE FIRST THREE (3) MONTHS (INTERIM PERIOD) ENDED MAY 31, 2000.
GENERAL
The Company had a net loss of $45,662 for the first quarter of its
current fiscal year compared to a net loss of $54,692 for the
comparable period of the previous fiscal year. Total revenues were
$61,803 for the first quarter of the company's current fiscal year
versus $57,990 for the first quarter of the previous fiscal year.
Sales were $61,803 for the first quarter of the company's current
fiscal year compared to $57,990 for the comparable period of the
preceding year. Included in sales for the first quarter of the current
fiscal year are food and beverage sales of $47,893, management fees of
$$6,576 and rent of $7,334 for the first quarter of the Company's
current fiscal year versus food and beverage sales of $44,511,
management fees of $6,145 and rent of $7,333 for the comparable
period of the previous year.
Head office and administrative expenses were $23,601 for the first
quarter of the current fiscal year compared to $26,796 for the
comparable period of the preceding year, a decrease of 20% or $3,195.
Cost of food and beverage were $21,379 for the first quarter of the
current fiscal year versus $20,225 for the first quarter of the
previous year. The increase is due to increased sales of food and
beverages. Retail store operating expenses were $26,216 for the first
quarter of the company's current fiscal year versus $28,357 for the
first quarter of the previous year. Retail operating expenses include
all labor cost. The assets of this store are owned by the Company,
however, the premises are leased from an independent third party.
The company collected management fees from the independent operator of
the Treats store, located in Detroit, Michigan of $6,576 for the first
quarter of the Company's current fiscal year compared to $6,145 for the
comparable period of the previous year. The management fees, which
represent a percentage (%) income to the Company based on weekly sales
and a monthly administration fee, collectively called "management fees"
the independent operator pays the Company. Monthly rent collected from
the independent operator of the Treats store located in Detroit,
Michigan, were $7,334 for the first quarter of the current fiscal year
were the same as collected for the comparable period of the previous
year. The independent operator is required to pay monthly rent for the
premises to the Company. The Company, being the lawful tenant, in turn
pays monthly rent to landlord of the premises. The assets of the store
are owned by the Company. However, the premises are leased from an
independent third party. The independent operator operates this store
for his own profit or loss pursuant to the terms and condition of an
operating agreement with the Company. The independent operator is
not a franchisee of the Treats franchise system. A copy of the
agreement is filed as an exhibit to the Form 10-SB12G/A.
LIQUIDY AND CASH FLOW FOR THE FIRST THREE (3) MONTHS OF THE CURRENT
FISCAL YEAR COMPARED TO THE SAME PERIOD OF THE PREVIOUS YEAR.
During the first 3 months ended May 31, 2000, the company did not
achieve a positive cash flow from operations. Accordingly, the company
relies on cash on hand.
The Company was able to meet its daily cash requirements due to the
following: On April 6, 1999, the company raised additional capital of
$419,500 in cash and cash equivalents through the sale of 2,195,000 of
the Company's common stock to various parties pursuant to Rule 504 of
Regulation D promulgated under the Securities Act of 1933 by the
Securities and Exchange Commission. The Company collected $128,500
in cash. The balance of $291,000 covering 1,455,000 shares of the
Company's Common Stock at $0.20 per share, were due February 28, 2000
pursuant to Promissory Notes with subscribers. The due date for payment
of the Promissory Notes was extended by the Company to April 30, 2001.
The Promissory Notes provide that any unpaid shares underlying the
Promissory Notes be returned to the Company by April 30, 2001.
IN THE CURRENT YEAR:
This year the Company focused on establishing short and long term
objectives and the development of a business plan to implement those
objectives. The Company determined that it was important to use the
Internet for communication and dissemination of information. As a result
the Company entered into a contract with Visibility Consulting Inc. of
Orlando, Florida to develop a web site (www.treatsusa) in order to
promote the Treats Franchise System in the United States and to
provide other relevant information to prospective clients. The
Company's management has discontinued this web-site in August 2000,
due to lack of inquiries.
In addition to its web site, Company management felt strongly that an
opportunity existed to market some of the Treats Coffees through the
Internet. To that extent a web site (www.treatscoffee) was developed.
While the site was fully operational to take orders, the Company,
however, has closed the web-site August 2000, due to lack of orders.
The Company will adopt the new design criteria and appearance of Treats
stores, developed by Treats Canada Corporation, which have been well
received by its customers, landlords and franchise owners. The updated
interior and exterior decor provides for a more comfortable and
relaxing atmosphere.
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
There are no legal proceedings of any kind against the Company or as to
its property.
Item 2. Changes in Securities.
(a) There are no changes with respect to any of the Company's
securities.
(b) Not applicable.
(c) The company has not sold any securities during the first quarter
of its current fiscal year.
(d) Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Pursuant to Section 15 of Article II of the Company's By-Laws, the
Company took action without a meeting subject to consent in writing
during the months of April and May 2000. Shareholders of the Company
were informed in writing via mail of the following consent action:
Pursuant to Chapter 607, Florida Statutes, this is to advise you,
as a shareholder of EMC Group, Inc., that shareholders owning a
majority of the common shares of EMC Group, Inc. ("the Corporation")
have, by written consent, taken the following actions as the actions
of the shareholders of the Corporation:
(1) Authorizing the amendment of the Articles of Incorporation of the
(2) Corporation to (a) provide for the increase in the authorized common
shares of the Corporation to 50,000,000 shares; (b) provide that the
number of authorized shares shall not be decreased as a result of any
future share combinations; and (c) establish the rights and preferences
of the holders of preferred shares.
(2) Approving and ratifying the issuance of preferred and common shares
of the Corporation. Details with respect to the terms and conditions
of the Preferred Shares are filed as exhibits to the Form 10-SB12G/A.
Item 5. Other Information.
Change in accountants. The Company engaged the services of Parks,
Tschopp, Whitcomb & Orr, P.A., CPA's, located in Orlando, Florida, in
June 2000. There are no disagreements with the accountants.
Item 6. Exhibits and Reports on Form 8-K.
(a) All required exhibits have been filed with the Form 10-SB12G/A.
(b) The company has not filed any reports on Form 8-K since inception.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
_EMC GROUP, INC.
(Registrant)
Date __June 7, 2001___________
_/s/Erhard Sommer_________________
(Signature)*
Erhard Sommer, President & CEO
Date _______________________________
___________________________________
(Signature)*