United States
Securities and Exchange Commission
Washington, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
September 30, 2002 333-51180
OFFICE MANAGERS, INC.
---------------------
(Exact name of registrant as specified in its charter)
NEVADA
-------
(State or other jurisdiction of incorporation or organization
87-0661638
----------
(I.R.S. Employer Identification No.)
136 East South Temple, Suite 1600, Salt Lake City, Utah 84111
-------------------------------------------------------------
(Address of principal executive offices)
(801) 363-2656
--------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
None
----
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.
X Yes No
----- -----
State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date.
Common stock, par value $.001; 34,598,500 shares outstanding
as of November 7, 2002
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
OFFICE MANAGERS, INC.
( Development Stage Company)
BALANCE SHEETS
September 30, 2002 and December 31, 2001
<Table>
<Caption>
===========================================================================
Sept 30, Dec 31,
2002 2001
ASSETS
CURRENT ASSETS
Cash $ 295,482 $ 35,161
----------- -----------
Total Current Assets 295,482 35,161
----------- -----------
Equipment - net of accumulated depreciation 10,052 -
----------- -----------
$ 305,534 $ 35,161
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - affiliate - note 4 $ 80,923 $ -
----------- -----------
Total Current Liabilities 80,923 -
----------- -----------
STOCKHOLDERS' EQUITY
Common stock
50,000,000 shares authorized, at $0.001
par value; 34,598,500 shares issued and
outstanding on September 30, 2002;
29,500,000 on December 31, 2001 34,599 29,500
Capital in excess of par value 470,045 64,310
Deficit accumulated during the
development stage (280,033) (58,649)
----------- -----------
Total Stockholders' Equity 224,611 35,161
----------- -----------
$ 305,534 $ 35,161
=========== ===========
</Table>
The accompanying notes are an integral part of these financial statements.
2
OFFICE MANAGERS, INC.
( Development Stage Company)
STATEMENT OF OPERATIONS
For the Three and Nine Months Ended September 30, 2002 and 2001 and the
Period September 19, 2000 (Date of Inception) to September 30, 2002
===========================================================================
<Table>
<Caption>
Sept 19,
Three Months Nine Months 2000 to
Sept 30, Sept 30, Sept 30, Sept 30, Sept 30,
2002 2001 2002 2001 2002
----------- ----------- ----------- ----------- -----------
REVENUES $ - $ - $ - $ - $ -
----------- ----------- ----------- ----------- -----------
EXPENSES
Administrative 96,075 25 217,357 7,605 246,979
Development of web
site - preliminary
project stage - - 4,027 - 33,054
----------- ----------- ----------- ----------- -----------
96,075 25 221,384 7,605 280,033
----------- ----------- ----------- ----------- -----------
NET LOSS $ (96,075) $ (25) $ (221,384) $ (7,605) $ (280,033)
=========== =========== =========== =========== ===========
NET LOSS PER COMMON
SHARE
Basic $ - $ - $ (.01) $ -
AVERAGE OUTSTANDING SHARES
Basic
(stated in 1000's) 32,899 29,500 30,228 29,500
----------- ----------- ----------- -----------
</Table>
The accompanying notes are an integral part of these financial statements
3
OFFICE MANAGERS, INC.
( Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period September 19, 2000 (Date of Inception)
to September 30, 2002
===========================================================================
<Table>
<Caption>
Common Stock
------------------------ Paid In Accumulated
Shares Amount Capital Deficit
----------- ----------- ----------- -----------
Balance September 19, 2000 - $ - $ - $ -
Issuance of common stock for cash
at $.001 - September 19, 2000 16,000,000 16,000 - -
Issuance of common stock for
web site - September 25, 2000
- Note 3 6,000,000 6,000 19,000 -
Issuance of common stock for cash
at $.01 - October 10, 2000 5,000,000 5,000 44,810 -
Net operating loss for the period
September 19, 2000 to December
31, 2000 - - - (47,010)
----------- ----------- ----------- -----------
Balance December 31, 2000 27,000,000 27,000 63,810 (47,010)
Issuance of common stock for cash
at $.0012 - January 2001 2,500,000 2,500 500 -
Net operating loss for the year
ended December 31, 2001 - - - (11,639)
----------- ----------- ----------- -----------
Balance December 31, 2001 29,500,000 29,500 64,310 (58,649)
Issuance of common stock for cash
at $.10 - net of offering costs
- July 22, 2002 5,098,500 5,099 405,735 -
Net operating loss for nine months
ended September 30, 2002 - - - (221,384)
----------- ----------- ----------- -----------
Balance September 30, 2002 34,598,500 $ 34,599 $ 470,045 $ (280,033)
=========== =========== =========== ===========
</Table>
The accompanying notes are an integral part of these financial statements.
OFFICE MANAGERS, INC.
( Development Stage Company)
STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2002 and 2001 and the
Period September 19, 2000 (Date of Inception) to September 30, 2002
===========================================================================
<Table>
<Caption>
Sept 19,
2000 to
Sept 30, Sept 30, Sept 30,
2002 2001 2002
----------- ----------- -----------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (221,384) $ (7,605) $ (280,033)
Adjustments to reconcile net loss
to net cash provided by operating
activities
Depreciation 1118 - 1,118
Change in accounts payable 80,923 500 80,923
Issuance of capital stock for
web site - - 25,000
----------- ----------- -----------
Net Decrease in Cash
From Operations (139,343) (7,105) (172,992)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of equipment (11,170) - (11,170)
----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Net proceeds from issuance of
common stock - note 5 410,834 2,500 479,644
Net Increase (Decrease) in Cash 260,321 (4,605) 295,482
----------- ----------- -----------
Cash at Beginning of Period 35,161 43,800 -
----------- ----------- -----------
Cash at End of Period $ 295,482 $ 39,195 $ 295,482
=========== =========== ===========
NON CASH FLOWS FROM
OPERATING ACTIVITIES
Issuance of 6,000,000 common shares for web site - 2000 $ 25,000
-----------
</Table>
The accompanying notes are an integral part of these financial statements.
5
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
===========================================================================
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on
September 19, 2000 with authorized common stock of 50,000,000 shares at
$0.001 par value.
The Company was organized for the purpose of acquiring and developing a
web site on the World Wide Web devoted exclusively to office managers for
the purpose of delivering credit, collections and financial services and
office products over the internet.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
- ------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
- ---------------
The Company has not adopted a policy regarding payment of dividends.
Income Taxes
- ------------
On September 30, 2002, the Company had a net operating loss available for
carry forward of $280,033. The tax benefit of approximately $84,010 from
the loss carry forward has been fully offset by a valuation reserve
because the use of the future tax benefit is doubtful since the Company has
no operations. The net operating loss will expire in 2023.
Basic Net Income (Loss) Per Share
- ----------------------------------
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding.
Amortization of Web Site
- ------------------------
Costs of the preliminary development of the web site are expensed as
incurred and costs of the application and post- implementation are
capitalized and amortized over the useful life of the fully developed web
site.
Financial Instruments
- ---------------------
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair values.
6
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
===========================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Concentration of Credit Risk
- ----------------------------
Financial instruments that potentially subject the Company to significant
concentration of credit risk consists of cash. Cash balances are
maintained in accounts that are not federally insured for amounts over
$100,000 but are other wise in financial institutions of high credit
quality.
Estimates and Assumptions
- -------------------------
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets
and liabilities, the disclosure of contingent assets and liabilities, and
the reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
Recent Accounting Pronouncements
- --------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
3. ACQUISITION OF WEB SITE
On September 25, 2000 the Company acquired the web site and the domain name
"officemanagers.net",(which was in the preliminary development stage) from
Ambra Resources, Inc.(an affiliate), by the issuance of 6,000,000 common
shares of the Company, for the purpose of pursuing its business interest
as outlined in note 1. The value of the web site was recorded at $25,000,
the acquisition cost to Ambra Resources, Inc., before the sale to the
Company.
Costs of the preliminary development of the web site are expensed as
incurred and costs of the application and post- implementation will be
capitalized and amortized over the useful life of the fully developed web
site.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors and Ambra Resources, Inc. have acquired 43 % of the
common stock issued. Ambra Resources, Inc. (an affiliate) received
6,000,000 common shares of the Company in exchange for the web site
outlined in note 3 and has made no interest, demand loans to the Company of
$80,923.
7
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
===========================================================================
5. CAPITAL STOCK
Since its inception the Company has completed private placement offerings
of 23,500,000 common shares for $68,810.
The Company completed the filing of an offering for the sale of 2,000,000
to 6,000,000 units at $.10 per unit. Each unit consists of one share of
common stock, one redeemable A warrant to purchase an additional common
share at $.50 within one year, and one redeemable B warrant to purchase
an additional common share at $1.20 within five years.
On July 22, 2002 5,098,500 units had been sold for $509,850 with a net
of $410,834, after offering costs, and 5,098,500 common shares were issued.
6. CONTINUING LIABILITIES
On September 26, 2002 the Company entered into an amended service agreement
with Media-Comm Marketing International , Inc., to assist the Company in
developing its referral network, to undertake a directed marketing campaign
to drive traffic to the Company's web site and to provide investor and
public relations services. The term of the agreement is for two years from
September 26, 2002 with $25,000 due on signing and 150,000 common shares of
the Company. The $25,000 was paid in October 2002 and the shares will be
issued in November 2002.
The foregoing balance sheets of Office Managers, Inc. (development stage
company) at September 30, 2002 and December 31, 2001, and the related
statement of operations and cash flows for the three and nine months ended
September 30, 2002, and 2001 and the period September 19, 2000 to September
30, 2002 have been prepared by the Company's management in conformity
with accounting principles generally accepted in the United States of
America. In the opinion of management, all adjustments considered
necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a
normal recurring nature.
Operating results for the three months ended September 30, 2002 are
not necessarily indicative of the results that can be expected for the
year ending December 31, 2002.
Item 2. Plan of Operations
This Form 10-QSB contains certain forward-looking statements. For
this purpose any statements contained in this Form 10-QSB that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate" or "continue" or comparable
terminology are intended to identify forward-looking statements. These
statements by their nature involve substantial risks and uncertainties.
Actual results may differ materially depending on a variety of factors.
8
General
- -------
Office Managers, Inc., (the "Company") is a development stage company
with limited operating history. On July 10, 2002, the Company completed a
public offering in which it raised total funds of $509,850.
The Company is creating a comprehensive website devoted to addressing
the credit and collections needs of small business and home office owners.
The Company's website, which is still in its initial stages of development,
may be viewed at www.officemanagers.net. The Company is seeking to offer
traditional professional service referrals, customer service and office
products via the internet. The Company is currently developing its
systems, which will include:
- A national network of reliable, qualified professional service
providers in the areas of credit, collections and financing.
- A personalized professional customer service department to
interact with, provide referrals to, and address the credit and
collections needs of small business and home office owners.
- Automated online sales of business products in over ten different
categories including, office supplies, computer hardware and
software and furniture.
- Access to secure current national, international and industry
news.
- Online advertising.
The Company believes its primary value driver will be the referral
fees it collects from referrals to credit and collections professionals.
The Company has initiated a direct marketing campaign focused at developing
the Company's referral network. At this early stage, it is unclear whether
the Company will be able to enroll a sufficient number of professional
collections agencies to its database. There is substantial uncertainty as
to whether the Company can convince credit and collections professionals
that the referrals they will be provided will be worth the referral fees
they will be required to pay to the Company.
Once the Company has enrolled an adequate number of credit and
collections professionals, it will undertake a marketing campaign directed
at driving small business and home office owner traffic to the Company's
website. The marketing campaign will include direct e-mails, direct
mailings and traditional marketing. In the interim, the Company has
established a small customer service department to handle inquiries for
referrals from small business and home office owners.
If the Company is unsuccessful in creating demand for its services or
cannot enroll sufficient credit and collections professionals into its
referral network, it is unlikely the Company can operate profitably.
The Company is also currently developing the infrastructure to support
its online sells of office products. Office products are not currently
available for sale on the Company's website. For convenience, however, the
Company has provided links on its website to a number of other online
sources for office products and services that may be valuable to small
business and home office owners. The Company does not intend product sales
to be a significant source of income. The Company has determined that it
will rely primarily on third parties to provide and distribute these
products. Moreover, the Company will not significantly mark up product
prices as it intends to sell the products at competitive prices.
9
The Company is also offering to sell advertising on its website. Even
if the Company generates significant traffic to its website, it does not
anticipate advertising sales to generate significant revenue for the
Company because it does not intend to vigorously pursue advertising sales.
The Company's plan of operations for the next twelve months is use the
funds raised through its recent public offering to continue to defray start
up expenditures. The offering proceeds are being used to purchase and put
in place the necessary electronic infrastructure to support the Company's
website and referral databases; to continue development of the website; to
continue building the referral network; to implement an aggressive
marketing campaign to drive the office management community to the
Company's website; and to negotiate agreements with product suppliers and
put in place the necessary infrastructure to support the Company's e-
commerce operations, including order placement, secure payment, and
delivery systems. The Company hopes to have its website, its referral
databases and its e-commerce infrastructure, fully operational by no later
than the first quarter of 2003, at a cost of approximately $85,000 to
$100,000.
The Company currently has 3 employees other than its officers. The
Company anticipates the need to hire up to 11 employees within the next
twelve months. As needed, the Company expects to hire three
accounting/billing coordinators, two sales representatives, three customer
service representatives, an office manager, a secretary/ receptionist, and
an information technology specialist.
Item 3. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures.
------------------------------------------------------
The Company's Chief Executive Officer and Chief Financial Officer have
conducted an evaluation of the Company's disclosure controls and procedures
as of a date (the "Evaluation Date") within 90 days before the filing of
this quarterly report. Based on their evaluation, the Company's Chief
Executive Officer and Chief Financial Officer have concluded that the
Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
applicable Securities and Exchange Commission rules and forms.
(b) Changes in Internal Controls and Procedures.
-------------------------------------------------
Subsequent to the Evaluation Date, there were no significant changes
in the Company's internal controls or in other factors that could
significantly affect these controls, nor were any corrective actions
required with regard to significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
No instruments defining the rights of the holders of any class of
registered securities have been materially modified, limited or qualified
during the quarter ended September 30, 2002.
10
The Company issued no securities, which were not registered under the
Securities Act of 1933, during the quarter ended September 30, 2002.
On January 11, 2002, the Company's public offering pursuant to
registration of units on Securities and Exchange Commission ("SEC") Form
was declared effective by the SEC. The offering was conducted by the
officers of the Company. The Company received subscriptions for 5,098,500
units and total proceeds of $5,098,050. The offering closed upon the
expiration of the offering period on July 10, 2002. As the offering was
not underwritten, the Company paid no underwriting expenses. No
distribution expenses were paid during the quarter ended September 30,
2002, and no distribution expenses were or will be paid to any officer,
director or affiliate of the Company.
During the quarter ended September 30, 2002, the Company used
approximately $96,075 of the proceeds of the offering to cover working
capital costs. During the quarter the Company paid $30,000 to Ambra
Resources Group, Inc., a related party, as partial payment of no interest,
demand loans made to the Company. The Company still owes Ambra $80,923.
The Company paid $25,000 to MediaComm Marketing International, Inc., to
assist the Company in developing its referral network, to undertake a
directed marketing campaign to drive traffic to the Company's web site and
to provide investor and public relations services. Approximately $24,000
of the proceeds of the offering were paid to officers and directors of the
Company as compensation incidental to their employment with the Company
during the quarter ended September 30, 2002.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
quarter ended September 30, 2002.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K
No reports on Form 8-K were filed or required to be filed during the
quarter ended September 30, 2002.
(B) Exhibits. The following exhibits are included as part of this
report:
99.1 Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this to be signed on its behalf by the
undersigned thereunto duly authorized.
Office Managers, Inc.
November 13, 2002 /S/ John M. Hickey
John M. Hickey, President
November 13, 2002 /S/ John Ray Rask
John Ray Rask, Secretary
12
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, John M. Hickey certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Office
Managers, Inc., (the "Company");
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the Company as of, and for, the periods presented in this
quarterly report;
(4) The Company's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Company and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the Company is made known
to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
(5) The Company's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Company's auditors and the
audit committee of the Company's board of directors (or persons fulfilling
the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data
and have identified for the Company's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's
internal controls; and
(6) The Company's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: November 13, 2002 By: /S/ John M. Hickey
John M. Hickey,
President and Chief Executive Officer
13
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, John Ray Rask, certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Office
Managers, Inc., (the "Company");
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the Company as of, and for, the periods presented in this
quarterly report;
(4) The Company's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Company and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the Company is made known
to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
(5) The Company's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Company's auditors and the
audit committee of the Company's board of directors (or persons fulfilling
the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data
and have identified for the Company's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's
internal controls; and
(6) The Company's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: November 13, 2002 By: /S/ John Ray Rask
John Ray Rask,
Secretary and Chief Financial Officer
14