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
June 30, 2003 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) 363-2599
-------------------------
(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; 36,673,500 shares outstanding
as of August 14, 2003
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
OFFICE MANAGERS, INC.
( Development Stage Company)
BALANCE SHEETS
June 30, 2003 and December 31, 2002
<Table>
<Caption>
================================================================================
Jun 30, Dec 31,
2003 2002
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 26,882 $ 90,601
------------ ------------
Tota Current Assets 26,882 90,601
------------ ------------
OTHER ASSETS
Office equipment - net of accumulated depreciation 12,708 13,498
Web site - net of accumulated amortization 4,525 5,027
------------ ------------
$ 44,115 $ 109,126
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ - $ 1,305
Accounts payable - affiliates 72,423 50,923
------------ ------------
Total Current Liabilities 72,423 52,228
------------ ------------
STOCKHOLDERS' EQUITY (deficit)
Common stock
50,000,000 shares authorized, at $0.001 par value;
36,548,500 shares issued and outstanding June 30;
34,598,500 shares outstanding December 31 36,549 34,599
Capital in excess of par value 499,845 470,045
Deficit accumulated during the development stage (564,702) (447,746)
------------ ------------
Total Stockholders' Equity (deficit) (28,308) 56,898
------------ ------------
$ 44,115 $ 109,126
============ ============
</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 Six Months Ended June 30, 2003 and 2002 and the
Period September 19, 2000 (Date of Inception) to June 30, 2003
<Table>
<Caption>
=====================================================================================
Three Months Six Months Sept 19,
------------------------ ----------------------- 2000 to
Jun 30, Jun 30, Jun 30, Jun 30, Jun 30,
2003 2002 2003 2002 2003
----------- ----------- ----------- ----------- -----------
REVENUES $ 69 $ - $ 69 $ - $ 69
----------- ----------- ----------- ----------- -----------
EXPENSES
Market development 27,616 - 78,146 - 239,242
Depreciation
& amortization 646 - 1,292 - 2,878
Administrative 8,820 109,904 37,587 121,282 293,624
Development of web
site - preliminary
project stage - 4,027 - 4,027 29,027
----------- ----------- ----------- ----------- -----------
37,082 113,931 117,025 125,309 564,771
----------- ----------- ----------- ----------- -----------
NET LOSS $ (37,013) $ (113,931) $ (116,956) $ (125,309) $ (564,702)
=========== =========== =========== =========== ===========
NET LOSS PER COMMON SHARE
Basic $ - $ - $ - $ -
----------- ----------- ----------- -----------
AVERAGE OUTSTANDING SHARES
Basic
(stated in 1000's) 38,828 29,500 36,598 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 June 30, 2003
<Table>
<Caption>
=====================================================================================
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value 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)
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)
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 year
ended December 31, 2002 - - - (389,097)
----------- ----------- ----------- -----------
Balance December 31, 2002 34,598,500 34,599 470,045 (447,746)
Issuance of common stock for
services at $.001 - January
through March 2003 - net of
cancellations 1,750,000 1,750 - -
Issuance of common stock for
payment of debt at $.15 -
May 30, 2003 200,000 200 29,800 -
Net operating loss for six months
ended June 30, 2003 - - - (116,956)
----------- ----------- ----------- -----------
Balance June 30, 2003 36,548,500 $ 36,549 $ 499,845 $ (564,702)
=========== =========== =========== ===========
</Table>
The accompanying notes are an integral part of these financial statements.
4
OFFICE MANAGERS, INC.
( Development Stage Company)
STATEMENT OF CASH FLOWS
For the Six Months Ended June 30, 2003 and 2002 and the
Period September 19, 2000 (Date of Inception) to June 30, 2003
<Table>
<Caption>
Sept 19, 2000
Jun 30, Jun 30, to Jun 30,
2003 2002 2003
------------ ------------ ------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (116,956) $ (125,309) $ (564,702)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Depreciation and amortization 1,292 559 2,878
Change in accounts payable 50,195 110,923 102,423
Issuance of capital stock for web site - - 25,000
Issuance of capital stock for services 1,750 - 1,750
------------ ------------ ------------
Net Decrease in Cash From Operations (63,719) (13,827) (432,651)
------------ ------------ ------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of web site - - (5,027)
Purchase of equipment - (11,170) (15,084)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock - 320,044 479,644
------------ ------------ ------------
Net Increase (Decrease) in Cash (63,719) 295,047 26,882
Cash at Beginning of Period 90,601 35,161 -
------------ ------------ ------------
Cash at End of Period $ 26,882 $ 330,208 $ 26,882
============ ============ ============
NON CASH FLOWS FROM OPERATING ACTIVITIES
Issuance of 6,000,000 common shares for web site - 2000 $ 25,000
------------
Issuance of 1,750,000 common shares (net of cancellations)
for services - 2003 1,750
------------
</Table>
The accompanying notes are an integral part of these financial statements.
5
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
===========================================================================
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 office products and related professional services
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 March 31, 2003, the Company had a net operating loss carry forward of
$564,702. The tax benefit of approximately $169,410 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 starting 2021 through 2024.
Basic and Dilutive Net Income (Loss) Per Share
- ----------------------------------------------
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding. Diluted EPS are
similarly calculated, except that the weighted average number of common
shares outstanding includes common shares that may be issued, subject to
existing rights, with dilutive potential. Dilutive (loss) per share has not
been computed nor presented if it would be anti-dilutive and for purposes
of this report the dilutive shares includes 10,197,000 shares that may be
issued as outlined in note 5.
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.
6
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2003
===========================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Financial Instruments
- ---------------------
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair values.
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.
Financial and Concentrations Risk
- ---------------------------------
The Company does not have any concentration or related financial credit
risk.
Revenue Recognition
- -------------------
Revenue is recognized on the sale and delivery of a product or the
completion of a service provided.
Statement of Cash Flows
- -----------------------
For the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be
cash equivalents.
Advertising and Market Development
- ----------------------------------
The company expenses advertising and market development costs as incurred.
Estimates and Assumptions
- -------------------------
Management uses estimates and assumptions in preparing financial statements
in accordance with accounting principles generally accepted in the United
States of America. 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.
Office equipment
- ----------------
Office equipment is depreciated over 3 and 7 years using the straight line
method.
<Table>
Cost $ 15,084
Less accumulated depreciation (2,376)
------------
Net 12,708
------------
</Table>
7
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2003
===========================================================================
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
Apex 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 Apex 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 are
capitalized and amortized over an estimated useful life of five years.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors, employees, and Apex Resources, Inc. (an affiliate by
common officers) have acquired 30 % of the common stock issued.
Apex Resources, Inc. has made no interest demand loans to the Company of
$72,423
5. CAPITAL STOCK
>From September 2000 to January 2001 the Company completed private
placement offerings of 23,500,000 common shares for $68,810.
During July 2002 the Company completed the sale of an offering of
5,098,500 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 by July 10, 2003, and one redeemable B warrant to purchase an
additional common share at $1.20 by July 10, 2007 which could amount to
the issuance of 10,197,000 additional shares. On the report date no
warrants had been redeemed.
During January and February 2003 the Company issued 1,750,000 restricted
common shares (net of cancellations during June 2003) for services. In May
2003, the Company issued 200,000 shares for payment of debt.
6. CONTINUING LIABILITIES
The Company is obligated under a month to month office lease.
8
OFFICE MANAGERS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2003
===========================================================================
7. GOING CONCERN
The Company intends to continue the development of its business interests,
however, there is insufficient working capital necessary to be successful
in this effort and to service its debt which raises substantial doubt about
its ability to continue as a going concern.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed
a strategy, which it believes will accomplish this objective, through
related party loans, long term financing, and additional equity funding,
which will enable the Company to operate for the coming year.
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.
For a complete understanding, this Plan of Operations should be read in
conjunction with Part I- Item 1. Financial Statements to this Form 10- QSB.
General
- -------
Office Managers, Inc., is a Nevada corporation acting primarily as a
consultant to businesses helping them match their needs to the goods and
services of reputable providers. The Company is considered a development
stage company because it has not yet generated revenue from sale of its
products. Since its inception, the Company has devoted substantially all
of its efforts to developing its service and product offerings and to the
search for sources of capital to fund its efforts.
To date, the Company has realized no income from its credit and
collections professional referral service. The Company believes this is
due to several factors. The Company has chosen to seek to develop at least
a minimal referral network before actively marketing its service to small
business and home office business owners. The Company has had difficulty
in retaining the services of qualified credit and collections professionals
for inclusion in its network. The Company believes this is due to doubts
on the part of credit and collections professionals about whether the $100
referral fee they pay will be worth the referral they will receive;
questions about the quantity and quality of referrals the Company will be
able to provide; and a lack of knowledge about the Company's services
because the Company's direct marketing campaign to enroll credit and
collections individuals has not commenced. Given its current financial
situation, the Company is uncertain when it may begin this direct marketing
campaign. If the Company cannot convince a sufficient number of credit and
collections professionals of the value of becoming a member of its referral
database, the Company will have no service to provide to its targeted
markets.
9
Through its subsidiary Vogue Environmental Solutions, Inc., ("Vogue"),
the Company continues to research and undertake efforts to develop a
commercially viable anaerobic digester system. At this point, particularly
given the Company's financial constraints, it is unclear when, or if the
Company will be able to develop a commercially viable anaerobic digester.
The Company, however, continues to work on designing a prototype digester
system. The Company anticipates the need to raise additional funds, either
through equity or debt financing, to fund the building of a working
prototype digester system.
Source of Funds
---------------
As discussed above, on July 10, 2002, the Company closed its initial
public offering pursuant to an effective registration statement with the
SEC. The Company received total proceeds of $509,850 from the offering.
Since that time, the Company has relied on the proceeds of that offering to
fund its operations. As of June 30, 2003, the Company has spent
approximately $499,468 of the funds raised in the offering.
During the quarter, the Company borrowed $16,500 from Apex Resources,
a related-party, as a no interest demand loan.
Once the proceeds from the public offering are fully used, which
should occur during the third quarter of 2003, the Company will need to
seek additional funding. This funding may be sought by means of private
equity or debt financing by the Company. The Company currently has no
commitments from any party to provide funding and there is no way to
predict when, or if, any such funding could materialize. There is no
assurance that the Company will be successful in obtaining additional
funding on attractive terms or at all. If the Company is unsuccessful in
obtaining additional funding by the end of the second quarter of 2003, the
Company may be unable to continue operations as it has insufficient working
capital necessary to meet its expenses and service its debt.
Results of Operations
---------------------
During the period from inception, September 19, 2000, to June 30,
2003, the Company has not generated any income from the sale of services or
products. The Company did earn $69 in interest during the quarter. The
Company does not expect to generate any material revenues from its credit
and collections referral service or online office product sales until at
least the fourth quarter of 2003, if at all. At this time, the Company
does not know if or when it may generate revenues from anaerobic digester
systems. The Company will use substantially all of its resources for
further development of its website, referral database and an anaerobic
digester system.
As of June 30, 2003, the Company had an accumulated deficit of
$564,702 funded by paid-in capital. At June 30, 2003, the Company had
total current liabilities of $72,423 compared to total current liabilities
of $0 on June 30, 2002. During the quarter ended June 30, 2003, the
Company spent $27,616 in market development expenses compared to $-0- in
the same period 2002. This increase in market development expenses is duly
primarily to the Company's efforts in connection with the development of a
prototype anaerobic digester, which the Company had not begun to develop
during the quarter ended June 30, 2002. During the quarter ended June 30,
2003, the Company spent $8,82 in administrative expenses compared to
$109,904 for the same period of 2002. Part of the reduction in
administrative expenses is the result of the Company eliminating its
employees and compensating its officers for their services as consultants
in connection with their market development efforts. During the quarter
the officers of the Company received consulting fees of approximately
10
$13,500. During the quarter ended June 30, 2003, the Company had losses
from operations of $37,082 compared to losses in the same period of 2002 of
$113,931. This decrease in losses is due primarily to the Company scaling
back its active operations as funds available to the Company decrease, and
as the Company pursues development of its anaerobic digester. As the
Company obtains additional funding and develops a functional prototype
digester, the Company expects its administrative expenses to increase to at
least previous levels. During the quarter, the Company issued 200,000
restricted common shares in satisfaction of an account payable to a
related-party of $30,000.
The Company has financed its operations mainly through the sale of its
common stock and has been entirely dependent on outside sources of
financing for continuation of operations. The Company expects to continue
its development efforts at the same pace until funds raised in the public
offering are exhausted. The Company anticipates the funds from the
offering may be sufficient to fund operations for the next month. The
Company is currently evaluating its situation to determine whether it needs
to scale back its efforts to minimize expenses. As stated previously, there
is no assurance that the Company will be successful in obtaining additional
funding on acceptable terms or at all.
The Company currently is currently paying monthly consulting fees to
its President, John Hickey and two other consultants for services being
rendered to the Company. The total fees paid to these individuals on a
monthly basis is approximately $6,000. The Company does not anticipate
hiring employees in 2003 unless the Company is successful in securing
additional funding. As the Company has basically exhausted the funds
raised in the offering, unless it is unable to raise additional funds, it
is unlikely the Company will be able to continue to retain the services of
some or any of these consultants.
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.
11
PART II - OTHER INFORMATION
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 June 30, 2003.
In the Company's Quarterly Report for the quarter ended March 31,
2003, the Company disclosed that it issued 1,985,850 restricted common
shares to Charles Yourshaw and Yourshaw Engineering from February 2003 to
May 2003. The Company also disclosed that in February 2003, it issued
250,000 shares to David Wagner and 300,000 shares to two consultants in
March 2003. All of these shares were issued to these individuals for
services rendered or to be rendered to the Company's wholly owned
subsidiary Vogue Environmental Solutions, Inc. During the current quarter,
the Company reached a mutual agreement with these parties to return the
shares to the Company for cancellation and return to the Company's
treasury. The parties are currently negotiating the terms of a new service
agreement.
On May 30, 2003, the Company issued 200,000 restricted common shares
to Leo Capital, an entity beneficially owned by Charles Smith, a Company
director, in satisfaction of a $30,000 account payable the Company owed to
Leo Capital. The shares were issued without registration under the
Securities Act of 1933 in reliance on an exemption from registration
provided by Section 4(2) of the Securities Act. No general solicitation
was made in connection with the offer or sale of these securities. No
funds were received by the Company for these shares.
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 $509,850. 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, 2003, the Company used
approximately $33,846 of the proceeds of the offering to cover working
capital costs. The Company borrowed $16,500 from Apex Resources Group,
Inc., a related party, (formerly known as Ambra Resources Group, Inc.) and
now owes Apex $72,423. Approximately $13,500 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
June 30, 2003.
12
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K
None.
(B) Exhibits. The following exhibits are included as part of this
report:
31.1 Certification of Principal Executive Officer
31.2 Certification of Principal Financial Officer
32 Certification pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
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.
August 13, 2003 /S/ John M. Hickey
--------------------------------------------
John M. Hickey, Principal Executive Officer
August 13, 2003 /S/ John Ray Rask
--------------------------------------------
John Ray Rask, Principal Financial Officer
13