UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2006 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ________________ to _______________ Commission File Number: 000-50754 IFSA STRONGMAN, INC. -------------------- (Name of small business issuer in its charter) - -------------------------------------------------------------------------------- Delaware 20-0929024 - -------------------------------------------------------------------------------- State or other jurisdiction of I.R.S. Employer Identification Number incorporation or organization - -------------------------------------------------------------------------------- 28-32 Wellington Road London, NW8 9SP, United Kingdom (Address of principal executive office) Issuer's telephone number: +44 20 7060 4372 N/A (Former name, former address and former 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 |X| No |_| State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of November 3, 2006 - 37,676,952 shares of common stock Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X| Transitional Small Business Disclosure Format (check one): Yes |_| No |X| 1 IFSA STRONGMAN, INC. Index Page Number ------ PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets (unaudited) 2 Consolidated Statements of Operations (unaudited) 3 Consolidated Statements of Cash Flows (unaudited) 4 Notes to the Consolidated Financial Statements (unaudited) 5 Item 2. Management's Discussion and Analysis or Plan of Operations 7 Item 3. Controls and Procedures 8 PART II. OTHER INFORMATION 9 Item 1. Legal Proceedings 9 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 9 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 9 SIGNATURES 10 1 IFSA STRONGMAN, INC. (formerly Synerteck Incorporated) Consolidated Balance Sheets ASSETS ------ September 30, December 31, 2006 2005 ------------- ------------ (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 60,388 $ 369,664 Accounts receivable, net 82,186 26,354 Other current assets 8,733 51,944 ----------- ----------- Total Current Assets 151,307 447,962 ----------- ----------- PROPERTY AND EQUIPMENT - NET 85,022 90,152 ----------- ----------- GOODWILL 1,325,610 1,325,610 ----------- ----------- TOTAL ASSETS $ 1,561,939 $ 1,863,724 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES Accounts payable and accrued expenses $ 213,731 $ 377,471 Notes payable - related parties 103,000 -- Notes payable 450,000 -- ----------- ----------- Total Current Liabilities 766,731 377,471 ----------- ----------- STOCKHOLDERS' EQUITY Preferred stock, $0.001 par value; 10,000,000 shares authorized, 50,000 issued and outstanding 50 50 Common stock, $0.001 par value; 100,000,000 shares authorized, 29,279,742 and 28,896,994 issued and outstanding, respectively 29,280 28,897 Additional paid-in capital 2,834,129 2,682,012 Accumulated deficit (2,285,643) (1,405,601) Foreign currency translation adjustment 217,392 180,895 ----------- ----------- Total Stockholders' Equity 795,208 1,486,253 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,561,939 $ 1,863,724 =========== =========== 2 IFSA STRONGMAN, INC. (formerly Synerteck Incorporated) Consolidated Statements of Operations (Unaudited) For the Three Months For the Nine Months Ended September 30, Ended September 30, ------------------------------ ------------------------------ 2006 2005 2006 2005 ------------ ------------ ------------ ------------ SALES $ 43,265 $ 469,442 $ 226,444 $ 1,118,677 COST OF SALES 24,573 659,899 125,307 1,199,493 ------------ ------------ ------------ ------------ GROSS MARGIN 18,692 (190,457) 101,137 (80,816) ------------ ------------ ------------ ------------ OPERATING EXPENSES Salaries and benefits 87,306 255,424 406,743 608,590 Selling, general and administrative 54,851 387,085 181,473 931,477 Professional fees 78,927 122,801 363,783 401,846 ------------ ------------ ------------ ------------ Total Operating Expenses 221,084 765,310 951,999 1,941,913 ------------ ------------ ------------ ------------ LOSS FROM OPERATIONS (202,392) (955,767) (850,862) (2,022,729) ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSES) Interest income 835 -- 1,745 -- Loss on foreign currency transactions (34) (17,782) (195) (10,998) Interest expense (19,042) (1,470) (30,731) (3,114) ------------ ------------ ------------ ------------ Total Other Expenses (18,241) (19,252) (29,180) (14,112) ------------ ------------ ------------ ------------ LOSS BEFORE INCOME TAXES (220,633) (975,019) (880,042) (2,036,841) INCOME TAX EXPENSE -- -- -- -- ------------ ------------ ------------ ------------ NET LOSS $ (220,633) $ (975,019) $ (880,042) $ (2,036,841) ============ ============ ============ ============ BASIC AND DILUTED: Net loss per common share $ (0.01) $ (0.07) $ (0.03) $ (0.15) ============ ============ ============ ============ Weighted average shares outstanding 29,279,742 14,868,436 29,171,701 13,556,459 ============ ============ ============ ============ OTHER COMPREHENSIVE INCOME NET LOSS $ (220,633) $ (975,019) $ (880,042) $ (2,036,841) Foreign currency translation adjustment (14,222) (97,371) (36,497) (120,749) ------------ ------------ ------------ ------------ COMPREHENSIVE LOSS $ (234,855) $ (1,072,390) $ (916,539) $ (2,157,590) ============ ============ ============ ============ 3 IFSA STRONGMAN LIMITED (formerly Synerteck Incorporated) Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, ---------------------------- 2006 2005 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (880,042) $(2,036,841) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 14,854 9,787 Common stock issued for services -- 658,065 Excess of valued of stock issued over services received -- (1,633,376) Changes in operating assets and liabilities: Increase in accounts receivable (55,832) (465) Decrease in due from related parties -- 152,012 (Increase) decrease in other assets 43,210 (81,076) Increase (decrease) in accounts payable and accrued expenses (111,239) 446,753 ----------- ----------- Net Cash Used in Operating Activities (989,049) (2,485,141) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (9,724) (130,188) ----------- ----------- Net Cash Used by Investing Activities (9,724) (130,188) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from stock subscriptions receivable -- 659,128 Proceeds from issuance of notes payable - related parties 103,000 -- Proceeds from issuance of notes payable 450,000 -- Proceeds from issuance of stock 100,000 1,821,698 ----------- ----------- Net Cash Provided by Financing Activities $ 653,000 $ 2,480,826 ----------- ----------- EFFECT OF FOREIGN CURRENCY TRANSLATION ADJUSTMENT 36,497 (147,152) NET DECREASE IN CASH AND CASH EQUIVALENTS $ (309,276) $ (281,655) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 369,664 337,852 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 60,388 $ 56,197 =========== =========== SUPPLEMENTAL CASH FLOW INFORMATION Cash Payments For: Interest $ -- $ -- Income taxes $ -- $ -- Non-Cash Investing and Financing Activities Common stock issued for services $ -- $ 658,065 Common stock issued for debt $ 52,500 $ -- 4 IFSA STRONGMAN, INC. Notes to the Financial Statements September 30, 2006 NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim consolidated financial statements include normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim consolidated financial statements be read in conjunction with the Company's audited financial statements and notes thereto included in its Form 10KSB filed on March 30, 2006. Operating results for the three months and nine months ended September 30, 2006 are not necessarily indicative of the results to be expected for the year ending December 31, 2006. NOTE 2 - FINANCING ACTIVITIES During the nine months ended September 30, 2006, the Company issued 250,000 shares of common stock for $100,000 cash. During the nine months ended September 30, 2006, the Company issued 132,748 shares of commons stock in exchange for debt of $52,500. During the nine months ended September 30, 2006, the Company issued convertible notes payable for $553,000 cash. A $450,000 note matures in six months and carries 16% annual interest. Notes for $103,000 mature in one year and carry 16% annual interest. NOTE 3 - GOING CONCERN CONSIDERATIONS The accompanying consolidated financial statements have been prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As reported in the consolidated financial statements, the Company has incurred losses of approximately $2,285,000 from inception of the Company through September 30, 2006, has negative cash flows from operations, and has a limited operating history. These factors combined, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans to address and alleviate these concerns are as follows: The Company's management continues to develop a strategy of exploring all options available to it so that it can develop successful operations and have sufficient funds to be able to operate over the next twelve months. As a part of this plan, management is currently in negotiations with their target industries' key players to develop additional business opportunities. In addition, management is exploring options in order to raise additional operating capital through debt and/or equity financing. No assurance can be given that funds will be available, or, if available, that it will be on terms deemed satisfactory to management. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually attain profitable operations. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties. 5 Item 2. Management's Discussion and Analysis or Plan of Operations Forward-Looking Statements The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as "believes," "estimates," "could," "possibly," "probably," anticipates," "projects," "expects," "may," "will," or "should" or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management's current expectations and are inherently uncertain. Our actual results may differ significantly from management's expectations. The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management. Corporate History On December 9, 2005, Synerteck Incorporated consummated a Share Exchange Agreement with IFSA Strongman Ltd. whereby all of the shareholders in IFSA Strongman Ltd. had their shares converted into 20,000,000 shares of Synerteck. On December 28, 2005, to effect a name change, Synerteck executed a merger document with its wholly owned subsidiary IFSA Strongman, Inc., a newly formed Delaware corporation. This effectively changed the registrant's name from Synerteck Incorporated to IFSA Strongman, Inc. Overview We are an integrated media, entertainment and athlete representation company, principally engaged in the development, production and marketing of television programs, live events and the licensing and sale of branded consumer products. The content of our entertainment and consumer products is centered on the various strongman competitions and events world-wide. Results of Operations Following is management's discussion of the relevant items affecting results of operations for the quarters ended September 30, 2006 and 2005. These results are in no way indicative of expected future operations. Revenues. The Company generated net revenues of $43,265 during the three months ended September 30, 2006, which represents a 91% decrease compared to $469,442 in net revenues during the third quarter of 2005. For the nine month period ended September 30, 2006, net revenues were $226,444, representing a 80% decrease compared to $1,118,677 in net revenues during the first nine months of 2005. This was mainly due to this year's policy of refraining from organizing non-strategic loss-making events such as the Arnold's Classic. An increase in activity is expected as the World Championships and other strategic events take place. Cost of Sales. Cost of sales for the three months ended September 30, 2006 were $24,573, representing a 96% decrease from $659,899 during the third quarter of 2005. For the nine month period ended September 30, 2006, cost of sales was $125,307, representing a 90% decrease from $1,199,493 during the first nine months of 2005. This decrease corresponds with the decrease in revenues for the same period. The change is mainly due to the decrease in loss-making activities described above. Salaries and Benefits. Salaries and benefits expense for the three months ended September 30, 2006 were $87,306, representing a 66% decrease compared to $255,424 for the third quarter of 2005. For the nine month period ended September 30, 2006, salaries and benefits were $406,743, representing a 33% decrease from $608,590 during the first nine months of 2005. In 2005, fixed payments to athletes amounted to approximately $68,000 per month. In 2006, payments to athletes are fully dependent on performance and are included in cost of sales. 6 Selling, General and Administrative Expenses. Our selling, general and administrative expenses have been comprised of administrative wages and benefits; occupancy and office expenses; travel and other miscellaneous office and administrative expenses. Selling, general and administrative expenses for the three months ended September 30, 2006 were $54,851, representing a 86% decrease compared to $387,085 during the third quarter of 2005. For the nine month period ended September 30, 2006, selling, general and administrative expenses were $181,473, representing a 81% decrease from $931,477 during the first nine months of 2005. This decrease was primarily due to the write off of $446,388 during 2005. Also, the Company has made efforts to cut or optimize any unnecessary costs associated with contract labor, and rent and occupancy-related expenses. However, as the business grows, these expenses will increase. Professional Fees. Professional fees for the three months ended September 30, 2006 were $78,927, representing a 36% decrease compared to $122,801 during the third quarter of 2005. For the nine month period ended September 30, 2006, professional fees were $363,783, representing a 9% decrease from $401,846 during the first nine months of 2005. This decrease is the result of decreased dependence on professional consultants. Professional fees mainly consist of legal, accounting and audit fees associated with the filings required by the Securities and Exchange Commission. Other Income (Expense). The Company incurred net other expenses of $18,241 for the three months ended September 30, 2006 compared to net other expenses of $19,252 during the third quarter of 2005. For the nine months ended September 30, 2006, the Company incurred net other expenses of $29,180 compared to net other expenses of $14,112 during the first nine months of 2005. During 2005 the Company had a loss on foreign currency transactions of $10,998 compared to $195 during 2006. However, interest expense increased from $3,114 during 2005 to $30,731 during 2006. The change is mainly the result of interest expense on notes payable which were issued during the first half of 2006. Liquidity and Capital Resources As of September 30, 2006, the Company's primary source of liquidity consisted of $60,388 in cash and cash equivalents. Since inception, the Company has financed its operations through a combination of short and long-term loans, and through the private placement of its Common Stock. Off-Balance Sheet Arrangements IFSA Strongman is not subject to any off-balance sheet arrangements. Critical Accounting Policies The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Because of our limited level of operations, we have not had to make material assumptions or estimates other than our assumption that we are a going concern. If our business increases, our principal estimates will involve whether engagements in process will be profitable. Item 3. Controls and Procedures As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and principal financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and principal financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. There was no change in our internal controls or in other factors that could affect these controls during our last fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 7 Part II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits Exhibit Number Description of Exhibit 3.1 Registrant's Certificate of Incorporation (incorporated by reference to the exhibits to Registrants Form 10-SB filed on September 15, 2004). 3.2 Certificate of Ownership of Synerteck Incroporated and IFSA Strongman, Inc. (incorporated by reference to the exhibits to Registrants Form 8-K filed on December 28, 2005). 3.3 Registrant's By-Laws (incorporated by reference to the exhibits to Registrants Form 10-SB filed on September 15, 2004). 10.1 Share Exchange Agreement by and among Synerteck Incorporated, and IFSA Strongman Ltd. and the shareholders of IFSA Strongman Ltd. (incorporated by reference to the exhibits to Registrants Form 8-K filed on December 15, 2005). 10.2 $500,000 Convertible Loan Note, dated March 21, 2006, issued to Pacemaker Fund, LLC (incorporated by reference to the exhibits to Registrants Form 10-QSB filed on May 15, 2005). 31.1 Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended 31.2 Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer) 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer) 8 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. IFSA STRONGMAN, INC. By: /s/ Jussi Laurimaa ---------------------- Jussi Laurimaa Chief Executive Officer (Principal Executive Officer) By: /s/ Jaime Alvarez ---------------------- Jaime Alvarez Chief Financial Officer (Principal Financial and Accounting Officer) 9