U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended December 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from _______ to _______
COMMISSION FILE NUMBER 333-62236
TELECOM COMMUNICATIONS, INC.
----------------------------
(Exact name of small business issuer as specified in its charter)
Indiana 35-2089848
-------- -----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
827 S. Broadway, Los Angeles, CA 90014
--------------------------------------
(Address of principal executive offices)
(213) 489-3486
--------------
(Issuer's telephone number)
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 [ ]
Number of shares of common stock outstanding as of
May 18, 2002: 10,000,000
ITEM 1. FINANCIAL STATEMENTS
TELECOM COMMUNICATIONS, INC.
BALANCE SHEETS
AT DECEMBER 31, 2001(UNAUDITED) AND SEPTEMBER 30, 2001
(Unaudited)
December 31,2001 September 30,2001
ASSETS
- -------------------------------------
CURRENT ASSETS
- -------------------------------------
Cash in banks (Note 4) . . . . . . $ 20,451 $ 25,920
Inventory (Note 5) . . . . . . . . $ 4,000 $ 4,000
TOTAL CURRENT ASSETS . . . . . . . 24,451 29,920
----------- -----------
PROPERTY AND EQUIPMENT, NET. . . . . -0- -0-
- --------------------------------------
TOTAL ASSETS . . . . . . . . . . . $ 24,451 $ 29,920
- - ------------------------------------
- ----------------- -------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
- - ------------------------------------
CURRENT LIABILITIES
- ---------------------------------------
Income taxes payable (Note 14) . . .$ 3,813 $ 21,026
TOTAL CURRENT LIABILITIES. . . . . . 3,813 21,026
- ---------------------------------------
STOCKHOLDERS' EQUITY (NOTE 15)
- ---------------------------------------
Common stock ($.001 par value, 80,000,000 shares authorized:
10,000,000 issued and outstanding). .. . .. . 10,000 10,000
Preferred stock ($.001 par value, 20,000,000 shares authorized:
none issued and outstanding). . . . . . . . . -0- -0-
Additional paid-in-capital . . . . . . . . . -0- -0-
Retained earnings. . . . . . . . . . . . . . 10,638 (1,106)
TOTAL STOCKHOLDERS' DEFICIT. . . . . . . . . 20,638 8,894
- -------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT. . . . . . . . . . . $ 24,451 $ 29,920
- -------------------------------------
The accompanying notes are an integral part of these financial statements
<page>
TELECOM COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
INCOME (NOTE 2):
- ----------------------------------
Phone calls . . . . . . . . . $ 31,123 $ 22,622
Lotto tickets (net) . . . . . 1,806 1,749
Bus tokens. . . . . . . . . . 98,193 110,464
Bus passes. . . . . . . . . . 2,084 15,207
Checks cashed . . . . . . . . 2,251 2,250
Money grams . . . . . . . . . 1,495 1,085
TOTAL . . . . . . . . . . . . $ 136,952 $ 153,377
------------ ------------
COST OF GOODS SOLD
- - ---------------------------------
Phone call costs. . . . . . . 15181 10368
Bus token costs . . . . . . . 89445 97967
Bus pass costs. . . . . . . . 1998 14371
TOTAL COST OF SALES . . . . . 106624 122706
------------ ------------
GROSS PROFIT. . . . . . . . . . $ 30,328 $ 30,671
------------ ------------
OPERATING EXPENSES:
- - ---------------------------------
General and administrative. . . $ 14,814 $ 12,152
TOTAL EXPENSES. . . . . . . . . 14,814 12,152
------------ ------------
OPERATING INCOME. . . . . . . . 15,514 18,519
------------ ------------
INCOME TAX (PROVISION) BENEFIT. (3,770) (6,527)
------------ ------------
NET INCOME. . . . . . . . . . . $ 11,744 $ 11,992
============ ============
Net income per common share
basic & fully diluted . . . . . $ ** $ **
============ ============
Weighted average common
shares outstanding. . . . . . . 10,000,000 10,000,000
============ ============
**Less than $.01
The accompanying notes are an integral part of these financial statements
<page>
TELECOM COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
------ ------
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net income $11,744 $11,992
Adjustments to reconcile net income to net
cash used in operating activities:
Common stock issued for services -0- -0-
(Decrease) in operating liabilities:
Income taxes payable (17,213) 6,527
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (5,469) 18,519
--------- ---------
CASH FLOWS FROM FINANCIANG ACTIVITIES:
- - -------------------------------------------
Shareholder distributions -0- (20,203)
NET CASH USED IN FINANCING
ACTIVITIES -0- (20,203)
--------- ---------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (5,469) (1,684)
--------- ---------
CASH AND CASH EQUIVALENTS:
- - -------------------------------------------
Beginning of period 25,920 2,443
End of period $20,451 $ 759
--------- ---------
The accompanying notes are an integral part of these financial statements
<page>
TELECOM COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001 (UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of management, the unaudited condensed consolidated financial
statements contain all adjustments consisting only of normal recurring accruals
considered necessary to present fairly the Company's financial position at
December 31, 2001, the results of operations for the three month periods ended
December 31, 2001 and 2000, and cash flows for the three months ended December
31, 2001 and 2000. The results for the period ended December 31, 2001, are not
necessarily indicative of the results to be expected for the entire fiscal year
ending September 30, 2002.
NOTE 1. ABOUT THE COMPANY
Telecom Communications of America was founded as a sole proprietorship in 1995
by Michelle Hiromoto with the assistance and management of her father Tak
Hiromoto. The purpose of the company was to provide low cost access to long
distance carriers for individuals needing to call Latin and South America. The
company operates on the Internet as opposed to using conventional long distance
carriers to facilitate lower costs that are passed on to the customers. Many of
the extra fees that are found in conventional long distance systems are avoided
this way. In addition the company also provides various services such as check
cashing, money wiring, the sale of bus tokens and passes, and tickets from
California Lottery known as Lotto.
NOTE 2. REVENUE RECOGNITION
SAB 101 identifies basic criteria that must be met for revenue recognition.
There must be the following items:
A. Persuasive evidence of an arrangement exists;
B. Delivery has occurred or service has been rendered.
C. The seller's price to the buyer is fixed or determinable;
D. Collectability is reasonably assured.
Except for check cashing, all transactions are done on a cash basis with fixed
prices made clear to the buyer prior to the transaction. All products are paidf
or immediately upon receipt or completion of phone calls. All monies received
are not refundable. EITF 99-19 requires that sales recognized on a gross basis
be for an item or service where the merchant takes total risk for the product or
service as opposed to an agent relationship wherein earnings are simply a
commission received as a representative who bears no risk. Phone calls, Bus
Passes, and Tokens, are reported at gross while Lotto Tickets, Money Grams and
Check Cashing are reported at net. Checks cashed are limited to local
individuals known by the owners as local employees with two types of I.D.
required. On one occasion $5,000 worth of checks did bounce which were later
determined to be counterfeit.
This incident was isolated and has not been repeated because of the controls
being used. For this reason bad checks are minimal. All cashed checks are
deposited the same evening and clear the next day so there are no material
receivables. There is a fee of 1.7% of the amount cashed.
NOTE 3. ACCOUNTING METHOD
The company uses the accrual method of accounting.
<page>
NOTE 4. BANKING POLICY
Funds are kept in two banks so no more than $100,000 is in any one account.
NOTE 5. INVENTORY VALUATION
The average inventories on any given day are as follows:
Bus Passes $ 500
Bus Tokens 2,000
Lotto Scratcher 1,500
_________
Total $ 4,000
========
NOTE 6. RECEIVABLES
There are no receivables as all business is done for cash. See Note 2.
NOTE 7. ASSETS
All capitalized assets are fully depreciated while new ones are currently being
leased.
NOTE 8. LIABILITIES
There are no loans outstanding and no material payables other than income taxes
accrued. See Note 14.
NOTE 9. LOANS AND LEASES
Although no loans are outstanding, the Company does have a computer lease
requiring a monthly payment of $911.00. This lease is good thru July 1, 2003.
Although there is a purchase option at the end of the lease for $3,600 this is
not small enough to be considered a bargain purchase option which would require
lease capitalization Statement No. 13 which requires capitalization and
depreciation of certain leases. No capitalization of the lease will be done.
The Company is also leasing its occupancy thru December 31, 2003. Both
obligations are broken down as follows:
Computer Lease
Balance on 07/01/2001 thru 09/30/2001 $ 2,733
Balance on 10/01/2001 thru 09/30/2002 10,932
Balance on 10/01/2002 thru 07/01/2003 8,199
___________
Total $ 21,864
===========
Occupancy Lease
Balance on 07/01/2001 thru 09/30/2001 $ 5,400
Balance on 10/01/2001 thru 09/30/2002 22,300
Balance on 10/01/2002 thru 09/30/2003 23,500
Balance on 10/01/2003 thru 12/31/2003 6,000
___________
Total $ 57,200
==========
NOTE 10. RELATED PARTY TRANSACTIONS
There have been no related party transactions.
NOTE 11. LITIGATION
There is no litigation at this time either threatened or pending.
<page>
NOTE 12. PRE-PAID ITEMS AND DEPOSITS
There are no large deposits on any assets or prepaid insurance.
NOTE 13. PAYROLL
Prior to incorporation there were no payrolls as ownership took draws as any
sole proprietorship does. After incorporation the officers will be paid as
professional, independent contractors. Therefore, there are no payroll tax
issues to be concerned about at this time.
NOTE 14. INCOME TAX PROVISION
Provision for income taxes is based on corporate rates for both state and
federal taxes. Corporate rates are used for the statements prior to
incorporation for consistency. The rates are calculated as follows:
Federal rates:
The first $50,000 @ 15% percent.
The next $25,000 @ 25% percent.
The balance @ 35% percent.
State rates:
California rate of 9.3%.
NOTE 15. INCORPORATION
On December 21, 2000, the Company was acquired by MAS Acquisition XXI Corp.
Following APB No. 16, this type of acquisition is commonly called a "reverse
merger" wherein the smaller private operating company, Telecom Communications of
America, merges into a non-operating shell corporation, MAS Acquisition XXI
Corp., which had no assets, resulting in the owner's/manager's, Tak Hiromoto
continuing to have effective operating control of the new combined company,
Telecom Communications, Inc. The shareholders of the former shell only continue
as passive investors. The accounting was accomplished by adjusting the balance
sheet into a corporate style as opposed to a sole proprietorship with simple
recognition of the assets and liabilities as they were in the former financial
statements of the sole proprietorship. The equity section is adjusted by taking
all owner's capital and reclassifying it as Additional Paid in Capital. The
Common Stock issued is recognized at its par value of .001 as per the offering.
Ten million shares were issued totaling $10,000 but no cash was received. The
offsetting entry is to reduce Additional Paid in Capital by the $10,000. The
financial statements presented here represent the activities of the smaller
operating company.
As mentioned, ten million shares have been issued at a par value of .001.
A total of 100 million shares are authorized with 80 million as common shares
and 20 million as preferred. The preferred stock will not be convertible so
once issued no dilution of Earnings per Share will be needed. The company
intends to raise additional capital through the issuance of stock to enable it
to expand. Management estimates that $50,000 is needed to move forward the
first year. Of the ten million shares issued, nine million were issued to Tak
Hiromoto. He then transferred one million shares to Herman Alexis & Co., Inc.
for assisting the company. The remaining one million shares are broken down
with 977,500 owned by MAS Capital, Inc. and the remaining 22,400 owned by a
large number of small investors.
<page>
NOTE 16. FACILITATION OF MERGER
The joining of the companies was accomplished by an introduction to MAS
Acquisition XXI Corp. by Herman Alexis & Co., Inc. to the Hiromotos. Neither
party knew each other before this introduction.
NOTE 17. GOING CONCERN
As mentioned in Note 15, management estimates that $50,000 is needed to
effectively expand and operate the company for the first year. Although the
company has operated successfully for seven years, ownership draws have
produced a capital deficiency that raises substantial doubt about the company's
ability to continue as a going concern. The future is unpredictable. The
financial statements are presented on the going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business. The company's ability to continue as a going concern
must be considered in light of the problems, expenses, and complications
frequently encountered by entrance into established markets and the competitive
environment in which the company operates. The financial statements prepared
here have not been adjusted to reflect possible future events and their effect
on the recoverability and classification of assets or the amounts and
classification of assets or the amounts and classification of liabilities that
may result from the possible inability of the company to continue as a going
concern.
NOTE 18. EARNINGS PER SHARE
The company calculates net income or Earnings per Share as required by SFAS No.
128. Earnings per share are calculated by dividing net income by the average
number of outstanding shares. No shares are convertible so dilution is not an
issue.
The following represents the calculation of earnings per share:
For the three months ended
December 31,
BASIC & DILUTED* 2001 2000
- - ------------------ ------ ----
Net income $ 11,744 $ 11,992
Less- preferred stock dividends -- --
----------- -----------
Net income $ 11,744 $ 11,992
Weighted average number
of common shares 10,000,000 10,000,000
------------- -----------
Basic & diluted
earnings per share $ ** $ **
=========== ==========
*There were no common stock equivalents for either period presented.
** Less than $.01
<page>
NOTE 19. DEFERRED TAXES
According to SFAS 109, the objectives of accounting for income taxes are to
recognize (a) the amount of taxes payable or refundable for a current year and
(b) deferred tax liabilities and assets for the future tax consequences of
events that have been recognized in an enterprise's financial statements or tax
returns. A deferred tax liability or asset is recognized for the estimated
future tax effects attributable to temporary differences and carry forwards.
Measurements of current and deferred tax liabilities and assets are based on
provisions of the enacted tax law. The effects of future changes in tax laws or
rates are not anticipated. If a tax deferral occurs, the measurement of
deferred tax assets is reduced, if necessary, by the amount of any tax benefits
that, based on available evidence, are not expected to be realized. At this
time, there are no such deferrals. See Note 14 for calculations of current tax
year liabilities based on existing rates.
NOTE 20. SEGMENT REPORTING
Currently the company reports only one segment on the financial statements, as
there is only one central location of business and not multiple locations or
departments. SFAS 131 defines an operating segment, in part, as a component of
an enterprise whose operating results are regularly reviewed by the chief
operating decision maker to make decisions about resources to be allocated to
the segment and assess its performance. The chief operating decision maker is
not necessarily a single person, but is a function that may be performed by
several persons.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- - --------
With the exception of historical facts stated herein, the matters discussed in
this report are "forward looking" statements that involve risks and
uncertainties that could cause actual results to differ materially from
projected results. Such "forward looking" statements include, but are not
necessarily limited to, statements regarding anticipated levels of future
revenues and earnings from operations of the Company. Readers of this report are
cautioned not to put undue reliance on "forward looking" statements, which are
by their nature, uncertain as reliable indicators of future performance. The
Company disclaims any intent or obligation to publicly update these "forward
looking" statements, whether as a result of new information, future events, or
otherwise.
DESCRIPTION OF BUSINESS
- - -----------------------
Business Development
- - --------------------
Telecom Communications Inc. was incorporated on January 6, 1997 in the State of
Indiana under the corporate name MAS Acquisition XXI Corp. Prior to December 21,
2000, we were a blank check company seeking a business combination with
unidentified business. On December 21, 2000, we acquired Telecom Communications
of America which was a sole proprietorship doing business in Los Angeles,
California since August 15, 1995 and changed our name to Telecom Communications
Inc. In connection with this acquisition, Aaron Tsai, our former sole officer
and director was replaced by Telecom Communications of America's owners and
associates. We issued 9,000,000 shares of our common stock or 90% of our total
outstanding common shares after giving effect to the acquisition. MAS Capital
Inc. returned 7,272,400 shares of common stock for cancellation without any
consideration.
Our principal executive offices are located at 827 S. Broadway, Los Angeles, CA
90014. Our telephone number is (213) 489-3486.
<page>
Overview
- ---------
Our main business is to provide low cost telephone calls over the Internet to
individuals and businesses. Our services enable our customers to make low cost
telephone calls over the Internet using the traditional telephone. In September
1999, we introduced a service that enables international and domestic calls to
be made over the Internet using traditional telephones. Long distance calls
made using our services are often substantially less expensive than long
distance calls routed over traditional voice network. Following illustrate a
typical cost for our customers. In summary, our cost of 9.5 cents per minute
compared with 17 cents per minute using traditional phones taking in
considerations for the monthly basic service charges for the traditional phone
services.
Illustration: (based on telephone services in our area)
Our cost per minute = 9.5
Traditional phone services cost per minute = 7 cents (without basic fees)
Assumptions: Residential long distance charge for the month is $10.78
for 154 minutes (domestic call). Customer is using plans
such as MCI 7 Cents anytime residential plan.
Additional costs for Traditional long distance charges:
MCI 7 Cents anytime residential plan $ 6.95
12% Federal Excise Tax 1.32
40% State & Local Taxes 4.36
.004% Federal, State & Local Surcharges 0.04
25% Federal Universal Service Fee 2.61
.23% CA High cost Fund-B Surcharges 0.25
.005% CA Universal Life Tel Service Surcharge 0.05
.003% CA Relay Service and Communication Device Fund 0.03
.006% CA 911 Local 0.07
-------------------- --------
TOTAL $15.68
To calculate traditional phone cost, we took the traditional long distance
charges for the month of $10.78 plus the monthly fees of $15.68 and divide the
result by 154 minutes which gives 17 cents per minute.
$10.78 + $15.68 = $26.46 divided by 154 minutes = 17 cents.
In this illustration, our customers would save 7.5 cents per minute using our
services. The basic fees may very for different areas and we do not have that
information at this time. For International calls, you have a higher savings
due to higher tariff on traditional phone calls.
We intend to expand our business through acquisitions. Currently, we have one
telephone calling center with one server located in Los Angeles, California.
We have only a limited operating history upon which you can evaluate our
business and prospects. We have achieved limited profitability, and expect to
continue to achieve limited profitability in the year 2001 and subsequent
fiscal periods. We will need to significantly increase our revenues in order to
achieve greater profitability, which may not occur. Even if we do achieve
greater profitability, we may be unable to sustain or increase profitability on
a quarterly or annual basis in the future. A total of 77% of our revenue have
been generated from the sale of Lotto Tickets, Bus Tokens, Bus Passes, Check
Cashing and Money Gram products constitute 77% of and 23% for
Telecommunications. Telecom Communications Inc is intended for people of all
ages and income levels who are interested in high quality telephone service at
low rates. Typically, however, Latin immigrants who are interested in contacting
their friends and relatives in countries outside of the United States are the
primary target audience.
<page>
Industry Background
- ---------------------
The Internet is experiencing unprecedented growth as a global medium for
communications and commerce. Internet telephony has emerged as a low cost
alternative to traditional long distance calls. Internet telephone calls are
less expensive than traditional domestic and international long distance calls
primarily because these calls are carried over the Internet and therefore bypass
a significant portion of local and international long distance tariffs. The fees
and tariffs that are eliminated for our services can be itemized as follows:
* Calling Plans Charge
* Carrier Access Charge
* Federal Excise Tax
* State and local Tax
* Federal, State and local surcharge
* Federal Universal Service fee
* California High Cost Fund-B surcharge
* California Universal Lifeline Telephone Service surcharge
* California Relay Service and Common Device fund
* California 911 Local charge
The technology by which Internet phone calls are made is also more cost-
effective than the technology by which traditional long distance calls are made.
he growth of Internet telephony has been limited to date due to poor sound
quality attributable to technological issues such as delays in packet
transmission and network capacity limitations. However, recent improvements in
packet-switching technology, new software algorithms and improved hardware have
substantially reduced delays in packet transmissions.
Products and Services
- - ---------------------
Presently, we have one telephone calling center located in Los Angeles,
California. This center has 6 phone booths each with its own traditional
telephone set, table and chair. Phone calls made from these booths are routed
through our computer server and Internet connection to a third party servers
which provide the interconnection to their established network which enables
telecommunications over Internet Protocol (IP) data networks using their
software, hardware and related components. The third party providing this
service is Inter-Tel.net, Inc. with whom Telecom has a contractual agreement.
We do not rely solely on customers visiting our telephone calling center.
We also have 24 phone lines attached to our server which enables customers
accessing our services using telephones away from our location by calling in to
our telephone calling center. The 24 phones lines attached to our server allow
24 customers to call in at a given time. When one caller complete a call the
phone line free up for another caller. In addition, the following products and
services are also offered at our telephone calling center:
* Money wiring service
* Check cashing
* Sales of Lotto tickets
* Automatic Telling Machine (ATM)
* Faxing services
* Sales of telephone cards
<page>
RESULTS OF OPERATIONS
- ------------------------
Sales
Revenues were $136,952 for the three months ended December 31, 2001, versus
$153,377 for the three months ended December 31, 2000, a decrease of $16,425
or 11%. The decrease in sales for the first three months was primarily due to
the Company's focus on marketing higher margin products and growing brand
awareness. Average selling prices remained fairly constant and gross margins
increased from20% to 22%. Presently, the percentage of customers using our
calling center versus using services from their resident is approximately 45%
versus 55%. We anticipate that eventually 99% of calls will be made from our
customers' residence due to convenience factor. The other 1% will be customers
who have no phones in their homes. We sell prepaid cards to call from their
residence. The company's focus on brand name recognition tends to have
particularly heavy customer service requirements. Because we anticipate growth
in our subscriber base, we provide discount to new subscribers and referral
bonuses to existing subscribers for their loyalty for referring new subscribers
to the company. We expect a reduction in revenue to be short term. We believe
that establishing and maintaining a brand and name recognition is critical
for attracting and expanding our targeted client base and that importance of
reputation and name recognition will increase as competition in the internet
telephone market increases. From time to time we have promotional prices
to attract clients through marketing which lead to a reduction in revenue.
Expenses
Total expenses were $14,814 for the three months ended December 31, 2001, versus
$12,152 for the three months ending December 31, 2000, an increase of $2,662
or 22%. The Company realized a slight increase in its total expenses due to its
effort to gain active trading status on the Over-the-Counter Bulletin Board
(OTCBB). Since became a fully reporting company, in addition to our management
time, which can be considerable, there are additional expenses relating to being
a public company. The cost of printing and distribution of prospectus,
preparation of SEC filing; review of financial statements by C.P.A.; and filing
on EDGAR which all contributed to the 22% increase of expenses.
Liquidity and Capital Resources
On December 31, 2001, the Company had cash of $20,451 and working capital of
$20,638. This compares with cash of $759 and a working capital deficit of
$1,570 at December 31, 2000. The increase in working capital was due to an
increase in cash and decrease in income taxes payable. The increase in cash was
generated from sale of stock. There are no line of credit and capital
expenditures at this time.
Net cash used in operating activities was $5,469 for the three months ended
December 31, 2001 as compared with net cash provide by operating activities of
$18,519 for the three months ended December 31, 2000. The difference in 2001 was
primarily attributed to a $17, 213 change in income taxes payable during 2001.
Cash provided by financing activities totaled $-0- for the three months ended
December 31, 2001 as compared with net cash used in financing activities of
$20,203 for the three months ended December 31, 2000. Cash used in financing
activities during 2000 consisted solely of shareholder distributions.
<page>
PART II. OTHER INFORMATION
- - --------------------------
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
During February 2002, the Company located a market maker to submit a filing
with the National Association of Security Dealers to quote the Company's common
stock on the Over-the-Counter Bulletin Board. However, there can be no assurance
that a market will be established or maintained.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
- - -----------
None.
b) Reports on Form 8-K
- - ----------------------
None.
<page>
SIGNATURES
----------
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TELECOM COMMUNICATIONS, INC.
/s/ Tak Hiromoto
----------------
Date: January 10, 2003 Tak Hiromoto
President and Director