SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
[ ]TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period from ___________ to ____________.
Commission File Number 0-27323
THE BAUER PARTNERSHIP, INC.
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(Exact name of registrant as specified in its charter)
Nevada 88-0429812
-------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
300 Park Avenue, Suite 1700, New York, New York 10022
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(Address of principal executive offices)
(212) 572-6276
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (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
As of August 19, 2002, 42,801,394 shares of Common Stock of the issuer were
outstanding.
THE BAUER PARTNERSHIP, INC.
FORM 10-QSB
INDEX
PART I
Item 1. Financial Statements F-3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations F-7
PART II
Item 1. Legal Proceedings F-8
Item 2. Changes in Securities and Use of Proceeds F-8
Item 5. Other Information F-8
Item 6. Exhibits and Reports on Form 8-K F-8
Signatures F-8
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE BAUER PARTNERSHIP, INC.
CONDENSED BALANCE SHEET
June 30,
2002
----------------
(Unaudited)
ASSETS
Investments $ 47,250
Advances - officer 2,865
----------------
$ 50,115
================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 74,078
Accrued interest 72,674
Convertible notes payable 554,908
Notes payable - related parties 718,000
----------------
Total current liabilities 1,419,660
----------------
Stockholders' equity (deficit):
Preferred stock, $.001 par value, 25,000,000 shares
authorized, none issued and outstanding -
Common stock, $.001 par value, 80,000,000 shares
authorized: 42,801,394 shares issued and outstanding: 42,801
Additional paid in capital 2,616,299
Accumulated deficit (4,028,645)
----------------
Total stockholders' equity (deficit) (1,369,545)
----------------
$ 50,115
================
See accompanying notes to interim condensed financial
statements.
THE BAUER PARTNERSHIP, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2002 2001 2002 2001
-------------- ---------- ------------ -----------
General and Administrative Expenses:
Salaries and benefits $ 48,000 $ - $ 121,000 $ -
General and administrative 113,250 - 228,789 -
-------------- ----------- ------------ -----------
161,250 - 349,789 -
-------------- ----------- ------------ -----------
Loss from operations 161,250 - (349,789) -
Other (income) and expense
Interest and other expense, net 24,918 - 68,006 -
Gain on sale of subsidiary - - (159,924) -
-------------- ----------- ------------ -----------
24,918 - (91,918) -
-------------- ----------- ------------ -----------
-------------- ----------- ------------ -----------
Net loss $ (186,168) $ - $ (257,871) $ -
============== =========== ============ ===========
Basic and diluted net loss per
common share $(0.00) n/a $(0.01) n/a
============== =========== ============ ===========
Weighted average shares outstanding 42,282,713 n/a 41,252,407 n/a
============== =========== ============ ===========
See accompanying notes to interim condensed financial
statements.
THE BAUER PARTNERSHIP, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
------------------------------------
2002 2001
-------------- --------------
Cash flows from operating activities:
Net loss $ (257,871) $ -
Adjustments to reconcile net income to net cash
used in operating activities:
Gain on sale of subsidiary (159,924) -
Changes in operating assets and liabilities
Accounts receivable 5,845 -
Investments (13,444) -
Accounts payable and accrued expenses (542,488) -
---------------- -----------------
Net cash used in operating activities (967,882) -
---------------- -----------------
Cash flows from financing activities:
Sale of common stock 180,000
Proceeds from notes payable 784,000 -
---------------- -----------------
964,000 -
---------------- -----------------
Effect of exchange rate changes on cash - -
Net increase (decrease) in cash and cash equivalents (3,882) -
Cash and cash equivalents at beginning of period 3,882 -
---------------- -----------------
Cash and cash equivalents at end of period $ - $ -
================ =================
Cash paid for:
Interest $ - $ -
Non-cash Disclosure:
Conversion of notes payable to common stock $ 522,500 $ -
See accompanying notes to interim condensed financial
statements.
THE BAUER PARTNERSHIP, INC.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
June 30, 2002
Note 1: PRESENTATION
The condensed consolidated balance sheet of the Company as of June 30, 2002, the
related condensed consolidated statements of operations for the three and six
months ended June 30, 2002 and 2001 and the statements of cash flows for the six
months ended June 30, 2002 and 2001 included in the condensed financial
statements have been prepared by the Company without audit. In the opinion of
management, the accompanying condensed financial statements include all
adjustments (consisting of normal, recurring adjustments) necessary to summarize
fairly the Company's financial position and results of operations. The results
of operations for the three and six months ended June 30, 2002 are not
necessarily indicative of the results of operations for the full year or any
other interim period. The information included in this Form 10-QSB should be
read in conjunction with Management's Discussion and Analysis and Financial
Statements and notes thereto included in The Bauer Partnership, Inc.'s December
31, 2001 Form 10-KSB.
Note 2: Sale of Subsidiary
Effective January 2002, the Company sold its wholly owned subsidiary, The Bauer
Partnership, Limited, to an unrelated entity for a nominal amount. The buyer
assumed all leases and employment agreements of the subsidiary. The Company
recorded a gain of $159,924.
Note 3 - Convertible Notes Payable
The Company has borrowed an aggregate of $240,000 from Ocean Strategic Holdings
Ltd., and Turbo International Ltd., of which no amounts have been repaid, and
this amount remains past due. The Company has a verbal agreement with Ocean
Strategic Holdings and Turbo International with respect to the repayment of the
loans and various other agreements upon the payment of $250,000. Ocean Strategic
Holdings and Turbo International have the right to declare the loan in default
and then convert the loans into 50,000,000 shares of common stock which would
result in a change of control of the Company. In this event it is likely that
the Company's operations would be discontinued and the Company's current
management would be removed.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
This report contains forward looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company's actual results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in the Company's filings with the Securities and Exchange
Commission, general economic conditions, and changes in the assumptions used in
making such forward looking statements.
Overview
The Company's business strategy is to utilize its common stock to acquire
existing hotel and commercial real estate assets. The Company did not implement
this business strategy until December 31, 2001. Prior thereto, the Company was
engaged in providing investment banking services to United States publicly
traded companies seeking financing in the range of $5 million to $20 million.
General and Administrative Expenses
For the three months ended June 30, 2002, the Company's salaries and benefits
were $48,000 and its other general and administrative expenses were $113,250.
General and administrative expenses include payment of professional fees,
issuance of stock to consultants, rent, travel and entertainment. The Company
was formed in March 2001 and had no operations for the corresponding periods in
the prior year.
For the six months ended June 30, 2002, the Company's salaries and benefits were
$121,000 and its other general and administrative expenses were $228,789.
General and administrative expenses include payment of professional fees,
issuance of stock to consultants, rent, travel and entertainment. The Company
was formed in March 2001 and had no operations for the corresponding periods in
the prior year.
Loss from Operations
The Company had a loss from operations of $186,168 for the three months ended
June 30, 2002. The Company was formed in March 2001 and had no operations for
the corresponding period in the prior year.
The Company had a loss from operations of $257,871 for the six months ended June
30, 2002. The Company was formed in March 2001 and had no operations for the
corresponding period in the prior year.
Net Loss Per Share
The Company had a net loss of $186,168 and $0.00 per share for the three months
ended June 30, 2002. The Company was formed in March 2001 and had no results per
share for the corresponding period in the prior year.
The Company had a net loss of $257,871 and $0.01 per share for the six months
ended June 30, 2002. The Company was formed in March 2001 and had no results per
share for the corresponding period in the prior year.
Liquidity and Capital Resources
For the six months ended June 30, 2002, the Company did not generate cash flow
from its operations which exceeded operating costs. As a result, the Company
will require additional working capital to develop its business until the
Company either achieves a level of revenues adequate to generate sufficient cash
flows from operations or obtains additional financing necessary to support its
working capital requirements.
Between July and November 2001, the Company raised $669,100 from the sale of
1,098,800 shares of common stock. During the first quarter of 2002, the Company
entered into an agreement to raise $500,000 based on certain conditions. The
Company sold 100,000 shares of common stock for proceeds of $50,000 in
connection with this agreement and another $200,000 came due for 400,000 shares
on May 15, 2002, which proceeds have not been received as of the date of this
report and are not expected to be received. In March 2002, the Company converted
$522,500 of notes payable into 1,741,667 shares of common stock. The Company
sold 800,000 shares of common stock for $130,000 during the 2nd quarter 2002.
The Company has outstanding $1,272,918 from various individuals including
officers of the Company, an entity and a financial institution, which amount
includes interest. These loans bear interest ranging from 3.875% to 12% and all
of these amounts remain outstanding.
As of June 30, 2002, the Company had no cash and a working capital deficit of
$1,369,545.
The Company is taking steps to raise equity capital or to borrow additional
funds. There can be no assurance that any new capital will be available to the
Company or that adequate funds for the Company's operations, whether from the
Company's revenues, financial markets, or other arrangements will be available
when needed or on terms satisfactory to the Company. The Company has no further
commitments from officers, directors or affiliates to provide funding. The
failure of the Company to obtain adequate additional financing may require the
Company to delay, curtail or scale back some or all of its operations. Any
additional financing may involve dilution to the Company's then-existing
shareholders.
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
During the quarter ended June 30, 2002 we sold an aggregate of 800,000 shares to
two individuals in consideration for $130,000. We believe this transaction was
exempt from registration pursuant to Section 4(2) of the Securities Act as a
transaction by an Issuer not involving a public offering.
Item 5. Other Information
Management is currently negotiating with lenders and the owners of the
Windjammer Resort & Spa in attempts to finalize an agreement. The Company
entered into a letter of intent with a lender in connection with the purchase of
the Windjammer which requires the Company to raise capital as collateral prior
to closing.
The Company has borrowed an aggregate of $240,000 from Ocean Strategic Holdings
Ltd., and Turbo International Ltd., of which no amounts have been repaid, and
this amount remains past due. The Company has a verbal agreement with Ocean
Strategic Holdings and Turbo International with respect to the repayment of the
loans and various other agreements upon the payment of $250,000. Ocean Strategic
Holdings and Turbo International have the right to declare the loan in default
and then convert the loans into 50,000,000 shares of common stock which would
result in a change of control of the Company. In this event it is likely that
the Company's operations would be discontinued and the Company's current
management would be removed.
During the quarter ended June 30, 2002, a subsidiary of the Company entered into
a letter of intent with Flint River Farms Limited, which provides that the
Company's subsidiary will buy 600 acres of land. The Company plans to develop a
200 unit time share resort and 100 home sites. There is no assurance that the
Company will complete this transaction.
A subsidiary of the Company is in the final stages of executing a development
agreement to construct 31 luxury villas at Tryall Club in Montego Bay, Jamaica.
There is no assurance that the Company will be successful in completing such
transaction.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
99.1 Certification of Financial Statements
b) Reports on Form 8-K
On April 12, 2002, the Company filed a report on Form 8-K/A relating
to the financial statements of The Bauer Partnership, Inc., a
Delaware corporation, which was acquired by the Company.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE BAUER PARTNERSHIP, INC.
Date: August 19, 2002 By: /s/ Ronald J. Bauer
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Ronald J. Bauer
CEO and Director