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 April 30, 2001
|_| Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _______________ to _______________
Commission File Number: 333-54822
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TDT DEVELOPMENT, INC.
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(Name of Small Business Issuer in its charter)
NEVADA 22-3762835
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1844 SW 16th Terrace, Miami, Florida 33145
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (305) 860-9913
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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) 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. Yes |_| No |X|
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: At April 30, 2001, the issuer had
outstanding 8,381,000 shares of Common Stock.
Transitional Small Business Disclosure Format: Yes |_| No |X|
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
To the extent that the information presented in this Quarterly Report on
Form-QSB for the quarter ended April 30, 2001 discusses financial projections,
information or expectations about our products or markets, or otherwise makes
statements about future events, such statements are forward-looking. We are
making these forward-looking statements in reliance on the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Although we
believe that the expectations reflected in these forward-looking statements are
based on reasonable assumptions, there are a number of risks and uncertainties
that could cause actual results to differ materially from such forward-looking
statements. these risks and uncertainties are described, among other places in
this Quarterly Report, in "Management's Discussion and Analysis of Financial
Condition and Results of Operations".
In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or circumstances after the date of this Quarterly
Report. When considering such forward-looking statements, you should keep in
mind the risks referenced above and the other cautionary statements in this
Quarterly Report.
PART I - FINANCIAL INFORMATION
TDT Development, Inc.
and Subsidiary
Consolidated Balance Sheets
April 30, October 31,
2001 2000
----------- -----------
(Unaudited)
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Assets
Current assets:
Cash $ 213,037 $ --
Accounts receivable 65,234 6,419
Deferred offering expenses -- 55,000
Inventory 46,768 7,490
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Total current assets 325,039 68,909
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Fixed assets:
Office furniture, net of
accumulated depreciation
of $1,177 and $655, respectively 3,141 3,563
Computers and equipment, net of
accumulated depreciation
of $2,681 and $1,343, respectively 10,519 8,695
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Total fixed assets 13,660 12,258
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Other assets:
Security deposits 1,500 1,500
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Total assets $ 340,199 $ 82,667
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Liabilities and Shareholders' Equity
Current liabilities:
Bank overdraft $ -- $ 1,468
Revolving Credit Line 4,965 --
Accounts payable 28,288 64,713
Accrued interest payable 4,564 2,500
Promissory note payable 35,000 30,000
Accrued expenses payable 23,944 5,619
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Total liabilities 96,761 104,300
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Shareholders' equity:
Common stock, 50,000,000 shares
authorized; 8,381,000 and
5,030,000 shares issued and
outstanding; par value $.0001 838 503
Preferred stock, 5,000,000 shares
authorized; -0- shares issued
and outstanding; par value $.0001 -- --
Additional paid in capital 305,707 25,942
Retained earnings (deficit) (63,107) (48,078)
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Total shareholders' equity 243,438 (21,633)
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Total liabilities and
shareholders' equity $ 340,199 $ 82,667
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See accompanying Notes to Consolidated Financial Statements.
TDT Development, Inc.
and Subsidiary
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
January 31 April 30
-------------------------- ---------------------------
2001 2000 2001 2000
-------------------------- ---------------------------
(Unaudited) (Unaudited)
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Revenues:
Net sales $ 47,158 $ -- $ 94,731 $ 18,516
Cost of sales 22,472 -- 43,179 15,395
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Gross profit 24,686 -- 51,552 3,121
Commissions 18,981 -- 26,510 6,000
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Total Revenue 43,667 -- 78,062 9,121
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Operating Expenses:
General and administrative expenses 19,971 7,101 48,243 13,031
Selling expenses 15,467 14,741 44,848 32,887
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Total expenses 35,438 21,842 93,091 45,918
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Net income (loss) $ 8,229 $ (21,842) $(15,029) $ (36,797)
========== =========== ========= ===========
Net income (loss) per share:
Basic $ 0.01 $ (0.01) $ (0.01) $ (0.01)
========== =========== ========= ===========
Diluted
Weighted average common shares used in
calculation of net income (loss) per share 7,727,188 5,030,000 5,571,337 5,030,000
========== =========== ========= ===========
See accompanying Notes to Consolidated Financial Statements.
TDT Development, Inc.
and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
April 30,
2001 2000
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(Unaudited) (Unaudited)
----------- -----------
Cash flows from operating activities:
Net loss $ (15,029) $(36,797)
Adjustments to reconcile net loss
to cash used by operating activities:
Depreciation 1,660 909
Contributed services -- 9,000
Increase in accounts receivable (58,815) (4,716)
Increase in security deposits -- (650)
Increase in inventory (39,278) (10,411)
Increase (decrease) in operating accounts payable (36,425) 6,050
Increase in accrued interest payable 2,064 --
Increase in accrued expenses 18,325 8,251
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Cash used by operating activities (127,498) (28,364)
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Cash flows from investing activities:
Purchase of fixed assets (3,062) (9,399)
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Cash flows from financing activities:
Issuance of common stock -- 14,445
Proceeds from loan from stockholders -- 16,000
Repayment of loan from stockholders -- (6,000)
Proceeds of private placement offering 335,100 --
Revolving credit line borrowings 4,965 --
Proceeds from promissory note payable 5,000 15,000
Proceeds (repayment) of bank overdraft (1,468) --
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Cash provided by financing activities 343,597 39,445
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Increase in cash 213,037 1,682
Cash, beginning of period -- --
--------- --------
Cash, end of period $ 213,037 $ 1,682
========= ========
See accompanying Notes to Consolidated Financial Statements.
TDT Development, Inc.
and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
1. Consolidated Financial Statements
The accompanying consolidated financial statements include the accounts of TDT
Development, Inc. and its subsidiary. All material intercompany balances and
transactions have been eliminated. The interim statements are unaudited and, in
the opinion of management, include all adjustments (which include only normal
recurring adjustments) necessary to present fairly the Company's financial
position as of April 30, 2001 and the results of its operations and cash flows
for the interim periods presented. The consolidated balance sheet data for
October 31, 2000 are derived from the audited financial statements that are
included in the Company's report on Form SB-2 registration Statement filed on
May 11, 2001, which should be read in connection with these financial
statements.
The accounting policies followed in the presentation of the interim financial
results are the same as those followed on an annual basis. Those policies are
presented in Note 3, "Significant Accounting Policies in the consolidated
financial statements included in the Company's annual report on Form SB-2.
The interim financial results as of the six months ended April 30, 2001 are not
necessarily indicative of the results that will be obtained for the year ending
October 31, 2001.
2. Inventory
Inventories of TDT Development, Inc. are stated at the lower of cost or market.
Cost is determined using the first-in first-out (FIFO) method. Inventories
consist of the following:
April 30 October 31
2001 2000
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Finished goods $46,768 $ 7,490
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3. Notes Payable
On April 5, 2001 Terre di Toscana, a TDT Development, Inc. Subsidiary, borrowed
$35,000 and executed a 10% promissory note due on December 31, 2001.
4. Supplemental Cash Flow Information
April 30 April 30
2001 2000
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Cash paid during the six months for:
Interest $ 2,559 $ --
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Income taxes $ -- $ --
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Non-cash financing transaction:
Direct stock placement costs $55,000 $ --
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Overview
We import and distribute through our wholly owned subsidiary Terre di Toscana,
Inc. specialized truffle based food products which includes fresh truffles,
truffle oils, truffle pates, truffle creams, and truffle butter. TDT commenced
operations on September 8, 2000. Terre di Toscana, Inc. was acquired by TDT on
September 14, 2000. This acquisition was a reorganization of entities under
common control and was accounted for at historical cost in a manner similar to a
pooling of interests. Terre di Toscana, Inc. was incorporated on November 10,
1999 and commenced operation in January, 2000.
Plan of Operations
TDT's plan of operations includes building its account base and building its
website. TDT plans to further expand sales to restaurants and hotels. This
effort will be lead by Mr. Bortolatti. Efforts include compilation of a list of
25,000 hotels and restaurants. In April 2001 TDT began a direct mailing
advertising campaign to 20,000 of these hotels and restaurants. The budget for
this direct mailing is approximately $7,500.
During fiscal year 2000, TDT produced approximately $90,000 in revenues with
Truffle oils representing approximately 70% of sales, Truffle sauces
approximately 15% of sales, and all other products the balance.
There is little or no seasonal or price impact upon the majority of TDT's
products (oils, creams, butters, and sauces) because these are processed foods
with a small percentage of the end product comprised of the pure essence of the
base product, truffles.
The website was developed primarily by contract labor with TDT staff building
the databases and providing design direction at a total development cost of
approximately $6,000. Since this was not a significant outlay, the item was
expensed. There have been no sales generated by TDT's website. TDT anticipates
sales through the website in December 2001.
TDT believes that based on the current level of sales, and the current working
capital in the business and the terms of sale with our suppliers that we will
not need to raise additional funds in the next twelve months. Our suppliers
require 25% of the cost of an order when the order is placed and the balance 90
days later. TDT believes that its strategy to focus on restaurants and hotels
will further improve its capital position and cash flow due to the fact that
these accounts pay by credit card, providing immediate payment. TDT's marketing
programs to reach these potential customers include direct mail and
telemarketing. Within the next twelve months TDT plans to hire two telemarketers
and one distribution person to handle Internet sales. These three positions will
each have salaries of approximately $15,000 per year. Additionally, the two
telemarketers will earn approximately 2% of the sales that they generate. TDT
believes that the additional costs to staff those positions will be covered by
the sales generated and the resulting profitability from these sales.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN 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 AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
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.
TDT DEVELOPMENT, INC.
(Registrant)
Date: June 28, 2001 By: /s/ Pietro Bortolatti
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Pietro Bortolatti, President,
Treasurer and Chairman of the Board