3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSSION
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 June 30, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934: For the transition period from _________ to _________
Commission file number: 000-30734
Humana Trans Services Holding Corp.
(Name of small business issuer in its charter)
Delaware 11-3255619
---------------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7466 New Ridge Road, Suite 7, Hanover, Maryland 21076
---------------------------------------- -----
(Address of Principal executive offices) (Zip Code)
Issuer's telephone number (410) 855-8758
Securities registered under Section 12(b) of the "Exchange Act"
Common Share Par Value, $.0001
(Title of each Class)
Securities registered under Section 12(g) of the Exchange Act: None
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 a 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
The number of shares of Common Stock outstanding, as of June 30, 2003 was .
----
Transitional Small Business Disclosure Format (check one): Yes [ ] ; No [X]
TABLES OF CONTENTS
Part I - FINANCIAL INFORMATION................................................1
Item 1. Financial Statements......................................... 1
Pages starting at F-1
Item 2. Management's Discussion and Analysis or Plan of Operation.... 1
Item 3. Controls and Procedures ..................................... 3
PART 2 - OTHER INFORMATION................................................... 6
Item 1. Legal Proceedings............................................ 6
Item 2. Changes in Securities........................................ 6
Item 3. Defaults upon Senior Securities.............................. 6
Item 4. Submission of Matters to a Vote of Security Holders.......... 6
Item 5. Other Information............................................ 6
Item 6. Exhibits and Reports on Form 8-K............................. 7
Signatures................................................................... 7
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002 ........................................... 9
ii
Item 1. Financial Statements
Appear on Page F-1
Item 2. Management's Discussion and Analysis or Plan of Operation
Results of Operations For the Three Months Ending June 30, 2002 vs.
June 30, 2003
------------------------------------------------------------------
Steam Cleaning USA, Inc., formerly TTI Holdings of America Corp was incorporated
in November 1994 under the laws of the State of Delaware under the name
Thermaltec International, Corp. On May 18, 2001, Thermaltec changed its name to
TTI Holdings of America Corp. ("TTI" or the "Company"). From its inception until
July 2001, TTI was primarily engaged in the thermal spray coating industry in
the U.S. and Costa Rica. In July 2001, TTI divested the operations of its
thermal spraying business, formerly consolidated in its wholly owned subsidiary
Panama Industries, Ltd, to its shareholders of record as of June 22, 2001 in the
form of a stock dividend on the basis of one (1) share of Panama for every three
(3) shares of TTI owned (the "Panama Spin-off"). Accordingly, as of July 2,
2001, TTI was no longer in the thermal spraying business and has been operating
as a holding company focused on developing new business opportunities.
On August 19, 2002, the company changed its name to Steam Cleaning USA, Inc. and
merged with Steam Cleaning USA, Inc. (SCUS) which was organized in Wisconsin on
August 16, 2002, specifically to acquire and expand the operations of Steam
Cleaning and Sterilization, Inc., a transaction that did not occur.
The company has continued its strategy of making acquisitions and investments in
private companies that would deliver increased value to the company's
shareholders.
For the nine months ended June 30, 2003, and from the point of divesture (August
16, 2002), the Company did not report any sales from operations. As a result,
the Company had no income in either the nine months ended June 30, 2003 or for
the period since divesture. During the nine months ended June, 30, 2003, and for
the period from divesture (August 16, 2002) the Company incurred approximately
$96,885 and $114,436, respectively, of expenses for general and administrative
expenses, associated with various regulatory compliance requirements and
exploratory costs for acquisitions and financing.
Liquidity and Financial Resources
---------------------------------
The company's primary sources of financing for the past several months have been
through stockholder loans. Due the company's inability to raise additional
capital or find or conclude a profitable acquisition, there is substantial doubt
about the Company's ability to continue as a going concern. It is the intention
of the Company's management to attempt to improve its liquidity by raising
additional investment capital to provide for continued operating funds and to
become profitable by finding business opportunities that create operating
revenues. The ultimate success of these measures is not reasonably determinable
at this time.
1
Inflation
----------
The amounts presented in the financial statements do not provide for the effect
of inflation on the Company's operations or its financial position. Because the
Company has no fixed assets, the net operating losses shown would approximate
those reported if the effects of inflation were reflected either by charging
operations with amounts that represent replacement costs or by using other
inflation adjustments.
Forward-looking Information
---------------------------
Certain statements in this document are forward-looking in nature and relate to
trends and events that may affect the Company's future financial position and
operating results. The words "expect" "anticipate" and similar words or
expressions are to identify forward-looking statements. These statements speak
only as of the date of the document; those statements are based on current
expectations, are inherently uncertain and should be viewed with caution. Actual
results may differ materially from the forward-looking statements as a result of
many factors, including changes in economic conditions and other unanticipated
events and conditions. It is not possible to foresee or to identify all such
factors. The Company makes no commitment to update any forward-looking statement
or to disclose any facts, events or circumstances after the date of this
document that may affect the accuracy of any forward-looking statement.
Subsequent Events
------------------
As of July 1, 2003, the Registrant entered into a Stock Purchase Agreement to
purchase 100% of the stock of Humana Trans Services Holding Corp., a Delaware
corporation ("Holding"). Holding is the owner of Humana Trans Services Group,
Ltd., Skilled Tradesman, Inc., Waste Remediation Systems, Inc., and Bio
Solutions of Maryland, LLC. Holding is currently wholly-owned by our Director,
James W. Zimbler, and other shareholders, as set forth herein. The purchase
price for the 100% issued and outstanding shares of Holding is the issuance of
6,000,000 shares of common stock of the Company, to be issued after the
effective date of the reverse 8 for 1 split of the common stock of the Company.
James W. Zimbler was the sole shareholder of Humana when it purchased Human
Trans Services Group, Ltd., from National Management Consulting, Inc. on April
30, 2003. The transaction was pursuant to a Promissory Note for $230,000,
payable in installments. Subsequent to the effectiveness of this transaction,
Mr. Zimbler, Humana and National Management Consulting, Inc., entered into a
Settlement Agreement, dated July 10, 2003, whereby the purchase price was
satisfied by the transfer of shares of common stock of National Management
Consulting, Inc., and shares of preferred stock of CDKNet.com, Inc., owned by
Mr. Zimbler back to the holder of the note. At the same time as this transaction
took place, Mr. Zimbler re-apportioned his ownership interest in Humana. The
Registrant has entered into a Promissory Note equal to the amount he paid for
the initial purchase of Registrant from National Management Consulting, Inc.
Humana's business is referred to as Employee Leasing. Humana has contracts with
various businesses to provide employees to the business. The business then pays
a fee to Humana. Out of this fee, the employee is paid, they receive benefits
2
and Humana retains a portion for its administrative efforts. Examples of the
types of services that Humana provides to its clients, include; Driver
recruitment, including the placement of ads, interviewing, all testing and
background checks, Driver leasing and Leased labor. Currently Humana operates in
10 states and has current annual revenues of approximately $2,000,000. Some of
Humana's clients are Alligence Healthcare, Mercedes, Giant Foods,
Northrop-Grumman and Royal Ahold.
Skilled Tradesmen Inc.
Skilled Tradesmen's predecessor began in recruiting CDL Truck Drivers over a
decade ago. Skilled Tradesmen provides skilled, laborers to fill customers'
varied Industry Construction positions. It specializes in Ship Building repair
and conversion, Heavy & Light Industrial manufacturing and both commercial and
residential construction.
Skilled Tradesmen, Inc. has 3 Targeted Markets, which are:
Ship Construction/Maintenance
-----------------------------
New Shipbuilding
Repair and Maintenance of existing ships
Manufacturing
-------------
Heavy Industrial
Light Industrial
Construction
------------
Commercial
Residential
Skilled Tradesmen, Inc. provides Industry Craftsmen in all skills at all skill
levels including, but not limited to:
Welders Electronic Technician General Shipboard Cleaner
Pipe fitters Shipboard Insulator General Laborer
Deck Electricians Pipe fitter Shop Sheet Metal Workers
Painters Rigger/Stagebuilder Crane Operators
Blasters Shipfitter
Rigger/Material Handler Outside Machinist
Waste Remediation Systems, Inc./Bio Solutions of Maryland
Waste Remediation Systems, Inc. (or "WRS"), a Maryland corporation, is a
technology provider of biological solutions to industries that want
environmentally friendly forms of waste remediation while controlling costs. The
Company owns intellectual properties for the service, systems and process of
waste remediation.
WRS's reinforces mother-nature through Engineered Bacteria and Enzymes, coupled
with integrated specific service systems to multiply the end process. Bacteria
and enzymes have provided a method to accelerate nature's own bioremediation
process. Bacteria produce all the necessary enzymes essential for biometabolism.
3
The enzymes then do their part to ease the metabolic reactions. The live
microbes in these treatments actually digest the grease or other waste. These
microbes continue to devour the grease or other waste as long as treatment is
maintained. These solutions are cost-effective, environmentally friendly, low
maintenance and dependable. The solutions can eliminate grease and fats, reduce
ammonia levels, reseed bio-filters/plants, breakdown hydrocarbons, eliminate
odors; and improve sludge management. Areas in which the solutions have proved
successful include wastewater treatment plants, sewer lines and lift stations,
lagoons, holding tanks, ponds, drain lines, grease traps, septic tanks,
cesspools and drain fields, and portable toilets. The primary market area that
WRS sells its products is drain maintenance for restaurants, and similar
facilities.
While restaurants make up the primary market for drain maintainers, any
foodservice-related facility can use the products. Delis, grocery-store meat
rooms, hospital cafeterias, schools, food processing plants and shopping
mall-based food courts are some examples of potential customers. A growing trend
in the drain maintenance market is to bundle the requisite products into a
package for which the distributor charges a monthly service fee.
Microbial enzyme systems are inherently environmentally preferable products.
Since the products digest food waste and grease a little bit at a time, they
prevent the need for acid-based chemicals, which can harm pipes and are frowned
upon by water treatment plants due to their caustic nature.
Bio-Solutions of Maryland is a franchise of Bio-Solutions International, which
is a public company.
Item 3. Controls And Procedures
Within the 90 days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely altering them to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in the Company's periodic SEC filings.
PART 2 - OTHER INFORMATION
Item 1. Legal Proceedings
In Not Applicable
Item 2. Changes in Securities
Not applicable.
4
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
On July 15, 2003, Security Holders voted to approve an Agreement of Merger
between Humana Trans Services Holding Corp. and Steam Cleaning USA Inc., and a
Change of Name of the Registrant to Humana Trans Holding Corp., as well as a
reverse split of the common stock of eight (8) shares to one (1) share.
Item 5. Other Information
AMENDMENT OF CORPORATE NAME
At the Special Meeting, holders of a majority of shares of Common Stock voted to
change the name of the Company from "STEAM CLEANING USA, INC." to "HUMANA TRANS
HOLDING CORP." (the "Corporate Name Change"), by means of an amendment to the
Company's Certificate of Incorporation and Certificate of Merger with its newly
acquired subsidiary. The Board of Directors had previously adopted resolutions
approving the Corporate Name Change and recommended that the Corporate Name
Change be submitted to the Stockholders for their approval at the Special
Meeting. The proposed amendment to the Certificate of Incorporation was approved
by the requisite number of shares of Common Stock entitled to vote at the
Special Meeting, and the Corporate Name Change and the proposed amendment to the
Company's Certificate of Incorporation will become effective upon the filing of
a Certificate of Amendment of Certificate of Incorporation with the Secretary of
State of Delaware, which is expected to occur shortly.
The Board of Directors determined that it was in the best interests of the
Company to make certain acquisitions that are currently under discussion. These
possible acquisitions are outside the current business of the Company. In
addition, it is the belief of the Board of Directors that the Company should
begin seeking other developmental ideas to nurture and expand upon in the
future. In light of this, the Board of Directors determined that the name of the
Company should be changed to better reflect the direction of the Company.
Accordingly, the Board of Directors decided that Article One of the Company's
Certificate of Incorporation would be amended to change the Company's corporate
name to "HUMANA TRANS SERVICES HOLDING CORP.", a name that will better reflect
the Company's possible future entry into alternate business and the development
of future business plans.
Stockholders holding approximately 72% of our outstanding common stock have
approved and ratified the following resolution amending our Articles of
Incorporation:
5
RELOCATION OF CORPORATE OFFICES
The Company has relocated its Office to Trans Service Group, 7466 New
Ridge Road, Suite 7, Hanover, Maryland 21076. The new phone number of the
Company is: (410) 855-8758 or (888) 508-8866. The Registrant has a lease for the
premises for a term of 3 years, with 30 months are left on the lease. The lease
covers a total of approximately 5,000 square feet. The rent is $1,500 per month.
The space is adequate for the needs of the registrant for the foreseeable time
period and for its operations.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following is a list of exhibits, which were previously filed
and are incorporated by reference.
SEC REFERENCE TITLE OF DOCUMENT
NUMBER
3.1 Articles of Incorporation (1)
3.2 Amendment to Articles of Incorporation (1)
3.3 Additional Amendment to Articles of Incorporation (2)
3.4 Bylaws (1)
16.1 Letter of change of Accountants (3)
99.1 Certification of the Chief Executive Officer of Humana Trans Services Holding Corp.,
pursuant to 18 U.S.C.
Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of the Chief Financial Officer of Humana Trans Services Holding Corp.,
pursuant to 18 U.S.C.
Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(1) These documents are hereby incorporated by reference to Form 10SB filed
November 21, 2000.
(2) These documents are incorporated by reference to the Form 8-K filed on June
29, 2001
(3) These documents are incorporated by reference to the Form 8-K filed on
February 6, 2002.
(b) Reports from Form 8-K:
On July 10, 2003, the Company filed a Current Report on Form 8-K with regard the
acquisition of Humana Trans Services Holding Corp., including the appointment of
new Officers/Directors, Acquisition of Assets, Change of Name, Reverse Split of
Common Stock and Relocation of Corporate Offices.
6
SIGNATURES
Humana Trans Services Holding Corp.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed by the following persons in the capacities indicated and on
August 14, 2003.
/s/ Andrew B. Mazzone Chairman of Board of Directors
-------------------------
Andrew B. Mazzone
/s/ Ron Shapps Director
---------------------------
Ron Shapps
/s/ James W. Zimbler Director
---------------------------
James W. Zimbler
/s/ John Daly Director and President
---------------------------
John Daly
/s/ George L. Riggs, III Chief Financial Officer
---------------------------
George L. Riggs, III
7
TABLE OF CONTENTS
FINANCIAL STATEMENTS PAGE
Accountants Report F-1
Balance Sheet as of June 30, 2003 F-2
Statements of Operation for the nine months ended June 30, 2003 and for
the period from inception (August 16, 2002) through
June 30, 2003 F-3
Statements of Operation for the three months
ended June 30, 2003 F-4
Statement of Stockholders' Deficiency for the
period from inception (August 16, 2002)
Through June 30, 2003 F-5
Statement of Cash Flows for the nine months ended June 30, 2003 and for
the period from inception (August 16, 2002) through
June 30, 2003 F-6
Notes to the Financial Statement F-7 - F-12
STEAM CLEANING USA, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
(formerly TTI Holdings of America Corp.)
June 30, 2003
INDEPENDENT ACCOUNTANTS'S REPORT
To the Board of Directors and Stockholders
TTI HOLDINGS OF AMERICA CORPORATION
I have reviewed the accompanying balance sheet of Steam Cleaning USA, Inc. as of
June 30, 2003, and the related statements of operations, changes in
stockholders' deficiency and cash flows for the nine months and three months
ended, and from inception (August 16, 2002) through June 30, 2003. These
financial statements are the responsibility of the Corporation's management.
I conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards of the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be
made to such financial statements for them to be in conformity with generally
accepted accounting principles of the United States of America.
Aaron Stein C.P.A.
Woodmere, New York
August 12, 2003
F-1
STEAM CLEANING USA, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
(formerly TTI Holdings of America Corp.
BALANCE SHEET
June 30, 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 47
Loan receivable-related parties 7,730
-------------------
total current assets 7,777
-------------------
Total Assets $ 7,777
===================
LIABILITIES AND DEFICIENCY IN ASSETS
CURRENT LIABILITIES:
Accounts payable $ 135,754
Accrued expenses 29,382
Convertible notes payable 35,000
Stockholder advances 70,794
-------------------
total current liabilities 270,930
-------------------
DEFICIENCY IN ASSETS:
Common stock, $.0001 par value, 50,000,000 shares authorized,
819,375 shares issued and outstanding 655
Deficit accumulated during development stage (263,808)
-------------------
total deficiency in assets (263,153)
-------------------
Total liabilities and deficiency in assets $ 7,777
===================
See notes to financial statements.
F-2
STEAM CLEANING USA, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
(formerly TTI Holdings of America Corp.)
STATEMENTS OF OPERATION
Period from
Inception
Nine Months (August 16, 2002)
ended through
June 30, June 30,
2003 2003
------------------ ------------------------
SALES $ - $ -
COST OF SALES
------------------ ------------------------
GROSS PROFIT - -
------------------ ------------------------
GENERAL AND ADMINISTRATIVE 96,885 114,436
------------------ ------------------------
LOSS FROM DEBT ASSUMPTION - 149,372
------------------ ------------------------
NET LOSS BEFORE INCOME TAXES (96,885) (263,808)
------------------ ------------------------
INCOME TAXES
NET LOSS (LOSS) $ (96,885) $ (263,808)
================== ========================
LOSS PER SHARE
Basic $ (0.13) $ (0.42)
================== ========================
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 770,229 624,504
================== ========================
See notes to financial statements.
F-3
STEAM CLEANING USA, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
(formerly TTI Holdings of America Corp.)
STATEMENTS OF OPERATION
Six months ended June 30, 2003
Three months
ended
June 30,
2003
----------------
SALES -
----------------
COST OF SALES -
----------------
GROSS PROFIT -
----------------
GENERAL AND ADMINISTRATIVE EXPENSES 7,500
----------------
NET LOSS BEFORE INCOME TAXES (7,500)
----------------
INCOME TAXES -
----------------
NET LOSS $ (7,500)
================
LOSS PER SHARE
Basic $ (0.01)
================
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 819,375
================
See notes to financial statements F-4
STEAM CLEANING USA, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
(formerly TTI Holding of America, Corp.)
STATEMENT OF CHANGES IN DEFICIENCY IN ASSETS
Period from inception (August 16, 2002) through June 30, 2003
Deficit
Accumulated
Stock Additional During
Common Stock Subscription Paid- Development
Shares Amount Receivable Capital Stage Total
------------------------------------------------------------------------------
(Inception) Issuance of Common Stock of
Steam Cleaning USA, Inc-August 16, 2002 2,250,000 $ 1,800 $ (1,800) $ - $ - - $ -
Issuance of stock for acquisition of
TTI Holdings of America, Corp. 250 -
..
Net loss for year period 9-30-2002 (166,392) (166,392)
------------------------------------------------------------------------------
Balance at September 30, 2002 2,250,250 1,800 (1,800) - (166,392) $ (166,392)
shares returned and new shares reissued (1,587,125) (1,270) 1,800 (530)
per 12-27-2002 amendment to agreements
shares issued for compensation 156,250 125 125
Net loss for nine months ended 6-30-2003 - - - - (96,886) (96,886)
-------------------------------------------------------------------------------
Balance at June 30, 2003 819,375 $ 655 $ - $ - $ (263,808) $ (263,153)
===============================================================================
See notes to financial statements.
F-5
STEAM CLEANING USA, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
(formerly TTI Holdings of America, Corp.)
STATEMENT OF CASH FLOWS
Period from
Inception
Nine Months (August 16, 2002)
ended through
June 30, 2003 June 30, 2003
----------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (96,885) $ (263,808)
Adjustments to reconcile net loss to net
cash used in operating activities: 149,392
Impairment loss on Goodwill -
stock compensation 455 455
Changes in assets and liabilities:
Accounts payable 4,032 21,563
Accrued expenses 29,381 29,381
----------------------------------------------------
Net cash used in operating activities (63,017) (63,017)
----------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES: . .
Acquisition of Goodwill - -
Loan receivable-related parties (7,730) (7,730)
----------------------------------------------------
Net cash used in investing activities (7,730) (7,730)
------------------------ -------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock -
Proceeds from Stockholder advances 70,794 70,794
Proceeds from convertible notes payable - -
------------------------ -------------------------
Net cash provided by financing activities 70,794 70,794
------------------------ -------------------------
NET INCREASE IN CASH 47 47
CASH AND CASH EQUIVALENTS, Beginning - -
-- -
CASH AND CASH EQUIVALENTS, End $ 47 $ 47
======================= =========================
SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS
Interest $ - $ -
======================= =========================
Taxes $ - $ -
======================= =========================
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING
AND FINANCING ACTIVITIES
As of inception (August 16, 2002) the company capitalized goodwill of
$149,392 based upon assuming Notes payable of $35,000 and accounts
payable of $131,192 in conjunction with the reverse acquisition of TTI
Holdings of America Corp.
See notes to financial statements. F-6
Note 1 - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and disclosures required
by accounting principles generally accepted in the United States of America.
However, in the opinion of management, the accompanying unaudited financial
statements contain all adjustments (all of which are normal and recurring in
nature) necessary to present fairly the financial position of Steam Cleaning
USA, Inc. & Subsidiaries (the company) at June 30, 2003 and changes in
stockholders' deficit and cash flows for the nine months ended June 30, 2003 and
the statements of operations for each of the nine and three months ended June
30, 2003 and from inception (August 16, 2002) through June 30, 2003. For further
information, refer to the financial statements and disclosures that were filed
by the Company with the Securities and Exchange Commission on Form 10-KSB
(Annual Report Pursuant to Section 13 or 15 (d) of the Securities Act of 1934)
(File No. 000-28459).
Note 2 -Organization and operations
Steam Cleaning USA, Inc. (SCUS) (the Company), was organized in Wisconsin on
August 16, 2002 specifically to acquire and expand the operations of Steam
Cleaning and Sterilization, Inc. Steam Cleaning and Sterilization began its
existence as an unincorporated proprietorship over forty five years ago when the
present owners began providing steam cleaning and cart maintenance services to
local grocery stores in Wisconsin. The proprietorship was incorporated in 1962
under its present name as a Wisconsin corporation. The company continued to
primarily service grocery stores, even after the stores were acquired or merged
into larger regional entities. Over the years, the business has grown through
the efforts of the present owners, their two sons, and several independent
contractors who provide such services in areas distant from the Milwaukee area.
At present, Steam Cleaning provides such services in six states (Wisconsin,
Illinois, Iowa, Minnesota, Michigan, and Missouri) through in house crews and
independent contractors. The present owners are now ready to retire and their
family is not interested in operating the business. These facts have limited
expansion of the business and have lead to the sale of the business to new
owners who desire to take advantage of the expansion opportunities which the
present owners are reluctant to undertake. In recent years Steam Cleaning has
been approached by a number of national retailers for the purpose of obtaining
steam cleaning and cart maintenance services for all of their carts in all of
their stores. Following the Company's successful experience with the "ShopKo"
chain of stores, negotiations are now pending with several other national and
regional grocery, drug, and general merchandise chains. While the previous
owners have been resistant to expansion beyond the existing six state area due
to their age, it will be the goal of the new management of SCUS to provide these
services on a national basis to national clients.
F-7
The Company has reorganized as a management and holding company with a focus on
acquiring and managing small enterprises that have potential growth prospects.
The primary criteria for acquisition candidates are that they must be at or near
profitability and exhibit potential for growth with a minimal amount of
financing. Financing recently has been from issuance of stock for services.
As a result of the above change in strategic focus, the Company is in the
development stage while it is focusing on geographic expansion and raising
capital. Principal risks to the Company include uncertainty of services and
generation of revenues; dependence on outside sources of capital; dependence on
third-party (independent contractors) to provide necessary corporate functions;
lack of experience; and competition with larger, better-capitalized companies.
Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company incurred a net loss of $96,885 for the nine months ended June 30,
2003 and a loss from inception (August 16, 2002 through June 30, 2003 of
$263,808. At June 30, 2003 current liabilities exceed current assets by
approximately $263,000. The company needs to obtain additional financing to
ensure that its present operating plan is met.
The Company anticipates that in order to fulfill its plan of operation including
payment of certain past liabilities of the company, it will need to seek
financing from outside sources. Also, the Company is actively in discussion with
one or more potential acquisition or merger candidates. There is no assurance
that the company will be successful in raising the necessary funds nor can there
be a guarantee that the Company can successfully execute any acquisition or
merger transaction with any company or individual or if such transaction is
effected, that the company will be able to operate such company profitably or
successfully.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.
Reverse Merger
On August 16, 2002, (new) Steam Cleaning USA Inc., a Wisconsin corporation was
organized. The formerly known TTI Holdings of America Corp. (TTI)), issued
90,000,000 of its shares of common stock in exchange for 100% of the common
stock of Steam Cleaning USA, Inc., (the Wisconsin corporation).
F-8
The original stockholders of Steam Cleaning USA, Inc. (the Wisconsin
corporation) had approximately 90% of the stock outstanding of TTI on a post
exchange basis. The shares were issued after the effectiveness of the five (5)
for one (1) reverse split, on September 3, 2002; This resulted in the
shareholders receiving an aggregate 18,000,000 shares (post reverse split
basis). On December 27, 2002, the Stock Purchase Agreement, dated August 15,
2002, was amended in that the 90,000,000 shares (18,000,000 shares post reverse
split basis) issued were returned to the treasury and in their place a total
3,750,000 (post reverse spit basis) shares were reissued. These shares are prior
to the eight (8) for one (1) reverse stock split as described in note 6
Simultaneously with the exchange, Steam Cleaning USA, Inc. (the Wisconsin
corporation) merged into TTI with TTI changing its name to Steam Cleaning USA,
inc. (a Delaware corporation) Such exchange diluted the ownership percentage of
the prior TTI stockholders to less than a controlling interest 10 percent and
resulted in the prior stockholders of Steam Cleaning USA, Inc. (Wisconsin)
obtaining control of TTI.
As a legal effect of the merger, TTI acquired all of the assets and assumed all
the liabilities of Steam Cleaning USA, Inc. For reporting purposes, however, the
foregoing stock-exchange has been accounted for similar to an equity transaction
resulting in a recapitalization of the accounting acquirer Steam Cleaning USA,
Inc. (Wisconsin) with it remaining as the reporting entity. Because Steam
Cleaning USA, Inc. (Delaware) (TTI) is the surviving entity for legal purposes,
all equity transactions have been restated in terms of this corporation's
capital structure.
Included in the liabilities assumed are notes payable dated January 22, 2002
representing a total of $35,000 that the company borrowed from three investors
through the issuance of 7% convertible promissory notes (the "Notes"). The Notes
have a one (1) year term and are convertible at the holder's election into
shares of Common Stock at the lower of (i) $0.05 or (ii) a variable conversion
price equal to 50% of the average closing bid price of the Common Stock prior to
the day of conversion. The Notes are automatically converted upon a merger or
other extraordinary corporate transaction. Management does not believe that the
terms of these notes represent a beneficial conversion feature that represents
fair value in excess of the notes' face value.
F-9
Note 2---Significant Accounting Policies
Principles of Consolidation - The consolidated financial statements included all
majority-owned subsidiaries in which the Company exercises control. Investments
in which the Company exercises significant influence, but which it does not
control (generally a 20% to 50% ownership interest), are accounted for under the
equity method of accounting. Investments in which the Company does not exercise
significant influence are recorded at cost (generally less than a 20% interest).
All material inter company transactions have been eliminated.
Cash and Cash Equivalents - For purposes of reporting cash flows, the Company
considers all cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and cash equivalents in the accompanying balance sheets. The
Company maintains their cash in a financial institution, which insures its
deposits with the FDIC up to $100,000 per depositor.
Income Tax -- Federal income tax and to the extent that all the corporations
have state income taxes they are accounted under an asset and liability method,
which recognizes deferred tax liabilities and assets for the expected future tax
consequences of temporary differences between the tax and financial reporting
bases of certain assets and liabilities of each entity of the combines group.
Goodwill and Impairment of Long-lived Assets - Goodwill is the excess of the
purchase price over the fair value of identifiable net assets acquired in
business combinations accounted for as purchase. Long-lived assets, including
goodwill and other acquired intangibles, are reviewed for impairment whenever
events such a significant industry downturn or other changes in circumstances
indicated that the carrying amount may not be recoverable. When such events
occur, the Company compares the carrying amount of the assets to the
undiscounted expected future cash flows. If this comparison indicates that there
is impairment, the amount of the impairment is calculated using discounted
expected future cash flows.
Use of Estimates in Financial Statements - The preparation of financial
statements and related disclosures in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of cash and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements, and revenue and expenses during the period reported.
These estimates include assessing the collect ability of accounts receivable,
the realization of deferred assets, tax contingencies, and employee benefits,
restructuring charges, useful lives for depreciation and amortization periods of
tangible and intangible assets, long-lived asset impairments and allocation of
costs. Estimates and assumptions are reviewed periodically and the effects of
revisions are reflected in the period that they are determined to be necessary.
Actual results could differ from those estimates.
F-10
Fair Value of Financial Instruments - The fair value of financial instruments
classified as current assets or liabilities, including cash and cash
equivalents, accounts receivable, related party receivables and accounts
payable, accrued expenses, and stockholder advance approximate carrying value,
principally because of the short maturity of those items.
Loss Per Share - Basic and diluted loss per common share are the same and is
calculated by dividing net loss by the weighted average number of common shares
outstanding during the period. Due to the Company's net loss the effect of any
potentially dilutive securities or common stock equivalents that could be issued
was excluded from the loss per share calculation due to its anti-dilutive
effect.
All outstanding share disclosures have been restated to reflect the shares
outstanding as of each period based upon the reverse acquisition transaction
(see Note 1) and the one for five-reversed split.
NOTE 3---LOANS RECEIVABLE - RELATED PARTY
Loans receivable related party represent non interest bearing advances to
companies in which there is substantial common stock ownership.
Note 4---INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred income tax asset and liability as of December 31, 2002
are as follows:
Current
Net operating loss carries forward $ 65,000
Valuation allowance (65,000)
---------
Net $ -0-
---------
The valuation allowance at December 31, 2002 relates primarily to tax assets
associated with net operating losses. Management's assessment is that the nature
of future taxable income is not probable and may not allow the Company to
realize certain tax benefits of net operating losses within the prescribed carry
forward period. Accordingly, an appropriate valuation allowance has been made.
The Company has tax net operating losses to offset future taxable income if such
taxable income materializes and subject to certain limitations under the
Internal Revenue Code.
F - 11
Note 5-Subsequent event
Stock Purchase Agreement - On July 1, 2003 the company entered into a stock
purchase agreement to acquire 100% of the outstanding stock of Humana Trans
Service Holding Corp. (Humana Holding) for 6,000,000 shares (reverse split
basis) of Steam Cleaning USA Inc. common stock. Humana Holdings consists of a
wholly owned subsidiary in the employee leasing industry that provides drivers
for the trucking industry.
Stock Split - On June 25, 2003 the company filed with the SEC an amended
Preliminary Schedule 14C (information statement) indicating the company intent
of an eight for one reverse common stock split. All per share in formation has
been retroactively adjusted for this.
F-12
CERTIFICATIONS
I, John Daly, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Humana Trans Services
Holding Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report; 3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report; 4.
The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared; b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and 6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
August 14, 2003
/s/ John Daly
--------------------------------
John Daly
President
8
I, George L Riggs, III, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Humana Trans Services
Holding Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report; 3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report; 4.
The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared; b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and 6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
August 14, 2003
/s/ George L Riggs, III
--------------------------------
George L Riggs, III
Chief Financial Officer
9