SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K-A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Event Requiring Report: July 1, 2003
HUMANA TRANS SERVICES HOLDING CORP.
(Exact name of registrant as specified in its charter)
Delaware 000-30734 11-3255619
(State of Incorporation) (Commission File Number) (IRS Employer Identification#)
7466 New Ridge Road, Suite 7, Hanover, Maryland 21076
-----------------------------------------------------
(Address of Principal Executive Offices)
(410) 855-8758
----------------------------------------------------
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS and REGULATION FD DISCLOSURE
On July 21, 2003, the majority of shares entitled to vote of the Company
voted to effectuate an Agreement of Merger between Human Trans Services Holding
Corp and Steam Cleaning USA, Inc., whereby the two corporations were merged and
Steam Cleaning USA, Inc., the surviving corporation took the name of Humana
Trans Services Holding Corp.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
(a) Financial Statements.
(b) Pro Forma financial information.
(c) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
By: /s/ John Daly
--------------------------------
John Daly
President
Date: January 15, 2004
Financial Statements
Page
Bio Solutions of Maryland, LLC.
Period ended December 31, 2002 3
Period ended April 30, 2003 10
Humana Trans Services Group, Ltd.
Period ended September 30, 2001 18
Period ended September 30, 2002 26
Period ended April 30, 2003 35
Humana Trans Services Holding Corp., and Subsidiaries
Nine months ended June 30, 2003 44
Pro Forma Financial Data - Balance Sheet 58
Pro Forma Financial Data - Statement of Operations 59
2
BIO-SOLUTIONS OF MARYLAND,
LLC
(A Development Stage Company)
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS REPORT
Period from Inception
(May 30, 2002)
through December 31, 2002
3
BIO-SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT AUDITORS 4
FINANCIAL STATEMENTS
Balance Sheet 5
Statements of Operation and Owner's Deficit 6
Statements of Cash Flows 7
Notes to Financial Statements 8-9
Aaron Stein
CERTIFIED PUBLIC ACCOUNT
981 ALLEN LANE
P.O. BOX 406
WOODMERE, NY 11598
516-569-0520
REPORT OF INDEPENDENT AUDITOR
To the Members'
Bio-Solutions of Maryland, LLC
I have audited the accompanying balance sheet of Bio-Solutions of Maryland, LLC
(a development stage company) as of December 31, 2002 and the related statements
of operations, owner's deficit and cash flows for the period from May 30, 2002
(date of inception) to December 31, 2002. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audits provide a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Bio-Solutions of Maryland, LLC (a
development stage company) as of December 31, 2002 and the results of its
operations and its cash flows for the period from May 30, 2002 (date of
inception) to December 31, 2002 in conformity with accounting principles
generally accepted in the United States of America
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered losses from inception that raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Aaron Stein CPA
Woodmere, New York
December 19, 2003
4
BIO - SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
BALANCE SHEET
December 31, 2002
ASSETS
CURRENT ASSETS
Cash $ --
Accounts receivable 7,177
---------
Total current assets $ 7,177
---------
$ 7,177
=========
LIABILITIES AND OWNER'S DEFICIT
CURRENT LIABILITIES
Accounts payable $ 37,204
---------
Total current liabilities $ 37,204
OTHER LIABILITIES
Loans payable 120,411
---------
157,615
OWNER'S DEFICIT (150,438)
---------
$ 7,177
=========
See notes to financial statements.
5
BIO - SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
STATEMENT OF OPERATIONS AND OWNER'S DEFICIT
Period from inception (May 30, 2002)
through December 31, 2002
REVENUE $ 10,371
COST OF GOODS SOLD 71,439
---------
GROSS PROFIT (LOSS) (61,068)
GENERAL AND ADMINISTRATIVE 37,024
---------
(98,092)
OTHER EXPENSES
Write-off of franchise fee $ 50,000
Abandonment of fixed assets 2,846 52,846
--------- ---------
NET LOSS (150,938)
OWNER'S EQUITY - BEGINNING OF PERIOD --
OWNER'S EQUITY CONTRIBUTED 500
---------
OWNER'S EQUITY - END OF PERIOD $(150,438)
=========
See notes to financial statements.
6
BIO - SOLUTIONS OF MARYLAND, LLC
STATEMENT OF CASH FLOWS
Period from inception (May 30, 2002)
through December 31, 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(150,938)
Adjustments to reconcile net loss to net
cash used in operating activities:
Changes in assets and liabilities:
Accounts receivable (7,177)
Accounts payable 37,204
---------
Net cash used in operating activities (120,911)
---------
CASH FLOWS FROM FINANCING ACTIVITIES
Owner's capital contributed 500
Loan from owner 16,653
Loan payable 103,758
---------
Net cash provided by financing activities 120,911
---------
NET INCREASE IN CASH --
CASH AND CASH EQUIVALENTS, Beginning --
---------
CASH AND CASH EQUIVALENTS, End $ --
=========
SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS
Interest $ --
=========
Taxes $ --
=========
See notes to financial statements.
7
BIO-SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- Organization, Business and Significant Accounting Policies
Organization
Bio-Solutions of Maryland, LLC (the LLC) was organized in the State of
Maryland on May 30, 2002 as a Limited Liability Company.
Business
The Company is a franchise of Bio - Solutions International, which is a
public company that provides biological and environmentally friendly
solutions for waste remediation involving clogged grease traps and
sewage.
Going concern considerations
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has virtually
no operating history. The Company's continued existence is dependent
upon its ability to resolve its liquidity problems, principally by
obtaining additional debt financing and equity capital until such time
the Company becomes profitable. The lack of financial resources and
liquidity raises substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Significant Accounting Policies
Use of Estimates in Financial Statements -- Management uses estimates
and assumptions in preparing these financial statements in accordance
with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported
revenues and expenses. Actual results could vary from the estimates
that were used.
Cash -- For purposes of reporting cash flows, the Company considers all
cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and equivalents in the accompanying balance sheet.
Income Taxes --The Company is a Limited Liability Company and as such
all profits or losses are included on the income tax return of its
member. Accordingly, no provision for income taxes is included in these
financial statements.
8
BIO-SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 -- Loans Payabe
Loans payable at December 31, 2002 are as follows:
Due Humana Force Systems $103,758
Due to Owner $16,653
Due Humana Force Systems - represents unsecured advances made to the
Company for working capital. There are no terms of repayment and it is
non-interest bearing. The principal owner of Humana Force Systems is
deceased.
Due to Owner - This represents funds advanced to the Company for
working capital. There are no terms for repayment and is non-interest
bearing. The advances are unsecured.
9
BIO-SOLUTIONS OF MARYLAND,
LLC
(A Development Stage Company)
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS REPORT
For the period
January 1, 2003 through
April 30, 2003
10
BIO-SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT AUDITORS 12
FINANCIAL STATEMENTS
Balance Sheet 13
Statements of Operation and Owner's Deficit 14
Statements of Cash Flows 15
Notes to Financial Statements 16-17
11
Aaron Stein
CERTIFIED PUBLIC ACCOUNT
981 ALLEN LANE
P.O. BOX 406
WOODMERE, NY 11598
516-569-0520
REPORT OF INDEPENDENT AUDITOR
To the Members'
Bio-Solutions of Maryland, LLC
I have audited the accompanying balance sheet of Bio-Solutions of Maryland, LLC
(a development stage company) as of April 30, 2003 and the related statements of
operations, owner's deficit and cash flows for the period from January 1, 2003
to April 30, 2003 and for the period from May 30, 2002 (date of inception) to
April 30, 2003. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audits provide a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Bio-Solutions of Maryland, LLC (a
development stage company) as of April 30, 2003 and the results of its
operations and its cash flows for the period from January 1, 2003 to April 30,
2003 and for the period from May 30, 2002 (date of inception) to April 30, 2003
in conformity with accounting principles generally accepted in the United States
of America
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered losses from inception that raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Aaron Stein CPA
Woodmere, New York
December 19, 2003
12
BIO-SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
BALANCE SHEET
April 30, 2003
ASSETS
CURRENT ASSETS
Cash $ 12,170
Accounts receivable 4,901
---------
Total current assets $ 17,071
---------
$ 17,071
=========
LIABILITIES AND OWNER'S DEFICIT
CURRENT LIABILITIES
Accounts payable $ 36,011
---------
Total current liabilities $ 36,011
OTHER LIABILITIES
Loans payable 124,682
---------
160,693
OWNER'S DEFICIT (143,622)
---------
$ 17,071
=========
See notes to financial statements.
13
BIO-SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
STATEMENT OF OPERATIONS AND OWNER'S DEFICIT
For the period May 30, 2002
January 1, 2003 to (Inception) to
April 30, 2003 April 30, 2003
------------------------ -----------------------
REVENUE $ 8,782 $ 19,153
COST OF GOOD SOLD 1,966 73,405
------------ ------------
GROSS PROFIT 6,816 (54,252)
GENERAL AND ADMINISTRATIVE -- 37,024
------------ ------------
6,816 (91,276)
------------ ------------
OTHER EXPENSES
Write-off of franchise fee -- (50,000)
Abandonment of fixed assets -- (2,846)
------------ ------------
-- (52,846)
------------ ------------
NET INCOME (LOSS) 6,816 (144,122)
OWNER'S DEFICIT - BEGINNING (150,438) --
OWNER'S EQUITY CONTRIBUTED -- 500
------------ ------------
OWNER'S DEFICIT - END $ (143,622) $ (143,622)
============ ============
See notes to financial statements.
14
HUMANA TRANS SERVICES GROUP, LTD.
STATEMENT OF CASH FLOWS
For the period May 30, 2002
January 1, 2003 to (Inception) to
April 30, 2003 April 30, 2003
------------------------ ---------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ 6,816 $ (144,122)
Adjustments to reconcile net loss to net
cash used in operating activities:
Changes in assets and liabilities:
Accounts receivable 2,276 (4,901)
Accounts payable (1,193) 36,011
------------ ------------
Net cash used in operating activities 7,899 (113,012)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Owner's capital contributed -- 500
Loan from owner 4,271 20,924
Loan payable -- 103,758
------------ ------------
Net cash provided by financing activities 4,271 125,182
NET INCREASE IN CASH 12,170 12,170
CASH AND CASH EQUIVALENTS, Beginning -- --
------------ ------------
CASH AND CASH EQUIVALENTS, End $ 12,170 $ 12,170
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS
Interest $ -- $ --
============ ============
Taxes $ -- $ --
============ ============
See notes to financial statements.
15
BIO-SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- Organization, Business and Significant Accounting Policies
Organization
Bio-Solutions of Maryland, LLC (the LLC) was organized in the State of
Maryland on May 30, 2002 as a Limited Liability Company.
Business
The Company is a franchise of Bio - Solutions International, which is a
public company that provides biological and environmentally friendly
solutions for waste remediation involving clogged grease traps and
sewage.
Going concern considerations
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has virtually
no operating history. The Company's continued existence is dependent
upon its ability to resolve its liquidity problems, principally by
obtaining additional debt financing and equity capital until such time
the Company becomes profitable. The lack of financial resources and
liquidity raises substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Significant Accounting Policies
Use of Estimates in Financial Statements -- Management uses estimates
and assumptions in preparing these financial statements in accordance
with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported
revenues and expenses. Actual results could vary from the estimates
that were used.
Cash -- For purposes of reporting cash flows, the Company considers all
cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and equivalents in the accompanying balance sheet.
Income Taxes --The Company is a Limited Liability Company and as such
all profits or losses are included on the income tax return of its
member. Accordingly, no provision for income taxes is included in these
financial statements.
16
BIO-SOLUTIONS OF MARYLAND, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 -- Loans Payabe
Loans payable at April 30, 2003 are as follows:
Due Humana Force Systems $103,758
Due to Owner $20,924
Due Humana Force Systems - represents unsecured advances made to the
Company for working capital. There are no terms of repayment and it is
non-interest bearing. The principal owner of Humana Force Systems is
deceased.
Due to Owner - This represents funds advanced to the Company for
working capital. There are no terms for repayment and is non-interest
bearing. The advances are unsecured.
17
HUMANA TRANS SERVICES
GROUP, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS REPORT
For the period
July 2, 2001 (Inception)
through September 30, 2001
18
Humana Trans Services Group, Ltd.
(A Development Stage Company)
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT AUDITORS 20
FINANCIAL STATEMENTS
Balance Sheet 21
Statements of Operations 22
Statement of Changes in Stockholders' Equity 23
Statements of Cash Flows 24
Notes to Financial Statements 25
19
Aaron Stein
CERTIFIED PUBLIC ACCOUNT
981 ALLEN LANE
P.O. BOX 406
WOODMERE, NY 11598
516-569-0520
REPORT OF INDEPENDENT AUDITOR
To the Board of Directors and Stockholders'
Humana Trans Services Group, Ltd.
I have audited the accompanying balance sheet of Humana Trans Services Group,
Ltd. (a development stage company) as of September 30, 2001 and the related
statements of operations, stockholders' deficit and cash flows for the period
from July 2, 2001 (date of inception) to September 30, 2001. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audits provide a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Humana Trans Services Group, Ltd.
(a development stage company) as of September 30, 2001 and the results of its
operations and its cash flows for the period from July 2, 2001 (date of
inception) to September 30, 2001 in conformity with accounting principles
generally accepted in the United States of America
Aaron Stein CPA
Woodmere, New York
December 19, 2003
20
HUMANA TRANS SERVICES GROUP, LTD.
(A Development Stage Company)
BALANCE SHEET
September 30, 2001
ASSETS
CURRENT ASSETS
Cash $ 50
-------
Total current assets $ 50
-------
$ 50
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 4,500
-------
Total current liabilities $ 4,500
-------
STOCKHOLDERS' EQUITY
Common Stock $0.0001
100,000,000 shares authorized
200 shares issued and outstanding --
Additional Paid-in-Capital 200
Accumulated deficit (4,650)
-------
Total stockholders' deficit (4,450)
-------
$ 50
=======
See notes to financial statements.
21
HUMANA TRANS SERVICES GROUP, LTD.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Period from inception (July 2, 2001)
through September 30, 2001
REVENUE $ --
--------
GENERAL AND ADMINISTRATIVE
Auditing fees $ 2,500
Legal 1,500
Other expenses 650
--------
4,650
--------
NET LOSS $ (4,650)
========
EARNINGS PER SHARE
Basic $ (23.25)
========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 200
========
See notes to financial statements.
22
HUMANA TRANS SERVICES GROUP, LTD.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
Period from inception (July 2, 2001)
through September 30, 2001
Accumulated
Deficit
Additional During the
Paid-In Development
Shares Amount Capital Stage Total
--------------- --------------- --------------- --------------- ---------------
Issuance of common stock-
upon incorporation 200 $ -- $ 200 $ -- $ 200
Net loss -- -- -- (4,650) (4,650)
--------------- --------------- --------------- --------------- ---------------
Balance September 30, 2001 200 $ -- $ 200 $ (4,650) $ (4,450)
=============== =============== =============== =============== ===============
See notes to financial statements.
23
HUMANA TRANS SERVICES GROUP, LTD.
STATEMENT OF CASH FLOWS
Period from inception (July 2, 2001)
through September 30, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(4,650)
Adjustments to reconcile net loss to net
cash used in operating activities:
Changes in assets and liabilities:
Accrued expenses 4,500
-------
Net cash used in operating activities (150)
-------
Financing activities:
Proceeds from issuance of common stock 200
-------
NET INCREASE IN CASH 50
CASH AND CASH EQUIVALENTS, Beginning --
-------
CASH AND CASH EQUIVALENTS, End $ 50
=======
SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS
Interest $ --
=======
Taxes $ --
=======
See notes to financial statements.
24
Humana Trans Services Group, Ltd.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- Organization, Business and Significant Accounting Policies
Organization
Humana Trans Services Group, Ltd. (the Company) was originally
incorporated in the State of New York on July 2, 2001 as a wholly owned
subsidiary of TTI Holdings of America Corp. under the name
Transventures Industries, Inc.
Business
The Company plans to engage in administration services, providing
reduced costs and improved services to customers as a third-party
provider. The Company has no prior operating history.
Significant Accounting Policies
Use of Estimates in Financial Statements -- Management uses estimates
and assumptions in preparing these financial statements in accordance
with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported
revenues and expenses. Actual results could vary from the estimates
that were used.
Cash -- For purposes of reporting cash flows, the Company considers all
cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and equivalents in the accompanying balance sheet.
Income Taxes --The Company accounts for income taxes under the asset
and liability method. Deferred income taxes and liabilities are
determined based on the difference between the financial statement and
tax bases of assets and liabilities using enacted tax rates for the
period in which the differences are expected to reverse.
Earnings per Common Share -- Basic earnings per share are computed
using the weighted average number of shares outstanding during the
year. Basic earnings per share also exclude any dilutive effects of
options, warrants and convertible securities. Diluted net loss per
share does not include options, warrants or convertible securities, as
they would be anti-dilutive.
25
HUMANA TRANS SERVICES
GROUP, LTD.
(A Development Stage Company)
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS REPORT
September 30, 2002
26
Humana Trans Services Group, Ltd.
(A Development Stage Company)
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT AUDITORS 28
FINANCIAL STATEMENTS
Balance Sheet 29
Statements of Operations 30
Statement of Changes in Stockholders' Equity 31
Statements of Cash Flows 32
Notes to Financial Statements 33-34
27
Aaron Stein
CERTIFIED PUBLIC ACCOUNT
981 ALLEN LANE
P.O. BOX 406
WOODMERE, NY 11598
516-569-0520
REPORT OF INDEPENDENT AUDITOR
To the Board of Directors and Stockholders'
Humana Trans Services Group, Ltd.
I have audited the accompanying balance sheet of Humana Trans Services Group,
Ltd. (a development stage company) as of September 30, 2002 and the related
statements of operations, stockholders' deficit and cash flows for the year then
ended and for the period from July 2, 2001 (date of inception) to September 30,
2002. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audits provide a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Humana Trans Services Group, Ltd.
(a development stage company) as of September 30, 2002 and the results of its
operations and its cash flows for the year then ended and for the period from
July 2, 2002 (date of inception) to September 30, 2002 in conformity with
accounting principles generally accepted in the United States of America
Aaron Stein CPA
Woodmere, New York
December 19, 2003
28
HUMANA TRANS SERVICES GROUP, LTD.
(A Development Stage Company)
BALANCE SHEET
September 30, 2002
ASSETS
CURRENT ASSETS
Cash $ 3,039
---------
Total current assets $ 3,039
---------
$ 3,039
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses 152,000
Note payable 10,000
---------
Total current liabilities $ 162,000
---------
STOCKHOLDERS' EQUITY
Common Stock, par value $0.0001
100,000,000 shares authorized
23,200 shares issued and outstanding 2
Additional Paid-in-Capital 15,198
Accumulated deficit (174,161)
---------
Total stockholders' deficit (158,961)
---------
$ 3,039
=========
See notes to financial statements.
29
HUMANA TRANS SERVICES GROUP, LTD.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the year July 2, 2001
Ended (Inception) to
September 30, 2002 September 30, 2002
------------------------ ------------------------
REVENUE $ -- $ --
------------- -------------
GENERAL AND ADMINISTRATIVE
Consulting fees 130,000 130,000
Auditing fees 10,000 12,500
Legal 7,500 9,000
Other expenses 22,011 22,661
------------- -------------
169,511 174,161
------------- -------------
NET LOSS $ (169,511) $ (174,161)
============= =============
EARNINGS PER SHARE
Basic $ (7.307) $ (7.507)
============= =============
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 23,200 23,200
============= =============
See notes to financial statements.
30
HUMANA TRANS SERVICES GROUP, LTD.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
Period from inception (July 2, 2001)
through September 30, 2002
Accumulated
Deficit
Additional During the
Paid-In Development
Shares Amount Capital Stage Total
--------------- --------------- --------------- --------------- ---------------
Issuance of common stock-
upon incorporation 200 $ -- $ 200 $ -- $ 200
Net loss for the year ended-
September 30, 2001 -- -- -- (4,650) (4,650)
Issuance of common stock-
private placement 23,000 2 11,498 -- 11,500
Forgiveness of stockholder
liability -- -- 3,500 -- 3,500
Net loss for the year ended-
September 30, 2002 -- -- -- (169,511) (169,511)
--------------- --------------- --------------- --------------- ---------------
Balance September 30, 2002 23,200 $ 2 $ 15,198 $ (174,161) $ (158,961)
=============== =============== =============== =============== ===============
See notes to financial statements.
31
HUMANA TRANS SERVICES GROUP, LTD.
STATEMENT OF CASH FLOWS
For the year July 2, 2001
Ended (Inception) to
September 30, 2002 September 30, 2002
------------------------ ---------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (169,511) $ (174,161)
Adjustments to reconcile net loss to net
cash used in operating activities:
Changes in assets and liabilities:
Accrued expenses 147,500 152,000
Note payable 10,000 10,000
------------- -------------
Net cash used in operating activities (12,011) (12,161)
Financing activities:
Proceeds from issuance of common stock 15,000 15,200
------------- -------------
NET INCREASE IN CASH 2,989 3,039
CASH AND CASH EQUIVALENTS, Beginning 50 --
------------- -------------
CASH AND CASH EQUIVALENTS, End $ 3,039 $ 3,039
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS
Interest $ -- $ --
============= =============
Taxes $ -- $ --
============= =============
See notes to financial statements.
32
Humana Trans Services Group, Ltd.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- Organization, Business and Significant Accounting Policies
Organization
Humana Trans Services Group, Ltd. (the Company) was originally
incorporated in the State of New York on July 2, 2001 as a wholly owned
subsidiary of TTI Holdings of America Corp. under the name
Transventures Industries, Inc. On March 8, 2002, TTI Holdings of
America Corp. announced that it intended to distribute one share in the
Company for each ten shares owned in TTI Holdings of America Corp. to
shareholder of record as of April 1, 2002. Approximately 715,445 shares
of common stock will be issued to approximately 1,000 shareholders of
TTI Holdings of America Corp. On April 1, 2002 the Company filed a
Certificate of Amendment with the Secretary of State of the State of
New York amending the Companies name and increasing the authorized
capital of the Company from 200 shares of common stock without par
value to 100,000,000 shares, with a par value of $0.0001 per share.
Business
The Company plans to engage in administration services, providing
reduced costs and improved services to customers as a third-party
provider. The Company has no prior operating history.
Significant Accounting Policies
Use of Estimates in Financial Statements -- Management uses estimates
and assumptions in preparing these financial statements in accordance
with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported
revenues and expenses. Actual results could vary from the estimates
that were used.
Cash -- For purposes of reporting cash flows, the Company considers all
cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and equivalents in the accompanying balance sheet.
Income Taxes --The Company accounts for income taxes under the asset
and liability method. Deferred income taxes and liabilities are
determined based on the difference between the financial statement and
tax bases of assets and liabilities using enacted tax rates for the
period in which the differences are expected to reverse.
33
Humana Trans Services Group, Ltd.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- Organization, Business and Significant Accounting Policies, Continued
Earnings per Common Share -- Basic earnings per share are computed
using the weighted average number of shares outstanding during the
year. Basic earnings per share also exclude any dilutive effects of
options, warrants and convertible securities. Diluted net loss per
share does not include options, warrants or convertible securities, as
they would be anti-dilutive.
NOTE 2 -- Stockholders' Equity
Private Placement
The Company from October 25, 2001 through December 31, 2001 offered for
sale 1,000,000 shares of common stock at a value of $0.50 per share in
a "private placement" pursuant to Regulation D, Rule 506 of the
Securities Act of 1933.
NOTE 3 -- Note Payable
On March 5, 2002 the Company borrowed a total of $10,000 from
Diversified Holdings, Inc. a division of CDKX. The note is due 180 days
after the execution of the Note and bears interest at the rate of 12%
per annum.
NOTE 4 -- Commitments
The Company has agreed to issue 2,600,000 shares of common stock to
Officers and Directors in exchange for services rendered at a value of
$0.05 per share or a total of $130,000, this amount has been accrued at
September 30, 2002. All services provided were prior to the Private
Placement. Individuals who are both Officers and Directors received
2,250,000 shares of common stock valued at $112,500, individuals who
are solely Directors received 350,000 shares of common stock valued at
$17,500.
Certain legal fees were paid for with the issuance of 150,000 shares of
common stock.
34
HUMANA TRANS SERVICES
GROUP, LTD.
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS REPORT
For the period
October 1, 2002 through
April 30, 2003
35
Humana Trans Services Group, Ltd.
TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT AUDITORS 37
FINANCIAL STATEMENTS
Balance Sheet 38
Statements of Operations 39
Statement of Changes in Stockholders' Equity 40
Statements of Cash Flows 41
Notes to Financial Statements 42-43
36
Aaron Stein
CERTIFIED PUBLIC ACCOUNT
981 ALLEN LANE
P.O. BOX 406
WOODMERE, NY 11598
516-569-0520
REPORT OF INDEPENDENT AUDITOR
To the Board of Directors and Stockholders'
Humana Trans Services Group, Ltd.
I have audited the accompanying balance sheet of Humana Trans Services Group,
Ltd. as of April 30, 2003 and the related statements of operations,
stockholders' deficit and cash flows for the period from October 1, 2002 to
April 30, 2003. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audits provide a reasonable basis for
my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Humana Trans Services Group, Ltd.
as of April 30, 2003 and the results of its operations and its cash flows for
the period from October 1, 2002 to April 30, 2003 in conformity with accounting
principles generally accepted in the United States of America
Aaron Stein CPA
Woodmere, New York
December 19, 2003
37
HUMANA TRANS SERVICES GROUP, LTD.
BALANCE SHEET
April 30, 2003
ASSETS
CURRENT ASSETS
Cash $ 23,320
Accounts receivable 5,920
Other receivable - Factor 12,728
Employee advances 5,810
---------
Total current assets 47,778
---------
Fixed Assets 1,056
---------
Intangible Assets
Customer list 90,000
---------
$ 138,834
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 174,894
Payroll taxes payable 59,478
Loans payable 229,400
---------
Total current liabilities $ 463,772
---------
STOCKHOLDERS' EQUITY
Common Stock, par value $0.0001
100,000,000 shares authorized
23,200 shares issued and outstanding 2
Additional Paid-in-Capital 15,198
Accumulated deficit (340,138)
---------
Total stockholders' deficit (324,938)
---------
$ 138,834
=========
See notes to financial statements.
38
HUMANA TRANS SERVICES GROUP, LTD.
STATEMENT OF OPERATIONS
For the period
October 1, 2002 to
April 30, 2003
-------------------------
REVENUE $ 820,396
---------
COST OF REVENUE 570,728
---------
GROSS PROFIT 249,668
GENERAL AND ADMINISTRATIVE EXPENSES 263,350
---------
OPERATING LOSS (13,682)
PROVISION FOR LOSS ON RELATED PARTY RECEIVABLE (152,295)
---------
(LOSS) BEFORE INCOME TAXES (165,977)
INCOME TAXES --
---------
NET LOSS $(165,977)
=========
EARNINGS PER SHARE
Basic $ (7.154)
=========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 23,200
=========
See notes to financial statements.
39
HUMANA TRANS SERVICES GROUP, LTD.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
Period from October 1, 2002
through April 30, 2003
Additional
Paid-In Accumulated
Shares Amount Capital Deficit Total
--------------- --------------- --------------- --------------- ---------------
Balance September 30, 2002 23,200 $ 2 $ 15,198 $ (174,161) $ (158,961)
Net loss -- -- -- (165,977) (165,977)
--------------- --------------- --------------- --------------- ---------------
Balance April 30, 2003 23,200 $ 2 $ 15,198 $ (340,138) $ (324,938)
=============== =============== =============== =============== ===============
See notes to financial statements.
40
HUMANA TRANS SERVICES GROUP, LTD.
STATEMENT OF CASH FLOWS
For the period
October 1, 2002 to
April 30, 2003
---------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (165,977)
Adjustments to reconcile net loss to net
cash used in operating activities:
Changes in assets and liabilities:
Accounts receivable (5,920)
Other receivable - Factor (12,728)
Employee advances (5,810)
Accrued expenses 22,894
Payroll taxes payable 59,478
Loans payable 219,400
------------
Net cash provided by operating activities 111,337
------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (1,056)
Purchase of customer list (90,000)
------------
Net cash used in investing activities (91,056)
------------
Net increase in cash and cash equivalents 20,281
CASH AND CASH EQUIVALENTS, Beginning 3,039
------------
CASH AND CASH EQUIVALENTS, End $ 23,320
============
SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS
Interest $ --
============
Taxes $ --
============
See notes to financial statements.
41
Humana Trans Services Group, Ltd.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- Organization, Business and Significant Accounting Policies
Organization
Humana Trans Services Group, Ltd. (the Company) was originally
incorporated in the State of New York on July 2, 2001 as a wholly owned
subsidiary of TTI Holdings of America Corp. under the name
Transventures Industries, Inc. On March 8, 2002, TTI Holdings of
America Corp. announced that it intended to distribute one share in the
Company for each ten shares owned in TTI Holdings of America Corp. to
shareholder of record as of April 1, 2002. Approximately 715,445 shares
of common stock will be issued to approximately 1,000 shareholders of
TTI Holdings of America Corp. On April 1, 2002 the Company filed a
Certificate of Amendment with the Secretary of State of the State of
New York amending the Companies name and increasing the authorized
capital of the Company from 200 shares of common stock without par
value to 100,000,000 shares, with a par value of $0.0001 per share.
Business
The Company plans to engage in administration services, providing
reduced costs and improved services to customers as a third-party
provider. The Company has no prior operating history.
Significant Accounting Policies
Use of Estimates in Financial Statements -- Management uses estimates
and assumptions in preparing these financial statements in accordance
with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported
revenues and expenses. Actual results could vary from the estimates
that were used.
Cash -- For purposes of reporting cash flows, the Company considers all
cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and equivalents in the accompanying balance sheet.
Income Taxes --The Company accounts for income taxes under the asset
and liability method. Deferred income taxes and liabilities are
determined based on the difference between the financial statement and
tax bases of assets and liabilities using enacted tax rates for the
period in which the differences are expected to reverse.
42
Humana Trans Services Group, Ltd.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- Organization, Business and Significant Accounting Policies, Continued
Earnings per Common Share -- Basic earnings per share are computed
using the weighted average number of shares outstanding during the
year. Basic earnings per share also exclude any dilutive effects of
options, warrants and convertible securities. Diluted net loss per
share does not include options, warrants or convertible securities, as
they would be anti-dilutive.
NOTE 2 -- Stockholders' Equity
Private Placement
The Company from October 25, 2001 through December 31, 2001 offered for
sale 1,000,000 shares of common stock at a value of $0.50 per share in
a "private placement" pursuant to Regulation D, Rule 506 of the
Securities Act of 1933.
NOTE 3 -- Note Payable
On March 5, 2002 the Company borrowed a total of $10,000 from
Diversified Holdings, Inc. a division of CDKX. The note is due 180 days
after the execution of the Note and bears interest at the rate of 12%
per annum.
NOTE 4 -- Commitments
The Company has agreed to issue 2,600,000 shares of common stock to
Officers and Directors in exchange for services rendered at a value of
$0.05 per share or a total of $130,000, this amount has been accrued at
September 30, 2002. All services provided were prior to the Private
Placement. Individuals who are both Officers and Directors received
2,250,000 shares of common stock valued at $112,500, individuals who
are solely Directors received 350,000 shares of common stock valued at
$17,500.
Certain legal fees were paid for with the issuance of 150,000 shares of
common stock.
43
Humana Trans Services Holding Corp.
And Subsidiaries
NINE MONTHS ENDED JUNE 30, 2003
44
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
Page
FINANCIAL STATEMENTS
Balance Sheet as of June 30, 2003 46
Statements of Operations for the nine months 47
ended June 30, 2003
Statements of Operations for the nine months 48
ended June 30, 2003
Statements of Stockholders' Deficiency for the
Nine months June 30, 2003 49
Statements of Cash Flows for the nine months 50
ended June 30, 2003
Notes to Financial Statements 51-52
45
REPORT OF INDEPENDENT AUDITOR
To the Directors
I have audited the accompanying sheet of Humana Trans Services Holding Corp. as
of June 30, 2003 and the related statements of operations, owner's deficit and
cash flows for the period from April 25, 2003 to June 30, 2003. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in
the United States of America. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of materials misstatements. An audit includes examining on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by managements, as well as evaluating the overall
financial statement presentation. I believe that my audits provide a reasonable
basis for my opinion.
In my opinion, the financial statements referred to about present fairly, in all
material respects, the financial position of Humana Trans Services Holding Corp.
as of June 30, 2003 and the results of its operations and its cash flows for the
period from April 25, 3003 to June 30, 2003 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered losses from inception that raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Aaron Stein, CPA
Woodmere, New York
December 19, 2003
46
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
BALANCE SHEET
June 30, 2003
ASSETS
CURRENT ASSETS
Cash $ 18,786
Accounts receivable 107,400
Other current assets 8,219
Employee advances 6,710
-----------
Total current assets 141,115
-----------
Fixed Assets 1,056
-----------
Intangible Assets
Customer list 76,500
Goodwill 295,219
-----------
371,719
-----------
$ 513,890
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 265,455
Payroll taxes payable 157,189
Loans payable 584,251
-----------
Total current liabilities $ 1,006,895
-----------
STOCKHOLDERS' EQUITY
Preferred Stock, par value $0.0001
5,000,000 shares authorized
none oustanding --
Common Stock, par value $0.0001
20,000,000 shares authorized
100 shares issued and outstanding --
Additional Paid-in-Capital --
Accumulated deficit (493,005)
-----------
Total stockholders' deficit (493,005)
-----------
$ 513,890
===========
See notes to financial statements
47
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSUDIARIES
STATEMENT OF OPERATIONS
April 25, 2003
(Inception) to
June 30, 2003
-----------
REVENUE $ 1,164,724
-----------
COST OF REVENUE 730,993
-----------
GROSS PROFIT 433,731
GENERAL AND ADMINISTRATIVE EXPENSES 426,132
-----------
INCOME FROM OPERATIONS 7,599
OTHER EXPENSES
Impairment of goodwill (438,841)
Interest expense (61,395)
Miscellaneous (368)
-----------
(500,604)
NET LOSS $ (493,005)
===========
EARNINGS PER SHARE
Basic $ --
===========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic --
===========
See notes to financial statements.
48
HUMANA TRANS SERVICES HOLDING CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
Period from April 25, 2003 through June 30, 2003
Additional
Paid-In Accumulated
Shares Amount Capital Deficit Total
--------- --------- --------- --------- ---------
Issuance of common stock-
upon incorporation 100 $ -- $ -- $ -- $ --
Net loss -- -- -- (493,005) (493,005)
--------- --------- --------- --------- ---------
Balance June 30, 2003 100 $ -- $ -- $(493,005) $(493,005)
========= ========= ========= ========= =========
See notes to financial statements.
49
HUMANA TRANS SERVICES HOLDING CORP.
STATEMENT OF CASH FLOWS
April 25, 2003
(Inception) to
June 30, 2003
--------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(493,005)
Adjustments to reconcile net loss to net
cash used in operating activities:
Changes in assets and liabilities:
Accounts receivable (107,400)
Other current assets (8,219)
Employee advances (6,710)
Accrued expenses 265,455
Payroll taxes payable 157,189
Loans payable 584,251
---------
Net cash provided by operating activities 391,561
---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (1,056)
Purchase of customer list (76,500)
Increase in goodwill (295,219)
---------
Net cash used in investing activities (372,775)
---------
Net increase in cash and cash equivalents 18,786
CASH AND CASH EQUIVALENTS, Beginning --
---------
CASH AND CASH EQUIVALENTS, End $ 18,786
=========
SUPPLEMENTAL DISCLOSURES OF CASH PAYMENTS
Interest 61,395
=========
Taxes $ --
=========
See notes to financial statements.
50
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION, NATURE OF BUSINESS AND PURCHASE OF OPERATIONS
Organization
Humana Trans Services Holding Corp. (the Company) was incorporated in Delaware
on April 25, 2003 issuing 100 shares of common stock. (On July 1, 2003 the
Company merged into Steam Cleaning USA, Inc. (Steam Cleaning) leaving Steam
Cleaning as the surviving corporation. On August 4, 2003 Steam Cleaning filed a
Certificate of Amendment to its Certificate of Incorporation changing its name
to "Humana Trans Services Holding Corp.) The Company's certificate of
incorporation authorized it to issue 20,000,000 shares of Common Stock with a
par value of $ .0001 per share and 5,000,000 shares of preferred stock, par
value $.0001. Prior to the company's acquisition of Humana Trans Services Group,
Ltd. and Bio Solutions LLC (see below) it had no operations.
Acquisitions:
Humana Trans Services Group, Ltd.
On April 30, 2003 the Company entered into a Stock Purchase Agreement
wherein the Company purchased from National Management Consulting Inc. (NMC)(a
publicly traded company and sole stockholder of Humana Trans Services Group,
Ltd. (HTSG)), all the outstanding shares of HTSG. The majority of shareholders
of HTSG were also shareholders of NMC. The purchase price was $255,000 for the
stock of which $25,000 was paid at closing and the balance in the form of a
promissory note that bears interest at the rate of five percent (10%), with
interest and principle payable over a two year period. The Note is secured by
stock owned by the majority shareholder of the company (and a former
director/officer) in the following companies: NMC, Dominix, Inc., and CDKnet.com
(all publicly traded companies). Also this stockholder gave a waiver to any
right to receive any shares or proceeds of any shares of NMC. Humana has
commenced operations in the employee leasing business whereby Humana contracts
with various businesses to provide employees to the business. The recipient
business then pays a fee to Humana out of which the employee is paid and Humana
retains a portion for its administrative efforts.
The fair values of assets acquired and liabilities assumed at the acquisition
date are as follows:
Cash $ 23,320
Accounts receivable 18,648
Employee advances 5,810
Fixed assets 1,056
Intangible asset-customer list 79,500
Goodwill 590,438
Accounts payable and accrued expenses (174,894)
Payroll taxes payable (59,478)
Notes payable (229,400)
---------
255,000
=========
51
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
Results of HTSG are included in the Company's financial statements since the
acquisition date.
$295,219 assigned to goodwill was written off at the date of acquisition. The
write-off is included in general and administrative expenses. The $79,500 of
acquired intangible assets have a weighted-average useful life of 4.5 years.
Goodwill is expected to be fully deductible for tax purposes.
NTSG had previously entered into an employment contract with an individual who
had previously operated the business. This individual owned and operated a
similar business and was to become the chief operating officer of Humana. HTSG
issued this individual 1,000,000 shares along with a salary arrangement for
services to be rendered over a period of time. Shortly after the contract was
executed this individual died. His shares have been cancelled and a lesser
number of shares have been issued to settle with his estate.
Bio Solutions, LLC
In conjunction with the acquition of HTSG the company assumed the operations of
Bio Solutions LLC owned by the president of the company and who is also a
significant stockholder of the company. No consideration was paid, however the
transaction resulted in acquiring $143,622 of goodwill that the company
considered impaired and has also been written down. Goodwill is expected to be
fully deductible for tax purposes.
The fair values of assets acquired and liabilities assumed of Bio Solutions LLC
at its acquisition date are as follows:
Cash $ 12,170
Accounts receivable 4,901
Goodwill 143,622
Accounts payable and accrued expenses (36,011)
Loans payable (124,682)
--------
0
========
Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.
The Company has reorganized as a management and holding company with a focus on
acquiring and managing small enterprises that have potential growth prospects in
similar lines of business as HTSG. 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
stockholder advances and factoring accounts receivable.
52
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
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. The company is currently pursuing a private
placement of debt. 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 adjustment that
might result from the outcome of this uncertainty.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation -- The consolidated financial statements include the
accounts of Humana Trans Services Group, Ltd. and Bio Solutions, LLC a wholly
owned subsidiary acquired in April 2003 (see note 1). Two new corporate
subsidiaries, Skilled Tradesman, Inc. and Waste Remediation, Inc. were formed
and have remained inactive. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Revenue Recognition -- HTSG recognizes revenue based upon services performed and
by employees and billed to customers.
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.
Allowance For Doubtful Accounts -- Trade accounts receivable are stated net of
any allowance for doubtful accounts. The Company estimates the allowance based
on an analysis of specific customers, taking into consideration the age of past
due accounts and an assessment of the customer's ability to pay. At March 31,
2003 management of the Company had determined no further reserve was required
after writing off any potential bad debts.
Client List - Client list is being amortized on a straight line basis over five
years
Property and Equipment -- Depreciation is computed on the straight-line method
over the estimated useful lives of the respective assets, which range from three
to five years. Maintenance and repairs are charged to expense as incurred; major
renewals and improvements are capitalized.
53
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
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. Note Payable-CDK.Net
also approximates it fair based upon its maturity and the interest rate.
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 combined group. As
of June 30, 2003 the Company had no taxable income. As of June 30, 2003 a
valuation allowance to offset any future benefit from net operating loss carry
forwards has been established because management believes it is more likely than
not that the deferred asset will not be recovered. 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.
Goodwill - Cost of investments in purchased companies in excess of the
underlying fair value of net assets at dates of acquisition are recorded as
goodwill and assessed annually for impairment. If considered impaired, goodwill
will be written down to fair value and a corresponding impairment loss
recognized.
Use of Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United State of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from those
estimates.
Note 3 - ACCOUNTS RECEIVABLE FACTORING ARRANGMENT
On October 21, 2003 HTSG entered into a factoring arrangement whereby certain
identified accounts receivable would be sold to AmeriFund Capital Group, LLC
(AFCG) up to a maximum of $500,000. AFCG will advance up to 80% of the face
value of the accounts receivable. At the time of collection the factor will
remit the remaining 20% of the face value of the receivable less a "discount
fee" ranging from 2.50% (if 15 days elapsed) to 10.11% (91 days after elapsed).
The arrangement is non-recourse to the company in the event of non-payment of an
account by reason of bankruptcy and the factor maintains a security interest in
all accounts receivable. The term of the arrangement is twelve months.
54
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
Note 4 - PAYROLL TAXES PAYABLE
In conjunction with the acquisition of Humana Trans Service Group (see Note 2)
the company assumed delinquent past due state and federal payroll taxes. The
balance of these liabilities are shown as $157,189 as of June 30, 2003. The
company has also accrued estimated interest and penalties on these unpaid taxes.
Additionally, several states have filed liens on the company. The company is
currently paying all payroll taxes and intends to pay and settle with state and
federal jurisdictions at time of receiving additional working capital.
NOTE 5-- LOANS PAYABLE
Loans payable at June 30, 2003 are as follows:
Due Humana Force Systems $103,758
Due stockholder $ 25,000
Due stockholder / officer $ 21,093
Due former officer $194,400
Note Payable - National Management $230,000
Note Payable - CDK.Net $ 10,000
--------
$584,251
========
Due Humana Force Systems - represents unsecured advances made to Bio Solutions
for working capital. Humana Force Systems is a company that had operated in the
same business as HTSG, whose owner became president of Human Trans Service
Group, Inc., but who died before assuming control. There are no terms of
repayment and it non-interest bearing.
Due Stockholder - represents an unsecured advance by the major stockholder for
the company to make the down payment to National Management Consulting Inc. (see
Note 1). There are no terms of repayment and the advance is non-interest
bearing.
Due Stockholder / Officer - This represents funds advances to Bio Solutions for
working capital. There are no terms for repayment and is non-interest bearing.
Also the advance is unsecured.
Due Former Officer - This amount represents funds advances by a former majority
stockholder of National Management Consulting, who advanced funds to Humana
Trans Services Group Ltd. for the purpose of acquiring a customer list and
providing working capital. The advance is non-interest bearing, unsecured and
requiring no terms for repayment. The loan is currently being negotiated to be
paid through the issuance of common stock.
55
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
Note Payable - National Management - This is the note issuance in conjunction
with the acquisition of Humana Trans Service Group Ltd (see Note 1). The note is
currently in default in that only the first few monthly payments were made, and
therefore the entire amount has been classified current. On July 10, 2003 a
settlement agreement was entered into by the company, National Management and
the major shareholder of the company whereby the majority stockholder gave
holdings in National Management Consulting and other companies that was being
held as collateral in order to satisfy the obligation. A new obligation was
created to this stockholder for an amount equal to the settlement.
Note Payable - CDK.Net - The company borrowed $10,000 on March 2, 2002 for a
term of 180 days and therefore it is in default.
NOTE 6 -
In August 2002, the company entered into lease for use of its headquarters in
Maryland. The lease calls for payments of $1,770/month. Rent expense for period
was $3,540. Additionally, the lease is guaranteed by the president of the
company.
Noncancellable payments over the term of the lease are as follows:
Twelve months ending:
June 30, 2004 $21,240
June 30, 2005 $21,240
June 30, 2006 $ 3,540
-------
$46,020
NOTE 7 - SUBSEQUENT EVENTS
Corporate Program Administrators, Inc.
On November 10, 2003 (with the effective date of the transaction January 1,
2004) the company entered into an asset purchase agreement to purchase certain
assets of "Corporate Program Administrators, Inc." for the issuance of 385,000
shares of common stock and $25,000 cash. No liabilities are being assumed and
certain assets such as accounts receivable and "prepaids" are being excluded
from the purchase.
Personnel Management Solutions LLP
The company and "Personnel Management Solutions, LLP (PMS)have entered into a
"memorandum of understanding on December 10, 2003" and "term left December 29,
2003" to pursue a "definitive purchase agreement." It is anticipated that the
purchase price will be based upon three times adjusted net earnings of PMS
payable 25% in cash plus the issuance of common stock of the company for the
remaining %75. Completion of any purchase is contingent upon performance of
adequate due diligence by the company.
56
HUMANA TRANS SERVICES HOLDING CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
Prior to the execution of a definitive agreement for the purchase of PMS by the
company will manage all operations and accounts of PMS effective January 1,
2004. All operations are to continue to be processed by PMS, but will be in the
name of the company. PMS will return ownership of all accounts and
responsibility for all liabilities. The company will receive a fee of 0.05% of
total gross payroll processed during this period.
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PRO FORMA FINANCIAL DATA
The following unaudited pro forma balance sheet has been derived from the
unaudited balance sheet of Steam Cleaning USA, Inc.(the "Company") at June 30,
2003 filed on form 10-QSB and the balance sheet of Humana Trans Service Holding
Corp.and subsidiaries ("HTSC") at June 30, 2003, and gives the effect to the
exchange of newly issued stock by the Company for all outstanding shares of HTSC
as if the transaction occurred on June 30, 2003. The pro forma balance sheet is
presented for informational purposes only and does not purport to be indicative
of the financial condition that actually would have resulted if the transaction
had been consummated at June 30, 2003. The pro forma balance sheet should be
read in conjunction with the notes thereto and the Company's financial
statements and related notes thereto contained elsewhere.
Humana Trans
Services
Steam Holding Corp.
Cleaning and
USA, Inc. Subsidiareis Pro Forma
June 30, 2003 June 30, 2003 Adjustments Pro Forma
----------- ----------- ----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 47 $ 18,786 $ -- $ 18,833
Accounts receivable $ 107,400
Other current assets 7,730 14,929 -- 22,659
----------- ----------- ----------- -----------
7,777 141,115 -- 148,892
----------- ----------- ----------- -----------
INVESTMENT IN SUBSIDIARY -- -- 600 a
(600) b --
PROPERTY AND EQUIPMENT -- 1,056 -- 1,056
----------- ----------- ----------- -----------
-- 1,056 -- 1,056
----------- ----------- ----------- -----------
OTHER ASSETS
Customer List -- 76,500 -- 76,500
Goodwill -- 295,219 295,219
----------- ----------- ----------- -----------
-- 371,719 -- 371,719
----------- ----------- ----------- -----------
TOTAL ASSETS $ 7,777 $ 513,890 $ -- $ 521,667
=========== =========== =========== ===========
CURRENT LIABILITIES
Accounts payable $ 135,754 $ 47,985 $ -- $ 183,739
Accrued expenses 29,381 217,470 246,851
Payroll taxes payable 157,189 157,189
Convertible notes payable 35,000 35,000
Loans payable 70,794 584,251 655,045
----------- ----------- ----------- -----------
Total current liabilities 270,929 1,006,895 -- 1,277,824
----------- ----------- ----------- -----------
TOTAL LIABILITIES 270,929 1,006,895 -- 1,277,824
----------- ----------- ----------- -----------
STOCKHOLDERS' DEFICIT
Common voting shares, $0.0001 par value, 656 -- 600 a 1,256
Additional paid-in capital -- -- --
-----------
Deficit (263,808) (493,005) (600) b (757,413)
----------- ----------- ----------- -----------
Total Stockholders' Equity (263,152) (493,005) -- (756,157)
----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 7,777 $ 513,890 $ -- $ 521,667
=========== =========== =========== ===========
PRO FORMA FINANCIAL DATA
Footnotes
a To record the issuance of 6,000,000 additional shares issued by the
Company to the stockholders of Humana Trans Services Holding Corp.as a
result of the business combination
b To record the fair value of assets which approximate book value on
books of Human Trans Service Holding Corp..
58
PRO FORMA FINANCIAL DATA
The following unaudited pro forma statement of operations has been derived from
the unaudited statement of operations of Steam Cleaning USA, Inc. (the
"Company") for the nine months ended June 30, 2002 (as filed in Form 10-Q) and
for the period from inception (April 26, 2003) through June 30, 2003 derived
from statement of operations for Humana Trans Services Holding Corp., a Delaware
corporation , and gives the effect to the exchange of newly issued stock by the
Company for all outstanding shares of Humana Trans Services Holding Corp. as if
the transaction occurred as of the beginning of the period. The stockholders of
Humana Trans Services Holding Corp. ,a Delaware Corp exchanged 100% of their
stock for stock of Steam Cleaning USA, Inc. The pro forma statement of
operations is presented for informational purposes only and does not purport to
be indicative of the results of operations that actually would have resulted if
the transaction had been consummated at October 1, 2002. The pro forma statement
of operations should be read in conjunction with Company's financial statements
and related notes thereto.
Humana Trans
Services
Holding Corp.
Steam and
Cleaning Subsidiareis
USA, Inc. Period April 25, 2003
Nine months ended Through Pro Forma
June 30, 2003 June 30, 2003 Adjustments Pro Forma
----------- ----------- ----------- -----------
REVENUES $ -- $ 1,164,724 $ -- $ 1,164,724
----------- ----------- ----------- -----------
COST OF REVENUE -- 730,993 730,993
----------- ----------- ----------- -----------
GROSS PROFIT -- 433,731 -- 433,731
GENERAL AND ADMINISTRATIVE 96,885 426,132 523,017
----------- ----------- ----------- -----------
NET INCOME (LOSS) FROM
OPERATIONS (96,885) 7,599 -- (89,286)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSE)
impairment of goodwill -- (438,841) -- (438,841)
Interest expense -- (61,395) (61,395)
Miscellaneous -- (368)
----------- ----------- ----------- -----------
-- (500,604) -- (500,236)
----------- ----------- ----------- -----------
NET LOSS $ (96,885) $ (493,005) $ -- $ (589,522)
=========== =========== =========== ===========
LOSS PER SHARE
Basic and fully diluted $ (0.02) $ -- $ -- $ (0.05)
=========== =========== =========== ===========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 6,161,829 -- 6,000,000 * 12,161,829
=========== =========== =========== ===========
59
(c) Exhibits
STATE OF DELAWARE
DELAWARE INTO DELAWARE
AGREEMENT OF MERGER
Now on this 22nd day of July, 2003, the STEAM CLEANING USA INC. and the
HUMANA TRANS SERVICES HOLDING CORP., both Delaware Corporations, pursuant to
Section 251 of the General Corporation Law of the State of Delaware, have
entered into the following Agreement of Merger:
WITNESSETH, that:
WHEREAS, the respective Boards of Directors of the foregoing named
corporations deem it advisable that the corporations merge into a single
corporation as hereinafter specified; and
WHEREAS, said STEAM CLEANING USA INC., filed its certificate of
Incorporation in the office of the Secretary of State of the State of Delaware
on November 17, 1994, as THERMALTEC INTERNATIONAL, CORP.; and
WHEREAS, said HUMANA TRANS SERVICES HOLDING CORP., filed its certificate
of Incorporation in the office of the Secretary of State of the State of
Delaware on April 25, 2003;
NOW, THEREFORE, the corporations, parties to this Agreement, by and
between their respective Boards of Directors, in consideration of the mutual
covenants, agreements and provisions hereinafter contained, do hereby prescribe
the terms and conditions of said merger and of carrying the same into effect as
follows:
FIRST: The HUMANA TRANS SERVICES HOLDING CORP. hereby mergers into itself
and said STEAM CLEANING USA, INC., shall be and hereby merged into STEAM
CLEANING USA, INC., which shall be the surviving corporation.
SECOND: The Certificate of Incorporation of HUMANA TRANS SERVICES HOLDING
CORP., as in effect on the date of the merger provided for in this Agreement,
shall continue in full force and effect as the Certificate of Incorporation of
the corporation surviving this merger.
THIRD: The manner of converting the outstanding shares of each of the
constituent corporations shall be as follows:
An exchange of one share of common stock of HUMANA TRANS HOLDING
CORP for one new share of STEAM CLEANING USA, INC. post reverse
split shares.
60
FOURTH: This merger shall become effective upon the filing with the
Secretary of State of Delaware
IN WITNESS WHEREOF, the parties to this Agreement, pursuant to authority
duly given by their respective Board of Directors, have caused these presents to
be executed by an authorized officer of each party hereto.
STEAM CLEANING USA, INC.
By:
--------------------------------
Authorized Officer
Name: James W. Zimbler
Title: President
HUMANA TRANS SERVCIES HOLDING CORP.
By:
--------------------------------
Authorized Officer
Name: John Daly
Title: President
61
I, Andrew B. Mazzone, Secretary of STEAM CLEANING USA, INC., a corporation
organized and existing under the laws of the State of Delaware, hereby certify,
as such Secretary of said Corporation, that the Agreement of Merger to which
this certificate is attached, after having been first duly signed on behalf of
sad corporation by an authorized officer STEAM CLEANING USA, INC., a corporation
of the State of Delaware, was duly submitted to the stockholders of said STEAM
CLEANING USA, INC., at a special meeting of said stockholders called and held
separately from the meeting of stockholders of any other corporation, upon
waiver of notice, signed by all stockholders, for the purpose of considering and
taking action upon said Agreement of Merger, that approximately 7,000,000 shares
of stock of said corporation were on said date issued and outstanding and that
the holder of 6,500,000 shares voted by ballot in favor of said Agreement of
Merger and the Holders of -0- shares voted by ballot against same, the said
affirmative vote representing at least a majority of the total number of shares
of the outstanding capital stock of said corporation, and that thereby the
Agreement of Merger was at said meeting duly adopted as the act of the stock
holders of said STEAM CLEANING USA, INC., and the duly adopted agreement of said
corporation.
WITNESS my hand on behalf of said STEAM CLEANING USA, INC., on this 21st
day of July, 2003.
By:
-------------------------------------
Secretary
Name: Andrew B. Mazzone
62
I, James W. Zimbler, Secretary of HUMANA TRANS SERVICES HOLDING CORP., a
corporation organized and existing under the laws of the State of Delaware,
hereby certify, as such Secretary of said Corporation, that the Agreement of
Merger to which this certificate is attached, after having been first duly
signed on behalf of sad corporation by an authorized officer HUMANA TRANS
SERVICES HOLDING CORP., a corporation of the State of Delaware, was duly
submitted to the stockholders of said HUMANA TRANS SERVICES HOLDING CORP.., at a
special meeting of said stockholders called and held separately from the meeting
of stockholders of any other corporation, upon waiver of notice, signed by all
stockholders, for the purpose of considering and taking action upon said
Agreement of Merger, that 1,000 shares of stock of said corporation were on said
date issued and outstanding and that the holder of 6,000,000 hares voted by
ballot in favor of said Agreement of Merger and the Holders of -0- shares voted
by ballot against same, the said affirmative vote representing at least a
majority of the total number of shares of the outstanding capital stock of said
corporation, and that thereby the Agreement of Merger was at said meeting duly
adopted as the act of the stock holders of said HUMANA TRANS SERVICES HOLDING
CORP., and the duly adopted agreement of said corporation.
WITNESS my hand on behalf of said HUMANA TRANS SERVICES HOLDING CORP., on
this 21st day of July, 2003.
By:
-------------------------------------
Secretary
Name:
-----------------------------------
63