U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended: MARCH 31, 2005
Commission File Number: 0-29507
CHANTICLEER HOLDINGS, INC.
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(Exact name of small business issuer as specified in its charter)
TULVINE SYSTEMS, INC.
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(Former name of small business issuer as specified in its charter)
DELAWARE 52-2102141
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(State of Incorporation) (IRS Employer ID No)
7633 EAST 63RD PLACE, SUITE 220, TULSA, OKLAHOMA 74133
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(Address of principal executive office)
(918) 459-8469
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No .
The number of shares outstanding of registrant's common stock, par value $.0001
per share, as of April 30, 2005 was 4,000,000 shares.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X].
CHANTICLEER HOLDINGS, INC.
INDEX
Page
No.
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Part I Financial Information (unaudited)
Item 1. Financial Statements
Balance Sheet - March 31, 2005 3
Statements of Operations - 4
Three Months Ended March 31, 2005 and 2004 and the
period from inception (October 21, 1999) to
March 31, 2005
Statements of Cash Flows - 5
Three Months Ended March 31, 2005 and 2004, and the
period from inception (October 21, 1999) to
March 31, 2005
Notes to Financial Statements 6-8
Item 2. Managements Discussion and Analysis or Plan of Operation 9-10
Item 3. Controls and Procedures 11
Part II Other Information 12-14
2
CHANTICLEER HOLDINGS, INC.
(A WHOLLY-OWNED SUBSIDIARY OF INTERIM CAPITAL CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
MARCH 31, 2005
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 20
Marketable securities 74,000
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Total assets $ 74,020
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 19,308
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Total liabilities 19,308
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STOCKHOLDERS' EQUITY
Common stock, $.0001 par value. Authorized 100,000,000 shares;
issued and outstanding 4,000,000 shares 400
Additional paid in capital 128,720
Accumulated deficit (74,408)
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Total stockholders' equity 54,712
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Total liabilities and stockholders' equity $ 74,020
=========
See accompanying notes to financial statements.
3
CHANTICLEER HOLDINGS, INC.
(A WHOLLY-OWNED SUBSIDIARY OF INTERIM CAPITAL CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2005 AND 2004,
AND THE PERIOD FROM INCEPTION (OCTOBER 21, 1999) TO MARCH 31, 2005
(UNAUDITED)
FROM
INCEPTION
(OCTOBER 21, 1999)
TO MARCH 31,
2005 2004 2005
--------------- --------------- -------------------
SALES AND REVENUES $ -- $ -- $ --
COST OF SALES -- -- --
--------------- --------------- -------------------
GROSS PROFIT -- -- --
OTHER EXPENSE
General and administrative expense 3,660 -- 22,080
Interest expense 430 -- 1,328
Unrealized loss on marketable
securities 54,500 -- 51,000
--------------- --------------- -------------------
58,590 -- 74,408
--------------- --------------- -------------------
LOSS BEFORE INCOME TAXES (58,590) -- (74,408)
INCOME TAXES -- -- --
--------------- --------------- -------------------
NET LOSS (58,590) -- (74,408)
=============== =============== ===================
NET LOSS PER SHARE, BASIC AND DILUTED $ (0.01) $ -- $ (0.05)
=============== =============== ===================
WEIGHTED AVERAGE SHARES
OUTSTANDING 4,000,000 1,000,000 1,524,145
=============== =============== ===================
See accompanying notes to financial statements.
4
CHANTICLEER HOLDINGS, INC.
(A WHOLLY-OWNED SUBSIDIARY OF INTERIM CAPITAL CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2005 AND 2004,
AND THE PERIOD FROM INCEPTION (OCTOBER 21, 1999) TO MARCH 31, 2005
(UNAUDITED)
FROM
INCEPTION
(OCTOBER 21, 1999)
TO MARCH 31,
2005 2004 2005
----------------- ----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (58,590) $ -- $ (74,408)
Adjustments to reconcile net loss to net
cash used in operating activities:
Unrealized loss on marketable securities 54,500 -- 51,000
Increase in accounts payable 3,610 -- 19,308
----------------- ----------------- -----------------
Net cash used in operating activities (480) -- (4,100)
----------------- ----------------- -----------------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
-- -- --
----------------- ----------------- -----------------
Net cash provided by investing activities -- -- --
----------------- ----------------- -----------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from sale of common stock -- -- 1,000
Contribution by stockholder -- -- 3,120
----------------- ----------------- -----------------
Net cash provided by financing activities -- -- 4,120
----------------- ----------------- -----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS (480) -- 20
CASH AND CASH EQUIVALENTS, beginning of period 500 500 --
----------------- ----------------- -----------------
CASH AND CASH EQUIVALENTS, end of period $ 20 $ 500 $ 20
================= ================= =================
See accompanying notes to financial statements.
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CHANTICLEER HOLDINGS, INC.
(A WHOLLY-OWNED SUBSIDIARY OF INTERIM CAPITAL CORPORATION)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1) ORGANIZATION AND BUSINESS OPERATIONS - Chanticleer Holdings,
Inc. (a development stage company) (the "Company" and formerly
Tulvine Systems, Inc.) was organized October 21, 1999, under
the laws of the State of Delaware. The Company has no
operations and in accordance with SFAS No. 7 is considered a
development stage company. The Company was formed to serve as
a vehicle to effect a merger, exchange of capital stock, asset
acquisition or other business combination with a domestic or
foreign private business. The Company is a wholly-owned
subsidiary of Interim Capital Corporation. On April 25, 2005,
the Company formed a wholly owned subsidiary, Chanticleer
Holdings, Inc. On May 2, 2005, Tulvine Systems, Inc. merged
with and changed its name to Chanticleer Holdings, Inc.
The Company's ability to commence operations is contingent
upon its ability to identify a prospective target business and
raise the capital it will require through the issuance of
equity securities, debt securities, bank borrowings or a
combination thereof.
(2) USE OF ESTIMATES - The preparation of the financial statements
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
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 reporting
period. Actual results could differ from those estimates.
(3) CASH AND CASH EQUIVALENTS - For purposes of the statement of
cash flows, the Company considers all highly liquid
investments purchased with an original maturity of three
months or less to be cash equivalents.
(4) MARKETABLE INVESTMENT SECURITIES - Marketable investment
securities are classified into the following categories:
o Trading securities reported at fair value with
unrealized gains and losses included in earnings;
o Available-for-sale securities reported at fair value
with unrealized gains and losses, net of deferred
income taxes, reported in other comprehensive income;
and
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o Held-to-maturity securities reported at amortized
cost.
Fair value is determined from quoted market price.
(5) GENERAL - The financial statements included in this report
have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission for
interim reporting and include all adjustments (consisting only
of normal recurring adjustments) that are, in the opinion of
management, necessary for a fair presentation. These financial
statements have not been audited.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America
have been condensed or omitted pursuant to such rules and
regulations for interim reporting. The Company believes that
the disclosures contained herein are adequate to make the
information presented not misleading. However, these financial
statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual
Report for the period ended December 31, 2004, which is
included in the Company's Form 10-KSB.
(6) INCOME TAXES - Deferred income taxes are recognized for income
and expense items that are reported for financial purposes in
different years than for income tax purposes.
(7) NET EARNINGS PER SHARE - Net earnings per share amounts are
computed using the weighted average number of shares
outstanding during the period. Fully diluted earnings per
share is presented if the assumed conversion of common stock
equivalents results in material dilution.
B. UNCERTAINTY
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has been in the development stage
since inception (October 21, 1999) and has not yet commenced any formal business
operations. All activity to date relates to the Company's formation and proposed
fund raising. Management intends to continue its efforts to identify a
prospective target business for acquisition, merger or other business
combination and raise the capital required through the issuance of equity
securities, debt securities, bank borrowings or a combination thereof.
The ability of the Company to continue as a going concern during the next year
depends on the Company's success in executing these plans. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
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C. MARKETABLE SECURITIES
The following summarizes the Company's investment in securities at March 31,
2005:
Trading securities:
Cost $ 125,000
Unrealized loss (51,000)
--------------
Fair value $ 74,000
==============
The Company included in operations $54,500 in unrealized losses during the three
month period ended March 31, 2005.
D. STOCKHOLDERS' EQUITY
The Company has 100,000,000 shares of its $0.0001 par value common stock
authorized and 4,000,000 shares issued. There are no warrants or options
outstanding.
The Company issued 4,000,000 shares of its common stock in a non-cash exchange
for marketable securities valued at $125,000 on June 21, 2004. The unregistered
common shares are restricted pursuant to Rule 144.
On December 31, 2004, the 1,000,000 shares that were issued in 1999 to the
original stockholder were cancelled.
On May 2, 2005, the Company increased its authorized common stock to 200,000,000
shares.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company has registered its common stock on a Form 10-SB registration
statement filed pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act") and Rule 12(g) thereof. The Company files with the Securities and Exchange
Commission periodic and episodic reports under Rule 13(a) of the Exchange Act,
including quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. As
a reporting company under the Exchange Act, the Company may register additional
securities on Form S-8 (provided that it is then in compliance with the
reporting requirements of the Exchange Act) and on Form S-3 (provided that it
has during the prior 12 month period timely filed all reports required under the
Exchange Act).
The Company was formed to engage in a merger with or acquisition of an
unidentified foreign or domestic private company that desires to become a
reporting company whose securities have been registered under the Exchange Act.
The Company may be deemed to meet the definition of a "blank check" company
contained in Section (7)(b)(3) of the Securities Act of 1933, as amended.
Management believes that there are perceived benefits to being a reporting
company which may be attractive to foreign and domestic private companies. These
benefits are commonly thought to include:
(1) the ability to use securities to make acquisition of assets or
businesses;
(2) increased visibility in the financial community;
(3) the facilitation of borrowing from financial institutions;
(4) improved trading efficiency;
(5) the potential for shareholder liquidity;
(6) greater ease in subsequently raising capital;
(7) compensation of key employees through options for stock for
which there may be a public market;
(8) enhanced corporate image; and
(9) a presence in the United States capital market.
A private company which may be interested in a business combination with the
Company may include:
(1) a company for which a primary purpose of becoming a reporting
company is the use of its securities for the acquisition of
assets or businesses;
(2) a company which is unable to find an underwriter of its
securities or is unable to find an underwriter of securities
on terms acceptable to it;
(3) a company which wishes to become a reporting company with less
dilution of its common stock than would occur normally upon an
underwriting;
(4) a company which believes that it will be able to obtain
investment capital on more favorable terms after it has become
a reporting company;
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(5) a foreign company which may wish an initial entry into the
United States securities market;
(6) a special situation company, such as a company seeking to
satisfy redemption requirements under a qualified Employee
Stock Option Plan; and
(7) a company seeking one or more of the other benefits believed
to attach to a reporting company.
Management is actively engaged in seeking a qualified private company as a
candidate for a business combination. The Company is authorized to enter into a
definitive agreement with a wide variety of private businesses without
limitation as to their industry or revenues. It is not possible at this time to
predict with which private company, if any, the Company will enter into a
definitive agreement or what will be the industry, operating history, revenues,
future prospects or other characteristics of that company.
As of the date hereof, management has not made any final decision concerning or
entered into any agreements for a business combination. When any such agreement
is reached or other material fact occurs, the Company will file notice of such
agreement or fact with the Securities and Exchange Commission on Form 8-K.
Persons reading this Form 10-QSB are advised to see if the Company has
subsequently filed a Form 8-K.
The current shareholder of the Company has agreed to not sell or otherwise
transfer any of its common stock of the Company except in connection with a
business combination.
The Company does not intend to trade its securities in the secondary market
until completion of a business combination. It is anticipated that following
such occurrence, the company will take the steps required to cause its common
stock to be admitted to quotation on the NASD OTC Bulletin Board or, if it then
meets the financial and other requirements thereof, on the Nasdaq SmallCap
Market, National Market System or regional or national exchange.
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ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
----------------------------------------------------
Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed
in the reports that are filed or submitted under the Exchange Act is
recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to
be disclosed in the reports that are filed under the Exchange Act is
accumulated and communicated to management, including the principal
executive officer, as appropriate, to allow timely decisions regarding
required disclosure. Under the supervision of and with the
participation of management, including the principal executive officer,
the Company has evaluated the effectiveness of the design and operation
of its disclosure controls and procedures as of March 31, 2005, and,
based on its evaluation, our principal executive officer has concluded
that these controls and procedures are effective.
(b) Changes in Internal Controls
--------------------------------
There have been no significant changes in internal controls or in other
factors that could significantly affect these controls subsequent to
the date of the evaluation described above, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
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PART II - OTHER INFORMATION
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 31 Certification pursuant to 18 U.S.C. Section 1350
Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32 Certification pursuant to 18 U.S.C. Section 1350
Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
None.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CHANTICLEER HOLDINGS, INC.
Date: May 10, 2005 By: /s/ Ross E. Silvey
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Ross E. Silvey,
Chief Executive Officer and
Principal Accounting Officer
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