-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U7UWlkxwfcvySWzpqBz4PczSrowx7L5M1b8KJP+0VvCmxfNRK8H4qe/cytJQAvya zyHjLSFKxa8LjYZl+pmNFw== 0001144204-05-033465.txt : 20051101 0001144204-05-033465.hdr.sgml : 20051101 20051101144844 ACCESSION NUMBER: 0001144204-05-033465 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051101 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051101 DATE AS OF CHANGE: 20051101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSI Business Finance, Inc. CENTRAL INDEX KEY: 0001070050 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 650847995 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27569 FILM NUMBER: 051169423 BUSINESS ADDRESS: STREET 1: 1761 WEST HILLSBORO BLVD STREET 2: SUITE 203 CITY: DEERFIELD BEACH STATE: FL ZIP: 33442 BUSINESS PHONE: 954-570-5900 MAIL ADDRESS: STREET 1: 1761 WEST HILLSBORO BLVD STREET 2: SUITE 203 CITY: DEERFIELD BEACH STATE: FL ZIP: 33442 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH EXPRESS USA INC DATE OF NAME CHANGE: 19990719 8-K/A 1 v028107_8k-a.txt UNITED STATES 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 Report: November 1, 2005 CSI BUSINESS FINANCE, INC. (Exact Name of Registrant as Specified in Charter) Florida 02-27569 65-0847995 ------- -------- ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 109 North Post Oak Lane, Suite 422, Houston, Texas 77024 -------------------------------------------------- ----- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (713) 621-2737 -------------- Item 2.01 Completion of Acquisition or Disposition of Assets On August 30, 2005, CSI Business Finance, Inc. (formerly Health Express USA, Inc., and hereinafter referred to as the "Company") filed a current report on Form 8-K in connection with the completion on August 25, 2005 of the share exchange transaction with CSI Business Finance, Inc., a Texas corporation ("CSI"), and the shareholders of CSI (the "CSI Shareholders"). On June 17, 2005, the Company, CSI and the CSI Shareholders entered into a share exchange agreement (the "Share Exchange Agreement"). Pursuant to the Share Exchange Agreement, no share exchange contemplated therein could occur until the Company's shareholders voted on the transaction. In connection with the Share Exchange Agreement, the Company filed a Definitive Information Statement with the U.S. Securities and Exchange Commission (the "Commission") on August 5, 2005, stating that the required number of shareholders had approved the transaction. On August 25, 2005, upon the effectiveness of the Definitive Information Statement, the CSI Shareholders exchanged with, and delivered to the Company, the issued and outstanding common stock of CSI in exchange for 100,000 shares of Series A Convertible Preferred Stock, par value $0.01 per share, of the Company. Pursuant to the Share Exchange Agreement, one share of the Series A Convertible Preferred Stock is convertible into 19,500 shares of common stock of the Company. The CSI Shareholders transferred and exchanged the CSI Common Stock for the Series A Convertible Preferred Stock so that effectively after the conversion of the preferred stock, shares of common stock issued upon conversion of the preferred stock would be equal to 97.5% of the issued and outstanding shares of common stock of the Company. As a result of the exchange, the CSI Shareholders converted the Series A Convertible Preferred Stock for 1,950,000,000 shares of the Company's common stock effectively transferring control and a 97.5% ownership interest, and CSI became a wholly-owned subsidiary of the Company. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of the business acquired. The following are the report and audited financials statements of CSI: (i) Report of Independent Registered Public Accounting Firm (ii) Balance Sheet as of December 31, 2004 (iii) Statement of Operations for the Period from October 22, 2004 (Inception) to December 31, 2004 (iv) Statement of Changes in Shareholders' Equity for the Period from October 22, 2004 (Inception) to December 31, 2004 (v) Statement of Cash Flows for the Period from October 22, 2004 (Inception) to December 31, 2004 (vi) Notes to the Financial Statements The following are the interim unaudited financials statements of CSI: (i) Unaudited Balance Sheet as of June 30, 2005 (ii) Unaudited Statement of Operations for the Six Months Ended June 30, 2005 -2- (iii) Unaudited Statement of Cash Flows for the Six Months Ended June 30, 2005 (iv) Notes to the Unaudited Financial Statements (b) Pro Forma Financial Information. The unaudited pro forma combined balance sheet is presented as if the exchange had taken place on January 1, 2005. The unaudited pro forma combined statement of operations for the year ended December 31, 2004 and the six months ended June 30, 2005 are presented as if the exchange had taken place at the beginning of each reporting period. The unaudited pro forma combined financial statements are provided for information purposes only and do not purport to represent what the combined financial position and results of operations would have been had the merger, in fact, occurred on the dates indicated. The unaudited pro forma combined financial statements are presented for illustrative purposes only. The pro forma adjustments are based upon available information and assumptions that management believes are reasonable. The following are the pro forma financial statements: (i) Unaudited Pro Forma Balance Sheet as of June 30, 2005 (ii) Unaudited Pro Forma Statement of Operations for the Six Months Ended June 30, 2005 (iii) Unaudited Pro Forma Statement of Operations for the Year Ended December 31, 2004 The accompanying financial statements of CSI presented in this report should be read in conjunction with CSI's audited financial statements and footnotes for the year ended December 31, 2004 which are included in this Form-8K/A. Also included are CSI's unaudited financial statements for the six months ended June 30, 2005. The accompanying financial statements of Health Express USA, Inc. should be read in conjunction with the historical financial statements of Health Express USA, Inc. included in the Annual Report on Form 10-KSB for the fiscal year ended December 26, 2004, filed with the Commission on May 20, 2005, and the Quarterly Report on Form 10-QSB for the six months ended June 26, 2005, filed with the Commission on August 17, 2005. This transaction is being accounted for as a reverse acquisition since the control of the Company has passed to the stockholders of the acquired company. (c) Exhibits
Exhibit Description Exhibit 99.1 Report of Independent Registered Public Accounting Firm and Provided herein. Audited Financials Statements of CSI Business Finance, Inc. Exhibit 99.2 Interim Unaudited Financials Statements of CSI Business Finance, Provided herein. Inc. Exhibit 99.3 Pro Form Financial Statements for CSI Business Finance, Inc. and Provided herein. Health Express USA, Inc.
-3- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CSI BUSINESS FINANCE, INC. Date: November 1, 2005 By: /s/ Timothy J. Connolly ----------------------- Name: Timothy J. Connolly Its: Chief Executive Officer -4- EX-99.1 2 v028107_ex99-1.txt Exhibit 99.1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders CSI Business Finance, Inc. Houston, Texas We have audited the accompanying balance sheet of CSI Business Finance, Inc. as of December 31, 2004 and the related statements of operations, changes in shareholders' equity, and cash flows for the period from October 22, 2004 (Inception) to December 31, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CSI Business Finance, Inc. as of December 31, 2004 and the results of its operations and its cash flows for the for the period from October 22, 2004 (Inception) to December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. /s/ Thomas Leger & Co., L.L.P. ------------------------------ Thomas Leger & Co., L.L.P. Houston, Texas March 16, 2005 CSI BUSINESS FINANCE, INC. BALANCE SHEET DECEMBER 31, 2004 ================================================================================ ASSETS CURRENT ASSETS Accounts receivable, other $ 23,180 Minimum lease payments receivable 129,468 --------- Total current assets 152,648 --------- NONCURRENT ASSETS Minimum lease payments receivable 269,726 Intangible assets, net 33,367 --------- Total noncurrent assets 303,093 --------- TOTAL ASSETS $ 455,741 ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Unearned income $ 70,499 Advances from parent 117,518 --------- Total current liabilities 188,017 --------- NONCURRENT LIABILITIES, Unearned income 68,620 --------- COMMITMENTS AND CONTINGENCIES -- SHAREHOLDERS' EQUITY Preferred stock, 1,000 shares authorized, $0.01 par value: Series A cumulative preferred stock, par value $0.01, 500 shares authorized, 200 shares issued and outstanding, dividend of $10.00 per share per month, aggregated liquidation and redemption value of $240,000 2 Common stock, par value $0.01, 9,000 shares authorized, 1,000 shares issued and outstanding 10 Additional paid-in-capital 200,988 Retained deficit (1,896) --------- Total shareholders' equity 199,104 --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 455,741 ========= The accompanying notes are an integral part of these financial statements. CSI BUSINESS FINANCE, INC. STATEMENT OF OPERATIONS FOR THE PERIOD FROM OCTOBER 22, 2004 (INCEPTION) TO DECEMBER 31, 2004 ================================================================================ REVENUE Lease income $ 6,653 OPERATING EXPENSES Amortization 953 Professional fees 2,825 ------- Total expenses 3,778 ------- Income before provision for income taxes 2,875 ------- INCOME TAX PROVISION Current income tax expense 771 Deferred income tax expense -- ------- Total income tax expense 771 ------- NET INCOME 2,104 Preferred dividends paid 4,000 ------- INCOME APPLICABLE TO COMMON SHARES $(1,896) ======= Net Loss Per Share-Basic and Diluted: $ (1.90) ======= Weighted average number of shares outstanding during the year--basic and diluted 1,000 ======= The accompanying notes are integral part of these financial statements. CSI BUSINESS FINANCE, INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE PERIOD FROM OCTOBER 22, 2004 (INCEPTION) TO DECEMBER 31, 2004 ================================================================================
Additional Total Preferred Stock Common Stock Paid-in Retained Shareholder's Shares Amount Shares Amount Capital Deficit Equity --------- --------- --------- --------- --------- --------- --------- Balance, October 22, 2004 -- $ -- -- $ -- $ -- $ -- $ -- Issuance of common stock -- -- 1,000 10 990 -- 1,000 Issuance of preferred stock 200 2 -- -- 199,998 -- 200,000 Preferred dividends paid -- -- -- -- -- (4,000) (4,000) Net income -- -- -- -- -- 2,104 2,104 --------- --------- --------- --------- --------- --------- --------- Balance, December 31, 2004 200 $ 2 1,000 $ 10 $ 200,988 $ (1,896) $ 199,104 ========= ========= ========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements. CSI BUSINESS FINANCE, INC. STATEMENT OF CASH FLOWS FOR THE PERIOD FROM OCTOBER 22, 2004 (INCEPTION) TO DECEMBER 31, 2004 ================================================================================ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,104 Adjustment to reconcile net income to net cash used in operating activities: Amortization 953 Non cash expenses 3,596 Non cash revenues (6,653) --------- Net cash provided by operating activities -- --------- NET CHANGE IN CASH -- CASH, BEGINNING OF PERIOD -- --------- CASH, END OF YEAR $ -- ========= SUPPLEMENTAL INFORMATION Interest paid $ -- Taxes paid $ -- Preferred dividends paid by charge to parent intercompany account $ 4,000 Preferred stock issued: For minimum lease payment receivable from parent $ 200,000 Common stock issued: For minimum lease payment receivable from parent $ 1,000 The accompanying notes are an integral part of these financial statements. CSI BUSINESS FINANCE, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2004 - -------------------------------------------------------------------------------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Organization CSI Business Finance, Inc. (the "Company"), was incorporated in Texas on October 22, 2004 for the purpose of engaging in equipment leasing activities. The financial statements of the Company include its results of operations for the period from October 22, 2004 (Inception) to December 31, 2004. The Company finances equipment leases for companies, primarily in Texas. The Company is a wholly owned subsidiary of Corporate Strategies, Inc. (the "parent" company). Revenue Recognition and Finance Lease Lease agreements, under which the Company recovers substantially all its investment from the minimum lease payments are accounted for as finance leases. At lease commencement, the Company records a minimum lease payment receivable and unearned lease income. The remaining unearned income is recognized as revenue over the term of receivables using the interest method. At December 2004, a summary of the installments due on minimum lease payments receivable is as follows: 2005 $ 129,468 2006 129,468 2007 129,468 2008 10,790 ---------- $ 399,194 Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosure. Accordingly, actual results could differ from those estimates. Concentrations Of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash balances and lease payment receivable. The Company maintains its cash accounts in a high quality FDIC insured bank in Texas. The Company's cash account was opened subsequent to year end. The Company performs on going credit evaluations to ensure collections and minimize losses. At December 31, 2004, the Company had one finance lease. CSI BUSINESS FINANCE, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2004 - -------------------------------------------------------------------------------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all short-term securities purchased with maturity of three months or less to be cash equivalents. Accounts Receivable, Other Accounts receivable, other, is a receivable for the proceeds from the sale of certain leases and was collected subsequent to year end. Intangible Assets In November 2004, the Company purchased from an existing leasing company its client list and the residual value in certain leases for $57,500. The leases were sold in January 2005,+ for approximately $23,000 which was the value assigned to the leases at December 31, 2004. The remaining purchase price of $34,320 was assigned to the client list. This intangible asset is being amortized over its estimated useful life of three years. The reserve for amortization at December 31, 2004 is $953. Income Taxes The Company accounts for income taxes under SFAS No. 109, "Accounting for Income Taxes," which requires an asset and liability approach to financial accounting and reporting for income taxes. The difference between the financial statement and tax basis of assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the periods in which they are expected to affect taxable income. Valuation allowances are established, if necessary, to reduce the deferred tax asset to the amount that will assure full realization. Income tax expense is the current tax payable or refundable for the period plus or minus the net change in the deferred tax assets and liabilities. All of the Company's operations are included in the consolidated tax return of its parent. For financial statement purposes income taxes are accounted for as if the Company filed a separate tax return. Income taxes currently payable or refundable are recorded as an offset to the intercompany account. CSI BUSINESS FINANCE, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2004 - -------------------------------------------------------------------------------- 2. SHAREHOLDERS' EQUITY Preferred stock The Company has authorized 1,000 shares of $0.01 par value preferred stock. The board of directors has the power, without further action by the holders of common stock, to designate the relative rights and preferences of the Company's preferred stock, when and if issued. Such rights and preferences could include preferences as to liquidation, redemption and conversion rights, voting rights, dividends or other preferences, over shares of common stock. The shares of preferred stock of any one series shall be identical with the other shares in the same series in all respects except as to the dates from and after which dividends thereon shall accumulate, if cumulative. The board of directors may, without further action by the stockholders of the Company, issue shares of preferred stock that it has designated. The rights of holders of the common stock will be subject to, and may be adversely affected by or diluted by, the holders of preferred stock. Series A preferred stock The Company has issued 200 shares of Series A cumulative preferred stock at December 31, 2004 in exchange for $200,000 contributed from its parent company. Each share of Series A cumulative preferred stock is non-voting, bears a dividend of $10.00 per share per month, and is entitled to a liquidation and/or redemption price of $1,200 per share plus any accrued but unpaid dividends on proceeds. Redemption is at the option of the Company. Common stock The Company is authorized to issue 9,000 shares of common stock. The Company issued 1,000 shares of common stock to its parent company in 2004 at a price of $1.00 per share. 3. RELATED PARTY TRANSACTIONS Through December 31, 2004, all balance sheets and income statement transactions have flowed through the parent's intercompany account. 4. INCOME TAXES The following table sets forth a reconciliation of the statutory federal income tax for the period from inception to December 31, 2004: Income before income taxes $ 2,875 ======= Income tax computed at statutory rates $ 431 Increase in valuation allowance 340 ------- Current tax expense $ 771 ======= CSI BUSINESS FINANCE, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2004 - -------------------------------------------------------------------------------- Deferred Income Taxes The tax effects of the temporary differences between financial statement income and taxable income are recognized as a deferred tax asset and liability. Significant components of the deferred tax asset and liability as of December 31, 2004 are as follows: Deferred tax asset Intangible tax basis difference $ 340 Valuation allowance (340) ------- Net deferred tax asset $ -- ======= 5. CONTINGENCIES In November 2004, the Company entered into a two year employment agreement which commences February 1, 2005 with the president of the Company. The agreement provides for certain fringe benefits and performance and incentive bonuses as defined in the agreement and may be terminated with three months compensation paid to the President, if in the Company's sole opinion, the economics of the contract is not satisfactory. EX-99.2 3 v028107_ex99-2.txt Exhibit 99.2 CSI BUSINESS FINANCE, INC. BALANCE SHEET JUNE 30, 2005 UNAUDITED - -------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash $ 19,413 Prepaid expense 2,188 Minimum lease payments receivable 152,854 -------- Total current assets 174,455 -------- NONCURRENT ASSETS Minimum lease payments receivable 215,783 Fixed assets, net 833 Intangible assets, net 27,647 -------- Total noncurrent assets 244,263 -------- TOTAL ASSETS $418,718 ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 3,934 Accrued liabilities 1,383 Unearned income 65,783 Advances from parent 101,612 -------- Total current liabilities 172,712 -------- NONCURRENT LIABILITIES, Unearned income 41,005 -------- COMMITMENTS AND CONTINGENCIES -- SHAREHOLDERS' EQUITY Preferred stock, 1,000 shares authorized, $0.01 par value: Series A cumulative preferred stock, par value $0.01, 500 shares authorized, 200 shares issued and outstanding, dividend of $10.00 per share per month, aggregated liquidation and redemption value of $240,000 2 Common stock, par value $0.01, 9,000 shares authorized, 1,000 shares issued and outstanding 10 Additional paid-in-capital 200,988 Retained earnings 4,001 -------- Total shareholders' equity 205,001 -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $418,718 ======== The accompanying note is an integral part of these financial statements. CSI BUSINESS FINANCE, INC. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2005 UNAUDITED - -------------------------------------------------------------------------------- REVENUE Lease income $41,311 Fee income 47,113 ------- 88,424 OPERATING EXPENSES Salaries and benefits 32,106 Commissions 3,828 Business development, travel and entertainment 634 Depreciation and amortization 5,887 Rent 5,114 Professional fees 10,797 Other 8,151 ------- Total expenses 66,517 ------- Income before provision for income taxes 21,907 ------- INCOME TAX PROVISION Current income tax expense 4,010 Deferred income tax expense -- ------- Total income tax expense 4,010 ------- NET INCOME 17,897 Preferred dividends paid 12,000 ------- INCOME APPLICABLE TO COMMON SHARES $ 5,897 ======= Net Loss Per Share-Basic and Diluted: $ 5.90 ======= Weighted average number of shares outstanding during the year--basic and diluted 1,000 ======= The accompanying note is an integral part of these financial statements. CSI BUSINESS FINANCE, INC. STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2005 UNAUDITED - -------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 17,897 Adjustment to reconcile net income to net cash used in operating activities: Depreciation and amortization 5,887 (increase) decrease in assets: Accounts receivable, other 23,180 Prepaid expense (2,188) Minimum lease payments receivable 64,573 Increase (decrease) in liabilities Accounts payable 3,934 Accrued liabilities 1,383 Unearned income (41,310) Advances from parent (27,906) -------- Net cash provided by operating activities 45,450 -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of fixed assets (1,000) Purchases of minimum lease payments receivable (25,037) -------- Net cash used in investing activities (26,037) -------- NET CHANGE IN CASH 19,413 CASH, BEGINNING OF PERIOD -- -------- CASH, END OF YEAR $ 19,413 ======== SUPPLEMENTAL INFORMATION Interest paid $ -- Taxes paid $ -- Preferred dividends paid by charge to parent intercompany account $ 12,000 The accompanying note is an integral part of these financial statements. CSI BUSINESS FINANCE, INC. - -------------------------------------------------------------------------------- NOTES TO THE UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2005 NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited financial statements of CSI Business Finance, Inc. have been prepared in accordance with the accounting principles generally accepted in the United States of America for interim financial reporting. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited financial statements. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the financial statements and footnotes for the year ended December 31, 2004 which are filed in the Form 8K/A. EX-99.3 4 v028107_ex99-3.txt Exhibit 99.3 CSI BUSINESS FINANCE, INC. UNAUDITED PRO FORMA COMBINED BALANCE SHEET JUNE 30, 2005
CSI Business Health Express Finance, Inc. USA, Inc. Adjustments Pro Forma ============================================= ============ ASSETS CURRENT ASSETS Cash $ 19,413 $ 22,351 $ -- $ 41,764 Prepaid expense 2,188 4,992 -- 7,180 Minimum lease payments receivable 152,854 -- -- 152,854 Assets of discontinued operations -- 126 (126) A -- --------------------------------------------- ------------ Total current assets 174,455 27,469 (126) A 201,798 --------------------------------------------- ------------ NONCURRENT ASSETS Minimum lease payments receivable 215,783 -- -- 215,783 Fixed assets, net 833 2,251 (1,551) 1,533 Debt issue costs -- 5,000 -- 5,000 Deposits -- 4,433 -- 4,433 Intangible assets, net 27,647 -- -- 27,647 --------------------------------------------- ------------ Total noncurrent assets 244,263 11,684 (1,551) 254,396 --------------------------------------------- ------------ TOTAL ASSETS $ 418,718 $ 39,153 $ (1,677) $ 456,194 ============ ============ ============ ============ LIABILITIES AND SHAREHOLDERS' DEFICIT CURRENT LIABILITIES Accounts payable $ 3,934 $ 26,211 $ -- $ 30,145 Accrued liabilities 1,383 -- -- 1,383 Unearned income 65,783 -- -- 65,783 Accrued interest payable -- 73,244 (5,188) B 68,056 Accrued interest payable--related party -- 25,627 (25,627) B -- Accrued compensation and related taxes--related parties -- 199,978 (199,978) A -- Notes payable--related party -- 171,660 (171,660) B -- Notes payable--net of debt discount -- 533,333 -- 533,333 Convertible debenture -- 14,200 -- 14,200 Liabilities of discounted operations -- 223,906 (23,906) A 200,000 Advances from parent 101,612 -- -- 101,612 --------------------------------------------- ------------ Total current liabilities 172,712 1,268,159 (426,359) 1,014,512 --------------------------------------------- ------------ NONCURRENT LIABILITIES Unearned income 41,005 -- -- 41,005 Convertible debenture -- 60,000 (60,000) B -- --------------------------------------------- ------------ Total noncurrent liabilities 41,005 60,000 (60,000) 41,005 --------------------------------------------- ------------ COMMITMENTS AND CONTINGENCIES -- -- -- -- SHAREHOLDERS' DEFICIT Preferred stock 2 -- -- 2 Convertible Preferred Stock Series A -- -- 1,000 C 1,000 Common stock 10 30,020 110,197 B,C 140,227 Common stock issuable -- 19,000 -- 19,000 Additional paid-in-capital 200,988 10,075,493 (10,235,710) A,B,C,D 40,771 Retained earnings (deficit) 4,001 (11,413,519) 10,609,195 D (800,323) --------------------------------------------- ------------ Total shareholders' deficit 205,001 (1,289,006) 484,682 (599,323) --------------------------------------------- ------------ TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 418,718 $ 39,153 $ (1,677) $ 456,194 ============ ============ ============ ============
A To eliminate assets and liabilities not assumed in the merger. B To adjust liabilities to amounts assumed in the merger. C To record 100,000 shares of preferred stock issued in accordance with the Share Exchange Agreement. D To record merger expense for the net liabilites acquired as part of the Share Exchange Agreement. CSI BUSINESS FINANCE, INC. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2005
CSI Business Health Express Finance, Inc. USA, Inc. Adjustments Pro Forma ============================================= ============ REVENUE Lease income $ 41,311 $ -- $ -- $ 41,311 Fee income 47,113 -- -- 47,113 --------------------------------------------- ------------ 88,424 -- -- 88,424 --------------------------------------------- ------------ OPERATING EXPENSES Salaries and benefits 32,106 -- -- 32,106 Commissions 3,828 -- -- 3,828 General and administrative -- 141,864 (141,864) A -- Business development, travel and entertainment 634 -- -- 634 Depreciation and amortization 5,887 -- -- 5,887 Rent 5,114 -- -- 5,114 Professional fees 10,797 -- -- 10,797 Debt issue cost -- 10,111 -- 10,111 Depreciation -- 487 (487) A -- Other 8,151 -- -- 8,151 Merger expense -- -- 804,324 C 804,324 --------------------------------------------- ------------ Total expenses 66,517 152,462 661,973 880,952 --------------------------------------------- ------------ OTHER INCOME (EXPENSE) Interest expense, net -- (55,696) 1,650 A (54,046) Other income -- 5,349 (5,349) A -- --------------------------------------------- ------------ Total other income (expense) -- (50,347) (3,699) (54,046) LOSS FROM DISCONTINUED OPERATIONS -- (621) 621 A -- --------------------------------------------- ------------ Income (loss) before provision for income taxes 21,907 (203,430) (665,051) (846,574) --------------------------------------------- ------------ INCOME TAX PROVISION 4,010 -- (4,010) D -- --------------------------------------------- ------------ NET INCOME (LOSS) 17,897 (203,430) (661,041) (846,574) Preferred dividends paid 12,000 -- (12,000) B -- --------------------------------------------- ------------ INCOME APPLICABLE TO COMMON SHARES $ 5,897 $ (203,430) $ (649,041) $ (846,574) ============ ============ ============ ============ Net Income (Loss) Per Share-basic and diluted $ 5.90 $ (0.01) $ (0.01) ============ ============ ============ Weighted average number of shares outstanding during the year--basic and diluted 1,000 33,273,130 159,226,866 ============ ============ ============
A To eliminate revenue and expenses that do not relate to on-going operations. B To reflect redemption of the Preferred Stock in July, 2005. C To record merger expense for the net liabilities acquired as a part of the Share Exchange Agreement. D To record income tax effect. CSI BUSINESS FINANCE, INC. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2004
CSI Business Health Express Finance, Inc. USA, Inc. Adjustments Pro Forma ============================================= ============ REVENUE Lease income $ 6,653 $ -- $ -- $ 6,653 Franchise fee revenue -- 70,000 (70,000) A -- Royalty revenue -- 17,779 (17,779) A -- --------------------------------------------- ------------ 6,653 87,779 (87,779) 6,653 --------------------------------------------- ------------ OPERATING EXPENSES Salaries and benefits -- 431,457 (431,457) A -- Commissions -- -- -- -- General and administrative -- 323,961 (323,961) A -- Business development, advertising and promotion -- 27,258 (27,258) A -- Depreciation and amortization 953 1,010 (1,010) A 953 Rent -- -- -- -- Professional fees 2,825 -- -- 2,825 Debt issue cost -- 80,894 -- 80,894 Bad debt expense -- 17,970 (17,970) A -- Merger expense -- -- 804,324 C 804,324 Other -- -- -- -- --------------------------------------------- ------------ Total expenses 3,778 882,550 2,668 888,996 --------------------------------------------- ------------ OTHER INCOME (EXPENSE) Interest expense, net -- (73,694) 3,000 (70,694) Other income -- (780) 780 A -- --------------------------------------------- ------------ Total other income (expense) -- (74,474) 3,780 (70,694) --------------------------------------------- ------------ LOSS FROM CONTINUING OPERATIONS 2,875 (869,245) (86,667) (953,037) LOSS FROM DISCONTINUED OPERATIONS -- (419,820) 419,820 A -- --------------------------------------------- ------------ Income before provision for income taxes 2,875 (1,289,065) 333,153 (953,037) INCOME TAX PROVISION 771 -- (771) D -- --------------------------------------------- ------------ NET INCOME (LOSS) 2,104 (1,289,065) 333,924 (953,037) Preferred dividends paid 4,000 -- (4,000) B -- --------------------------------------------- ------------ INCOME APPLICABLE TO COMMON SHARES $ (1,896) $ (1,289,065) $ 337,924 $ (953,037) ============ ============ ============ ============ Net Loss Per Share-Basic and Diluted: Loss from continuing operations $ (1.90) $ (0.05) $ (0.01) Loss from discontinued operations -- (0.03) -- ------------ ------------ ------------ Net (Loss) Per Share-basic and diluted $ (1.90) $ (0.08) $ (0.01) ============ ============ ============ Weighted average number of shares outstanding during the year--basic and diluted 1,000 16,812,569 159,226,866 ============ ============ ============
A To eliminate revenue and expenses that do not relate to on-going operations. B To reflect redemption of the Preferred Stock in July, 2005. C To record merger expense for the net liabilities acquired as a part of the Share Exchange Agreement. D To record the income tax effect. -----END PRIVACY-ENHANCED MESSAGE-----