10KSB 1 frm10ksb-dec2006.txt FORM 10-KSB DECEMBER 31, 2006 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2006 ----------------- [] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to __________ Commission File Number 333-91436 ---------------------- OCIS Corp. ---------- (Exact name of registrant as specified in charter) Nevada 26-0014658 ------------------------------------ ------------------------- State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization 2081 South Lakeline Drive, Salt Lake City, Utah 84109 ----------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code (801) 467-4566 -------------- Securities registered pursuant to section 12(b) of the Act: Title of each class Name of each exchange on which registered None N/A Securities registered pursuant to section 12(g) of the Act: None (Title of class) Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act [X] 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. (1) Yes [X] No [] (2) Yes [X] No [] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [] No State issuer's revenues for its most recent fiscal year: $0 State the aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of a specified date within the past 60 days: OCIS does not have an active trading market and it is, therefore, difficult, if not impossible, to determine the market value of the stock. Based on the bid price for OCIS's Common Stock at February 6, 2007, of $2.25 per share, the market value of shares held by nonaffiliates would be $875,250. As of February 6, 2007, the Registrant had 1,017,000 shares of common stock issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE List hereunder the following documents if incorporated by reference and the part of the Form 10-KSB (e.g., part I, part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or other information statement; and (3) Any prospectus filed pursuant to rule 424(b) or (c) under the Securities Act of 1933: NONE Transitional Small Business Disclosure Format (Check One) Yes []; No [X] PART I ITEM 1. DESCRIPTION OF BUSINESS SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities for existing products, plans and objectives of management. Statements in this periodic report that are not historical facts are hereby identified as "forward-looking statements." Organization and Corporate History OCIS Corp. was organized on February 6, 2002, in the state of Nevada. OCIS was organized to engage in the purchase and sale of used business equipment with an initial emphasis on used warehousing equipment. As part of the organization of OCIS, an initial inventory was purchased and a president with experience in the used equipment market was hired. The initial equipment inventory primarily consisted of warehousing rack systems and forklifts. Business in General Our initial focus has been on buying and selling used warehouse storage systems, lift trucks and office components that facilitate office, commercial and industrial users with their inventory control, manufacturing process and/or office equipment needs. As part of the organization of OCIS, we purchased an initial inventory, which consisted of warehousing rack systems and forklifts. Although we were initially successful in getting sales and revenue, our former president who ran the operation decided to pursue other interests. With the departure of the president and guiding force behind the business plan, the remaining management has been trying to decide how to proceed. At this point, the decision has been made to discontinue the operations related to the sale of used equipment. Management is now investigating other possibilities and business opportunities to pursue. Management has entered into a letter of intent with Ecology Coating, Inc. ("Ecology"). It is anticipated if an agreement is reached with Ecology its management would take control of OCIS and Ecology's business would become the business of OCIS. Additionally, the shareholder's of Ecology would become the major shareholders of OCIS. At this time, a definitive agreement has not been reached and the parties are still completing additional due diligence. If an agreement cannot be reached, OCIS will continue to pursue other business opportunities. The selection of a business opportunity in which to participate is complex and risky. Additionally, as OCIS has only limited resources, it may be difficult to find good opportunities. There can be no assurance that OCIS will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to OCIS and its shareholders. OCIS will select any potential business opportunity based on management's business judgment. The activities of OCIS are subject to several significant risks which arise primarily as a result of the fact that OCIS has no specific business and may acquire or participate in a business opportunity based on the decision of management which potentially could act without the consent, vote, or approval of OCIS's shareholders. The risks faced by OCIS are further increased as a result of its lack of resources and its inability to provide a prospective business opportunity with significant capital. Employees OCIS has no employees at this time other than its directors and officers. -3- ITEM 2. DESCRIPTION OF PROPERTIES OCIS's administrative offices are provided by OCIS's secretary and director, Kirk Blosch. Without current operations, the space provided by Mr. Blosch is adequate for OCIS's needs. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS No matters were submitted to a vote of shareholders of OCIS during the fiscal year ended December 31, 2006. PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS OCIS's common stock is quoted on the National Association of Securities Dealers Electronic Bulletin Board under the symbol "OCIC." Set forth below are the high and low bid prices for OCIS's Common Stock since it began trading in November 2004, for the respective quarters. Although OCIS's common stock is quoted on the Electronic Bulletin Board, it has traded sporadically with no real volume. Consequently, the information provided below may not be indicative of OCIS's common stock price under different conditions. Quarter Ended High Bid Low Bid -------------- -------- ------- December 2004 $0.40 $0.40 March 2005 $0.60 $0.60 June 2005 $0.55 $0.55 September 2005 $0.50 $0.50 December 2005 $1.51 $1.51 March 2006 $1.20 $1.20 June 2006 $1.25 $1.25 September 2006 $1.25 $1.25 December 2006 $3.50 $2.50 At February 6, 2007, the bid and asked price for OCIS's Common Stock was $2.25 and $2.25, respectively. All prices listed herein reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions. Since its inception, OCIS has not paid any dividends on its Common Stock, and OCIS does not anticipate that it will pay dividends in the foreseeable future. At February 6, 2007, OCIS had approximately 46 shareholders. In December 2003, OCIS completed the sale of shares of its common stock pursuant to a registration statement filed with the Securities and Exchange Commission, file no. 333-91436. OCIS raised a total of $104,250 through the sale of 417,000 shares of common stock to 50 shareholders at an offering price of $0.25 per share. The offering was subsequently terminated on December 31, 2003. The offering was for the sale of a minimum of 300,000 shares and a maximum of 600,000 shares. A total of $1,909 in direct expenses, exclusive of legal and accounting fees, of the offering were incurred resulting in net offering proceeds of $102,341. The officers and directors of OCIS acted as sales agents and no commissions or other fees were paid to the officers and directors for the sale of the shares. Since the -4- offering was closed at the end of December 2003, we have used approximately $73,732 of the proceeds for the purchase of inventory, payment of expenses and liabilities. This number is an estimate based on use of cash by OCIS. Since OCIS has had sales and a profit since the offering closed, it is difficult to say the exact amount of proceeds used versus revenue. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION General OCIS Corp. was organized on February 6, 2002, in the state of Nevada. OCIS was organized to engage in the purchase and sale of used business equipment with an initial emphasis on used warehousing equipment. As part of the organization of OCIS, an initial inventory was purchased and a president with experience in the used equipment market was hired. The initial equipment inventory primarily consisted of warehousing rack systems and forklifts. Business in General Our initial focus has been on buying and selling used warehouse storage systems and office components that will facilitate office, commercial and industrial users with their inventory control, manufacturing process and/or office equipment needs. With the departure of OCIS's former president, who ran operations, and the inability to increase revenues significantly, management is investigating other possible business ventures to enter. At this time, OCIS has entered into a letter of intent with Ecology Coatings, Inc. but has not completed a definitive agreement. Under the terms of the letter of intent, several items had to be accomplished by Ecology prior to the completion of a reorganization. At this time, management is uncertain whether a definitive agreement will be complete but will continue to pursue such agreement in the belief it is in OCIS and its shareholders' best interest. If an agreement cannot be reached, OCIS will start looking for other business opportunities. Liquidity and Capital Resources We have had sufficient resources to cover ongoing expenses and expansion. At December 31, 2006, we had $87,850 in cash, and liabilities owing of only $53,067. Part of the cash is the result of a stand still agreement with Ecology which was required to deposit $50,000 with us to prevent us from pursuing other potential deals for a certain time. The original stand still agreement expired on February 5, 2007 but was extended for an additional thirty days by Ecology depositing an additional $25,000. If the deal is not closed within the extended time frame, we will be entitled to keep the $75,000. With the closure of our operations, our overall cash needs should be met with available resources. However, we would probably need additional funds to start a new business. Any business decision will be dictated by the requirement for start up funding and our ability to obtain sufficient funding to launch a new business endeavor. Results of Operations For the year ended December 31, 2006, we had no revenues as compared to $4,675 for the year ended December 31, 2005. We had a loss of $25,399 for the year ended December 31, 2006. Our expenses for 2006 were $26,825 as opposed to $17,573 for 2005. We would expect expenses to remain at the same levels for 2007 if we do not consummate the reorganization with Ecology. If a reorganization with Ecology is consummated, our financial outlook would change completely and be dependent on the business and finances of Ecology. At this time it is difficult to predict what the financial statements would look like from a reorganization with Ecology. -5- ITEM 7. FINANCIAL STATEMENTS The financial statements of OCIS are set forth immediately following the signature page to this Form 10-KSB. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE On January 2, 2006, our independent auditor, Child, Sullivan & Company, changed its accounting practice from a corporation to a professional limited liability company named Child, Van Wagoner & Bradshaw, PLLC, (the PLLC). Because Child, Van Wagoner & Bradshaw, PLLC, is viewed as a separate legal entity, we were obliged to dismiss Child, Sullivan & Company as our independent auditor, and to engage Child, Van Wagoner & Bradshaw, PLLC, as our independent auditor for the fiscal year ending December 31, 2005 and the interim periods for 2006. The decision to change our independent auditor was approved by our Board of Directors. None of the reports of Child, Sullivan & Company on our financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles. There were no disagreements between us and Child, Sullivan & Company, for either of the past two years or subsequent interim period on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Child, Sullivan & Company, would have caused it to make reference to the subject matter of the disagreement in connection with its report. No reportable events of the type described in item 304(a)(1)(iv)(B) of Regulation S-B occurred during the two most recent fiscal years. We provided Child, Sullivan & Company with a copy of this disclosure and requested that they furnish the Company with a letter addressed to the Commission stating whether Child, Sullivan & Company agrees or disagrees with the statements by us in a Current Report on Form 8-K and, if not, stating the respects in which it does not agree. A letter from Child, Sullivan & Company to such effect is attached as Exhibit 16.1 to our current report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2006. During our two most recent fiscal years, we have not consulted with Child, Van Wagoner & Bradshaw, PLLC, on any matter that (i) involved the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on our financial statements, in each case where written or oral advice was provided, that was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) was either the subject of a disagreement or event, as that term is described in item 304(a)(1)(iv)(A) of Regulation S-B. ITEM 8A. CONTROLS AND PROCEDURES a) Evaluation of Disclosure controls and procedures. OCIS's principal executive officers, including principal accounting officers, have reviewed the disclosure controls and procedures (as defined in section 240.15d-14) in place to assure the effectiveness of such controls and procedures. This review occurred within 90 days of this filing. Based on this review, the principal executive officers and accounting officers believe OCIS' disclosure controls and procedures are adequate. -6- b) Changes in Internal Controls. There were no significant changes in OCIS's internal controls, or other factors, that could significantly affect OCIS's controls subsequent to the date of the evaluations performed by the executive officers of OCIS. No deficiencies or material weaknesses were found that would require corrective action. ITEM 8B. Other Information None. PART III ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT The following table sets forth as of February 20, 2007, the name, age, and position of each executive officer and director and the term of office of each director of OCIS. Name Age Position Held Position Since ---- --- -------- ------------------- Kirk Blosch 52 President, Secretary, Treasurer, Director 2002 Jeff W. Holmes 53 Director, Vice President 2002 Brent W. Schlesinger 52 Director 2002 The term of office of each director is one year and until his or her successor is elected at the annual shareholders' meeting and is qualified, subject to removal by the shareholders. The term of office for each officer is for one year and until a successor is elected at the annual meeting of the board of directors and is qualified, subject to removal by the board of directors. OCIS does not have a standing audit, nominating or compensation committee. The size of OCIS's board has not permitted the board of directors to divide up some of the corporate governance provisions. It is anticipated as our business expands, that board of director committees will be formed. At this time, however, the exact timing and the nature of such committees are unknown. Biographical Information Set forth below is certain biographical information with respect to OCIS's existing officers and directors. Jeff W. Holmes is a general partner and founder in the partnership of Blosch and Holmes, LLC, a business consulting and private venture funding general partnership founded in 1984. Since September 1997, Mr. Holmes has been a managing partner of the Scottsdale Equity Growth Fund, LLC, which is a private equity fund engaged in financing technology companies. Since September 1998, Mr. Holmes is the managing partner of DMG Advisors, LLC, which provides consulting to private and public companies. Mr. Holmes also served as the chairman of the board of directors of Ion Laser Technology, 1983 to 1994, a medical device company listed on the American Stock Exchange. Mr. Holmes is presently the chairman of the board of directors, chief executive officer and principal shareholder of Calibrus, Inc. a contact center located in Phoenix, Arizona. As a contact center, Calibrus handles inbound and outbound telephone calls for corporations. These calls can range from assistance with customer service to third party verification where a Calibrus operator will verify a party has agreed to purchase products over the telephone from another contact or call center. Mr. Holmes graduated from the University of Utah in 1976 with a Bachelor of Science degree in Marketing and Management. Kirk Blosch is a general partner and founder of Blosch and Holmes LLC, a business consulting and private venture funding general partnership established in 1984. Mr. Blosch is and has been since -7- October 1999 a member of the board of directors of Calibrus, Inc. Calibrus is a contact center located in Phoenix, Arizona. From the first quarter of 1997 through the second quarter of 2000, Mr. Blosch was a director of Zevex International, a medical product company specializing in medical devices and ultrasound technology. Zevex (ZVXI) is traded on NASDAQ. Mr. Blosch graduated from the University of Utah in 1977 with a B.S. degree in Speech Communications. Brent W. Schlesinger was the president and general manager of Yale Industrial Trucks, Inc. in Salt Lake City, Utah from 1989 to 1994 where he oversaw all daily activity for Yale. Yale Industrial managed a fleet of rental fork lifts and engaged in the purchase and sale of used warehouse equipment. From 1994 until hired by OCIS, Mr. Schlesinger operated his own private company doing business as PS Enterprises. PS Enterprises was a sole proprietorship and never incorporated. Mr. Schlesinger's business was engaged in the purchase and sale of warehouse equipment. Currently, Mr. Schlesinger is self employed. Except as indicated below, to the knowledge of management, during the past five years, no present or former director, or executive officer of OCIS: (1) filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; (2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities: (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliate person, director or employee of any investment company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any type of business practice; or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; (4) was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity; (5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated. (6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the -8- judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated. ITEM 10. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following tables set forth certain summary information concerning the compensation paid or accrued for each of OCIS's last three completed fiscal years to OCIS's or its principal subsidiaries' chief executive officer and each of its other executive officers that received compensation in excess of $100,000 during such period (as determined at December 31, 2006, the end of OCIS's last completed fiscal year):
Nonqualified Non-Equity Deferred Name and Option Incentive Plan Compensation All Other Principal Position Year Salary Bonus($) Awards Compensation Earnings Compensation Total ------------------ ---- ------ -------- ------ ------------ -------- ------------- ----- Kirk Blosch, CEO 2006 $-0- $-0- -0- -0- -0- -0- -0- Brent W. Schlesinger 2005 -0- 2,788 -0- -0- -0- -0- -0- President and CEO 2004 -0- 2,000 -0- -0- -0- -0- -0-
Employment Agreements OCIS does not have any employment agreements in place. Board Compensation OCIS's directors receive no compensation for attendance at board meetings. Additional members of the Board of Directors who may be appointed will serve for no compensation until the next annual meeting of shareholders. Options/Stock Appreciation Rights ("SAR") Grants in Last Fiscal Year No individual grants of stock options (whether or not in tandem with SARs), or freestanding SARs were made since inception to any of the named executive officers. Bonuses and Deferred Compensation (Termination of Employment and Change of Control Arrangement) There are no compensation plans or arrangements, including payments to be received from OCIS, with respect to any person named as a director, executive officer, promoter or control person above which would in any way result in payments to any such person because of his resignation, retirement, or other termination of such person's employment with OCIS or its subsidiaries, or any change in control of OCIS, or a change in the person's responsibilities. Compensation Pursuant to Plans OCIS has no compensation plan in place. -9- ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth as of February 20, 2007, the name and the number of shares of OCIS's Common Stock, par value $0.001 per share, held of record or beneficially by each person who held of record, or was known by OCIS to own beneficially, more than 5% of the 1,017,000 issued and outstanding shares of OCIS's Common Stock, and the name and shareholdings of each director and of all officers and directors as a group.
Title of Name of Amount and Nature of Percentage Class Beneficial Owner Beneficial Ownership(1) of Class ----- ---------------- ----------------------- -------- Common Brent W. Schlesinger 104,000 10.22% 3942 South 210 West Salt Lake City, Utah 84107 Common Kirk Blosch 262,000 25.76% 2081 South Lake Line Rd. Salt Lake City, Utah 84109 Common Jeff W. Holmes 262,000 25.76% 600 Highway 50 Pinewild At Marla Bay, Unit 101 Zephyr Cove Nevada 89448 OFFICERS, DIRECTORS AND NOMINEES: Common Kirk Blosch --------See Above--------- Common Jeff W. Holmes --------See Above--------- Common Brent W. Schlesinger --------See Above--------- All Officers and Directors as a group (3 persons) 628,000 61.75%
(1) Indirect and Direct ownership are referenced by an "I" or "D", respectively. All shares owned directly are owned beneficially and of record and such shareholder has sole voting, investment, and dispositive power, unless otherwise noted. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS TRANSACTIONS WITH MANAGEMENT AND OTHERS. The information set forth below is provided by OCIS based on what OCIS believes may be material to the shareholders in light of all the circumstances of the particular case. The significance of the transactions disclosed may be evaluated by each potential investor after taking into account the relationship of the parties to the transactions and the amounts involved in the transactions. On organization of OCIS, Jeff W. Holmes and Kirk Blosch, who are the founders and officers and directors of OCIS, purchased 500,000 shares of OCIS common stock for $25,000 consisting of $10,000 in cash and promissory notes for $15,000. Each purchased 250,000 shares. The promissory notes for $15,000 have been paid in full. OCIS purchased its original inventory from Brent Schlesinger. Mr. Schlesinger was subsequently appointed a director and president of OCIS. As part of the purchase price of the initial inventory, OCIS issued Mr. Schlesinger 100,000 shares of common stock. OCIS also gave Mr. Schlesinger a promissory note for $40,626. As of December 31, 2004, the note was paid in full. -10- Kirk Blosch, an officer of the Company, is providing a mailing address to the Company without charge. This service has been determined by the Company to have only nominal value. There were no additional transactions with related parties during 2005 or 2006. TRANSACTIONS WITH PROMOTERS There have been no transactions between OCIS and promoters during the last fiscal year. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a)(1)FINANCIAL STATEMENTS. The following financial statements are included in this report: Title of Document Page ----------------- ---- Independent Auditor's Report F-1 Balance Sheets F-2 Statements of Operations F-3 Statement of Stockholders' Equity F-4 Statements of Cash Flows F-5 Notes to Financial Statements F-6 - F-9 (a)(2)FINANCIAL STATEMENT SCHEDULES. The following financial statement schedules are included as part of this report: None. (a)(3)EXHIBITS. The following exhibits are included as part of this report: SEC Exhibit Reference Number Number Title of Document Location ------ ------ ----------------- -------- Item 3 Articles of Incorporation and Bylaws 3.01 3 Articles of Incorporation Incorporated by reference* 3.02 3 Bylaws Incorporated by reference* Item 4 Instruments Defining the Rights of Security Holders 4.01 4 Specimen Stock Certificate Incorporated by reference* Item 31 Certifications 31.01 31 CEO certification Pursuant to 18 USC Section 1350, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 This Filing 31.02 31 CFO certification Pursuant to 18 USC Section 1350, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 This Filing 32.01 32 CEO Certification pursuant to section 906 This Filing 32.02 32 CFO Certification pursuant to Section 906 This Filing * Incorporated by reference from OCIS's registration statement on Form SB-2 filed with the Commission, SEC file no. 333-91436. -11- ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Information required by Item 9(e) of Schedule 14A 1) Audit Fees - The aggregate fees billed us for each of the last two fiscal years for professional services rendered by our principal accountant for the audit of our annual financial statements and review of our quarterly financial statements is $8,000 and $6,800, for the years ending December 31, 2006 and 2005, respectively. The aggregate fees billed us for each of the last two fiscal years for professional services rendered by our former accountant to the audit of our annual financial statements and review of our quarterly financial statements is $-0-. 2) Audit-Related Fees - $-0-. 3) Tax Fees. $500. 4) All Other Fees. -0-. 5) Not applicable. 6) Not Applicable. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: OCIS Corp. By: /s/ Kirk blosch -------------------------------- Kirk Blosch, President Principal Financial and Accounting Officer In accordance with the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Brent W. Schlesinger Director February 27, 2007 ------------------------------------ Brent W. Schlesinger /s/ Krik Blosch Director February 27, 2007 ------------------------------------ Kirk Blosch /s/ Jeff W. Holmes Director February 27, 2007 ------------------------------------ Jeff W. Holmes -12- OCIS CORP. (A Development Stage Company) Financial Statements For the Years Ended December 31, 2006 and 2005 Contents Page Report of Independent Registered Public Accounting Firm................F-1 Financial Statements Balance Sheets.........................................................F-2 Statements of Operations...............................................F-3 Statements of Changes in Stockholders' Equity..........................F-4 Statements of Cash Flows...............................................F-5 Notes to Financial Statements....................................F-6 - F-9 Report of Independent Registered Public Accounting Firm To the Board of Directors OCIS Corp. We have audited the balance sheets of OCIS Corp. (a development stage company) (the Company) as of December 31, 2006 and 2005, and the related statements of operations, changes in stockholders' equity and cash flows for the years then ended and for the period of inception (February 6, 2002) to December 31, 2006. 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 audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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 OCIS Corp. as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended, and for the period of inception (February 6, 2002) to December 31, 2006, 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 6 to the financial statements, the Company has suffered net losses since inception and is still considered a development stage company. The Company is dependent on financing to continue operations. This raises substantial doubt about its ability to continue as a going concern. Management's plans to resolve this uncertainty is also discussed in Note 7. The financial statements do not include any adjustments that might result form the outcome of this uncertainty. /s/ Child, Van Wagoner & Bradshaw, PLLC Child, Van Wagoner & Bradshaw, PLLC February 15, 2007 Salt Lake City, Utah F-1 OCIS CORP. (A Development Stage Company) Balance Sheets
December 31, December 31, 2006 2005 -------------------- ------------------- ASSETS CURRENT ASSETS: Cash in bank $ 87,850 $ 63,396 Due from Related Party (Note 4) 317 - Prepaid Expense 175 - -------------------- ------------------- Total Current Assets 88,342 63,396 -------------------- ------------------- TOTAL ASSETS $ 88,342 $ 63,396 ==================== =================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 3,067 $ 2,722 Stand Still Deposit (Note 5) 50,000 - -------------------- ------------------- Total Current Liabilities 53,067 2,722 -------------------- ------------------- STOCKHOLDERS' EQUITY: Preferred stock; $.001 par value, 10,000,000 shares authorized, no shares issued and outstanding - - Common stock; $.001 par value, 90,000,000 shares authorized, 1,017,000 shares issued and outstanding both periods 1,017 1,017 Capital in excess of par value 131,324 131,324 Deficit accumulated during the development stage (97,066) (71,667) -------------------- ------------------- Total Stockholders' Equity 35,275 60,674 -------------------- ------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 88,342 $ 63,396 ==================== ===================
See Notes to Financial Statements. F-2 OCIS CORP. (A Development Stage Company) STATEMENTS OF OPERATIONS
Cumulative from Inception, For the Year Ended For the Year Ended February 6, 2002, December 31, December 31, to December 31, 2006 2005 2006 ------------------------- ------------------------ --------------------- REVENUES $ - $ - $ - ------------------------- ------------------------ --------------------- EXPENSES: General and administrative (26,825) (17,573) (94,465) ------------------------- ------------------------ --------------------- Total Expenses (26,825) (17,573) (94,465) ------------------------- ------------------------ --------------------- NET LOSS FROM OPERATIONS (26,825) (17,573) (94,465) OTHER INCOME (EXPENSE) Interest income 1,426 1,213 3,720 Interest expense - - (3,635) ------------------------- ------------------------ --------------------- TOTAL OTHER INCOME (EXPENSE) 1,426 1,213 85 ------------------------- ------------------------ --------------------- NET LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (25,399) (16,360) (94,380) ------------------------- ------------------------ --------------------- Provision for income taxes - - - ------------------------- ------------------------ --------------------- NET LOSS FROM CONTINUING OPERATIONS $ (25,399) $ (16,360) $ (94,380) ========================= ======================== ===================== DISCONTINUED OPERATIONS Revenues - 4,675 88,339 Cost of Goods Sold - (6,500) (76,589) ------------------------- ------------------------ --------------------- Gross profit (loss) (1,825) 11,750 General and administrative expenses - (8,485) (14,436) ------------------------- ------------------------ --------------------- NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS - (10,310) (2,686) ------------------------- ------------------------ --------------------- NET LOSS FROM CONTINUING AND DISCONTINUED OPERATIONS $ (25,399) $ (26,670) $ (97,066) ========================= ======================== ===================== BASIC INCOME (LOSS) PER SHARE: Continuing operations $ (0.025) $ (0.016) Discontinued operations $ - $ (0.010) ------------------------- ------------------------ Total $ (0.025) $ (0.026) ------------------------- ------------------------ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 1,017,000 1,017,000
See Notes to Financial Statements. F-3 OCIS CORP. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY FROM INCEPTION, FEBRUARY 6, 2002 TO DECEMBER 31, 2006
Deficit Accumulated Additional Common During the Total Common Stock Paid-in Stock Development Stockholders' Shares Amount Capital Subscribed Stage Equity ---------- --------- ------------ ----------- ------------ -------------- Balance, February 6, 2002 (inception) - $ - $ - $ - $ - $ - Shares issued to incorporators for net assets of OCIS Company, at $0.05 per share 200,000 200 9,800 - - 10,000 Shares issued February 6, 2002 at $0.05 5,000 per share in exchange for inventory 100,000 100 4,900 - - Subscriptions for the purchase of 14,945 300,000 shares at $0.05 300,000 300 14,700 (55) - Net income (loss) for the period from inception, February 6, 2002, through December 31, 2002 - - - - (22,173) (22,173) ---------- --------- ------------ ----------- ------------ -------------- Balance, December 31, 2002 600,000 600 29,400 (55) (22,173) 7,772 Cash received from 2002 stock subscriptions - - - 55 - 55 Issuance of common shares for cash at $0.25 417,000 417 101,924 - - 102,341 per share, net of offering costs Net income (loss) for the year ended December 31, 2003 - - - - (25,363) (25,363) ---------- --------- ------------ ----------- ------------ -------------- Balance, December 31, 2003 1,017,000 1,017 131,324 - (47,536) 84,805 Net income (loss) for the year ended December 31, 2004 - - - - 2,539 2,539 ---------- --------- ------------ ----------- ------------ -------------- Balance, December 31, 2004 1,017,000 1,017 131,324 - (44,997) 87,344 Net income (loss) for the year ended December 31, 2005 - - - - (26,670) (26,670) ---------- --------- ------------ ----------- ------------ -------------- Balance, December 31, 2005 1,017,000 1,017 131,324 - (71,667) 60,674 Net income (loss) for the year ended December 31, 2006 - - - - (25,399) (25,399) ---------- --------- ------------ ----------- ------------ -------------- Balance, December 31, 2006 1,017,000 $ 1,017 $ 131,324 $ - $ (97,066) $ 35,275 ========== ========= ============ =========== ============ ==============
See Notes to Financial Statements. F-4 OCIS CORP. (A Development Stage Company) STATEMENTS OF CASH FLOWS
Cumulative from For the Year For the Year Inception, Ended Ended February 6, 2002 December 31, December 31, to December 31, 2006 2005 2006 ----------------- ---------------- ------------------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS Net loss from continuing operations $ (25,399) $ (16,360) $ (94,380) Adjustments to reconcile net loss from continuing operations to cash rovided by (used in ) operating activities Offering costs charged to additional paid-in capital - - (1,909) Changes in operating assets and liabilities: (Increase) decrease in due from officer (317) - (317) (Increase) decrease in prepaid expenses (175) - (175) Increase (decrease) in accounts payable and accrued expenses 345 (742) 3,067 Increase in other current liabilities 50,000 - 50,000 ----------------- ---------------- ------------------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS 24,454 (17,102) (43,714) ----------------- ---------------- ------------------- CASH FLOWS FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS - - - ----------------- ---------------- ------------------- CASH FLOWS FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS Common stock issued for cash - - 129,250 Payment on note payable - officer - - (27,355) ----------------- ---------------- ------------------- NET CASH PROVIDED BY (USED IN) FINANCING FROM CONTINUING OPERATIONS - - 101,895 ----------------- ---------------- ------------------- NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS - (1,325) 29,669 ----------------- ---------------- ------------------- NET CHANGE IN CASH 24,454 (18,427) 87,850 CASH AT THE BEGINNING OF THE PERIOD 63,396 81,823 - ----------------- ---------------- ------------------- CASH AT THE END OF THE PERIOD $ 87,850 $ 63,396 $ 87,850 ================= ================ =================== SUPPLEMENTAL INFORMATION: Cash paid for interest and income taxes $ - $ - $ - ================= ================ =================== SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Offering costs charged to additional paid-in capital $ - $ - $ (1,909) ================= ================ =================== Stock issued to acquire inventory (discontinued operations) $ - $ - $ 5,000 ================= ================ =================== Debt issued to acquire inventory (discontinued operations) $ - $ - $ 27,355 ================= ================ =================== Officer compensated with inventory (discontinued operations)$ - $ 2,788 $ 2,788 ================= ================ ===================
See Notes to Financial Statements. F-5 OCIS CORP. (A Development Stage Company) Notes to Financial Statements December 31, 2006 Note 1 - Organization The OCIS Corp. (The Company) was organized under the laws of the State of Nevada on February 6, 2002 and has elected a fiscal year end of December 31. The Company intended to engage in business operations to buy used equipment wholesale and resell it to other dealers or to retail customers. To this end, the Company acquired an inventory of used material handling equipment. During the fourth quarter of 2005 the Company discontinued its used materials handling equipment operations and is currently assessing other business opportunities. The Company is considered a development stage company as defined in SFAS No. 7. The Company has at the present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors. All of the Company's revenue to date has been from sales to companies located in Utah. Note 2 - Summary of Significant Accounting Policies Net Earnings Per Share - The computation of net income (loss) per share of common stock is based on the weighted average number of shares outstanding during the periods presented. Income Taxes - Due to losses at December 31, 2006 and since inception, no provision for income taxes has been made. There are no deferred income taxes resulting from income and expense items being reported for financial accounting and tax reporting purposes in different periods. Deferred income tax assets arising from net operating losses have been fully offset by valuation allowances, in accordance with SFAS No. 109 "Accounting for Income Taxes" due to the uncertainty of their realization. The change in valuation allowance of $10,160 results from offsets against deferred tax assets arising from net operating loss carryforwards, which totaled $97,066 at December 31, 2006 and expire in 2026. A reconciliation of income tax expense (benefit) to the amount computed by applying the federal statutory tax rate to pretax income (loss): Net loss at federal statutory rate of 35% $ 8,890 State taxes (benefit) 1,270 Valuation allowance (10,160) ----------- Net income expense (benefit) $ 0 =========== Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. During the year ended December 31, 2006 and since inception, February 6, 2002, the Company did not have non-cash investing activities. Use of Estimates - The preparation of 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. Inventory - Inventory consists of used finished materials handling equipment purchased for resale and is stated at the lower of cost determined by the first-in first-out (FIFO) method or market. Inventory cost includes those costs directly attributable to the product before sale. Revenue recognition - The Company recognizes revenue at the time the sale of the used equipment takes place and title has transferred to the customer upon shipment or delivery. The Company has recognized $88,339 of sales since inception, February 6, 2002. F-4 OCIS CORP. (A Development Stage Company) Notes to Financial Statements (continued) December 31, 2006 Note 3 - Common Stock Transactions The Company on February 6, 2002 entered into agreements with its two initial stockholders for the sale of a total of 500,000 shares of common stock for $25,000, or $0.05 per share. Each individual paid $5,000 cash and executed a promissory note for the remaining balance of $7,500 for the purchase of 250,000 shares. The notes carried simple interest at a rate of 6% per annum. The principal and interest were due and payable on December 31, 2002 or on demand of the holder. The notes were paid in full and the Company received $512 for interest accrued on the notes. The Company on February 6, 2002, issued 100,000 shares of its common stock at $0.05 per share for a total amount of $5,000 as part of its purchase of used materials handling equipment as described in Note 4. On December 30, 2003 the Company closed an offering for the sale of a minimum of 300,000 shares or maximum of 600,000 shares of its authorized but previously unissued common stock at $0.25 per share. The shares were offered pursuant to a Form SB-2 Registration Statement under the Securities Act of 1933. The Company accepted subscriptions for the purchase of 417,000 shares for a total of $104,250. The officers of the Company acted as sales agents and no commissions were incurred by the Company. A total of $1,909 in expenses directly related to the offering has been offset against capital in excess of par value. Note 4 - Related Party Transactions At inception, the Company entered into a Purchase and Sale Agreement with the former President of the Company and P.S. Enterprises, a Utah DBA of the President. Under the agreement, the Company purchased certain used materials handling inventory. Each item purchased was valued at the lower of cost of the inventory item to the President or P.S. Enterprises or the appraised wholesale market value. The original purchase price of the inventory was $45,626. The Company issued 100,000 shares of common stock valued at $0.05 per share totaling $5,000 and executed a promissory note for the remaining balance of $40,626. The note provided for simple interest at a rate of 6% per annum. The total principal and accrued interest was due and payable December 31, 2003 (as extended by mutual agreement of the parties), or at the time of closing of a public offering of securities by the Company. The note was secured by the inventory purchased and the agreement stated that all proceeds, net of selling expenses, from the sale of the inventory purchased by the note would be applied to the payment of the note. During the third quarter of 2003 the remaining principal amount due on the note was discounted $13,271 by mutual consent of the parties. This amount was treated as a reduction of total cost of goods sold during the year ended December 31, 2003. The principal and accrued interest was paid in full during the first quarter of 2004. An officer of the Company is providing a mailing address to the Company without charge. This service has been determined by the Company to have only nominal value. The Company paid bonuses totaling $3,000 to the President and Chief Financial Officer of the Company during the year ended December 31, 2004. No other compensation has been paid or accrued to any officer or director of the Company since its inception. Certain officers and stockholders of the Company have advanced funds to the Company to pay operating expenses. The funds are due upon demand, are unsecured and carry simple interest at the rate of 6% per annum. At December 31, 2003, officers and stockholders had advanced a total of $10,945. This amount was paid along with $415 accrued interest during the first quarter of 2004. An officer advanced an additional $772 for out-of-pocket expenses incurred in connection with the Company's offering of common stock during 2003. The advance was non-interest bearing and was included in accounts payable and accrued expenses of $10,443 at December 31, 2003. The advance was repaid in full during the first quarter of 2004. F-5 OCIS CORP. (A Development Stage Company) Notes to Financial Statements (continued) December 31, 2006 Note 4 - Related Party Transactions (continued) On August 31, 2005 the Company accepted the resignation of its former President, Brent W. Schlesinger, who agreed to continue to work with the Company on a consultant basis through February 2006. During the fourth quarter of 2005 the Company's management made the decision to discontinue its used equipment operations. The Company had made no purchases or sales of used materials handling equipment since the first quarter of 2005. The remaining inventory on hand, with a cost of $2,788, was given to Mr. Schlesinger as compensation for past services rendered. Certain officers of the Company have used personal funds for airfare, hotel, conference registration and other expenses in conducting the affairs of the Company. Such expenses are periodically reimbursed by the Company. As of December 31, 2006 the Company had reimbursed an officer $317 in excess of the amount due him. The officer subsequently repaid the $317 shortly after year end. Note 5 - Contingencies and Commitments As discussed in a Form 8-K filed on November 7, 2006, the Company entered into a Letter of Intent to acquire Ecology Coating, Inc., a California corporation. In the event the proposed agreement is consummated, the holders of the capital stock of Ecology Coating, Inc. would acquire control of the Company. On November 6, 2006 Ecology paid the Company a $50,000 "stand still deposit" upon signing the Letter of Intent to allow both companies 90 days to complete their respective due diligence procedures. Ecology has the option to extend the closing date for an additional 30 days upon the payment of an additional $25,000 to the Company which was paid in February, 2007. The Company will retain the deposit(s) if the closing of the merger does not occur for any reason. The Company will refund the deposit(s) to Ecology on the closing date of the merger. As of December 31, 2006, the companies had not entered into a definitive agreement regarding the proposed merger transaction. There is no assurance that this transaction will be consummated. Note 6 - Development Stage Company and Going Concern The Company is in the development stage as defined in Financial Accounting Standards Board Statement No. 7 and has incurred significant cumulative net losses. As reported in the financial statements, the Company has a cumulative gross profit of $11,750 from the sale of used materials handling equipment and an accumulated deficit of $97,066. At December 31, 2006 the Company's total assets are $88,342 including $87,850 cash. The Company has current liabilities totaling $53,067 including a $50,000 "stand still deposit" from Ecology Coating, Inc. The Company, during 2003, completed the sale of 417,000 shares of its common stock at $0.25 per share to raise capital so that it can develop successful operations per its business plan. However, there can be no assurance that the funds raised will be sufficient or that the Company will be able to obtain additional funding or generate profitable operations, or that other funding, if obtained in adequate amounts, will be on terms favorable to the Company to execute its business plan. As discussed in a Form 8-K filed on August 31, 2005, the Company's former President resigned to pursue other business interests. Subsequently, the Company's management made the decision to discontinue its previous business operations of buying used equipment and reselling it to other dealers and retail customers, and is now seeking other business opportunities. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it is able to engage in profitable business operations. The Company's inability to obtain additional funding, as required, would severely impair its business operations and there can be no assurance that the Company's operating plan will be successful. If the Company is unable to obtain adequate capital it could be forced to cease operations. F-6 OCIS CORP. (A Development Stage Company) Notes to Financial Statements (continued) December 31, 2006 Note 6 - Development Stage Company and Going Concern (continued) Ultimately, however, the Company will need to achieve profitable operations in order to continue as a going concern. Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. F-7