10QSB 1 f10qj5o.txt OCIS JUNE 30, 2005-10QSB U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2005 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934 Commission File Number: 333-91436 OCIS Corp. ----------------------------------------------- (Exact name of small business issuer as specified in its charter) Nevada 26-0014658 ------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2081 South Lakeline Drive, Salt Lake City, Utah 84109 ------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (801) 467-4566 ------------------------------- (Issuer 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 [ ] Yes [X] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 1,017,000 shares of its $0.001 par value common stock as of August 2, 2005. Transitional Small Business Disclosure Format (check one) Yes [ ] No [X] 2 PART I-FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS OCIS Corp. FINANCIAL STATEMENTS (UNAUDITED) The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company. 3 OCIS CORP. (A Development Stage Company) CONDENSED BALANCE SHEETS June 30, December 31, 2005 2004 ------------- -------------- (Unaudited) ASSETS Current Assets: Cash in bank $75,989 $ 81,823 Inventory 3,485 8,485 ---------- ---------- Total Current Assets 79,474 90,308 ---------- ---------- Total Assets $79,474 $ 90,308 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 4,800 $ 2,964 Due to officers and stockholders - - ---------- ---------- Total Current Liabilities 4,800 2,964 ---------- ---------- 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 (57,667) (44,997) ---------- ---------- Total Stockholders' Equity 74,674 87,344 ---------- ---------- Total Liabilities and Stockholders' Equity $79,474 $ 90,308 ========== ========== The accompanying notes are an integral part of these financial statements. 4 OCIS CORP. (A Development Stage Company) CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
Cumulative from Inception, For the Three Months Ended For the Six Months Ended February 6, 2002, June 30, June 30, to June 30, -------------------------- ------------------------ ----------------- 2005 2004 2005 2004 2005 ------------ ----------- ------------- --------- ---------------- Revenue Sales $ - $ - $ 4,675 $ 820 $ 88,339 Cost of goods sold - - (6,500) (2,320) (76,589) ---------- ---------- ------------ --------- --------------- Gross profit (loss) - - (1,825) (1,500) 11,750 ---------- ---------- ------------ --------- --------------- Expenses: General and administrative 4,107 7,327 11,408 10,691 67,426 ---------- ---------- ------------ --------- --------------- Total Expenses 4,107 7,327 11,408 10,691 67,426 ---------- ---------- ------------ --------- --------------- Net Loss From Operations (4,107) (7,327) (13,233) (12,191) (55,676) Other Income (Expense) Interest income 308 149 563 250 1,644 Interest expense - - - (36) (3,635) ---------- ---------- ------------ --------- --------------- Total Other Income (Expense) 308 149 563 214 (1,991) ---------- ---------- ------------ --------- --------------- Net Loss Before Income Taxes (3,799) (7,178) (12,670) (11,977) (57,667) Provision for income taxes - - - - - ---------- ---------- ------------ --------- --------------- Net Loss $ (3,799) $ (7,178) $ (12,670) $(11,977) $ (57,667) ========== ========== ============ ========= =============== Net Loss Per Share $ (0.00) $ (0.01) $ (0.01) $ (0.01) ========== ========== ============ ========= Weighted Average Common Shares Outstanding 1,017,000 1,017,000 1,017,000 1,017,000 ========== ========== ============ =========
The accompanying notes are an integral part of these financial statements. 5 OCIS CORP (A Development Stage Company) CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Cumulative from Inception, For the Six Months Ended February 6, 2002, June 30, to June 30, ----------------------------------- ------------------- 2005 2004 2005 --------------- -------------- --------------- Cash Flows from Operating Activities Cash from sale of equipment inventory $ 4,983 $ 874 $ 91,623 Cash paid to suppliers and others (11,380) (23,629) (115,538) Cash from interest income 563 250 1,644 Cash paid for interest - (415) (3,635) ------------- -------------- --------------- Cash Used in Operating Activities (5,834) (22,920) (25,906) ------------- -------------- --------------- Cash Flows from Investing Activities - - - ------------- -------------- --------------- Cash Flows from Financing Activities Sale of common stock - - 129,250 Due to officers - (10,945) - Payment on note payable - (4,545) (27,355) ------------- -------------- --------------- Cash Provided by (Used in) Financing Activities - (15,490) 101,895 ------------- -------------- --------------- Net Change in Cash (5,834) (38,410) 75,989 Cash at the Beginning of the Period 81,823 104,759 - ------------- -------------- --------------- Cash at the End of the Period $ 75,989 $ 66,349 $ 75,989 ------------- -------------- --------------- Reconciliation of Net Loss to Cash Used in Operating Activities Net Loss $ (12,670) $ (11,977) $ (57,667) Adjustments to reconcile net loss to net cash used in operating activities Offering costs charged to Capital in Excess of Par - - (1,909) Stock issued to acquire inventory - - 5,000 Debt issued to acquire inventory - - 27,355 Changes in assets and liabilities (Increase) decrease in inventory 5,000 (6,180) (3,485) Increase (decrease) in accounts payable and accrued expenses 1,836 (4,384) 4,800 Increase (decrease) in accrued interest - (379) - ------------- -------------- --------------- Net Cash Used in Operating Activities $ (5,834) $ (22,920) $ (25,906) ============= ============== ===============
The accompanying notes are an integral part of these financial statements. 6 OCIS CORP. (A Development Stage Company) NOTES TO UNAUDITED FINANCIAL STATEMENTS (UNAUDITED) Note 1 CONDENSED INTERIM FINANCIAL STATEMENTS The accompanying unaudited condensed financial statements include the accounts of OCIS Corp. These statements are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company's most recent annual financial statements for the year ended December 31, 2004 and for the period from inception, February 6, 2002, through December 31, 2004, included in Form 10-KSB filed with the U.S. Securities and Exchange Commission on March 30, 2005. In particular, the Company's significant accounting policies were presented as Note 2 to the financial statements in that report. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed financial statements for the period ended June 30, 2005 are not necessarily indicative of the operating results that may be expected for the full year ending December 31, 2005. Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization - 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 intends 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. 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. 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 through June 30, 2005 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. 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 periods ending June 30, 2005 and 2004, the Company did not have non-cash investing activities. 7 OCIS CORP. (A Development Stage Company) NOTES TO UNAUDITED FINANCIAL STATEMENTS Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. Note 3 COMMON STOCK TRANSACTIONS 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 was offset against capital in excess of par value. No additional shares were sold during the period ended June 30, 2005. Note 4 - 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 $57,667. At June 30, 2005 the Company's only assets are $75,989 cash and an inventory of used materials handling equipment held for sale valued at $3,485. The Company has current liabilities totaling $4,800. During 2003 the Company completed the sale of 417,000 shares of its common stock at $0.25 per share to raise capital so that it could 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. 8 OCIS CORP. (A Development Stage Company) NOTES TO UNAUDITED FINANCIAL STATEMENTS Note 4 - DEVELOPMENT STAGE COMPANY AND GOING CONCERN (continued) 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. 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. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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." General --------- 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 appointed. 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. Our initial plan was to expand to encompass other used business equipment. As part of the organization of OCIS, we purchased an initial inventory, which consisted of warehousing rack systems and forklifts. Our efforts over the last two years have not been as profitable as we had hoped and management may have to evaluate the future business direction. Management still believes the used equipment market will expand as the economy improves. As companies begin to expand, they will need to purchase additional equipment. Management believes companies will focus more on used equipment since it is more economical to purchase and generally functions as well as new equipment. Products and Services --------------------- OCIS currently provides used equipment particularly warehousing equipment with the majority of its current and past inventory consisting of warehousing rack systems and related equipment such as forklifts and conveyors. Management will not, however, limit itself to any particular business equipment. In addition to warehouse equipment, management will focus on office equipment including partitions, desk, work spaces and cabinets. Initially, management will not focus on computer or server related systems because of the short life cycle and obsolescence in these areas and the current glut of used computer equipment. Instead, management intends to focus on business equipment that has long life cycles. Marketing and Distribution -------------------------- OCIS's management relies on industry contacts to locate used equipment. Ocis' president, Brent Schlesinger, has been in the material handling industry for over twenty years. His experience and contacts developed as president and 10 senior management of other companies have brought him into contact with many companies in the United States and with material handling specialist (inventory managers) at these companies. Mr. Schlesinger also keeps in contact with the auction companies that liquidate industrial equipment. These companies will contact those people in the industry, such as Mr. Schlesinger, as they need to liquidate or acquire equipment. Mr. Schlesinger also spends time personally contacting business to inform them of product offerings. These contacts are aimed at finding not only customers to purchase used equipment but to find any businesses that have equipment they would like to sell. As funds permit and, depending on the type of equipment OCIS has in inventory, we will advertise our products in trade journals and in local papers. The kind of equipment in inventory often will dictate the type of marketing program we have in place. With equipment like warehousing, the potential customers are often known to us or readily identifiable so we will use more direct marketing and personal sales efforts to these companies. If our inventory consists of office equipment, we will rely on advertising in local papers and trade journals as the most effective marketing campaign. The nature of our products will require that our market area be limited to Utah and the surrounding states, at first. The geographical limit is the result of the size of our products currently being offered. The transportation of the products has to be done by truck or trailer. The longer the distance from our storage facility in Utah the more difficult and expensive it will be to deliver the products. Accordingly, until our business expands to the point we feel a new facility can be opened in another region of the country, we will limit our geographical area to Utah and our surrounding states which are within a day's drive of our yard. These states would be Idaho, Nevada, Wyoming and Colorado. We anticipate most of our business at first to be within Utah and slowly expanding to the broader areas of Idaho, Wyoming and Nevada. By limiting our geographical coverage, most of our shipping can be done with pickup trucks and rented trailers or through a rental of a local semi trailer for the day. This helps keep our cost down by not having to incur or pass along expensive shipping cost. It also allows us to store all of our inventory at a yard without having other storage facilities around the country. All products are simply stored at our yard until the day they need to be loaded and delivered to a client's facility. With many customers located in the same area, customers are also able to pick up the products themselves and save any shipping cost. We typically will try and pass along the shipping cost if possible. However, in an industry where competition is based on price, we may have to absorb some of the shipping cost. Manufacturing, Supplies, and Quality Control OCIS does not manufacture any equipment. OCIS does inspect all equipment to assure that it is in good condition prior to any purchase or sale. We do not provide any warranties to the equipment we sell. All equipment is sold "as is." Inventory on hand will vary as funds permit. Management is hopeful that with the funds from the offering (as described in Part II, Item 2 below), we will be able to increase our inventory and take advantage of the ability to purchase additional inventory if a good opportunity presents itself. Presently, existing capital will not allow us to purchase all the inventory we want and we have had to pass on the opportunity to purchase some office and warehousing equipment at favorable prices. 11 Liquidity and Capital Resources ------------------------------- As of June 30, 2005, OCIS had working capital of $74,674. Management intends to use these funds to purchase additional inventory and operate. To date, most expenses have been for professional services such as accounting and attorney's fees in organizing OCIS and conducting audits and reviews. We anticipate monthly ongoing expenses to be held to a minimum until revenue allows us to expand our workforce, advertise and purchase additional inventory. We are trying to keep our cash needs to a minimum until we start receiving revenue from sales of product. Results of Operations --------------------- For the quarter ended June 30, 2005, we had no revenues. For the six months ended June 30, 2005, we had revenues of $4,675 compared to revenues of $820 for the six months ended June 30, 2004. We had a net loss of $3,799 for the quarter ended June 30, 2005, compared with a net loss of $7,178 for the quarter ended June 30, 2004. OCIS management anticipates costs will remain relatively constant over the next couple of months with the primary focus on buying additional products for sale. OCIS management is hopeful sales will increase in 2005. However, if sales do not increase management may have to look at other business opportunities with its remaining cash. At this time, management does not have any new businesses in which to enter or know of any new opportunities that they would enter. The majority of expenses in 2005 and 2004 were professional fees. OCIS management anticipates more cost for operations such as advertising, marketing and storage-related fees for inventory. At this time it is difficult to predict all the cost since management is in the process of acquiring additional inventory to sell and has not been active in pursuing sales. During the third and fourth quarters of 2005, management anticipates sales to increase and costs to also increase. ITEM 3. CONTROLS AND PROCEDURES a) Evaluation of Disclosure controls and procedures. ------------------------------------------------- OCIS' 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. b) Changes in Internal Controls. ----------------------------- There were no significant changes in OCIS' internal controls, or other factors, that could significantly affect OCIS' 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. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None 12 ITEM 2. CHANGES IN SECURITIES In December 2004, 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 Stockholders at an offering price of $0.25 per share. The offering was subsequently closed on December 30, 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 offering was closed at the end of December 2003, we have used approximately $55,700 of the proceeds for the purchase of inventory, payment of expenses and liabilities. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. ---------- Item 4 Instruments Defining the Rights of Security Holders ------- --------------------------------------------------- 4.01 4 Specimen Stock Certificate Incorporated by reference* 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 the Company's registration statement on form SB-2 filed with the Commission, SEC file no. 333-91436. (b) Reports on From 8-K. -------------------- None 13 SIGNATURES 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. OCIS Corp. Dated: August 12, 2005 By:/s/ ---------------------------------- Kirk Blosch, Principal Accounting and Chief Financial Officer