-----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, BnhHK70TEaAkZ0TtKNUAaVBBZXT3oSsKAVekMoNgWFZ3Rv1ugUQy8rJcJ9FoN/Ci 3dQ9YILMTWzffrwDzXgj3w== 0001213900-05-000148.txt : 20050228 0001213900-05-000148.hdr.sgml : 20050228 20050228161354 ACCESSION NUMBER: 0001213900-05-000148 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040531 FILED AS OF DATE: 20050228 DATE AS OF CHANGE: 20050228 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPREHENSIVE HEALTHCARE SOLUTIONS INC CENTRAL INDEX KEY: 0000069623 STANDARD INDUSTRIAL CLASSIFICATION: MEN'S & BOYS' FURNISHINGS, WORK CLOTHING, AND ALLIED GARMENTS [2320] IRS NUMBER: 580962699 STATE OF INCORPORATION: DE FISCAL YEAR END: 0225 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 033-08955 FILM NUMBER: 05645751 BUSINESS ADDRESS: STREET 1: 45 LUDLOW STREET, SUITE 602 CITY: YONKERS STATE: NY ZIP: 10705 BUSINESS PHONE: (914) 375-7591 MAIL ADDRESS: STREET 1: 45 LUDLOW STREET, SUITE 602 CITY: YONKERS STATE: NY ZIP: 10705 FORMER COMPANY: FORMER CONFORMED NAME: NANTUCKET INDUSTRIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NANTUCKET LINGERIE INC DATE OF NAME CHANGE: 19690715 10-Q/A 1 f10q0504a1_comprehensive.txt AMENDMENT NO. 1 TO FORM 10-Q FOR PERIOD 05/04 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------------- AMENDMENT NO. 1 TO FORM 10-Q ---------------------------------------- |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 31, 2004 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-26715 COMPREHENSIVE HEALTHCARE SOLUTIONS, INC. (Exact name of registrant as specified in its charter) Delaware 58-0962699 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 45 Ludlow Street, Suite 602 Yonkers, New York 10705 (Address of principal executive offices) (Zip Code) (914) 375-7591 (Registrant's telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 |_| State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of July 20, 2004, we had 12,398,959 shares of common stock outstanding, $0.10 par value. PART I - FINANCIAL INFORMATION Item 1. Financial Statements: --------------------- BASIS OF PRESENTATION The accompanying unaudited financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying statements should be read in conjunction with the audited financial statements for the year ended February 28, 2004. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three months ended May 31, 2004 are not necessarily indicative of results that may be expected for the year ending February 28, 2005. The financial statements are presented on the accrual basis. The Company is filing this amended 10Q due to the fact that the financial statements for this period were not reviewed by an accountant who was registered with the Public Company Accounting Oversight Board ("PCAOB"). The accountant has applied for registration with PCAOB and has not received approval or denial with regard to its application. In the interim, the Company has engaged an accountant registered with the PCAOB in the event that the current accountant is not registered in a timely manner. The Company intends to file an amended 10Q with the reviewed financial statements as soon as possible. Nantucket Industries, Inc. FORM 10-Q Table of Contents Page ---- PART I FINANCIAL INFORMATION................................................. 1 Item 1. Financial Statements................................................ 1 Balance Sheet as of May 31, 2004 and February 29, 2004.............. 1 Statement of Operations May 31, 2004 and 2003 ...................... 3 Statements of Cash Flow May 31, 2004 and 2003....................... 4 Notes to Financial Statements....................................... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................................... 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk ......... 11 Item 4. Controls and Procedures ........................................... 11 PART II. OTHER INFORMATION.................................................. 11 Item 6. Exhibits and Reports on Form 8-K.................................... 11 SIGNATURES................................................................... 11
Nantucket Industries, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) ================================================================================================================================= February 29, May 31, 2004 2004 Not reviewed Unaudited - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- Assets (1) Cash and cash equivalents $ 189,856 $ 172,429 Accounts receivable 162,221 147,954 Inventories 4,125 3,870 Prepaid expenses 99,077 73,067 Stock subscription receivable 185,000 160,800 Other current assets - 5,000 - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- Total current assets 640,279 563,120 - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- Property, plant and equipment, net 66,429 61,027 Other assets, net Goodwill 176,975 - Covenant not to compete 300,000 300,000 Customer list 353,334 260,000 Prepaid expenses 305,038 223,750 - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- $ 1,842,055 $ 1,407,897 ========================================================================= =================== ================= ================= Liabilities and Stockholders' Equity Accounts payable $ 114,727 $ 106,768 Loans payable 15,000 15,000 Obligation under capital lease, current portion 2,536 - Pre-petition taxes 3,964 3,964 - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- Total current liabilities 136,227 125,732 Line of credit 30,000 30,000 Obligation under capital lease, net ofcurrent portion 2,869 - Pre-petition taxes, net of current portion 19,821 19,821 - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- Total liabilities 188,917 175,553 - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- Stockholders' equity Common stock, $.10 par value; authorized 20,000,000 1,239,896 1,166,730 shares; issued 12,398,959 Additional paid-in capital 14,029,215 13,534,031 Common stock subscribed 185,000 160,800 Accumulated deficit (13,800,973) (13,629,217) - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- Total stockholders' equity 1,653,138 1,232,344 - ------------------------------------------------------------------------- ------------------- ----------------- ----------------- $ 1,842,055 $ 1,407,897 ========================================================================= =================== ================= ================= (1) Derived from audited financial statements See accompanying notes to financial statements. 1
Nantucket Industries, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) ================================================================================================================================= Quarters ended May 31, 2004 2003 Not reviewed Reviewed - --------------------------------------------------------------------------------------------------------------------------------- Net sales $ 115,479 $ 103,663 Cost of sales 71,912 73,180 - --------------------------------------------------------------------------------------------------------------------------------- Gross profit 43,567 30,483 Selling, general and administrative expenses 201,552 54,834 - --------------------------------------------------------------------------------------------------------------------------------- Loss from operations (157,985) (24,351) Other expense: Interest expense 1,394 1,920 Depreciation and amortization 12,377 11,613 - --------------------------------------------------------------------------------------------------------------------------------- Total other expense 13,771 13,533 - --------------------------------------------------------------------------------------------------------------------------------- Loss before income taxes (171,756) (37,884) Income taxes - - - --------------------------------------------------------------------------------------------------------------------------------- Net loss (171,756) (37,884) Net loss per share - basic and diluted (.01) (.00) - --------------------------------------------------------------------------------------------------------------------------------- Weighted average common shares outstanding 12,351,180 8,830,570 ================================================================================================================================= See accompanying notes to financial statements. 2
Nantucket Industries, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) ============================================================================================================================= Quarters ended May 31, 2004 2003 Not reviewed Reviewed - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net loss $ (171,756) $ (37,884) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 12,377 11,613 Decrease (increase) in assets: Accounts receivable (14,267) 5,733 Inventories (255) 850 Prepaid expenses (26,010) - Other current assets 5,000 (1,000) (Decrease) increase in liabilities: Accounts payable 7,959 1,121 - ----------------------------------------------------------------------------------------------------------------------------- Net cash used by operating activities (186,952) (19,567) - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property, plant and equipment (288,088) - Increase in other assets (81,288) - - ----------------------------------------------------------------------------------------------------------------------------- Net cash used by investing activities (369,376) - - ----------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Issue of stock for operations 568,350 25,000 Proceeds from capital lease 5,405 - - ----------------------------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 573,755 25,000 - ----------------------------------------------------------------------------------------------------------------------------- Net increase in cash and cash equivalents 17,427 5,433 Cash and cash equivalents, beginning of period 172,429 550 - ----------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 189,856 $ 5,983 ============================================================================================================================= Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 1,394 $ 1,920 Income taxes $ - $ - See accompanying notes to financial statements. 3
Nantucket Industries, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ 1. Summary of Significant Accounting Policies a. The Company Nantucket Industries, Inc. and its wholly owned subsidiaries (the "Company") were inactive from October 1999 until January 26, 2002. At that date a reverse merger with Accutone Inc. and Subsidiary occurred. (See note 1) Accutone Inc. is engaged in the business of selling and distributing hearing aids and providing the related audio logical services. b. Principles of Consolidation The consolidated financial statements include the accounts of Nantucket Industries, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. As a result of the above described acquisition, Nantucket Industries, Inc. (together with Accutone's wholly-owned subsidiary) has no business or assets other than those which it acquired through its acquisition of Accutone. c. Accounts Receivable An allowance for doubtful accounts is provided based upon historical bad debt experience and periodic evaluations of the aging of the accounts. No allowance was considered necessary since to date there has been no bad debt expense. d. Property, Plant and Equipment Property and equipment are stated at cost. Depreciation is computed for financial statement purposes, using the straight-line method over the estimated useful life. For income tax purposes, depreciation is computed using statutory rates. e. Inventories Inventories are stated at the lower of costs (first-in, first-out method) or market. f. Intangible Assets Intangible assets include customer lists, which are stated at cost. Amortization is computed for financial statement and tax purposes using the straight-line method over 15 years. g. Income Taxes The Company and its wholly owned subsidiaries file a consolidated federal income tax return. Deferred income taxes arise as a result of differences between financial statement and income tax reporting 4 Nantucket Industries, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ h. Earnings (Loss) Per Common Share In fiscal year 1998, the Company adopted Statement of Financial Accounting Standards No. 128 (SFAS No. 128), Earnings Per Share, which requires public companies to present earnings per share and, if applicable, diluted earnings per share. All comparative periods must be restated as of February 28, 1998 in accordance with SFAS No. 128. Basic earnings per share are based on the weighted average number of common shares outstanding without consideration of potential common share equivalents. Diluted earnings per share are based on the weighted average number of common and potential common shares outstanding. The calculation takes into account the shares that may be issued upon exercise of stock options, if any, reduced by the shares that may be repurchased with the funds received from the exercise, based on the average price during the year. i. Reporting Comprehensive Income In June 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 130 (SFAS No. 130), Reporting Comprehensive Income, which is effective for the Company's year ending February 27, 1999. SFAS No. 130 addresses the reporting and displaying of comprehensive income and its components. Earnings (loss) per share will only be reported for net earnings (loss), and not for comprehensive income. Adoption of SFAS No. 130 relates to disclosure within the financial statements and is not expected to have a material effect on the Company's financial statements. j. Segment Information In June 1997, the FASB also issued Statement of Financial Accounting Standards No. 131 (SFAS No. 131), Disclosure About Segments of an Enterprise and Related Information, which is effective for the Company's year ending February 27, 1999. SFAS No. 131 changes the way public companies report information about segments of their business in their financial statements and requires them to report selected segment information in their quarterly reports. Adoption of SFAS No. 131 relates to disclosure within the financial statements and is not expected to have a material effect on the Company's financial statements. k. Fiscal Year The Company's fiscal year ends February 28. 5 Nantucket Industries, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ l. Reclassification Certain prior year amounts have been reclassified in order to conform to the current year's presentation. m. Use of Estimates In preparing the Company's financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. n. Impairment of Long-Lived Assets The Company applies Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of. Accordingly, when indicators of impairment are present, the Company periodically evaluates the carrying value of property, plant and equipment and intangibles in relation to the operating performance and future undiscounted cash flows of the underlying business. The Company adjusts carrying amount of the respective assets if the expected future undiscounted cash flows are less than their book values. No impairment loss was required in fiscal year 2003. o. Fair Value of Financial Instruments Based on borrowing rates currently available to the Company for debt with similar terms and maturities, the fair value of the company's long-term debt approximate the carrying value. The carrying value of all other financial instruments potentially subject to valuation risk, principally cash, accounts receivable and accounts payable, also approximate fair value. p. Goodwill and Other Intangible Assets The Company applies Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). Accordingly, the Company ceased amortization of certain intangible assets i.e. the covenant not to compete, effective at the beginning of its February 28, 2003 fiscal year. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS 142. A impairment loss would be recorded for any intangible that is determined to be impaired. No impairment loss was required in fiscal year 2003. 6 Nantucket Industries, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ q. Advertising Costs Costs for newspaper and other media advertising are expensed as incurred and were $18,147, $1,686 and $0 in 2003, 2002 and 2001, respectively. r. Sales return policy The Company provides to all patients purchasing hearing aids a specific return period, a minimum of 45 days, if the patient is dissatisfied with the product. The Company does not provide an allowance in accrued expenses for returns since actual returns for this fiscal year were less than 2%. The return period can be extended an additional 15 days at the discretion of the dispensing audiologist. All the manufacturers that supply the Company accept all returns back for full credit within these return periods. 2. Concentration of Risk Currently approximately 70% of the reorganized Company's business is based on contracts with The New York State Medical Assistance Program (Medicaid) and Empire Medicare Service (Medicare). 3. Acquisition of Audiology Practice On February 28, 2002 the Company executed a contract with Park Avenue Medical Practice Associates, P.C. and Park Avenue Health Care Management, Inc. The Park Avenue Group directly employs medical professional personnel, including physicians in both general and specialty practices and other health care professionals such as podiatrists, audiologists, psychologists and psychotherapists. Nursing homes and long term care facilities contract with Park Avenue for the services of Park Avenue's medical professionals, on a pre-determined schedule or on an as-needed basis. Pursuant to the terms of the agreement Park Avenue contributed its entire audiology practice to the Company. The contract also calls for Brad I. Markowitz, the president of Park Avenue Management to join the Company's Board of Directors. Mr. Markowitz is a banker by trade and has been with Park Avenue since 1995. At that time Park Avenue was servicing approximately seven nursing homes. Under his tutelage Park Avenue has grown to service over seventy long term care facilities. In addition, Mr. Markowitz serves on the Board of Trustees of several private companies. The Company issued 1,200,000 shares of restricted common stock to acquire the audiology practice of Park Avenue Medical Associates P.C. Under the agreement the Company gains access to approximately 70 nursing homes to provide complete audiology services. As of February 28, 2003 the Company has entered into contracts with approximately 38 of these nursing homes. In addition, Park Avenue will continueto provide additional access to any new nursing homes they have contact with. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations --------------------------------------------------------------- Certain statements contained in this filing are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions, competition and other uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company is filing this amended 10Q due to the fact that the financial statements for this period were not reviewed by an accountant who was registered with the Public Company Accounting Oversight Board ("PCAOB"). The accountant has applied for registration with PCAOB and has not received approval or denial with regard to its application. In the interim, the Company has engaged an accountant registered with the PCAOB in the event that the current accountant is not registered in a timely manner. The Company intends to file an amended 10Q with the reviewed financial statements as soon as possible. Overview Currently, net sales substantially refer to fees earned by the provision of audiological testing in our offices as well as those provided on site in Nursing Homes, Assisted Living Facilities, Senior Care Facilities and Adult Day Care Centers as well as the sales and distribution of hearing aids generated in each of these venues. A majority of our audiology sales have represented reimbursement from Medicare, Medicaid and third party payors. Generally, reimbursement from these parties can take as long as 120 to 180 days. With the implementation of the billing of Medicare payers on-line we have recognized a shorter time of reimbursement from 120 days to approximately 60 days. Medicaid reimbursements can only be billed with various paper submissions which are mailed on a weekly basis. While we have attempted to find a method of expediting this paper submission process it seems unlikely that we will be able to accomplish this in our near future. As a result, Medicaid payments, which constitute approximately 60% of our reimbursement will continue to take 120 to 180 days to be realized. Management had anticipated a growth in revenues resulting from the prior acquisition of the audiology practice of Park Avenue. This has not come to fruition. We believe that this was caused in part by our inability to attract additional audiologists on a timely basis and insufficient working capital as well as Management concentration of acquiring new businesses in related medical fields. Management believes that these revenues will increase in future periods by the utilization of a portion of our recent increases in working capital This new capital will allow us to make improvements in the revenues streams and profitability of our audiology practices. Management has signed a contract to open an additional audiological facility which will concentrate its efforts on early intervention child care in the field of audiology and believes that the reimbursement rates and lower costs at this location will add to both revenues and profitability. Although Management believes that this intended expansion in audiological services will increase revenues and profitability, Management can not be certain that the result of these efforts will succeed. Management's expectations are that the acquisition of Comprehensive Network Solutions and the marketing of the medical health care discount cards will significantly add to both revenues and profitability. It should be noted that the expenses related to the sales and marketing of these discount cards will initially utilize major portions of the additional working capital realized in the last six months. (See Outlook) THREE MONTHS ENDED MAY 31, 2004 COMPARED TO THREE MONTHS ENDED MAY 31, 2003 Sales for the first quarter of fiscal year ended 2004 and 2003 were $115,479 and $103,663, respectively. Management attributes the revenue increase to be due to recognition of revenues from Comprehensive Network Solutions, Inc. which was acquired March 1, 2004. Revenues from the audiological segment of the business have not increased as anticipated by management. This can be attributed to management being actively involved in pursuing potential merger and/or acquisition candidates in related fields, which have diminished marketing efforts by the company to attempt to increase the number of facilities being serviced and therefore adding to our revenue base. 8 Cost of sales was $71,912 and $73,280, respectively. The minimal increase was due to the fact that revenues also increased in approximately the same proportions and management attempts to contain costs in the audiological portion of the business. General and administrative costs were $201,552 and $54,843, respectively. The difference is attributable to the costs related to the purchase of Comprehensive Network Solutions, Inc. which included consulting fees, administration fees and other related legal and accounting expenses. For the most part the increase was due to consulting fees which are currently being amortized and which were substantially paid for by the issuance of our restricted common stock. LIQUIDITY AND CAPITAL RESOURCES Cash flows from operating activities were $(186,952) and $19,567, respectively. Cash flows from financing activities were $573,755 and $25,000, respectively. These changes were due primarily to the issuance of restricted common stock for the acquisition of Comprehensive Network Solutions, Inc. totaling $405,050 and proceeds from the sale of restricted common stock in the amount of $163,300 as well as the proceeds from a capital lease of $5,405. Working capital totaled $504,052 and $24,305, respectively for the quarter ended May 31, 2004 and May 31, 2003, respectively. The increase is working capital was attributable to an increase in cash of $183,873, an increase in accounts receivable of $35,630; an increase in prepaid expenses of $91,010; and an increase in stock subscription receivables of $174,000. For the most part, management believes that these increase were due to its ability to raise additional capital based upon interest generated by the acquisition of Comprehensive Network Solutions, Inc. and its medical care discount card. We anticipate that this medical care discount card will be marketed by Comprehensive as well as Nantucket. Outlook On March 1, 2004 pursuant to a Stock Purchase Agreement, we acquired one hundred percent (100%) of the issued and outstanding shares of common stock of Comprehensive Network Solutions, Inc. based in Austin, Texas from the Comprehensive shareholders in consideration for the issuance of a total of 250,000 restricted shares of our common stock to the Comprehensive shareholders. Pursuant to the Agreement, Comprehensive became our wholly owned subsidiary. Additional consideration of $60,000 was also paid to Comprehensive to be used as working capital and we assumed a liability of $25,000 for marketing services performed by an individual. Such liability was satisfied through the issuance of 25,000 shares of our restricted common stock to such individual. All shares issued in this transaction have a holding period of two years. Comprehensive Network Solutions, Inc. was organized in June 2002 with headquarters in Austin, Texas. The company has been focused on specialty health benefits products, including three levels of provider networks and one limited indemnity medical insurance plan. These products have been trademarked as ChiroCare Select, ChiroCare Advantage, ChiroCare Optima and CNS 500 Plan. The company is currently working on expanding its product with additional benefits and alternative benefit funding options. These new expanded products will be offered through a captive retail sales operation to individuals and small employers; and customized private label versions of the products through its broker and consultant relationships to associations, unions political subdivisions and large employers. The offerings are alternative cost and quality benefit solutions to prospects and clients who are uninsured or underinsured through existing traditional defined benefit health plans. Comprehensive Network Solutions, Inc. and its parent, Nantucket Industries will specialize in creating, marketing and distributing value added healthcare savings programs, services, and products. Together the Company will give individuals and families access to healthcare providers offering up to 16 major healthcare services at significantly discounted fees for a low annual fee. It is intended to market these products predominantly to underserved markets where individuals either have limited health benefits, or no insurance. These markets may vary widely from senior populations with Medicare (no prescription benefits), part-time employees, to some of the over 40 million uninsured in the United States looking for lower cost medical services and access to providers. 9 Although the Company does not sell insured plans the discounts realized by its members through its programs typically range from 10% to 75% off providers' usual and customary fees. The Company's programs require members to pay the provider at the time of service, thereby eliminating the need for any insurance claims filing. These discounts, which are similar to managed care discounts, typically save the individual more than the cost of the program itself. Membership Service Programs The Company will initially offer memberships to individuals, large employers, unions, union benefits funds, associations and insurance companies. Cardholders will be offered discounts for products and services ranging from 10% to 75% depending on the area of coverage and the specific procedures. Below are examples of the range of discounts in the major service categories: Discount Off Service Retail - ------- ------ Dental Care 10-45% Vision Care Prescription eyeglasses 10-60% Contact Lenses 10-60% Sunglasses 20-50% Lasik (vision correction) 10-30% Hearing Aids 15-40% Prescription Drugs 10-50% Chiropractic Care 25% Orthodontics 23-35% Physical Therapy 15-20% Fitness Centers Preferred Rate Acupuncture 25% Physicians 20%-40% Hospitals 20%-50% The Company anticipates that it will be adding additional medical services and products in the course of the upcoming year. Our goal is to implement the Comprehensive business model initially in the North East and then expand nationwide. In order to implement these goals, we are interviewing potential qualified candidates to fill various positions of sales, marketing and administration. To date, we have already met with and presented our various discount health care products and services. We estimate that in order to achieve these goals, we will require financing from sources other than cash flow, within the next eighteen months, in an amount ranging from $750,000 to $1,000,000. Since the acquisition, we have been successful in raising approximately $2,000,000 through private equity offerings. Although we have previously been unsuccessful in raising significant capital, our management believes that the current financial market upturn as well as the benefits of the acquisition of Comprehensive Network Solutions, Inc. will assist us in potentially raising additional capital. Management believes that the acquisition of Comprehensive will add significant revenues and profitably during the upcoming year to the consolidated Nantucket family of businesses. The Company anticipates that it will change its name in the next quarter to HealthCare Solutions, Inc. in order to better reflect the direction that the Company is taking in expanding its marketing efforts in various segments of the healthcare industry. In addition, the Company expects to sign an employment agreement with Mr. Paul S. Rothman in the next quarter to become the President of the Company. John Treglia will remain in his other current positions with the Company. Mr. Rothman has been assisting the Company in the acquisition of Comprehensive Network Solutions, Inc. and the development and implementation of its new marketing concepts. 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse changes in market prices and rates. Our short-term debt bears interest at fixed rates; therefore our results of operations would not be affected by interest rate changes. Item 4. Controls and Procedures ----------------------- Evaluation of disclosure controls and procedures Our principal executive officer and principal financial officer evaluated our disclosure controls and procedures (as defined in rule 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended) as of a date within 90 days before the filing of this annual report (the Evaluation Date). Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, the disclosure controls and procedures in place were adequate to ensure that information required to be disclosed by us, including our consolidated subsidiaries, in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported on a timely basis in accordance with applicable rules and regulations. Although our principal executive officer and principal financial officer believes our existing disclosure controls and procedures are adequate to enable us to comply with our disclosure obligations, we intend to formalize and document the procedures already in place and establish a disclosure committee. Changes in internal controls We have not made any significant changes to our internal controls subsequent to the Evaluation Date. We have not identified any significant deficiencies or material weaknesses or other factors that could significantly affect these controls, and therefore, no corrective action was taken. PART II - OTHER INFORMATION Item 1. Legal Proceedings: None Item 2. Changes in Securities: None Item 3. Defaults Upon Senior Securities: Not Applicable 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 b. Reports on Form 8-K On March 16, 2004 we filed a Form 8-K with the SEC to disclose the acquisition of Comprehensive Network Solutions, Inc. 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. COMPREHENSIVE HEALTHCARE SOLUTIONS, INC. By: /s/ John H. Treglia ---------------------------------------- JOHN H. TREGLIA CEO, CFO and President Dated: February 28, 2005 11 EX-31 2 f10q0504a1ex31_compre.txt 302 CERTIFICATION OF CERTIFYING OFFICER CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, John Treglia, certify that: 1. I have reviewed this amended Form 10-Q of Comprehensive Healthcare Solutions, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods present in this report; 4. The small business issuers other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals; (c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financing reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involved management or other employees who have a significant rile in the small business issuer's internal control over financial reporting. Date: February 28, 2005 /s/ John Treglia ------------------------------------- John Treglia Chief Executive Officer, Chief Financial Officer EX-32 3 f10q0504a1ex32_compre.txt 906 CERTIFICATION OF CERTIFYING OFFICER CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the amended Quarterly Report of Comprehensive Healthcare Solutions, Inc. (the "Company") on Form 10-Q for the quarter ended May 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John H. Treglia, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respect, the financial condition and result of operations of the Company. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. /s/ John H. Treglia - --------------------------------- Name: John H. Treglia Title: Chief Executive Officer and Chief Financial Officer Date: February 28, 2005 -----END PRIVACY-ENHANCED MESSAGE-----