-----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, IQEFCBb1TR1d1TjhK4a6v3R0TcUsz1pWvbTZHr+X5THy8WdNA8gdZGcLlhuxRHxC pKAoqlxCGOebGlR63k2pDQ== 0001072588-01-500222.txt : 20010821 0001072588-01-500222.hdr.sgml : 20010821 ACCESSION NUMBER: 0001072588-01-500222 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORMAX BUSINESS SOLUTIONS INC CENTRAL INDEX KEY: 0000736314 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 840959153 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-11424 FILM NUMBER: 1719221 BUSINESS ADDRESS: STREET 1: #250708 11TH AVENUE SW STREET 2: CALGARY ALBERTA CITY: CANADA T2R 0E4 STATE: C1 ZIP: 00000 BUSINESS PHONE: 888 261 2887 MAIL ADDRESS: STREET 1: #250708 11TH AVENUE SW STREET 2: CALGARY ALBERTA CITY: CANADA T2R 0E4 STATE: C1 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: WATCHOUT INC DATE OF NAME CHANGE: 19991110 FORMER COMPANY: FORMER CONFORMED NAME: WHITE CLOUD EXPLORATION INC DATE OF NAME CHANGE: 19920703 10QSB 1 cmxs10q63001.txt Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB [X] Quarterly report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly period ended June 30, 2001 [ ] Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition period from_______________ to _______________ 000-11424 ----------------------- (Commission File Number) CORMAX BUSINESS SOLUTIONS INC. ------------------------------- (Exact Name of Small Business Issuer as Specified in its Charter) UTAH 84-0959153 - ------------------------------- ---------------------------- (State of other Jurisdiction of (IRS Employer Identification Incorporation or Organization) Number) #250, 708 11th Avenue S.W., Calgary, Alberta, Canada, T2R 0E4 ------------------------------------------------------------- (Address of Principal Executive Offices) 877-322-8822 -------------- Issuer's Telephone Number Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (X) Yes ( ) No APPLICABLE ONLY TO CORPORATE ISSUER'S State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: June 30, 2001 CLASS Outstanding at June 30, 2001 - ---------------------------- ---------------------------- Common Stock $.001 Par Value 23,904,921 CORMAX BUSINESS SOLUTIONS INC. INDEX TO FORM 10-QSB FILING FOR THE QUARTER ENDED JUNE 30, 2001 PART 1 - FINANCIAL INFORMATION PAGE ITEM 1. Financial Statements Consolidated Balance Sheet as of June 30, 2001 (Unaudited) and December 31, 2000 3 Consolidated Statement of Operations for the Three and Six month period Ended June 30, 2001 and 2000 (Unaudited) 4 Consolidated Statement of Cash Flows for the Six month period ended June 30, 2001 and 2000 (Unaudited) 5 Statements of Changes in Stockholders Equity (Deficit) 6 Notes to Consolidated Financial Statements (Unaudited) as of June 30, 2001 7 Management Discussion and Analysis ITEM 2. Management's Discussion and Analysis or Plan of Operation. 7 PART II - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K Form 8-K filed on April 6, 2001 Form 8-K/A filed June 20, 2001 PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements CORMAX BUSINESS SOLUTIONS, LTD. Financial Statements For the Six Month Period Ended June 30, 2001
Cormax Business Solutions Inc. Consolidated Balance Sheet As of June 30, 2001 and December 31, 2000 (unaudited) (audited) June 30,'01 Dec. 31.'00 ----------- ----------- ASSETS Current Assets Cash $ 334 $ 3,471 Accounts Receivable-trade 402,824 62,799 Work in Progress 18,877 Inventory 31,725 Prepaid Expenses 11,267 ----------- ----------- Total Current Assets 465,027 66,270 ----------- ----------- Investments 12,935 8,280 ----------- ----------- Fixed Assets Computer Equipment 112,400 111,523 Computer Software 4,545 6,921 Furniture & Fixtures 30,762 26,151 ----------- ----------- 147,707 144,595 Less Accumulated Depreciation (32,730) (14,921) ----------- ----------- Net Fixed Assets 114,976 129,674 ----------- ----------- Other Assets Goodwill 166,050 Less Accumulated Amortization (4,000) ----------- ----------- Total Other Assets 162,050 ----------- ----------- TOTAL ASSETS $ 754,989 $ 204,224 =========== =========== LIABILITIES & EQUITY Liabilities Current Liabilities Bank Overdraft 47,511 Accounts Payable-trade 449,807 783,282 Accrued Expenses 111,771 105,682 Accrued Interest Payable 99,361 98,467 Notes Payable-Current Portion 268,823 250,000 ----------- ----------- Total Current Liabilities 977,273 1,237,431 ----------- ----------- Long-Term Debt Notes Payable 8,967 - Due to Stockholders 106,977 - ----------- ----------- Total Long-Term Debt 115,944 TOTAL LIABILITIES 1,093,217 1,237,431 Shareholders' Equity (Deficit): Preferred Stock, no par Value, 10,000,000 Shares authorized, no shares issued and Outstanding Common Stock, Par Value $.001 500,000,000 shares authorized, 23,504,921 issued and outstanding at June 30, 2001 and December 31, 2000, respectively 23,505 12,052 Additional Paid-In Capital 4,562,111 3,483,855 Deficit (4,923,911) (4,529,114) ----------- ----------- Total Shareholders Equity (338,228) (1,033,207) ----------- ----------- TOTAL LIABILITIES & EQUITY $ 754,989 $ 204,224 =========== ===========
The accompanying notes are an integral part of these financial statements F-1
Cormax Business Solutions Inc. Consolidated Statement of Operations For the Three and Six month periods Ended June 30, 2001 and 2000 (Unaudited) Three Months Ended Six Months Ended June 30, 2001 June 30, 2000 June 30,2001 June 30, 2000 --------------- --------------- --------------- --------------- REVENUES: $ 334,368 $ - $ 445,338 $ - COST OF GOODS SOLD: 213,199 213,199 - --------------- --------------- --------------- --------------- GROSS PROFIT 121,169 - 232,139 - --------------- --------------- --------------- --------------- OPERATING EXPENSES: Selling and Marketing 54,739 - 54,739 - General and Administrative 492,590 3,322,818 626,586 3,425,382 --------------- --------------- --------------- --------------- Total Expenses 547,329 3,322,818 681,325 3,425,382 --------------- --------------- --------------- --------------- OTHER REVENUES & EXPENSES: Interest Expense 1,172 1,172 Interest Income 2,386 2,386 Other Income 3 42,698 Other Expenses 79 55,060 Depreciation Expense 14,080 763 14,080 1,525 Loss on Sale of Assets 40,104 40,104 --------------- --------------- --------------- ---------------- Total Other Revenues & Expenses (53,046) (763) (65,332) (1,525) --------------- --------------- --------------- ---------------- Extraordinary Item -Cancellation of Debt - 119,720 NET INCOME (LOSS) $ (479,205)$ (3,323,581) $ (394,797) $ (3,426,907) ================ ================ ================ ================ Per Share information: Weighted Average Number Of Common Shares Outstanding 19,192,421 17,760,245 16,812,254 17,760,245 ---------------- ---------------- ---------------- ---------------- Net (loss) Per Common Share $ (0.02)$ (0.19) $ (0.02) $ (0.19) ================ ================ ================ =================
The accompanying notes are an integral part of this financial statement F-2
Cormax Business Solutions Inc. Consolidated Statement of Cash Flows For the Six months ended June 30, 2001 And June 30, 2000 (Unaudited) (unaudited) (unaudited) Six Months Ended Six Months Ended June 30, 2001 June 30, 2000 ---------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES NET LOSS FOR THE PERIOD $ (394,797) $ (3,427,312) Adjustments to reconcile net income to net cash Used in operating activities: Depreciation and Amortization 21,809 1,524 Stock Issued for Services 400,574 3,116,250 Debt Forgiveness (119,720) Changes in Assets and liabilities: (Increase) In Accounts Receivable (340,025) (Increase) In Inventory (50,602) (Decrease) in Prepaid Expenses (11,267) (11,016) (Decrease) in Accounts Payable & Accrued Expenses (326,491) (12,119) --------------- --------------- Net Cash used in Operating Activities (850,519) (332,673) --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of Expanded Systems 481,649 Purchase of Investments (4,655) (1,131,530) Proceeds From Sale of Fixed Assets 7,674 Capital Expenditures (3,112) --------------- --------------- Net Cash Used in Investing Activities 481,556 (1,131,530) --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES Stock Issued for Cash 153,549 Increase in Notes Payable 18,823 27,784 Bank Overdraft 47,511 Advances form Stockholders 106,977 Proceeds From Notes Payable 8,967 1,563,660 --------------- --------------- Cash Flows Provided by Financing Activities 335,827 1,591,444 --------------- --------------- Net (decrease) Increase in Cash and Cash Equivalents (3,137) 127,241 Cash And Cash Equivalents at Beginning of the Period 3,471 - --------------- --------------- Cash and Cash Equivalents at the End of the Period $ 334 $ 127,241 =============== =============== Supplemental Information: Interest Paid $ - $ 404 =============== =============== Income Taxes Paid $ - $ - =============== ===============
The accompanying notes are an integral part of this financial statement F-3
Cormax Business Solutions Inc. Statement of Changes in Stockholders' Equity Common Stock Additional Retained Total -------------------- Paid-in Earnings Stockholders' Shares Amounts Capital (Deficit) Equity --------- ---------- ---------- ------------ ------------ Balance-December 31,1997 $1,503,024 $ 1,503 $1,003,029 $(1,051,471) $(1,051,471) Net Loss - - - (856,896) (856,896) --------- ---------- ---------- ------------ ------------ Balance December 31,1998 1,503,024 1,503 1,003,029 2,912,899 (1,908,367) --------- ---------- ---------- ------------ ------------ Net Loss - - - (46,198) (46,198) --------- ---------- ---------- ------------ ------------ Balance December 31, 1999 1,503,024 1,503 1,003,029 (2,959,097) (1,954,565) --------- ---------- ---------- ------------ ------------ Stock Issued for Cancellation 35,000 35 35,000 - 35,035 Stock Issued for Services 8,003,897 8,004 2,445,826 - 2,453,830 Stock Issued for Subsidiary 2,510,000 2,510 - - 2,510 Net loss for Year Ended - - - (1,570,017) (1,570,017) --------- ----------- ---------- ------------ ------------ Balance-December 31,2000 12,051,921 12,052 3,483,855 (4,529,114) (1,033,207) --------- ----------- ---------- ------------ ------------ Stock Issued for Expanded Systems 400,000 400 232,605 - 233,072 Stock Issued for Cancellation 1,375,000 1,375 301,206 - 302,581 Stock Issued for Services 4,170,000 4,170 396,404 - 400,574 Stock Issued for Cash 5,508,000 5,508 148,041 - 153,549 Net income for Period - - - (394,797) (394,797) --------- ----------- ----------- ------------- ------------ Balance-June 30, 2001 23,504,921 23,505 4,562,111 (4,923,911) (338,228) --------- ----------- ----------- ------------- ------------
The accompanying notes are an integral part of this financial statement F-4 CORMAX BUSINESS SOLUTIONS, LTD. NOTES TO FINANCIAL STATEMENTS 1. Presentation of Interim Information In the opinion of the management of Cormax Business Solutions, Ltd., the accompanying unaudited financial statements include all normal adjustments considered necessary to present fairly the financial position as of June 30, 2001, and the results of operations for the three months and six months ended June 30, 2001 and 2000, and cash flows for the six months ended June 30, 2001 and 2000. Interim results are not necessarily indicative of results for a full year. The financial statements and notes are presented as permitted by Form 10-Q, and do not contain certain information included in the Company's audited financial statements and notes for the fiscal year ended December 31, 2000. 2. Acquisition of Expanded Systems Solutions On March 13, 2001 the Company entered into an agreement to purchase all of the issued and outstanding common shares of Expanded Systems Solutions, Inc. (Expanded). Expanded is a private company engaged in the business of installing wireless facilities and is a reseller of wireless equipment. The purchase became effective on March 30, 2001. The purchase price of the common shares was $200,000, and was paid by the issuance of 400,000 shares of the Company's common stock. The Company's shares are held by an escrow agent and are to be liquidated in satisfaction of the purchase price over a period of nine months. Should the escrow agent realize less than the $200,000 from the shares, the Company is required to pay the shortfall in cash within seven days following the end of the liquidation period. In the event there are shares remaining in the escrow account after realizing the $200,000, the escrow agent is to return the excess shares to the treasury of the Company. The company has accounted for the acquisition of the shares of Expanded as a purchase and the excess of the purchase price over the underlying net asset value of Expanded is shown as goodwill in the amount of $166,050 on the balance sheet at June 30, 2001. F-5 ITEM 2. Management's Discussion and Analysis and Results of Operations MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE FOLLOWING DISCUSSION OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL CONDITION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT. EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE DISCUSSION CONTAINED IN THIS REPORT CONTAINS "FORWARD-LOOKING STATEMENTS" THAT INVOLVE RISK AND UNCERTAINTIES. THESE STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES," "EXPECTS," "MAY," "WILL," "SHOULD" OR "ANTICIPATES" OR THE NEGATIVE THEREOF OR SIMILAR EXPRESSIONS OR BY DISCUSSIONS OF STRATEGY. THE CAUTIONARY STATEMENTS MADE IN THIS REPORT SHOULD BE READ AS BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING STATEMENTS WHEREVER THEY APPEAR IN THIS REPORT. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THIS REPORT. Result of Operations During the three-month periods ended June 30, 2001, we had revenues of $334,368 compared to nil in the same period in 2000. We incurred general and administrative expenses of $306,386 for the six-month period ended June 30, 2001 and $3,425,382 for the six-month period ended June 30, 2000. Net loss in the three-month periods ended June 30, 2001 was ($479,205) or ($.02) per share compared to net loss of ($3,323,581) or ($.19) per share in the same period 2000. We recognize revenues as they are earned, not necessarily as they are collected. Direct costs such as hosting expense, design cost and server expense are classified as cost of goods sold. General and administrative expenses include salaries, accounting, advertising, contract labor, bank charges, entertainment, equipment rental, insurance, legal, supplies, pay roll taxes, postage, professional fees, telephone and travel. The decrease in general and administrative expenses during the three month period ended June 30, 2001 as compared to the three month period ended June 30, 2000 is primarily attributable to the decrease in payroll expenses and consulting fees. Liquidity and Capital Resources. The auditor's report accompanying our audited financial statements for the year ended December 31, 2000 indicated that there is substantial doubt respecting our ability to continue as a going concern. The qualification was due to our need to generate positive cash flow from operations or obtain additional financing. During the quarter ended June 30, 2001, we were unable to generate positive cash flow. No assurance can be given that we will be able to achieve our cash flow or obtain our additional financing. We have incurred losses since the inception of our business. We expect to continue to incur losses until we increase our revenues while reducing costs of good sold and general and administrative expenses. We have been dependent on additional funding from lenders and investors to conduct operations. At June 30, 2001 we had a retained deficit of ($4,923,911) compared to retained deficits of ($6,523,818.21) and ($4,529,114) at June 30, 2000 and December 31, 2000, respectively. As at June 30, 2001, we had total current assets of $465,027 and total current liabilities of $977,273 or negative working capital of ($512,246). At December 31, 2000, we had total current assets of $66,270 and total current liabilities of $1,237,431 or negative working capital of ($1,171,161). At June 30, 2000 we had total current assets of $138,257.32, and total current liabilities of $3,680,448.53 or negative working capital of ($3,542,191.21). We currently have no material commitments for capital expenditures. We will continue to evaluate possible acquisitions or investments in businesses, products and technologies that are complimentary to ours. These may require the use of cash which would require us to seek financing. We believe that existing cash, investments and loans available under our present credit facilities will only be sufficient for the next 1 to 2 months. However, we may sell additional equity or debt securities or seek additional credit facilities to fund acquisition-related or other business costs. Sales of additional equity or convertible debt securities would result in additional dilution to our stockholders. We may also need to raise additional funds in order to support more rapid expansion, develop new or enhanced services or products, respond to competitive pressures, or take advantage of unanticipated opportunities. Our future liquidity and capital requirements will depend upon numerous factors, including the success of our service offerings and competing technological and market developments. PART II - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K Form 8-K filed April 6, 2001 for the acquisition of Expanded Systems Solutions Inc. An amendment to Form 8-K was filed June 20, 2001, including audited and pro forma financials for the acquisition of Expanded Systems Solutions Ltd. as disclosed in Form 8-K, April 6, 2001. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Cormax Business Solutions Inc. BY: /s/ Todd Violette ---------------------------- Todd Violette, President Dated: This 17th day of August 2001 -----END PRIVACY-ENHANCED MESSAGE-----