10QSB/A 1 cbsi10qa2-302.txt Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB/A Amendment #2 [X] QUARTERLY REPORT PURSUANT SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2002 [ ] TRANSITION REPORT PURSUANT SECTION 13 or 15(d) OF THE SECURUTIES 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 or other Jurisdiction of (IRS Employer Incorporation or organization) Identification Number) #250 708, 11th Ave S.W., Calgary, Alberta, Canada, T2R 0E4 ----------------------------------------------------------- (Address of Principal Executive Offices) (403) 296-0280 ------------------ (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 ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: March 31, 2002 CLASS Outstanding at March 31, 2002 ---------------------------- ----------------------------- Common Stock $.001 Par Value 56,988,393 Preferred Stock No Par Value 1,000,000
CORMAX BUSINESS SOLUTIONS INC. INDEX TO FORM 10-QSB FILING FOR THE QUARTER ENDED MARCH 31,2002 PAGE ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements Auditor's Report F-1 Balance Sheet at March 31, 2002 F-2 Statement of Operations for the Period January 1, 2002 to March 31, 2002 F-3 Statement of Cash Flow for the Period January 1, 2002 to March 31, 2002 F-4 Statment of Stockholders' Equity for the Period January 1, 2002 to March 31, 2002 F-5 Notes to Financials F-6 Item 2. Management's Discussion and Analysis or Plan of Operation. PART II - OTHER INFORMATION Item 1. Legal Proceedings Item 2. Changes in Securities and Use of Proceeds Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K Signatures
Michael Johnson & Co., LLC Certified Public Accountants 9175 East Kenyon Ave., Suite 100 Denver, Colorado 80237 Michael B. Johnson C.P.A. Telephone: (303) 796-0099 Member: A.I.C.P.A. Fax: (303) 796-0137 Colorado Society of C.P.A.s REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT To the Board of Directors Cormax Business Solutions, Inc. Calgary, Canada We have reviewed the accompanying consolidated balance sheet of Cormax Business Solutions, Inc. as of March 31, 2002 and the related consolidated statements of operations and cash flows for the three month period ended March 31, 2002 and 2001, included in the accompanying Securities and Exchange Commission Form 10-QSB for the period ended March 31, 2002. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with accounting principles generally accepted in the United States. We have previously audited, in accordance with auditing standards generally accepted in the United States, the consolidated balance sheet as of December 31, 2001, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein). In our report dated April 12, 2002, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of March 31, 2002 is fairly stated in all material respects in relation to the balance sheet from which it has been derived. /s/ Michael Johnson & Co., LLC. Michael Johnson & Co., LLC. Denver, Colorado May 2, 2002 F-1 PART I - FINANCIAL INFORMATION CORMAX BUSINESS SOLUTIONS INC. AND SUBSIDIARY Item 1. Financial Statements Consolidated Balance Sheets (unaudited) (audited) Mar 31, 2002 Dec. 31, 2001 ----------- ----------- ASSETS Current Assets Cash $ 13,503 $ 38,551 Accounts Receivable-trade 109,763 125,550 Work in Progress 3,387 - Prepaid Expenses 14,097 7,037 Inventory 10,987 11,032 ----------- ----------- Total Current Assets 151,737 182,170 ----------- ----------- Investments 3,432 3,456 ----------- ----------- Fixed Assets Computer Equipment 123,273 115,515 Computer Software 5,199 5,177 Furniture & Fixtures 35,592 31,026 ----------- ----------- 164,064 151,718 Less Accumulated Depreciation (54,849) (46,473) ----------- ----------- Net Fixed Assets 109,214 105,245 ----------- ----------- TOTAL ASSETS $ 264,383 $ 290,871 =========== =========== LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable-trade 279,955 273,580 Accrued Expenses 20,599 23,438 Accrued Interest Payable 101,289 96,466 Due to Stockholders 85,638 119,944 Notes Payable-Current Portion 274,149 274,955 ----------- ----------- Total Current Liabilities 761,631 788,383 ----------- ----------- Shareholders' Equity (Deficit): Preferred Stock, no par Value, 10,000,000 Shares authorized, 1,000,000 shares issued and Outstanding Common Stock, Par Value $.001 33,333 - 500,000,000 shares authorized, 56,988,393 and 36,640,160 issued and outstanding at March 31, 2002 and December 31, 2001 respectively. 56,988 36,640 Additional Paid-In Capital 5,228,927 4,920,613 Subscriptions Receivable (160,767) - Deficit (5,657,657) (5,454,765) Other Comprehensive Income (Loss) 1,928 - ----------- ----------- Total Shareholders' Equity (497,248) (497,512) ----------- ----------- TOTAL LIABILITIES & EQUITY $ 264,383 $ 290,871 =========== =========== see accountant's review report F-2 Cormax Business Solutions Inc. and subsidiary Consolidated Statements of Operations For the Three months Ended March 31, 2002 and 2001 (Unaudited) Three Months Ended March 31, 2002 March 31, 2001 --------------- --------------- REVENUES: $ 286,581 $ 110,970 COST OF GOODS SOLD: 245,610 - --------------- --------------- GROSS PROFIT 40,971 110,970 --------------- --------------- OPERATING EXPENSES: Selling and Marketing 41,780 - General and Administrative 198,868 133,996 --------------- --------------- Total Expenses 240,648 133,996 --------------- --------------- OTHER REVENUES & EXPENSES: Interest Expense (337) - Interest Income - - Other Income - 42,695 Other Expenses (2,879) (54,981) --------------- --------------- Total Other Revenues & Expenses (3,216) (12,286) --------------- --------------- Extraordinary Item -Cancellation of Debt - 119,720 NET INCOME (LOSS) $ (202,892) $ 84,408 ================ ================ Per Share information: Weighted Average Number Of Common Shares Outstanding 46,814,277 14,879,921 ---------------- ---------------- Net (loss) Per Common Share $ (0.00) $ 0.01 ================ ================ see accountant's review report F-3
Cormax Business Solutions Inc. and subsidiary Consolidated Statement of Cash Flows For the Three months ended March 31, 2002 and March 31, 2001 (unaudited) (unaudited) Three Months Ended March 31, 2002 March 31, 2001 ---------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES NET LOSS FOR THE PERIOD $ (202,892) $ 84,408 Adjustments to reconcile net income to net cash Used in operating activities: Depreciation and Amortization 8,376 3,729 Stock Issued for Services 6,650 80,281 Debt Forgiveness - (119,720) Goodwill - 159,974 Changes in Assets and liabilities: (Increase) In Accounts Receivable 15,787 (1,129,732) (Increase) In Inventory & Contract in Progress (3,342) (31,998) (Decrease) in Prepaid Expenses (7,060) - (Decrease) in Accounts Payable (6,375) 834,911 (Decrease) in Accrued Expenses (1,984) (7,468) --------------- ------------- Net Cash used in Operating Activities (190,841) (125,615) --------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES Capital Expenditures (12,346) (16,607) --------------- -------------- Net Cash Used in Investing Activities (12,346) (16,607) --------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds From Sale Of Stock 116,931 93,314 Due to Stockholders 62,012 61,204 Proceeds/Payments From notes Payable-Net (806) 32,124 --------------- -------------- Cash Flows Provided by Financing Activities 178,138 186,642 --------------- -------------- Net (decrease) Increase in Cash and Cash Equivalents (25,048) 44,420 Cash And Cash Equivalents at Beginning of the Period 38,551 3,471 --------------- -------------- Cash and Cash Equivalents at the End of the Period $ 13,503 $ 47,891 =============== =============== Supplemental Information: Cash Paid For Interest $ (337) $ - =============== =============== Income Taxes Paid $ 550 $ - =============== ===============
see accountant's review report F-4
CORMAX BUSINESS SOLUTIONS, INC. AND SUBSIDIARY Consolidated Statements of Stockholders' Equity (Unaudited) Additional Other Total Preferred Stock Common Stock Paid-In Subscriptions Retained Comprehensive Stock- holders' Shares Amount Shares Amount Capital Receivable Deficit Income (Loss) Equity ------------------------------------------------------------------------------------------------------------------------------------ Balance -December 31, 1997 1,503,024 $1,503 $1,003,029 $ (2,056,003) $ (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) ---------- ------- ----------- ------- ----------- ---------- ------------ --------- ------------ Net loss - - - - - - (1,570,017) - (1,570,017) ---------- ------- ----------- ------- ----------- ---------- ------------ --------- ------------ Balance - December 31, 2000 - - 12,051,921 12,052 3,483,855 - (4,529,114) - (1,033,207) ---------- ------- ----------- ------- ----------- ---------- ------------ --------- ------------ Net loss - - - - - - (925,651) - (925,651) ---------- ------- ----------- ------- ----------- ---------- ------------ --------- ------------ Balance - December 31, 2001 - - 36,640,160 36,640 4,920,613 - (5,454,765) - (497,512) ---------- ------- ----------- ------- ----------- ---------- ------------ --------- ------------ Issuance of Preferred Shares 1,000,000 33,333 - - - - - - 33,333 Stock issued for cash - - 4,326,200 4,326 96,164 (16,892) - - 83,598 Stock issued for services - - 300,000 300 6,350 - - - 6,650 Warrants Issued - - 4,200,000 4,200 205,800 (143,876) - - 66,125 Stock issued for cancellation of debt - - 11,522,033 11,522 - - - - 11,522 Other Comprehensive Income (Loss) - - - - - - - 1,928 1,928 Net Loss - - - - - - (202,892) - (202,892) ---------- ------- ----------- ------- ----------- ---------- ------------ --------- ------------ Balance - March 31, 2002 1,000,000 33,333 56,988,393 56,988 5,228,927 (160,767) (5,657,657) 1,928 (497,248) ========== ======= =========== ======= =========== ========== ============ ========= ============
see accountant's review report F-5 CORMAX BUSINESS SOLUTIONS, INC. AND SUBSIDIARY NOTES TO FINANCIAL STATEMENTS 1. Presentation of Interim Information In the opinion of the management of Cormax Business Solutions, Inc., the accompanying unaudited financial statements include all normal adjustments considered necessary to present fairly the financial position as of March 31, 2002, and the results of operations for the three months ended March 31, 2002 and 2001, and cash flows for the three months ended March 31, 2002 and 2001. Interim results are not necessarily indicative of results for a full year. The financial statements and notes are presented as permitted by Form 10-QSB, 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. Capital Stock Transactions On December 26, 2001, an 8K was filed by the Company for the issuance of Class A preferred shares. The Board of Directors agreed to sell Todd Violette 1,000,000 shares of Class A Preferred for $50,000 CDN and completion of his current employment contract. On April 6, 2002 Todd Violette gave notice to the Board of Directors for the conversion of 500,000 preferred shares into common stock pursuant to the terms outlined in the December 26, 2001 8-K. A total of 100,000,000 shares will be issued for the conversion. Binding the total issued and outstanding to 156,988,393 as of April 6, 2002. F-6 Item 2. Management's Discussion and Analysis or Plan of Operation. 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 March 31, 2002, we had revenues of $286,581 compared to $110,970 in the same period in 2001. We incurred general and administrative expenses of $198,868 for the three-month period ended March 31, 2002 and $133,996 for the three-month period ended March 31, 2001. Net loss in the three-month periods ended March 31, 2002 was ($202,892) or $.00 per share compared to net income of $84,408 or $.01 per share in the same period 2001. 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, payroll taxes, postage, professional fees, telephone and travel. The increase in general and administrative expenses during the three month period ended March 31, 2002 as compared to the three month period ended March 31, 2001 is primarily attributable to the increase in employee levels and operating activities. Liquidity and Capital Resources. The auditor's report accompanying our audited financial statements for the year ended December 31, 2001 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 March 31, 2002, 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 March 31, 2002 we had an accumulated deficit of $5,657,657 compared to accumulated deficits of $4,444,706 and $5,454,765 at March 31, 2001 and December 31, 2000, respectively. As at March 31, 2002, we had total current assets of $151,737 and total current liabilities of $794,964 or negative working capital of $643,227. At December 31, 2001, we had total current assets of $182,170 and total current liabilities of $788,383 or negative working capital of $606,213. At March 31, 2001 we had total current assets of $1,272,420, and total current liabilities of $2,147,213 or negative working capital of $874,793. 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 2. Changes in Securities On December 26, 2001, an 8K was filed by the Company for the issuance of Class A preferred shares. The Board of Directors agreed to sell Todd Violette 1,000,000 shares of Class A Preferred for $50,000 CDN and completion of his current employment contract. On April 6, 2002 Todd Violette gave notice to the Board of Directors for the conversion of 500,000 preferred shares into common stock pursuant to the terms outlined in the December 26, 2001 8-K. A total of 100,000,000 shares will be issued for the conversion. Binding the total issued and outstanding to 156,988,393 as of April 6, 2002. Item 6. Exhibits and Reports on Form 8-K No reports were filed on Form 8-K during the first quarter ending March 31, 2002. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly 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 14th day of May 2002.