-----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, VDIMVL2is/pNmflDOeeocU7OeUH1JdeLx4nxbcdLLUArPVT/ZV2PTX4WwH8yq9/D UrkY616twWeoWuryJK2VoA== 0001072588-02-000407.txt : 20021120 0001072588-02-000407.hdr.sgml : 20021120 20021120131314 ACCESSION NUMBER: 0001072588-02-000407 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021120 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: 02834446 BUSINESS ADDRESS: STREET 1: #250708 11TH AVENUE SW STREET 2: CALGARY CITY: ALBERTA CANADA STATE: C1 ZIP: T2R 0E4 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: WHITE CLOUD EXPLORATION INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: WATCHOUT INC DATE OF NAME CHANGE: 19991110 10QSB 1 cbsi10q902.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 September 30, 2002 [ ] 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) 200 Barclay Place SW Calgary, Alberta T2P 0E8 ------------------------------------------------------------- (Address of Principal Executive Offices) 403-818-6147 -------------- 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: September 30, 2002 CLASS Outstanding at September 30, 2002 - ---------------------------- --------------------------------- Common Stock $.001 Par Value 198,155,262 Preferred Stock 500,000 CORMAX BUSINESS SOLUTIONS INC. INDEX TO FORM 10-QSB FILING FOR THE QUARTER ENDED September 30, 2002
PART 1 - FINANCIAL INFORMATION PAGE ITEM 1. Financial Statements Independent Auditor's Review Letter F-1 Consolidated Balance Sheet as of September 30, 2002 (Unaudited) and December 31, 2001 F-2 Consolidated Statement of Operations for the Three and nine month period Ended September 30, 2002 and 2001 (Unaudited) F-3 Statements of Changes in Stockholders Equity (Deficit) F-4 Consolidated Statement of Cash Flows for the Nine month period ended September 30, 2002 and 2001 (Unaudited) F-5 Notes to Consolidated Financial Statements (Unaudited) as of September 30, 2002 F-6 Management Discussion and Analysis ITEM 2. Management's Discussion and Analysis or Plan of Operation. 7 PART II - OTHER INFORMATION ITEM 1. Legal Proceedings ITEM 6. Exhibits and Reports on Form 8-K
PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements Michael Johnson & Co., LLC. Business Information: 9175 Kenyon Ave., #100 Denver CO 80237 Phone: 303-796-0099 Fax: 303-796-0137 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 September 30, 2002 and the related consolidated statements of operations for the three month and nine month period ended September 30, 2002 and 2001 and the related consolidated cash flows for the nine month ended September 30, 2002 and 2001, included in the accompanying Securities and Exchange Commission Form 10-QSB for the period ended September 30, 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 September 30, 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 November 13, 2002 F-1
Cormax Business Solutions Inc. Consolidated Balance Sheet (Unaudited) (Audited) September 30, December 31, 2002 2001 ----------- ----------- ASSETS Current Assets Cash $ 6,667 $ 38,551 Accounts Receivable-trade 743 125,550 Prepaid Expenses 2,797 11,032 Inventory - 7,037 ----------- ----------- Total Current Assets 10,207 182,170 ----------- ----------- Investments 298 3,456 ----------- ----------- Fixed Assets Computer Equipment - 115,515 Computer Software - 5,177 Furniture & Fixtures - 31,026 ----------- ----------- - 151,718 Less Accumulated Depreciation - (46,473) ----------- ----------- Net Fixed Assets 96,129 105,245 ----------- ----------- Other Assets 9,287 - ----------- ----------- TOTAL ASSETS $ 19,791 $ 290,871 =========== =========== LIABILITIES & EQUITY Liabilities Current Liabilities Line of Credit 610 - Accounts Payable-trade 252,552 273,580 Accrued Expenses - 23,438 Accrued Interest Payable 203,000 96,466 Due to Stockholders 45,113 119,944 Notes Payable-Current Portion 259,926 274,955 ----------- ----------- Total Current Liabilities 761,200 788,383 ----------- ----------- Shareholders' Equity (Deficit): Preferred Stock, no par Value, 10,000,000 Shares authorized, 500,000 shares issued and 16,667 - Outstanding Common Stock, Par Value $.001 500,000,000 shares authorized, 198,155,262 and 36,640,160 issued and outstanding at June 30, 2002 and December 31, 2001 respectively 198,155 36,640 Additional Paid-In Capital 5,447,682 4,920,613 Subscription Receivable (97,332) - Retained Deficit (6,253,715) (5,454,765) Other comprehensive Income (Loss) (52,866) - ----------- ----------- Total Stockholders Equity (741,409) (497,512) ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS EQUITY $ 19,791 $ 290,871 =========== ===========
The accompanying notes are an integral part of these financial statements F-2
Cormax Business Solutions Inc. Consolidated Statement of Operations (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2002 2001 2002 2001 --------------- --------------- --------------- --------------- REVENUES: $ - $ 257,914 $ 409,237 $ 703,252 COST OF GOODS SOLD: - 64,065 324,111 277,264 --------------- --------------- --------------- --------------- GROSS PROFIT - 193.849 85,126 425,988 --------------- --------------- --------------- --------------- OPERATING EXPENSES: Selling and Marketing 792 29,661 47,403 84,400 General and Administrative 17,903 152,804 410,725 801,198 --------------- --------------- --------------- --------------- Total Expenses 18,694 182,465 458,128 885,598 --------------- --------------- --------------- --------------- OTHER REVENUES & EXPENSES: Interest Expense (106,531) (1,094) (107,411) (2,266) Interest Income - - - 2,386 Other Income - 5,373 - 48,071 Other Expenses (83,333) (361) (91,291) (51,692) Loss on sale of assets - - - (40,104) Loss on Investment (3,134) - (3,134) - --------------- --------------- --------------- ---------------- Total Other Revenues & Expenses (193,001) 3,918 (201,837) (43,605) --------------- --------------- --------------- ---------------- Net income (loss) from continuing Operations (211,696) 15,302 (547,838) (503,215) Discontinued operations: Loss from operations of Expanded Systems Inc. and Cormax Business Solutions Ltd. (118,154) - (118,154) - Loss on disposal of Expanded Systems Solutions Inc and Cormax Business Solutions Ltd. (97,036) - (97,036) - Extraordinary Item -Cancellation of debt - - - 119,720 NET INCOME (LOSS) $ (426,885) $ 15.302 $ (790,027) $ (383,495) ================ ================ ================ ================ Per Share information: Weighted Average Number Of Common Shares Outstanding 188,241,296 22,202,541 153,443,788 19,761,667 ---------------- ---------------- ---------------- ---------------- Net (loss) Per Common Share $ (0.00) $ 0.00 $ (0.01) $ (0.03) ================ ================ ================ =================
The accompanying notes are an integral part of this financial statement F-3
Cormax Business Solutions Inc. Statement of Changes in Stockholders' Equity Additional Other Total Preferred Stock Common Stock Paid-In Subscriptions Retained Comprehensive Stockholders' 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) ----------------------------------------------------------------------------------------------------------- Nel 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 500,000 16,667 - - - - - - 16,667 Stock issued for cash - - 9,896,200 9,896 255,094 - - - 264,990 Stock issued for services - - 109,173,663 109,174 26,975 - - - 136,149 Warrants Issued - - 5,000,000 5,000 245,000 (97,332) - - 152,669 Stock issued for cancellation of debt - - 28,522,033 28,522 - - - - 28,522 Other Comprehensive Income (Loss) - - - - - - - (52,866) (52,866) Net Loss - - - - - - (790,027) - (790,027) ----------------------------------------------------------------------------------------------------------- Balance - September 30,2002 500,000 16,667 198,155,262 198,155 5,447,682 (97,332) (6,253,715) (52,866) (741,409) ===========================================================================================================
F-4
Cormax Business Solutions Inc. Consolidated Statement of Cash Flows (Unaudited) Nine months ended September 30, 2002 2001 ---------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES NET LOSS FOR THE PERIOD $ (790,027) $ (383,495) Adjustments to reconcile net income to net cash Used in operating activities: Depreciation (46,473) 31,132 Stock Issued for Services 136,149 446,006 Loss on sale of assets - 40,104 Stock Issued in Lieu of Debt 28,522 - Debt Forgiveness - (119,720) Changes in Assets and liabilities: (Increase) In Accounts Receivable 113,730 5,994 (Increase) in Prepaid Expenses 4,240 (10,900) (Increase) In Inventory & contract in Progress 11,032 (131,692) (Decrease) in Accounts Payables (21,028) (465,323) (Decrease) in Accrued Expenses 74,032 (27,837) --------------- --------------- Net Cash used in Operating Activities (489,825) (820,520) --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of Expanded Systems - 418,697 Purchase of Investments 3,158 (4,205) Proceeds From Sale of Fixed Assets - 7,674 Capital Expenditures 151,718 1,441 --------------- --------------- Net Cash Used in Investing Activities 154,867 423,607 --------------- --------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Sale of Stock 281,657 129,461 Line of Credit 610 - Due to Stockholders 35.826 98,763 Proceeds/Payments from Notes Payable-Net (15,029) 27,018 --------------- --------------- Cash Flows Provided by Financing Activities 303,064 255,242 --------------- --------------- Net (decrease) Increase in Cash and Cash Equivalents (31,884) 50,603 Cash and Cash Equivalents at Beginning of the Period 38,551 3,471 --------------- --------------- Cash and Cash Equivalents at the End of the Period $ 6,667 $ 54,074 =============== =============== Supplemental Information: Cash Paid for interest $ (106,534) $ 2,266 =============== =============== Cash Paid For Income Taxes $ - $ 2,809 =============== ===============
The accompanying notes are an integral part of this financial statement F-5 Cormax Business Solutions, Inc. Notes to Consolidated Financial Statements (Unaudited) as of September 30, 2002 1. Presentation of Interim Information In the opinion of the management of Cormax Business Solutions, Inc., the accompanying unaudited consolidated financial statements include all normal adjustments considered necessary to present fairly the financial position as of September 30, 2002, and the results of operations for the three months and nine months ended September 30, 2002 and 2001, and cash flows for the nine months ended June 30, 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 consolidated financial statements and notes for the fiscal year ended December 31, 2001. 2. Capital Stock Transactions August 13, 2002 The Board of Directors has elected to repurchase Todd Violette's Class A Preferred and all common stock related to the Convertible Preferred under the terms outlined in the December 26, 2001 8-K. Mr. Violette has returned 100,000,000 million shares of common stock back to the treasury of Cormax and holds only the 1,000,000 shares of Convertible Preferred. The Board expects to complete the repurchase October 31, 2002. October 17, 2002 Todd Violette transferred the 1,000,000 shares of preferred stock to Ingenuity Marketing an effect the return to treasury of the 100,000,000 million share of common stock. October 17, 2002 the company signed a separation agreement with Mr. Violette. Mr. Violette received five million shares of restricted stock and was allowed to exercise two million options. Mr. Violette gave a release to the company for all money owe to him. 3. Discontinued Operations On September 1,2002, the Company decided to rationalize its two operating subsidiaries, Expanded Systems Solutions Inc. and Cormax Business Solutions Ltd., thereby discontinuing distribution and support of technology services and IT solutions. The operating loss to date of discontinued operations, relating entirely to this division, was ($118,154). The loss on disposal of ($97,036) represents the write-down of the inventory, fixed assets, technology and investment at the date of discontinuance of operations together with the expenses related to the discontinuance of activities. F-6 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 September 30, 2002, we had no revenues from continuing operations compared to $257,914 in the same period in 2001. We incurred general and administrative expenses of $410,725 for the nine-month period ended September 30, 2002 and $801,198 for the nine-month period ended September 30, 2001. Net loss in the three-month periods ended September 30, 2002 was ($426,885) or ($0.00) per share compared to net income of $15,302 or $0.00 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, pay roll taxes, postage, professional fees, telephone and travel. The decrease in general and administrative expenses during the three month period ended September 30, 2002 as compared to the three month period ended September 30, 2001 is primarily attributable to the discontinuation of the operating subsidiaries Expanded Systems Solutions Inc. and Cormax business Solutions Ltd. 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 September 30, 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 September 30, 2002 we had a retained deficit of ($6,253,715) compared to retained deficits of ($4,912,609) and ($5,454,765) at September 30, 2001 and December 31, 2001, respectively. As at September 30, 2002, we had total current assets of $10,207 and total current liabilities of $761,200 or negative working capital of ($750,993). 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 September 30, 2001 we had total current assets of $253,470, and total current liabilities of $764,496 or negative working capital of ($511,026). 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 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULT UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION In October, 2002, Todd Violette resigned as President, CEO, and Director In October, 2002, Grahame Entwistle resigned as a Director. In October, 2002, Peter Leeuwerke was appointed President and sole Director. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were made for the period for which this report is filed. Form 8-K filed June 27, 2002 announcing a stock dividend to shareholders. Form 8-K filed September 3, 2002 announcing the return of the common stock from the preferred shares and the take over by Ingenuity marketing. 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/ Peter Leeuwerke - ---------------------------- Peter Leeuwerke, President Dated: This 16th day of November 2002 EX-99.14 OTH CONSENT 3 ex99-14.txt EXHIBIT 99.14 CERTIFICATION 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 Quarterly Report of Cormax Business Solutions, Inc. (the "Company") on Form 10-QSB for the period ending September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"). I, Peter Leeuwerke, President and CEO of the company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief. (1) The Report fully complies with the requirements of Sction 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 respects, the financial condition and results of operations of the Company. /s/ Peter Leeuwerke -------------------------------- Peter Leeuwerke, President/CEO Dated: 11/19/02 -----END PRIVACY-ENHANCED MESSAGE-----