10QSB 1 cgi0602qsb.txt FOR THE QUARTER ENDED JUNE 30, 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [Mark One] [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXHANGE ACT OF 1934 For the quarterly period ended : June 30, 2002 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 33-19980-D CGI HOLDING CORPORATION ----------------------- (Exact name of small business issuer as specified in its charter) Nevada 87-0450450 ----------------------------- --------------------------- State of other jurisdiction of I.R.S. Employer I.D. No. incorporation or organization 300 N MANNHEIM ROAD, HILLSIDE, ILLINOIS 60162 ------------------------------------------ -------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code (708) 547-0401 ----------------- 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 Company was required to file such reports), and (2) has been subject to such filing requiremenst for the past 90 days. Yes [x] No [ ] Yes [ ] No[x] 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: 15,599,627 shares of its $0.001 par value common stock as of August 12, 2002 Transitional Small Business Disclosures Format (check one) Yes [ ] No [x] CGI HOLDING CORPORATION FORM 10-QSB For the quarter ended June 30, 2002 INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Item 2. Managements Discussion and Analysis of Financial Conditions and Results of Operations PART II. OTHER INFOMRATION Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Securities Holders Item 5. Other Information Signature PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS CGI HOLDING CORPORATION, INC. CONSOLIDATED BALANCE SHEET JUNE 30, 2002, DECEMBER 31, 2001 AND JUNE 30, 2001 JUNE 30 DECEMBER 31, JUNE 30 2002 2001 2001 (unaudited) (audited) (unaudited) ----------- ------------ ----------- CURRENT ASSETS Cash 205,104 73,118 115,020 Accounts Receivable 784,895 348,029 2,364,906 Allowance for Bad Debts (52,127) (14,999) (57,143) Escrow Deposit 400,000 - - Inventory - - 26,763 Other Current Assets 133,293 31,686 85,088 Loans Receivable-Employees 12,667 12,667 - Costs and Estimated Earnings in Excess of Billings - 17,800 - Other Notes Receivable 200,000 550,000 350,000 Deferred Tax Asset 158,250 158,250 221,265 Advances to ACS Construction - 830,708 876,990 Current Assets of Discontinued Operations - - 956,782 ----------- ------------ ----------- Total Current Assets 1,842,082 2,007,259 4,939,672 ----------- ------------ ----------- PROPERTY, PLANT AND EQUIPMENT Property, Plant and Equipmet 947,625 226,834 389,787 Less:Accumulated Depreciation (102,401) (31,718) (124,263) ----------- ------------ ----------- Subtotal 845,224 195,115 265,524 Fixed Assets of Discontinued Operations(Net) - - 481,300 ----------- ------------ ----------- NET PROPERTY, PLANT AND EQUIPMENT 845,224 195,115 746,824 ----------- ------------ ----------- OTHER ASSETS Goodwill - 2,367,041 2,709,012 Good Faith Deposit - - 80,000 Loans Receivable-Employees 222,333 222,333 - Deferred Tax Asset 371,050 371,050 - Other Assets 93,777 167,228 112,826 Other Assets of Discontinued Operations - - 84,165 ----------- ------------ ----------- TOTAL OTHER ASSETS 687,160 3,127,653 2,986,003 ----------- ------------ ----------- TOTAL ASSETS 3,374,466 5,330,027 8,672,499 =========== ============ =========== CURRENT LIABILITIES Current Portion of Long Term Debt 784,271 332,729 926,727 Notes Payable-Line of Credit 1,361,090 1,024,618 70,100 Accounts Payable 354,596 265,973 733,972 Billings in Excess of Costs and Estimated Earnings 113,341 Short-Term Borrowings - - - Accrued Corporate Taxes - 29,712 361,078 Accrued Liabilities 144,140 17,414 160,840 Deferred Revenue 341,547 304,835 364,361 Loan Payable- Shareholder - - 467,000 Current Liabilities of Discontinued Operations - - 500,298 ----------- ------------ ----------- TOTAL CURRENT LIABILITIES 3,098,985 1,975,281 3,584,376 ----------- ------------ ----------- LONG TERM LIABILITIES Long-Term Debt, Net of Current Portion 128,634 151,415 288,459 Deferred Income Tax - 49,652 Loan Payable-Shareholder 189,229 153,132 286,637 Long Term Liabilities of Discontinued Operations - - 419,153 ----------- ------------ ----------- TOTAL LONG TERM LIABILITIES 317,863 304,547 1,043,901 ----------- ------------ ----------- STOCKHOLDERS' EQUITY Preferred Stock, $0.001 par value, 5,000,000 shares authorized; no shares issued or outstanding - - - Common Stock, $0.001 par value, 100,000,000 shares authorized, 18,099,627 shares issued and 15,599,627 outstanding 18,099 17,999 17,416 Additional Paid In Capital 5,070,967 5,056,067 4,969,150 Accumulated Deficit (4,591,449) (1,623,868) (592,344) Treasury Stock (540,000) (400,000) (350,000) ----------- ------------ ----------- TOTAL STOCKHOLDERS' EQUITY (42,382) 3,050,198 4,044,222 ----------- ------------ ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 3,374,466 5,330,027 8,672,499 =========== ============ =========== CGI HOLDING CORPORATION, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY PERIOD ENDED JUNE 30, 2002 COMMON COMMON PAID-IN RETAINED TREASURY SHARES STOCK CAPITAL EARNINGS STOCK ---------- -------- --------- ---------- ------------ BALANCE:JANUARY 1, 2001 10,229,779 11,230 3,119,381 (1,133,961)(350,000) ISSUED 6,186,515 IN THE PURCHASE OF WORLDMALL.COM ON MARCH 27, 2001 6,186,515 6,186 1,849,769 PURCHASED 500,000 SHARES ON JULY 20, 2001 FOR $0.10/SHARE (500,000) (50,000) SOLD 200,000 SHARES AT $.15 PER SHARE ON 12/1/01 200,000 200 29,800 SOLD 333,333 SHARES AT $.15 PER SHARE ON 12/17/01 333,333 333 49,667 SOLD 50,000 SHARES AT $.15 PER SHARE ON 12/31/01 50,000 50 7,450 2001 NET LOSS (489,907) ---------- ---------- ---------- ---------- ---------- BALANCE:DECEMBER 31, 2001 16,499,627 17,999 5,056,067 (1,623,868)(400,000) SOLD 100,000 SHARES AT $0.15 PER SHARE ON 1/02/02 100,000 100 14,900 PURCHASED 1,000,000 SHARES ON APRIL 29, 2002 FOR $0.14/SHARE (1,000,000) (140,000) NET LOSS (2,967,581) ---------- ---------- ---------- ---------- ---------- BALANCE: MARCH 31, 2002 15,599,627 18,099 5,070,967 (4,591,449)(540,000) ========== ========== ========== ========== ========== CGI HOLDING CORPORATION, INC. CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2002 AND 2001 SIX MONTHS ENDED THREE MONTHS ENDED 2002 2001 2002 2001 ------------ ------------ ------------ ----------- SALES 2,715,227 4,947,153 1,485,578 2,588,454 COST OF GOODS SOLD 1,501,546 2,712,206 1,082,260 1,370,909 ------------ ------------ ------------ ----------- GROSS PROFIT 1,213,681 2,234,947 403,318 1,217,545 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,410,938 1,424,930 517,433 1,008,766 ------------ ------------ ------------ ----------- INCOME(LOSS) FROM OPERATIONS (197,257) 810,017 (114,115) 208,779 ------------ ------------ ------------ ----------- OTHER INCOME (EXPENSES) Impairment of Goodwill (2,367,041) - - - Other Income(Expense) (335,000) 107,478 - 69,449 Interest Income - 3,095 - 20 Interest Expense (68,283) (68,853) (50,764) (37,402) ------------ ------------ ------------ ----------- TOTAL OTHER INCOME (EXPENSE) (2,770,324) 41,720 (50,764) 32,067 ------------ ------------ ------------ ----------- INCOME(LOSS) BEFORE CORPORATE INCOME TAXES (2,967,581) 851,737 (164,879) 240,846 INCOME TAX PROVISION - 340,695 - 130,214 ------------ ------------ ------------ ----------- NET INCOME(LOSS) FROM CONTINUING OPERATIONS (2,967,581) 511,042 (164,879) 110,632 INCOME FROM DISCONTINUED OPERATIONS (NET OF TAX OF $20,383 AND $14,622) - 30,575 - 21,932 ------------ ------------ ------------ ----------- NET INCOME(LOSS) (2,967,581) 541,617 (164,879) 132,564 ============ ============= ============ =========== NET INCOME)LOSS)PER COMMON SHARE FROM CONTINUING OPERATIONS ($0.18) $0.04 ($0.01) $0.01 ============ ============ ============= =========== NET INCOME PER COMMON SHARE FROM DISCONTINUED OPERATIONS $0.00 $0.00 $0.00 $0.00 =========== ============ ============== =========== NET INCOME(LOSS) PER COMMON SHARE ($0.18) $0.04 ($0.01) $0.01 ============ ============ ============= =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 16,425,205 13,476,845 16,779,421 16,416,294 ============ ============ ============= =========== CGI HOLDING CORPORATION, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED) SIX MONTHS ENDED JUNE 30, 2002 AND 2001 2002 2001 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net profit(Loss) (2,967,581) 541,617 Non-Cash Items Included in Net Profit(Loss) Depreciation 70,683 52,359 Amortization 2,367,041 141,883 Allowance for Bad Debts 37,128 (8,001) Allowance for Impaired Assets 350,000 - OTHER CHANGES: Change in Accounts Receivable (436,866) (1,041,692) Change in Inventory - (24,064) Change in Other Current Assets (83,807) 16,059 Change in other Assets 73,451 17,384 Change in Accounts Payable 88,623 (155,281) Change in Accrued Expenses 126,726 (199,245) Change in Accrued Income Taxes (29,712) 229,270 Change in Deferred Revenue 36,712 364,361 Change in Billings in Excess of Costs and Estimated Earnings 113,341 - Change in Good Faith Deposit - (349,500) ------------ ------------ NET CASH CHANGE FROM OPERATING ACTIVITIES (254,261) (414,850) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Fixed Assets Acquired (23,331) (56,578) Escrow Deposit (400,000) Received from ACS Construction 210,000 - Cash acquired in acquisition - 22,670 ------------ ------------ NET CASH CHANGE FROM INVESTING ACTIVITIES (213,331) (33,908) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Principal Payments Made (165,394) (76,471) Change in Line of Credit 336,472 (847,232) Proceeds from Loans 500,000 400,000 Proceeds from Sale of Stock 15,000 - Proceeds from Shareholder Loans 53,500 506,637 Purchase of Treasury Stock (140,000) - ------------ ------------ NET CASH CHANGE FROM FINANCING ACTIVITIES 599,578 (17,066) ------------ ------------ NET CASH CHANGE 131,986 (465,824) CASH BALANCE:JANUARY 1 73,118 582,972 ------------ ------------ CASH BALANCE: MARCH 31 205,104 117,148 ============ ============ Supplemental Information Interest Paid 68,283 114,719 Income Taxes Paid 29,712 131,808 Supplemental Schedule Of Noncash Investing and Financing Activities On March 27, 2001, the Company issued 6,186,515 shares of its common stock in a merger with WorldMall.Com. The Company received assets of 681,568 and liabilities of $841,557 and realized goodwill of $2,534,179. During the first quarter of 2002, the Company received equipment in the amount of $697,460, and assumed liabilities totalling $76,752 from ACS Construction Company in lieu of part of their outstanding obligations to the Company. CGI HOLDING CORPORATION, INC. FOOTNOTES TO FINANCIAL STATEMENTS JUNE 30, 2002 GOODWILL WRITE DOWN The first quarter of 2002 results reflect the elimination of goodwill amortization. The amount of the quarterly charge would have been $131,791 if their elimination had not occurred. However, the Company, in conjunction with the implementation of Statement of Financial Accounting Standard 142 (FASB 142), has elected to take a one time charge, reflected as 'Impairment of Asset' in the amount of $2,367,041. This goodwill was associated with the Company's acquisitions of World Mall.Com in March of 2001 and Safe Environment Corporation in August of 1997. The implementation of FASB 142 is required for fiscal years beginning after December 15, 2001. The new FASB requires an annual valuation of the goodwill as opposed to the periodic amortization under old rules. Management has elected to value the its goodwill acquired in the purchases of WorldMall.Com and Safe Environment Corporation at zero in light of their current operating results since acquisition. The total recorded cost of the goodwill at the time of acquisition of WorldMall.Com was $2,534,179 and the amount amortized through 2001 was $380,127. The original amount of goodwill associated with Safe Environment Corporation was $301,924 with $88,935 being recognized to date. MERGER WITH WORLDMALL.COM The Company acquired the common stock of WorldMall.Com on March 27, 2001. Pursuant to the merger all the issued and outstanding shares of common stock of WorldMall.Com were converted into shares of voting common stock of CGI Holding Corporation. At the time of the merger, 9,331,903 shares of WorldMall.Com were converted to 6,186,515 shares of CGI Holding Corporation. The market value of CGI stock on the date of the merger was $0.30 per share. WorldMall.Com was incorporated in October, 1999 in the State of New York. It is presently engaged in the internet industry and provides search engine enhancement services and an on-line shopping mall through which web sites may be accessed. The transaction was accounted for using the purchase method of accounting. The balance sheet included in this filing reflects the acquisition of WorldMall.Com. Effective July 1, 2002, Worldmall changed its name to Websourced, Inc. in connection with its reincorporation to North Carolina from New York. INCOME TAXES The Company has not recognized a deferred tax asset relating to the write down of its goodwill. The goodwill will be amortized for tax purposes for a 15 year period, expiring in the year ended 2016. The Company currently has net operating loss carryovers from the year ended 2001 and World Mall's carryover prior to the merger which totaled $2,603,002. No increase in the deferred tax asset will be recognized until future positive earnings can be projected. NOTES PAYABLE 2002 2001 ------------ ---------- M & T BANK This is a demand loan dated 3/23/01. The maximum amount available is $100,000. Interest is paid at prime plus one floating. 45,485 70,100 UNITED COMMUNITY BANK Note is a line of credit due July 13, 2002 with an interest rate of 6.50% 1,315,605 - MARINE BANK - LINE OF CREDIT Note was due on 9/1/01 and carried an interest rate of 10.00%. This note was secured by the assets of Trifinity, Inc. - 424,804 ------------ ---------- 1,361,090 494,904 ------------ ---------- THOMAS MOORE ASSOCIATION Note payable due June 30, 2002 with an interest rate of 8.50% 50,000 100,000 OTTO BARTH Note payable due June 30, 2002 with interest rate of 8.25%. 15,000 50,000 AUDREY LOVE Note payable due October 30, 2002 with an interest rate of 8.25%. 170,000 100,000 PAUL DOLL TRUST Note payable due June 1, 2002 with interest rate of 10.00%. 35,000 35,000 HIGH FALLS DEVELOPMENT Note dated August 25, 2000 at prime plus 2. Payments are $5,555.56 principal plus interest. 136,160 164,449 JOHN DIMARIA Note payable due September 15, 2001 with an interest rate o 10.00% - 100,000 COLE TAYLOR BANK This note was dated June 29, 2001 carrying an interest rate of prime plus 2 for 36 months. - 400,000 CIB BANK Note dated 4/29/02 and is due 4/29/03. The interest rate is 13.0% plus 1% per month until maturity as an additional provision. This note is secured by 1,000,000 shares of treasury stock that were acquired in the second quarter of 2002. 400,000 - NOTE PAYABLE - UNICYN Note dated 2/14/01 and is for 36 months at $2,196.19 principal plus interest per month. 44,131 - NOTE PAYABLE- AMERICAN EXPRESS 36 month note dated August 2000. Interest rate is 14.50% 15,436 - OTHER INSTALLMENT LOANS 47,178 15,736 UNION FEDERAL SAVINGS Note dated 8/20/99 with a 6 year amortization. This note was secured by the equipment of Trifinity, Inc. - 419,153 JOHN ENGLISH Note payable due 7/1/01 with an interest rate of 8.0%. - 250,000 ------------ ---------- 2,273,996 2,129,242 ============ ========== LOANS FROM SHAREHOLDERS The Company borrowed funds from shareholders to cover operating expenses. The total outstanding principal balance due as of June 30, 2002 was $189,229. The details of the balance on June 30, 2002 were as follows: John Giura 90,953 - No repayment terms. No interest paid or accrued. Pat Martin 98,276 - No repayment terms. No interest paid or accrued. NOTES RECEIVABLE In satisfaction of $550,000 of notes receivable owed to CGI from ACH Construction, the Company took a 40.5% interest in a residential housing development in St. Charles, MO (a suburb of St. Louis). The developer is engaged in the completion of the infrastructure and a model single family residence. When completed, the project will include 26 lots on 10.5 acres. It is estimated that the project will be built-out over a 24-36 month period commencing in the third quarter of 2002. Management has elected to write down their asset to $200,000, which reflects estimated liquidation value, due to the uncertainty of the project manager's intention and capacity to complete the project's build-out. PRESENTATION OF FINANCIAL STATEMENTS The financial statements reflect all adjustments which are, in the opinion of management, necessary to present a fair statement of the results for the six and three months ended June 30, 2002 and 2001. PRO FORMA STATEMENT OF OPERATIONS The following pro forma results of operations include the operations of WorldMall.Com for the period presented. CGI HOLDING CORPORATION, INC. PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2001 2001 ----------------- SALES 5,391,564 COST OF GOODS SOLD 3,045,852 ----------------- GROSS PROFIT 2,345,712 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,738,842 ----------------- INCOME FROM OPERATIONS 606,870 ----------------- OTHER INCOME (EXPENSES) Other Income 107,479 Interest Income 3,095 Interest Expense (88,877) ----------------- TOTAL OTHER INCOME (EXPENSE) 21,697 ----------------- INCOME BEFORE CORPORATE INCOME TAXES 628,567 INCOME TAX PROVISION 251,427 ----------------- NET INCOME FROM CONTINUING OPERATIONS 377,140 ================= NET INCOME PER COMMON SHARE FROM CONTINUING OPERATIONS $0.03 ================= WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 13,476,845 ================= ITEM II CGI HOLDING CORPORATION, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS FINANCIAL CONDITION Total assets of the Company at June 30, 2002 were $3,374,466 compared to $8,672,449 at June 30, 2001, reflecting a decrease of $5,297,983. This decrease, as discussed in the first quarter filing, was attributable to $1,522,247 of assets from discontinued operations and the write down of goodwill in the first quarter of $2,367,041. Total debt at June 30, 2002 was $3,416,848 as compared to $4,628,277 at June 30, 2001. The decrease of $1,211,429 resulted primarily from discontinued operations. The total stockholders' equity at June 30, 2002 was a negative $42,382 as compared to a positive $3,050,198 at December 31, 2001 representing a decrease of $3,092,580. This decrease is mainly due to the results of operations for the six months ended June 30, 2002, which will be discussed in that section. Liquidity and Capital Resources Cash flows for the six months ended June 30, 2002 were a positive $131,986 as compared to a negative $465,824 for the same period last year. Working capital at the end of the second quarter of 2002 was a negative $1,256,903 compared to positive working capital at December 31, 2001 of $31,978. The substantial negative results of the SECO subsidiary has made management acutely aware that the Company's liquidity position has been severely impaired, and that this impairment must be addressed, most likely by an infusion of new capital or a sale of assets. Results of Operations Sales for the six months and three months ended June 30, 2002 were $2,715,227 and $1,485,578 compared to $5,826,936 and $3,022,378 for the same periods last year. The decrease in sales for the six months of this year compared last year were $3,111,709 or 53.40%. The decrease in sales resulted in decreased gross profits of $1,213,681 in 2002 from $2,662,882 in 2001, a drop of $1,449,201. This was a direct result of SECO's drop in business from last year. Selling, general and administrative expenses were $1,426,849 in 2002 compared to $1,756,041 in 2001, a decrease of $329,192 or 18.75%. The decrease was not proportionate to sales due to the activities of Worldmall, purchased as of March 27, 2001, which contributed $846,778 to the total. The net loss from operations for the six months ended June 30, 2002 was ($2,967,581) compared to net income for the same period last year of $541,617. Included in the operating results was a one time charge to 'Impairment of Goodwill' of $2,367,041 in the first quarter of 2002. The results of operations on a per share basis were ($0.18) for the six months and ($0.01) for the three months ended June 30, 2002 compared to last years per share earnings of $0.04 and $0.01 for the six and three month periods ended June 30, 2001 respectively. Results of operations for the six months of 2002 would have been a loss of $600,450 or ($0.04) per share without the one time charge. Sales of SECO for the second quarter of 2002 were $375,835 compared to the second quarter of 2001 of $2,140,282, a decrease of $1,764,447. SECO's loss on operations in the second quarter of 2002 was ($221,612). Their pre tax profit for the second quarter of 2001 was $684,985. Certain anticipated contracts have been delayed and some never materialized due to the general slowdown of the economy. Difficulty in obtaining surety bonds also hindered SECO's business during the second quarter of 2002. Sales of Worldmall increased in the second quarter of 2002 to $1,109,743 from $448,172 for the same quarter in 2001. Worldmall's results of operations for the June quarter were $150,039 compared to a loss of ($211,284) for the June 2001 quarter. Effective July 1, 2002, Worldmall changed its name to Websourced, Inc. in connection with its reincorporation to North Carolina from New York. Management believes the stabilization of the World Mall operations has been accomplished by its KeywordRanking.com services. It is anticipated that a significant portion of its future cash flows will be required to satisfy repayment of debts incurred prior to stabilization. Consequently, World Mall's growth will be capital constrained until these debts are satisfied. Management of CGI, which was installed in December of 2001, has elected to pursue selected acquisitions of existing businesses in the Internet, software and financial services sectors. However, no acquisitions have been determined as of this filing. Segment Analysis INDUSTRY SEGMENT SIX MONTHS ENDED JUNE 30, 2002 SECO WORLDMALL CGI CONSOLIDATED ------------- ------------- ------------ -------------- SALES 711,298 2,003,929 - 2,715,227 COST OF SALES 579,713 921,833 - 1,501,546 ------------- ------------- ------------ -------------- GROSS PROFIT 131,584 1,082,096 - 1,213,681 SELLING AND ADMINISTRATION 422,241 846,778 141,918 1,410,938 ------------- ------------- ------------ -------------- INCOME FROM OPERATIONS (290,656) 235,318 (141,918) (197,257) ------------- ------------- ------------ -------------- OTHER INCOME (EXPENSE) IMPAIRMENT OF ASSETS (212,989) (2,154,052) (350,000) (2,717,041) OTHER INCOME(EXPENSE) - - 15,000 15,000 INTEREST INCOME - - - - INTEREST EXPENSE (20,924) (31,448) (15,911) (68,283) ------------- ------------- ------------ -------------- TOTAL (233,913) (2,185,500) (350,911) (2,770,324) ------------- ------------- ------------ -------------- INCOME BEFORE TAXES (524,570) (1,950,182) (492,830) (2,967,581) ============= ============= ============ ============== INDUSTRY SEGMENT THREE MONTHS ENDED JUNE 30, 2002 SECO WORLDMALL CGI CONSOLIDATED ------------- ------------- ------------ -------------- SALES 375,835 1,109,743 - 1,485,578 COST OF SALES 390,114 692,146 - 1,082,260 ------------- ------------- ------------ -------------- GROSS PROFIT (14,280) 417,597 - 403,318 SELLING AND ADMINISTRATION 186,408 251,717 79,307 517,433 ------------- ------------- ------------ -------------- INCOME FROM OPERATIONS (200,687) 165,880 (79,307) (114,115) ------------- ------------- ------------ -------------- OTHER INCOME (EXPENSE) IMPAIRMENT OF ASSETS - - - - OTHER INCOME(EXPENSE) - - - - INTEREST INCOME - - - - INTEREST EXPENSE (20,924) (15,841) (13,998) (50,763) ------------- ------------- ------------ -------------- TOTAL (20,924) (15,841) (13,998) (50,763) ------------- ------------- ------------ -------------- INCOME BEFORE TAXES (221,612) 150,039 (93,306) (164,878) ============= ============= ============ ============== INDUSTRY SEGMENT SIX MONTHS ENDED JUNE 30, 2001 SECO WORLDMALL CGI CONSOLIDATED ------------- ------------- ------------ -------------- SALES 4,498,981 448,172 - 4,947,153 COST OF SALES 2,403,180 309,027 - 2,712,207 ------------- ------------- ------------ -------------- GROSS PROFIT 2,095,801 139,145 - 2,234,946 SELLING AND ADMINISTRATION 801,372 341,109 282,449 1,424,930 ------------- ------------- ------------ -------------- INCOME FROM OPERATIONS 1,294,429 (201,964) (282,449) 810,016 ------------- ------------- ------------ -------------- OTHER INCOME (EXPENSE) IMPAIRMENT OF ASSETS - - - - OTHER INCOME(EXPENSE) 107,479 - - 107,479 INTEREST INCOME - - 3,095 3,095 INTEREST EXPENSE (41,707) (9,321) (17,825) (68,853) ------------- ------------- ------------ -------------- TOTAL 65,772 (9,321) (14,730) 41,721 ------------- ------------- ------------ -------------- INCOME BEFORE TAXES 1,360,201 (211,285) (297,179) 851,737 ============= ============= ============ ============== INDUSTRY SEGMENT THREE MONTHS ENDED JUNE 30, 2001 SECO WORLDMALL CGI CONSOLIDATED ------------- ------------- ------------ -------------- SALES 2,140,282 448,172 - 2,588,454 COST OF SALES 1,061,882 309,027 - 1,370,909 ------------- ------------- ------------ -------------- GROSS PROFIT 1,078,400 139,145 - 1,217,545 SELLING AND ADMINISTRATION 446,732 341,109 220,925 1,008,766 ------------- ------------- ------------ -------------- INCOME FROM OPERATIONS 631,668) (201,964) (220,925) 208,779 ------------- ------------- ------------ -------------- OTHER INCOME (EXPENSE) IMPAIRMENT OF ASSETS - - - - OTHER INCOME(EXPENSE) 69,449 - - 69,449 INTEREST INCOME - - 20 20 INTEREST EXPENSE (16,131) (9,321) (11,950) (37,402) ------------- ------------- ------------ -------------- TOTAL 53,318 (9,321) (11,930) 32,067 ------------- ------------- ------------ -------------- INCOME BEFORE TAXES 684,986 (211,285) (232,855) 240,846 ============= ============= ============ ============== Forward Looking Statements This report included forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements contain information regarding growth and earnings expectations based on the Company's current assumptions involving a number of risks and uncertainties. There are certain important factors that can cause actual results to differ materially from the forward looking statements, including, without limitation: adverse business or market conditions; size of Company debt and lack of liquiidity; the ability of the Company to secure and satisfy customers; and adverse competitive developments. Readers are cautioned not to place undue reliance on forward looking statements. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS NONE ITEM 2. CHANGES IN SECURITIES NONE ITEM 3. DEFAULTS UPON SENIOR SECURITIES NONE ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS NONE ITEM 5. OTHER INFOMRATION NONE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS NONE (B)REPORTS ON FORM 8-K NONE SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, CGI HOLDING CORPORATION DATED: AUGUST 12, 2002 BY: /S/ GERARD M. JACOBS ---------------------------------------- Gerard M. Jacobs, President and Chief Executive Officer DATED: AUGUST 12, 2002 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title /s/ Gerard M. Jacobs President and Chief Executive Officer -------------------- Gerard M. Jacobs