-----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, OFKnPkTe6M3z/H4VBXlWVy5SFyBjlCtWNt8hV/UZfmIM4UckuP7gkWsal/hDC0Tb AJxXwlOagBzI6ZpwoiEx7w== 0001013596-97-000019.txt : 19970318 0001013596-97-000019.hdr.sgml : 19970318 ACCESSION NUMBER: 0001013596-97-000019 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970317 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOLUTIONS INC CENTRAL INDEX KEY: 0000926844 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 841273503 STATE OF INCORPORATION: NV FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-24512 FILM NUMBER: 97557275 BUSINESS ADDRESS: STREET 1: 1635 NE LOOP 410 CITY: SAN ANTONIO STATE: TX ZIP: 78209 BUSINESS PHONE: 2108050599 MAIL ADDRESS: STREET 1: 1635 NE LOOP 410ESIN STREET 2: 6 VENTURE SUITE 207 CITY: SAN ANTONIO STATE: TX ZIP: 78209 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-QSB Quarterly Report Under the Securities Exchange Act of 1934 For Quarter Ended: January 31, 1997 Commission File Number: 0-24590 SUARRO COMMUNICATIONS, INC. (f/k/a SOLUTIONS, INCORPORATED) (Exact name of small business issuer as specified in its charter) Nevada (State or other jurisdiction of incorporation or organization) 84-1273503 (IRS Employer Identification No.) 1635 N.E. Loop 410, Suite 900 San Antonio, Texas (Address of principal executive offices) 78209 (Zip Code) (210) 805-0599 (Issuer's Telephone Number) SOLUTIONS, INCORPORATED 6 Venture, Suite 207 Irvine, California 92718 (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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: Yes __X__ No ____. The number of shares of the registrant's only class of common stock issued and outstanding, as of January 31, 1997 was 6,200,000 shares. PART I ITEM 1. FINANCIAL STATEMENTS. The unaudited financial statements for the nine month period ended January 31, 1997, are attached hereto. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS PLAN OF OPERATIONS The Company's principal business plan provides for the Company to deliver cost effective nationwide on-line business products and services, via the Internet, the world's largest electronic network. The Company anticipates deriving its revenue from two segments of the industry including (i) sales of its proprietary On-line products, and (ii) sales of Internet access services. Its initial proprietary on-line business services is known as Annual Reports On- line (ARO). In addition to ARO, the Company intends to offer a wide range of services to the Internet community including but not limited to Internet Access Services, Internet Consulting Services, Services Network Design, Installation and Support Services, Internet Advertising and Marketing Support including Creative Services and Concept Development, Web Page Design and Editing, Graphic Design and Image Manipulation, and Audio Clips. Management believes that the Company's flexible World Wide Web advertising and marketing strategy will allow its clients to gain immediate exposure to any web browser, free of charge. In addition to on-line revenue, the Company plans to consolidate and acquire several strategically located telecommunication customer bases under the Suarro banner. These consolidation targets have been identified, and are well positioned, with loyal customer bases. Management has commenced discussions with these consolidation targets. However, as of the date of this report, no definitive agreements have been reached. Of those targeted companies chosen for its consolidation program, each has complimentary operations servicing a specific segment of the telecommunications market. The Company's plan calls for combining customer bases and infrastructure, thereby reducing the overhead by economies of scale and increasing profitability. With this consolidation strategy, additional proven products and services should be obtained, which should add to the attractiveness of the Company to its customer base. As of the date of this report, the Company's objective is to propel the Company into a prominent position in the Internet and telecommunications services market. It is the Company's overall goal to continue to offer viable solutions to real world problems using the Internet as the distribution channel as well as provide businesses with a full suite of Internet services ranging from consulting to Internet business development activities. To accomplish this goal the Company has developed a plan to accelerate its marketing and sales activities, product development, and customer service. This should be accomplished with the consolidation of the strategically located telecommunication customer bases combined with a full scale cross marketing program between the customer bases. 2 As of the date of this report, the Company's securities are not liquid. There is no market for the Company's securities. Relevant thereto, the Company has submitted an application to the NASD for trading its common stock on the OTC Bulletin Board. The Company is currently awaiting response from the NASD and anticipates the stock being cleared for trading within the next fiscal quarter. However, there are no assurances that this will occur. The Company generated no revenues during the nine month period ended January 31, 1997. Management of the Company anticipates that the Company will not generate any significant revenues until the Company accomplishes its business objectives stated above. The Company anticipates accomplishing its business objective within a twelve month period, once the Company's stock has been cleared for trading by the NASD. Once this occurs, the Company can begin its plan of consolidation and acquisition creating a unified profitable customer base, thereby reducing overhead through economies of scale. It is the Company's intention to consummate its consolidation and acquisition strategy with issuance of its common stock. While these are the Company's proposed operations, there are no assurances that the Company will be successful. The Company is currently seeking a cash infusion of $500,000 in the form of debt or equity via private or potentially public means. The Company has not reached an agreement with any underwriters at this time and because the Company is not required to pay rent or salaries to any of its officers or directors, management believes that the Company has sufficient funds to continue operations through the foreseeable future. The cash infusion will be utilized for facilities expansion, equipment, supplies and a reserve account for operations. Relationships with outside services have already been established for accounting, legal, database marketing, front end development and program services. It is management's belief that out-source services should be used whenever viable. The Company anticipates the need for product research and development for the term of the outlined plan. Research and development is an ongoing process in the communications industry and is necessary to stay competitive in the industry. It is management's belief that most of the ongoing research and development will be conducted in-house within the companies that are targeted for consolidation or merger. While these are the Company's anticipations, there are no assurance that this will occur. The Company does not anticipate the purchase of a plant and/or significant equipment unless such assets are acquired through the consummation of a consolidation or merger. The Company does not anticipate any significant changes in the number of employees; however, in the event an acquisition or merger is consummated, this may change. 3 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 INFORMATION - NONE. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - The Registrant filed a Form 8-K on August 28, 1996 reporting a change in control of Registrant wherein the Company underwent a name change from Solutions, Inc. to Suarro Communications, Inc. Additionally, there was a change in the Registrant's Certifying Accountant and the resignation of the Registrant's directors. The Registrant filed amendments to this Form 8-K on September 6, 1996 (A-1) which provided for the change in accountants, October 28, 1996 (A-2) which provided for the financial statement of the business acquired, and November 1, 1996 (A-3) which provided the pro forma combined balance sheet and statements of operation, and January 15, 1997 (A-4) which provided the restated pro forma combined balance sheet and restated pro forma combined statements of operations. 4 SUARRO COMMUNICATIONS, INC. (A Development Stage Company) Unaudited Balance Sheet January 31, 1997 and April 30, 1996 (Unaudited)
(Unaudited) (Audited) January 31, April 30, 1997 1996 _________ ___________ ASSETS Cash $ 623 $ 1,870 Proprietary telecommunication and Internet costs 0 0 _________ ___________ TOTAL ASSETS $ 623 $ 1,870 ========= =========== LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 4,210 $ 0 --------- ----------- Total Liabilities $ 4,210 $ 0 --------- ----------- SHAREHOLDERS' EQUITY Preferred stock, no par value, Authorized 1,000,000 shares; issued and outstanding, 0 shares 0 0 Common Stock, $.001 par value Authorized 20,000,000 shares; issued and outstanding, 6,200,000 shares 6,200 6,200 Additional paid in capital (discount) (2,048) (2,048) Deficit accumulated during development (7,739) (2,282) ---------- ------------ Total Stockholders' Equity $ (3,587) $ 1,870 _________ ___________ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 623 $ 1,870 ========= ===========
5 SUARRO COMMUNICATIONS, INC. (A Development Stage Company) Unaudited Statement of Operations
Three Months Nine Months Nine Months Ended Ended Ended January 31, January 31 January 31 1997 1997 1996 ____________ ____________ _____________ Revenue $ 0 $ 0 $ 0 Expenses 2,959 5,457 0 ------------ ------------ ------------- Net Income (loss) $ (2,959) (5,457) $ 0 ============= ============= ============== Net Loss per share $ ($0.0005) ($0.0009) 0 ============ =============== =============== Common Shares Outstanding 6,200,000 6,200,000 6,200,000
6 SUARRO COMMUNICATIONS, INC. (A Development Stage Company) Unaudited Cash Flow Statement
Nine Months Nine Months Ended Ended January 31, January 31 1997 1996 ____________ ____________ Cash flows from operating activities: Deficit accumulated during the development stage $ (5,457) $ 0 Adjustment to reconcile the deficit accumulated during the development stage to net cash used in operating activities: Increase in accounts payable 4,210 0 ------------ ----------- Net cash used in operating activities (1,247) 0 ------------ ----------- Cash flows from investing activities 0 0 Cash flows from financing activities 0 0 ------------ ----------- Net decrease in cash (1,247) 0 Cash, beginning of period 1,870 0 ----------- ----------- Cash, end of period $ 623 $ 0 =========== =========== Supplemental disclosures; Noncash investing and financing activities $ 0 0 =========== ===========
7 SUARRO COMMUNICATIONS, INC. (A Development Stage Company) NOTES TO UNAUDITED FINANCIAL STATEMENTS January 31, 1997 (1) Unaudited Financial Statements The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles and applicable SEC guidelines pertaining to interim financial information. In the opinion of the company's management, all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of the financial statements, have been included therein. These statements should be read in conjunction with the Financial Statements and Notes thereto included in the company's audited financial statements for the periods ended August 16, 1996 and April 30, 1996. (2) Merger Effective August 16, 1996, the Company acquired all of the outstanding common stock of Suarro Communications, Inc. by issuing 5,200,000 shares of its authorized common stock. As a result of the consummation of this share exchange, the Company undertook a forward split of its common stock whereby 20 shares of common stock was issued in exchange for 1 share of common stock, increased its authorized capitalization to 20,000,000 shares of common stock and authorized 1,000,000 shares of preferred stock, and changed its name to Suarro Communications, Inc. The merger was accounted for by the "pooling of interests" method of accounting. (3) Proprietary Telecommunication and Internet Costs The costs of developing the proprietary telecommunication and Internet products were incurred prior to incorporation of the Company. Material and contract services totaling $149,982 were paid by two individuals or their wholly-owned company. In addition, the shareholders valued their personal time in producing the technology at $328,000. Upon incorporation, the Company originally recorded as an asset $349,382 of these costs as proprietary telecommunication and Internet costs. The remaining $128,600 ($8,600 in paid expenses and $120,000 of the shareholders' personal time) of the total cost was not recorded as an asset because this amount was originally considered to be the only amount incurred as research and development costs. The $349,382 was originally capitalized because management concluded that technological feasibility had been established after incurring the research and development expenses. Management's subsequent evaluation of the development process changed its original conclusion as to the date that technological feasibility had been established; therefore, all costs incurred prior to incorporation ($477,982) were expensed as research and development expenses. 8 Accordingly, the financial statements were restated to reflect the following changes:
As previously reported (Decrease) As restated _____________ __________ ___________ October 31, 1996 and April 30, 1996: Proprietary telecommunication and Internet costs $ 349,382 (349,382) 0 Additional paid-in capital (discount) $ 347,334 (349,382) (2,048)
(4) Development Stage Operations The Company is currently in the developmental stage and has no significant operations to date. (5) Going Concern The Company is a newly organized development stage corporation that has not commenced operations as of January 31, 1997. This factor, together with its limited capital, among others, indicate that the Company may be unable to continue its operations without successful development and marketing of the Company's products and the procurement of additional financing. The accompanying financial statements have been prepared on the assumption that the Company will continue in business, which contemplates the realization of assets through continuing operations. No adjustments have been made to reflect potentially lower realizable value of assets should the Company be unable to continue its operations, as the outcome of the above matter is not currently determinable. 9 SIGNATURES Pursuant to the requirements of Section 12 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. SUARRO COMMUNICATIONS, INC. (Registrant) Dated: March 14, 1997 By: /s/Michael D. McAuliffe Michael D. McAuliffe President 10 SUARRO COMMUNICATIONS, INC. Exhibit Index to Quarterly Report on Form 10-QSB For the Quarter Ended January 31, 1997 EXHIBITS Page No. EX-27 Financial Data Schedule . . . . . . . . . . . . . . . . . . . . .12 11 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE UNAUDITED FINANCIAL STATEMENTS CONTAINED IN THE FORM 10-QSB FOR THE QUARTER ENDED JANUARY 31, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS APR-30-1997 JAN-31-1997 623 0 0 0 0 623 0 0 623 4,210 0 0 0 6,200 (9,787) 623 0 0 0 0 2,959 0 0 0 0 0 0 0 0 (2,959) 0 0
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