<PAGE>
AMENDMENT
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB-A
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
/ / TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (No Fee Required)
Commission File No. 000-24551
-----------
COMPOSITE SOLUTIONS, INC.
-------------------------
(Name of Small Business Issuer in its Charter)
Florida 65-0790758
- ------------------------------ ----------
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
3655 Nobel Drive, Suite 440, San Diego, California 92122
- -------------------------------------------------- -----
Address of principal executive office Zip Code
Issuer's telephone number: (858) 459-4843
--------------
- ------------------------------------------------------------------------------
Former name and address, if changed since last report
Check whether the issuer has (1) filed all reports required by Section 13 or
15(d) of the Exchange Act during the past 12 months, and (2) been subject to
such filing requirements for the past ninety (90) days. Yes X No
----- -----
As of March 31, 2000 10,625,000 shares of Common Stock were outstanding.
1
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The following unaudited financial statements contain information
regarding the results of operation and balance sheet of Composite Solutions,
Inc. a Florida corporation formerly known as JS Business Works, Inc., for the
quarterly period ended as of March 31, 2000.
The Company's revenues for the quarter ended March 31, 2000 were $0.00.
INDEX TO FINANCIAL STATEMENTS
Unaudited Consolidated Balance Sheets.......................................F-2
Unaudited Consolidated Statements of Operations.............................F-3
Unaudited Consolidated Statements of Changes in Stockholders' Equity........F-4
Unaudited Consolidated Statements of Cash Flows.............................F-5
Notes to Consolidated Financial Statements..................................F-6
2
<PAGE>
COMPOSITE SOLUTIONS, INC.
F/K/A J S BUSINESS WORKS
(A Developmental Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, September 30,
2000 1999
----------- -------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 102,747 $ 8,811
Advance receivable - related party 4,392 0
Prepaid expense 10,579 4,226
----------- -----------
Total current assets 117,718 13,037
----------- -----------
PROPERTY AND EQUIPMENT
Computer equipment 26,111 14,798
Less: Accumulated depreciation (4,121) (1,655)
----------- -----------
Net property and equipment 21,990 13,143
----------- -----------
INTANGIBLE ASSETS
Technical licenses 103,275 93,682
Fire Test Data - related party 13,979 13,979
Software - related party 420,000 420,000
----------- -----------
Total intangible assets 537,254 527,661
----------- -----------
Total Assets $ 676,962 $ 553,841
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 74,034 $ 90,630
Accrued payroll and related liabilities 16,934 17,999
----------- -----------
Total current liabilities 90,968 108,629
----------- -----------
NON-CURRENT LIABILITIES
Long-term obligation - related party 25,146 13,773
----------- -----------
Total non-current liabilities 25,146 13,773
----------- -----------
Total Liabilities 116,114 122,402
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, authorized 10,000,000
shares, none issued 0 0
Common stock, $0.0001 par value, authorized 50,000,000
shares, issued and outstanding 14,500,000 in 1999 and
10,625,000 in 2000 1,063 1,450
Additional paid-in capital 1,430,226 1,004,839
Deficit accumulated during the development stage (870,441) (574,850)
----------- -----------
Total Stockholders' Equity 560,848 431,439
----------- -----------
Total Liabilities and Stockholders' Equity $ 676,962 $ 553,841
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
COMPOSITE SOLUTIONS, INC
(f/k/a J S Business)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Period from
For the Six For the Six October 27,1997
Months Months (Inception)
Ended Ended through
March 31, 2000 March 31, 1999 March 31, 2000
-------------- -------------- --------------
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
-------------- -------------- --------------
Expenses
Consulting fees 23,347 15,000 104,447
Depreciation 2,466 0 4,121
General and administrative expenses 113,757 48,762 258,134
Organizational fees 0 115 514
Professional fees - related party 0 0 25,884
Professional fees - other 15,797 1,472 28,438
Salaries - employees 142,068 68,914 462,729
-------------- -------------- --------------
Total expenses 297,435 134,263 884,267
-------------- -------------- --------------
Loss from operations $ (297,435) $ (134,263) $ (884,267)
============== ============== ==============
OTHER INCOME (EXPENSE)
Interest income 1,990 1,148 7,939
Interest expense (146) 0 (17,971)
Gain on forgiveness of debt 0 0 4,861
Interest income - forgiveness of note 0 0 17,825
Loss on forgiveness of debt 0 0 (11,021)
-------------- -------------- --------------
Total other income (expense) 1,844 1,148 1,633
-------------- -------------- --------------
Net loss $ (295,591) $ (133,115) $ (882,634)
============== ============== ==============
Basic net loss per weighted average share $ (0.03) $ (0.13)
============== ==============
Weighted average number of shares 10,571,923 1,000,000
============== ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
COMPOSITE SOLUTIONS, INC.
(f/k/a J S Business Works)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(A Development Stage Enterprise)
Period from October 27, 1997 (Inception)
through March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE TOTAL
NUMBER OF COMMON PAID-IN DEVELOPMENT STOCKHOLDERS'
SHARES STOCK CAPITAL STAGE EQUITY
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BEGINNING BALANCE,
September 30, 1998 21,196,410 $ 2,120 $ 16,215 $ (12,193) $ 6,142
YEAR ENDED SEPTEMBER 31, 1999:
6/25 - shares contributed (7,896,410) (790) 790 0 0
Pre-acquisition income 0 0 0 47 47
6/30 - shares issued for acquisition 1,000,000 100 (12,146) 12,146 100
6/30 - shares issued for payment of note payable 200,000 20 999,980 0 1,000,000
Net loss 0 0 0 (574,850) (574,850)
----------- ----------- ----------- ----------- -----------
BALANCE, September 30, 1999 14,500,000 1,450 1,004,839 (574,850) 431,439
----------- ----------- ----------- ----------- -----------
SIX MONTHS ENDED MARCH 31, 2000: (UNAUDITED)
12/99 - shares issued for cash 320,000 32 319,968 0 320,000
12/99 - shares surrendered (4,300,000) (430) 430 0 0
02/00 - shares issued for cash 105,000 11 104,989 0 105,000
Net loss 0 0 0 (295,891) (295,591)
----------- ----------- ----------- ----------- -----------
BALANCE, March 31, 2000 (unaudited) 10,625,000 $ 1,063 $ 1,430,226 $ (870,741) $ 560,848
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
COMPOSITE SOLUTIONS, INC.
(f/k/a J S Business Works)
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31, 2000
(Unaudited)
t
<TABLE>
<CAPTION>
Period from
For the Six For the Six October 27,1997
Months Months (Inception)
Ended Ended through
March 31, 2000 March 31, 1999 March 31, 2000
-------------- ------------------ ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (295,591) $ (133,115) $ (882,634)
Adjustments to reconcile net loss to net cash used by operating
activities:
Depreciation 2,466 0 4,121
Stock issued for services 0 0 2,638
Stock issued in lieu of cash 0 100 100
Pre-acquisition income 0 47
Changes in operating assets and liabilities:
(Increase) decrease in advance receivable - related party (4,392) 0 (4,392)
(Increase) decrease in accrued interest - related parties 0 0 0
(Increase) decrease in prepaid expense (6,353) 0 (10,579)
Increase (decrease) accounts payable - trade (16,596) 26,186 74,034
Increase (decrease) accrued expense 0 0 0
Increase (decrease) accrued payroll and related liabilities (1,065) 35,594 16,934
-------------- ------------------ ---------------
Net cash used by operating activities (321,531) (71,235) (799,731)
-------------- ------------------ ---------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (11,313) (3,307) (26,111)
Acquisition of intangible assets (9,593) (343,979) (537,254)
(Issuance) repayment of note receivable - related party 0 0 0
-------------- ------------------ ---------------
Net cash used by financing activities (20,906) (347,286) (563,365)
-------------- ------------------ --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 425,000 0 440,700
Proceeds from loan payable - related party 11,373 0 25,143
Proceeds from note payable 0 550,000 1,000,000
-------------- ------------------ -------------
Net cash provided by financing activities 436,373 550,000 1,465,843
-------------- ------------------ -------------
Net increase in cash 93,936 131,479 102,747
CASH, beginning of period 8,811 0 0
-------------- ------------------ -------------
CASH, end of period $ 102,747 $ 131,479 $ 102,747
============== ================== =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
Non-cash financing and investing activities:
Note payable paid by issuance of common stock $ 0 $ 0 $ 1,000,000
============== ================== =============
Investment in subsidiary $ 0 $ 0 $ (12,046)
============== ================== =============
Interest on note payable $ 0 $ 0 $ 17,825
============== ================== =============
Forgiveness of interest on note payable $ 0 $ 0 $ (17,825)
============== ================== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
COMPOSITE SOLUTIONS, INC.
(f/k/a J S Business Works)
(A development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information with respect to the six months ended
March 31, 2000 and 1999 is unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) THE COMPANY Composite Solutions, Inc., f/k/a JS Business Works, Inc.,
is a Florida chartered development stage corporation which conducts
business from its headquarters in San Diego, California. The Company was
incorporated on October 20, 1997.
The Company has not yet engaged in its expected operations. The Company's
future operations include plans to market unique, innovative and affordable
high technology products and processes for utilization in key areas of
existing and new construction. Current activities include raising
additional capital and negotiating with potential key personnel and
facilities. There is no assurance that any benefit will result from such
activities. The Company will not receive any operating revenues until the
commencement of operations, but will nevertheless continue to incur
expenses until then.
The following summarizes the more significant accounting and reporting
policies and practices of the Company:
(b) BASIS OF PRESENTATION On June 17, 1999, the Company entered into a
Share Exchange Agreement with Composite Solutions, Inc., a Nevada
corporation, headquartered in San Diego, California. The business
combination was closed on June 30, 1999 and is a reverse merger that is
accounted for as a reorganization of Composite Solutions, Inc., a Nevada
corporation. The consolidated financial statements include the accounts of
CSI, a Nevada company, its wholly-owned subsidiary. Intercompany accounts
and transactions have been eliminated in consolidation.
(c) USE OF ESTIMATES The consolidated financial statements have been
prepared in conformity with generally accepted accounting principles. In
preparing the consolidated financial statements, management is required to
make estimates and assumptions that affect the reported amounts of assets
and liabilities as of the date of the statements of financial condition and
revenues and expenses for the year then ended. Actual results may differ
significantly from those estimates.
(d) START-UP COSTS Costs of start-up activities, including organization
costs, are expensed as incurred, in accordance with Statement of Position
(SOP) 98-5.
(e) NET INCOME (LOSS) PER SHARE Basic loss per share is computed by
dividing the net income (loss) by the weighted average number of common
shares outstanding during the period.
(f) PROPERTY AND EQUIPMENT All property and equipment are recorded at cost
and depreciated over their estimated useful lives, using the straight-line
method. Upon sale or retirement, the cost and related accumulated
depreciation are eliminated from their respective accounts, and the
resulting gain or loss is included in the results of operations. Repairs
and maintenance charges, which do not increase the useful lives of the
assets, are charged to operations as incurred.
(g) INTANGIBLE ASSETS Intangible assets are recorded at historical cost and
amortized, beginning on the date the asset is placed in service, over the
estimated useful life. The cost of software intended to be sold or licensed
to others has been capitalized in accordance with Statement of Financial
Accounting Standards (SFAS) 86, and will be amortized at the greater of the
ratio to estimated future gross revenue or the straight-line method .
(h) INTERIM FINANCIAL INFORMATION The financial statements for the six
months ended March 31, 2000 and 1999 are unaudited and include all
adjustments which in the opinion of management are necessary for fair
presentation, and such adjustments are of a normal and recurring nature.
The results for the three months are not indicative of a full year results.
F-6
<PAGE>
COMPOSITE SOLUTIONS, INC.
(F/K/A JS BUSINESS WORKS, INC.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(2) INTANGIBLE ASSETS In April 1999, the Company entered into a license
agreement with the Regents of the University of California-San Diego,
(UCSD), for a license under patent rights to make, use, sell, offer for
sale, import licensed products, practice licensed methods, and use
technology. The Company paid a license fee of $40,000 upon execution of
the agreement. Under the terms of the agreement, the Company must pay to
the licensor a royalty of 1.5% on net sales of the licensed products.
The Company must also pay for one-half of all past and future patent
costs, which totaled $12,390 during the period ended March 31, 2000.
Also, the Company is obligated to pay certain fees and royalties for any
executed sub-license arrangements. As of March 31, 2000, there were no
such arrangements.
In August 1999, the Company entered into a second license agreement with
UCSD under patent rights to make, use, sell, offer for sale, and import
licensed products and to practice licensed methods and to use
technology. The Company paid a license fee of $5,000 upon execution of
the agreement. Under the terms of the agreement, the Company must pay to
the licensor a royalty of 1.5% on net sales and certain fees and
royalties for any executed sub-license agreements. In addition, the
Company is obligated to pay for one-half of all past and future patent
costs. As of September 30, 1999, past patent costs payable have been
recorded as follows:
<TABLE>
<CAPTION>
Due Year Ending September 30, 1999
<S> <C>
2000 (included in Accounts payable - trade) $ 27,547
2001 (Long-term obligation) 13,773
----------
$ 41,320
==========
</TABLE>
In January 1999, the Company acquired certain intangible assets from
Trans-Science Corporation (TSC), a company under common control. Fire test
data, concerning the overlay systems in the form of technical reports from
an independent laboratory in New York performed prior to the Company's
inception, was purchased from TSC, at their cost, for $13,979 in cash.
Also, in January 1999, TSC sold, assigned and transferred all of its
rights, title and interest to the Earthquake Retrofit Design Software to
the Company for $330,000 in cash. This purchase price is an amount
significantly less than the cost incurred by TSC. In addition, during the
period ended September 30, 1999, the Company paid TSC $90,000 for upgrade
services on this software.
There was no amortization expense incurred during the period ended March
31, 2000, as these intangible assets have not yet been placed in service.
(3) STOCKHOLDERS' EQUITY The Company has authorized 50,000,000 shares of
$0.0001 par value common stock and 10,000,000 shares of $0.0001 par value
preferred stock. Rights and privileges of the preferred stock are to be
determined by the Board of Directors prior to issuance. The Company had
14,500,000 and no shares of common and preferred stock issued and
outstanding, respectively, at September 30, 1999. On October 21, 1997, the
Company issued 1,601,000 shares to its President for the value of services
rendered in connection with the organization of the Company. In April 1998,
the Company issued 646,000 shares of common stock under Regulation D
offerings in exchange for $20,200 in cash. The Company paid $4,500 of legal
expenses in connection with these offerings. Also in April 1998, the
Company issued 49,500 shares to its Executive Vice President in
consideration of services rendered of $2,475.
On June 25, 1999, the Company completed a 9.229876 shares for 1 share
forward split. Retroactive effect to this split has been given in the
accompanying financial statements. On June 25, 1999, the Company received
7,896,410 shares contributed back to the Company. On June 30, 1999, the
Company issued 1,000,000 shares to acquire 100% of the issued and
outstanding common stock of Composite Solutions, Inc., a Nevada
corporation. On June 30, 1999, the Company issued 200,000 shares in
settlement of its subsidiary note payable with a principal balance of
$1,000,000 and accrued interest of $17,825. In December 1999, a trustee
shareholder surrendered 4,300,000 shares which have been canceled. In
December 1999, the Company issued 320,000 shares of common stock under a
private placement in exchange for $320,000 in cash. In February 2000, the
Company issued 105,000 shares of common stock under a private placement in
exchange for $105,000 in cash.
F-7
<PAGE>
COMPOSITE SOLUTIONS, INC.
(F/K/A JS BUSINESS WORKS, INC.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(4) OPERATING LEASE In November 1999, the Company and TSC, a company under
common control, entered into an operating lease for its offices. The lease
term ends November 2002. Future minimum payments under the lease are as
follows:
<TABLE>
<S> <C>
Fiscal Year 2000 $ 41,645
Fiscal Year 2001 85,367
Fiscal Year 2002 85,977
Fiscal Year 2003 14,746
--------
$227,735
========
</TABLE>
(5) INCOME TAXES Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax and
financial reporting purposes. The Company had net operating loss
carry-forwards for income tax purposes of approximately $870,000 expiring
at September 30, 2020.
The amount recorded as deferred tax assets as of March 31, 2000 is
approximately $348,000, which represents the amount of tax benefit of the
loss carry-forward. The Company has established a valuation allowance
against this deferred tax asset, as the Company has no history of
profitable operations.
(6) RELATED PARTIES See Note (2) for disclosure of note receivable-related
party. See Note (3) for disclosure of related party intangible assets. See
Note (4) for issuance of stock for services rendered by related parties.
These amounts, totaling $2,635, were charged to Professional fees - related
party.
In June 1999, the Company advanced funds in the amount of $4,950 to an
officer of the Company for certain moving expenses. As of September 30,
1999, the amount has been repaid. At September 30, 1999, the Company owed
certain of its officers a total of $2,179 for reimbursement of certain
Company- related expenses. This amount is presented in Accounts payable -
officers.
As of January 1999, the Company shares office space and certain related
expenses with TSC, a company under common control. The Company remits their
portion of the lease payment directly to an independent lessor. Rent
expense totaled $37,800 for the period ended September 30, 1999. Total
payments to TSC for office expenses were $2,734 during the period ended
September 30, 1999. At September 30, 1999, the Company owed TSC a total of
$730 for utilities. This amount is presented in Accounts payable - related
party.
During the period ended September 30, 1999, the Company was advanced funds
from the then president and majority shareholder of the Company. At
September 30, 1999, the advance has been paid.
On February 14, 2000, the Company issued a promissory note in exchange for
an unsecured loan of $25,000 from a director. The note bears an interest
rate of 7%. Subsequent to March 31, 2000, the Company repaid the loan plus
accrued interest.
F-8
<PAGE>
COMPOSITE SOLUTIONS, INC.
(F/K/A JS BUSINESS WORKS, INC.)
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(7) GOING CONCERN The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. The
Company's financial position and operating results raise substantial doubt
about the Company's ability to continue as a going concern, as reflected by
the net loss of $574,850 accumulated from October 20, 1997 (Inception)
through September 30, 1999. The ability of the Company to continue as a
going concern is dependent upon commencing operations, developing sales and
obtaining additional capital and financing. The consolidated financial
statements do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern. The Company is currently
seeking additional capital to allow it to begin its planned operations.
In October 1999, the Company began efforts to raise $2,000,000 through a
private placement limited offering of 2,000,000 shares of common stock
priced at $1.00 per share. See Note 8. The private placement was closed on
February 27, 2000 after raising $425,000 net. On March 10, 2000, the
Company created a new private placement offering 300,000 shares of common
stock at $1.50 per share. As of April 3, 2000, the Company had raised
$210,000 through this subscription.
F-9
<PAGE>
ITEM 2. PLAN OF OPERATION
For the period from inception (October 20, 1997) through March 31,2000 the
Company had no revenues from operations and had no significant business
operations other than organizational and capital raising activities.
On June 30, 1999, the Company consummated a reverse acquisition pursuant to
which the Company acquired Composite Solutions, Inc., a Nevada corporation ("CSI
Nevada"), a developer of certain construction technology described below. Since
the date of such acquisition, the Company's business activities have consisted
of research and development and marketing activities relating to the development
of the Company's construction technology and services.
Utilizing the technology of CSI - Nevada Company, the Company intends to
complete CSI Nevada's development of an affordable high-technology method for
the retrofit/repair of buildings and other structures. This technology is based
upon the application of a composite material that is layered over existing
surfaces. This "composite overlay" is designed to be applied to key areas of
buildings and other structures to repair damage or to add structural integrity.
The Company believes that the simplicity of the overlay applications, and the
reduced cost and time to apply, has the potential to revolutionize the way
retrofit/repairs are done and will provide a solution to many structures that
would have otherwise been torn down or rebuilt completely. This overlay, which
is created by impregnating a carbon or glass fabric with a chemical resin, and
the "wallpapering" this combination to a structural surface, is appropriate for
concrete, masonry, and wood, and can be used to accomplish a variety of
structural objectives including: earthquake retrofit and damage repair, defect
repair, loan capacity increase, and structural hardening to protect against bomb
blasts.
The Company intends to market a new method for construction called the
Carbon Shell System ("CSS"). CSS combines conventional civil construction
techniques and advanced carbon fiber reinforced polymer matrix composites to
provide a pre-manufactured advanced composite tube which is filled with concrete
depending on the strength, stiffness and stability requirements for the
structural component. In the CSS, the carbon shells are joined and filled with
concrete on site. The lightweight tubes will allow for rapid field construction
without the need for heavy lifting equipment. This, as well as the lack of
cumbersome rebar cages, offers the potential for reduced construction costs and
time. The Company believes CSS is applicable for a variety of common structural
components, including columns, girders, and beams.
In the last quarter the Company has continued the development of its
technology and began active marketing of its technology and services to the
construction industry. In order to facilitate such marketing efforts, the
Company expects to seek additional capital through the sale of debt or equity
securities or a combination thereof. The Company may also seek to add more sales
and marketing personnel and strategic partner in order to accelerate the
marketing of its products and services.
The Company's financial position and operating results raise substantial
doubt about its ability to continue as a going concern, as reflected by the net
losses accumulated from inception through March 31, 2000. The Company currently
does not have sufficient capital resources to effectively pursue its plan of
operation or continue its operations over the next twelve months. The ability of
the Company to continue as a going concern will be dependent upon obtaining
additional capital and financing in order to support its marketing and sales
activities. The Company is currently seeking additional capital to allow it to
implement its business plan. However, no assurances can be given that the
Company will be successful in raising such additional capital or other financing
or that the Company will be successful in implementing
10
<PAGE>
its business plan even if adequate financing is obtained.
To the extent that the Company is successful in its financing activities,
the Company intends to devote substantially all of its financial resources
towards the continued development and marketing of its technology and services
to the construction industry. Capital will also be used for corporate and
administrative expenses and general working capital.
FORWARD-LOOKING STATEMENTS
When included in this Quarterly Report on Form 10-QSB, the words "expects,"
"intends," "anticipates," "plans," "projects" and "estimates," and analogous or
similar expressions are intended to identify forward-looking statements. Such
statements, which include statements contained in Item 2 hereof, are inherently
subject to a variety of risks and uncertainties that could cause actual results
to differ materially from those reflected in such forward-looking statements.
For a discussion of certain of such risks, see the subsection of Item 1 entitled
"Risk Factors" in the Annual Report 10KSB for September 30, 1999.
These forward-looking statements speak only as of the date of this Quarterly
Report on Form 10-QSB. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statement contained herein to reflect any change in the Company's expectations
with regard thereto or any change in events, conditions or circumstances on
which any such statement is based.
PART II
ITEM 1. LEGAL PROCEEDINGS.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation S-B,
as described in the following index of exhibits, are incorporated herein by
reference, as follows:
27.1 * Financial Data Schedule
- -------------------
* Filed herewith
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: May 25, 2000
Composite Solutions, Inc.
By: /s/ Donald Nicholson
--------------------------------------
Donald Nicholson, President, CFO and
Interim Chief Financial Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 102,747
<SECURITIES> 0
<RECEIVABLES> 4,392
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 117,718
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 676,962
<CURRENT-LIABILITIES> 90,968
<BONDS> 0
0
0
<COMMON> 1,063
<OTHER-SE> 1,430,226
<TOTAL-LIABILITY-AND-EQUITY> 676,962
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 297,435
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (295,591)
<INCOME-TAX> 0
<INCOME-CONTINUING> (295,591)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (295,591)
<EPS-BASIC> 0
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</TABLE>
