<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ending September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-28015
COI SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
Nevada 86-09884116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5300 West Sahara, Suite 101
Las Vegas, Nevada 89102
(Address of principal executive offices)
Registrant's telephone number including area code: (905) 294-9163
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common shares, $0.001 par value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 common shares without par value outstanding on September 30, 2000
was 7,473,542 shares.
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COI SOLUTIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Month Period Ended Nine Month Period Ended
September 30 September 30
2000 1999 2000 1999
------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
Revenue $ 577,973 $ 403,624 $ 1,162,005 $ 1,762,500
------------- ------------ ------------- --------------
Expenses
Bad debts - - 6,702 -
Management fees 90,000 90,000 270,000 270,000
Professional fees 30,046 23,250 55,346 43,357
Consulting 760,850 3,595,669 952,748 8,191,472
Administrative 151,951 15,041 153,554 96,567
------------- ------------- ------------- --------------
$ 1,032,847 $ 3,723,960 $ 1,438,350 $ 8,601,396
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
Net earnings (loss) $ (454,874) $ (3,320,336) $ (276,345) $ (6,838,896)
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
Net earnings (loss) per share (Note)1
basic $ (0.07) $ (0.81) $ (0.05) $ (1.90)
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
Weighted average shares
basic 6,723,814 4,078,122 5,248,450 3,600,149
------------- ------------- ------------- --------------
diluted 9,551,757 6,183,122 8,007,427 5,169,767
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
</TABLE>
See accompanying notes to the condensed financial statements.
<PAGE>
COI SOLUTIONS, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30 December 31
2000 1999
------------- -------------
<S> <C> <C>
ASSETS
Current
Cash $ 20,626 $ 765
Accounts receivable (net of allowance for
doubtful accounts of $1,856,702;
1999 - $1,850,000) 890,497 154,702
Loan receivable 299,114 242,500
------------- -------------
1,210,237 397,967
Investment 1 1
------------- -------------
$ 1,210,238 $ 397,968
------------- -------------
------------- -------------
LIABILITIES
Current
Accounts payable and accrued liabilities $ 866,700 $ 416,824
Loan payable 6,000 -
Due to directors 50,295 42,371
------------- -------------
922,995 459,195
------------- -------------
SHAREHOLDERS' DEFICIENCY
Capital stock (Note 3) 7,473 4,498
Additional paid in capital 6,843,124 6,221,284
Deficit (6,563,354) (6,287,009)
------------- -------------
287,243 (61,227)
------------- -------------
$ 1,210,238 $ 397,968
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to the condensed financial statements.
<PAGE>
COI SOLUTIONS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ending September 30
<TABLE>
<CAPTION>
2000 1999
------------- -------------
<S> <C> <C>
Cash flows from (applied to)
OPERATING
Net earnings (loss) $ (276,345) $ (6,838,896)
Services for stock 624,815 6,495,291
Changes in
Accounts receivable (735,795) (698,511)
Loan receivable (56,614) -
Accounts payable and accrued liabilities 449,876 308,685
------------- -------------
5,937 (733,431)
------------- --------------
FINANCING
Issue of common share - 610,138
Bank indebtedness - (6,612)
Advance from (to) directors 7,924 -
Loan payable 6,000 150,000
------------- -------------
13,924 753,526
------------- -------------
Net increase in cash during the period 19,861 20,095
Cash, beginning of period 765 -
------------- -------------
Cash, end of period $ 20,626 $ 20,095
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to the condensed financial statements.
<PAGE>
COI SOLUTIONS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2000
-------------------------------------------------------------------------------
1. GENERAL
The unaudited condensed financial statements have been prepared on the same
basis as the audited financial statements and, in the opinion of management,
reflect all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation for each of the periods presented. The results of
operations for interim periods are not necessarily indicative of results to be
achieved for full fiscal years.
As contemplated by the Securities and Exchange Commission (SEC) under Rule 10-01
of Regulation S-X, the accompanying financial statements and related footnotes
have been condensed and do not contain certain information that will be included
in the Company's annual financial statements and footnotes thereto. For further
information, refer to the financial statements and related footnotes for the
year ended December 31, 1999 included in the Company's Annual Report on Form
10-KSB.
INCOME TAXES
Income taxes for the interim periods were computed using the effective tax rate
estimated to be applicable for the full fiscal year, which is subject to ongoing
review and evaluation by management. There are no income taxes for the current
year as the company has approximately $888,400 of net operating loss
carryforwards which expire in 2019.
LOSS PER SHARE
The Company reports earnings per share in accordance with the provisions of SFAS
No. 128, EARNINGS PER SHARE. SFAS No. 128 requires presentation of basic and
diluted earnings per share in conjunction with the disclosure of the methodology
used in computing such earnings per share. Basic earnings per share excludes
dilution and is computed by dividing income available to common shares by the
weighted average common shares outstanding during the period. Diluted earnings
per share takes into account the potential dilution that could occur if
securities or other contracts to issue common stock were exercised and converted
into common stock. Diluted loss per share is not shown as the diluted effects
are antidilutive.
There were stock options outstanding at September 30, 2000, to purchase
2,833,922 shares of common stock (1999 - 2,105,000).
Basic weighted average shares outstanding for the period were 5,248,450 (1999 -
3,600,149). Diluted average shares outstanding for the period were 8,007,427
(1999 - 5,169,767)
-------------------------------------------------------------------------------
2. CONCENTRATIONS
The company currently has contracts with two customers. The initial contracts
with The TeleMedica Group was extended to December 31, 2000 at $60,000 per
month. The contract with the other customer totals $500,000 which has been
included in revenue.
<PAGE>
COI SOLUTIONS, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2000
-------------------------------------------------------------------------------
3. CAPITAL STOCK
a) On July 5, 2000, 2,200,000 restricted common shares were issued as
compensation to the officers of the company with a market value of
$396,000 (2,200,000 X $0.18). There was no cash consideration and the
$396,000 has been charged as compensation and included in the operating
expenses on the statement of operations. $2,200 being the par value of
the shares, was credited to share capital and $393,800 was credited to
additional paid in capital.
b) On September 27, 2000, 775,000 common shares were issued in exchange for
services to non-related parties at an issued price of $0.25 per share.
There was no cash consideration and the $193,750 has been charged as
compensation and included in the operating expenses on the statement of
operations. $775 being the par value of the shares, was credited to share
capital and $192,975 was credited to additional paid in capital.
<PAGE>
Item 2.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
General
These discussions contain forward-looking statements containing words such AS
WILL CONTINUE TO BE, WILL BE, CONTINUE TO, ANTICIPATES THAT, TO BE or CAN
IMPACT. Management cautions that forward-looking statements are subject to risks
and uncertainties that could cause the Company's actual results to differ
materially from those projected in forward looking statements.
For the quarter ended September 30, 2000, the Company continued its plan of
directing its efforts in the e-health industry with special focus on global
expatriates. It announced its intention to acquire a majority stake in the
Telemedica Group.Com, Inc. a private company that the Company was doing
extensive work for in areas of company infrastructure and web based platforms.
This acquisition is scheduled for completion in the last quarter of the current
year.
Sales
For the quarter ended September 30, 2000, the Company reported revenue of
$577,973 compared to $403,624 for the same period in 1999, an increase of 43%
over the same period in 1999. The revenue for the quarter ended September 30,
2000 was derived from two contracts in the e-health business. The contract with
Telemedica Group.Com, Inc. generates $60,000 per month and is in force until the
end of the current year. The second contract was with an incubator company ICCA
where the Company developed an effective evaluative process for determining
potential investments and or acquisitions in the e-health industry. This
contract was completed in August, 2000.
For the nine months ended September 30, 2000 the Company reported revenue of
$1,162,005 compared to $1,762,500, a decrease of 34% over the same period. The
decrease for the period was due to a major contract terminating in 1999.
COSTS AND EXPENSES
Expenses for the quarter ended September 30, 2000 were $1,032,847 compared to
$3,723,960 for the same period of 1999, a decrease of 72%. The decrease was
mainly due to a reduction in consulting costs associated with a major project
that ended in the year 1999. Contributing to the $1,032,847 of expenses were
Management fees, $90,000, Professional fees $30,046, Consulting fees $760,850
and Administrative expense $151,951. With the exception of Administration, other
expenses were maintained at the normal running rates. Additional Administration
expenses were incurred to ramp up for the anticipated acquisition forecasted in
the last quarter of 2000 and beyond.
Expenses for the nine months ended September 30, 2000 were $1,438,350 compared
to $8,191,472 for the same period of 1999, a decrease of 82%.
<PAGE>
The decrease was due to a reduction in consulting costs associated with a large
project that ended in 1999,
Financial Condition and Liquidity
As of September 30, 2000, the Company had $20,626 of cash. The Company's sources
of cash are from its two in-force contracts. Future funds required to carry out
management's plans are expected to be derived from the continuation of its
current contracts, acquiring new contracts in the e-health industry and future
stock sales. There can be no assurance that the Company will be successful in
executing its plans.
<PAGE>
PART II
Item 1. Legal Proceedings
None.
Item 2. Change in Securities and Use of Proceeds
None.
Item 3. Default 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
(a) EXHIBIT INDEX
Exhibit
No. Description.
27 Financial Data Schedule
(b) No reports on Form 8-K have been filed for the period ended September 30,
2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
Dated this 14th day of November, 2000.
COI SOLUTIONS, INC.
BY: /s/ Robert W. Wilder
Robert W. Wilder,
Chief Executive Officer and a
Member of the Board of
Directors
<PAGE>
COI Solutions Inc.
Financial Data Schedule
THIS DOCUMENT CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANTS' UNAUDITED BALANCE SHEET AS AT SEPTEMBER 30, 2000 AND THE UNAUDITED
STATEMENT OF OPERATIONS FOR THE NINE MONTHS THEN ENDED AND THE AUDITED BALANCE
SHEET AS AT DECEMBER 31, 1999 AND THE AUDITED STATEMENT OF OPERATIONS FOR THE
YEAR THEN ENDED.
PERIOD TYPE 9 MONTHS
FISCAL YEAR END 31-Dec-00
PERIOD START 1-Jan-00
PERIOD END 30-Sep-00
CASH 20,626
SECURITIES -
RECEIVABLES 3,046,313
ALLOWANCES (1,856,702)
INVENTORY -
CURRENT ASSETS 1,210,237
PP&E -
DEPRECIATION -
TOTAL ASSETS 1,210,238
CURRENT LIABILITIES 922,995
BONDS -
PREFERRED MANDATORY -
PREFERRED -
COMMON 7,473
OTHER SE 279,770
TOTAL LIABILITY AND EQUITY 1,210,238
SALES 1,162,005
TOTAL REVENUES 1,162,005
CGS -
TOTAL COSTS 1,438,350
OTHER EXPENSES -
LOSS PROVISION -
INTEREST EXPENSE -
INCOME-PRETAX (276,345)
INCOME TAX -
INCOME CONTINUING (276,345)
DISCONTINUED -
EXTRAORDINARY -
CHANGES -
NET INCOME (276,345)
EPS-PRIMARY (0.07)
EPS-DILUTED (0.05)
