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SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
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FORM 10-SB/A-1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) and (g) of the Securities Exchange Act of 1934
COI SOLUTIONS, INC.
(Name of Small Business Issuer in its charter)
STATE OF 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) (Zip Code)
Issuer's telephone number, including area code: (212) 953-0865
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of class)
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Background
COI SOLUTIONS, INC. (the "Company") was incorporated under the
laws of the State of Nevada on August 1, 1997 as Expedia Com Global,
Inc., to engage in the business of designing and building network based
solutions for business customers. On August 23, 1997, Expedia Com
Global, Inc. changed its name to Expediacom Global Inc. On November
16, 1998, Expediacom Global Inc. changed its name to COI Solutions,
Inc. The common shares of the Company commenced trading in June 1998
on the Bulletin Board ("Bulletin Board") operated by the National
Association of Securities Dealers Inc. ("NASD") under the symbol
"COSL". The Company's common stock was delisted from the Bulletin
Board on October 25, 1999, as a result of the Company's failure to file
reports with the Securities and Exchange Commission ("Commission") as
mandated by the NASD. The Company has filed this Form 10-SB in order
to regain its listing on the Bulletin Board. Prior to being relisted
on the Bulletin Board, this registration statement must be declared
effective by the Commission and there can be no outstanding comments
pending with the Commission.
The Company is project oriented with an intent to retain a
small equity position in client projects where appropriate. The
majority of Company revenues is derived from consultant and project
management services which design and integrate network and Internet
technologies into the client's business operations. Since the
Company's services tend to be people expertise intensive, its major
assets are its staff. Furthermore, since the Company is in its start-
up phase, it is focusing on a small number of medium to large
consulting projects rather than a large number of small projects.
The Company currently is performing services for the following:
1. Internet Based International Health Insurance Service
(TeleMedica Group)
2. Internet / Intranet Medical Referrals & Collaboration Service
(TeleMedica Group)
3. International E-Business Pharmaceutical Distribution &
Dispensing Service (TeleMedica Group)
All of the foregoing have produced revenues for the Company. While a
portion of the World Telehealth contract is currently in dispute, the
Company has received significant revenue from this contract.
The Company is engaged in the business of designing and building
network based solutions for business customers. The Company
accomplishes the foregoing by creating custom integrated electronic
network based solutions, combining strategic business, marketing and
investment planning with high technologies, including the Internet and
private Intranets. The Company also provides services to facilitate
stakeholders of the customer organization into a team or community to
pursue the optimum solution design. The Company is involved with the
following industries; health care, trade and commerce, travel and
tourism, and telecommunications. The Company builds electronic
business solutions for global organizations based on a "community of
interest" model.
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The Company currently has assembled the following resources
to pursue its business plan:
The Company provides consultations services to businesses that
wish to establish a more effective telecommunications environment in
which to conduct their business. This requires the company to
understand their business needs and translate this into the appropriate
telecommunications technology, systems and operating procedures. A
typical contract has the following steps:
- Assess customer's business environment
- Understand their telecommunications needs
- Design a business plan for the new telecommunications
environment
- Manage the contracting of the build of the telecommunications
environment
- Approve the final operation
- Document operating procedures
- Assist the customer in marketing the use of this new telecom
environment.
The Company currently has six full time resources and up to twelve
part time contract resources, depending on the current contract load.
The Company outsources specific functions to its alliance
partners, who have expertise as follows:
- Karo Inc - Website and marketing collateral
- OE/One Inc. - Technology development of network management
applications
- Media Renaissance - Web based profile and data base
management applications
- BNT Inc. - International business development, opportunity
prospecting and sales
As our projects begin to mature, the Company will need to add more
resources in the following areas: Project Management, Software
Applications Development, and Marketing Research. In all cases the
Company will endeavor to bring these resources on board first by
establishing alliance outsource agreements with other companies, second
through part time contracts and third via full time personal.
The "community of interest" model.
The community of interest provides electronic tools and creative
business networking solutions that allow organizations to operate in a
fully integrated manner with clients and suppliers in both real and
non-real time, regardless where they are located in the world.
Currently, the Company's is concentrating its efforts in the
following applications:
Global Health Care - Telehealth Applications
This is the Company's primary focus of concentration. The Company
designs and builds electronic healthcare solutions for companies
(Business to Business) engaged in the e-commerce supply of
products,(eg: medical equipment and medical durable supplies)
telemedicine and information services for global health care.
The Company has decided to focus on the internet healthcare sector
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because of the current explosive growth. Healthcare represents
over 40% of current internet information inquiries. This growth
is anticipated to continue for the foreseeable future. The
company has significant background with the internet, networking
solutions, and international telehealth/telemedicine applications
from previous projects. This experience, along with our current
medical advisors and our international business and government
contacts in over 100 countries, makes the company well positioned
to provide internet healthcare services to wealthy individuals in
the underserved international markets, particularly in South
America, Asia and Africa. Competition in these areas is not
significant and tends to be localized which adds to the
attractiveness of these markets for the Company.
Web Site Design & Build
The Company in conjunction with Community-Builder.com, has
developed a five-phase program for the development and build of
Web sites for companies that are beginning to engage in marketing
and commerce over the Internet. The initial focus will be on South
America, Asia and Africa, as the Internet is still a relatively
new media but is beginning to show significant growth in these
regions. The Company believes that there are less competitive
markets in Africa, South America and Asia for the Company's
services. The Company intends to business only in areas where the
communications infrastructure for businesses is in place. The
Company has established an agreement with BNT Inc., a business
development agent with executive level presence in Africa, South
America, and Asia. Under the terms of the agreement, BNT will
represent the company to qualify international opportunities for
the company's internetworking consultative services. BNT will
introduce the company to businesses and governments in over 100
countries, assist in qualifying opportunities, and assist in
executing consulting contracts for the company. For its services,
BNT will receive a 30% commission on the profits of the projects
they assist in developing. BNT has experience in working with the
Worldwide Chambers of Commerce, the World Bank and various UN
organizations. BNT has executive presence in Brazil, Pakistan and
Kenya and transacts business in over 100 hundred countries around
the world. They are particularly focused on propagating internet
services and e-commerce technology to developing nations to
stimulate increased trade and commerce. To date we have had
introductory discussions with officials in Brazil regarding
consultative work on several telecommunications expansion
projects.
Global Trade & E-commerce - Generic Drug Distribution
Distribution of generic drugs and vitamin supplements through the
creation of a global electronic trading environment.
Initial focus is on several African nations through trading
partners in developing countries.
Country Portals
Design and build of Internet portals for trade and commerce.
These portals could focus on trade at the national or regional
level in countries around the world or a portal that focuses on a
specific community of interest spanning multiple countries.
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Industry Information
The Internet is a world-wide medium of interconnected electronic
and/or computer networks. Individuals and companies have recently
recognized that the communication capabilities of the Internet provide
a medium for not only the promotion and communication of ideas and
concepts, but also for the presentation and sale of information, goods
and services.
Electronic commerce, generally refers to utilizing electronic
networks to facilitate buying and selling of products, information, and
services. In electronic commerce, computers and telecommunications take
the place of paper documents, mail and faxes. Businesses now use
computers to electronically send and receive a wide variety of business
documents. These include, for example, product catalogs, price lists,
purchase orders and invoices. Electronic Data Interchange ("EDI") is a
specific form of electronic commerce. It refers to the transmission of
data between a business and its customers or its vendors in the course
of a business transaction. A typical example of EDI is electronically
placing a purchase order for merchandise with a vendor, and having the
vendor electronically confirm the order and produce an invoice when the
goods are shipped. The computers of the buyer and the seller
communicate and exchange the relevant information. They use an
agreed-upon or standard format to do so. In an earlier stage of
electronic commerce, companies that wanted to do business
electronically needed to have an arrangement with a special type of
computer network. That network is referred to as a value-added computer
network, or "VAN."
Traditionally, much of the EDI and e-commerce market was serviced
by companies which provide their services through VANs. A VAN provides
standardized forms and acts as a kind of electronic post office, where
data and forms are exchanged, parties can communicate via email, and
funds can be electronically transferred.
More recently the Internet has provided an alternative means for
companies to conduct electronic commerce. Rather than using a
proprietary VAN, companies can use the Internet as the medium over
which electronic commerce is conducted. The Company intends to utilize
this medium to develop business to business e-commerce solutions with
its initial products providing Internet-based functionality for
commercial transactions, marketing, data management and analysis.
Operations
The Company's executive offices are located at the residence
of Robert Wilder, the Company's Chief Executive Officer at 50 Augusta
Drive Way, Markham, Ontario, Canada L6E 1B5. The Company utilizes
approximately 140 square feet of space on a rent free basis at Mr.
Wilder's home. The Company intends to find suitable office space when
it determines it can economically afford to do so.
All employees, either permanent or on part time or short duration
contracts operate out of their homes with late vintage PCs, printers,
fax machines, telephone systems and internet access.
The Company uses the term "virtual company" to define a company
that does not have a single specific operating location or a fixed set
of employees, but rather has a small contingent of permanent employees,
and a fluid set of contractors that operate out of their homes and
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temporary project offices when they are established. This group of
contractors is further supported by a number of non-related companies
with which the Company has established alliance agreements to outsource
work, such as technology development, graphics and marketing collateral
multi-media publishing.
Currently, the Company's operations are being conducted only in
Markham, Ontario, Canada. The Company intends to expand to other
geographical locations as new business develops. Work assignments are
made and supervised via daily e-mails, weekly conference calls and a
minimum quarterly "face to face" meeting with each employee,
contractor, or outsourcer. Employees and contrators are chosen for
their ability to be results focussed and to operate independently,
however, significant collaboration occurs amongst the high performance
team through the communications mechanisms mentioned above.
Each project has an accounting module that feeds information to a
computer located at Mr. Wilder's home. Mr. Wilder monitors the
accounting at his home. Grant Thornton LLP performs audits and provide
financial advice when requested by the Company.
Customer contact typically occurs at the customer's locations or
on conference calls. Internet e-mail is also used extensively to
transmit information to customers. For projects underway these
customer interactions are tightly scheduled. Prospecting activities
are also conducted on the customer's premises, and are typically less
tightly scheduled.
Equipment
The Company acquires the equipment recommended to customers from
numerous third party suppliers. There are numerous substitute
suppliers available to the Company in the event a supplier does not
possess the necessary equipment or is unwilling to supply the
equipment.
Marketing
To date the Company has attracted its new business prospects
via word-of-mouth and through the strong telecom industry reputations
of the company's management team. The Company has prepared a website,
a brochure and a presentation that it will provide to BNT to deliver
"face to face" to international prospects. Once these prospects have
been qualified, the company will participate in conference calls to
establish "face to face" meetings in international locations to
negotiate contracts. The Company forecasts a marketing budget of
$225,000 in year 2000. The Company is currently in discussions on
Brazilian telecom consulting contracts, but no international contracts
have been signed at this time.
The Company charges a contract fee which is based upon information
it has relative to its competitors. In addition to the fee charged,
all out-of-pocket expenses are paid by the customer. A retainer fee is
also specified that is dependent on the contract duration. In the case
of services rendered to start-up corporations, the Company also seeks
an equity position in the customer.
Press releases and hired press or financial agents are primarily
intended to keep the public appraised of the Company's current
activities. They are not intended to play any role in the Company's
activities to raise additional capital.
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Agreement with BNT, Inc.
On October 16, 1999, the Company entered into an agreement with
BNT, Inc., a Bahamian corporation ("BNT")wherein it was agreed that BNT
would provide consulting services to the Company in connection with its
products and services and would promote the Company to third parties
around the world. The term of the agreement is two years. The Company
will pay BNT thirty per cent (30%) of all pretax profits for each
project that BNT assists in gaining for the Company. All monies will
be paid net thirty (30) days. The Company is obligated under the
agreement with BNT to pay BNT an additional annual fee of $10,000.
Competition
The Company competes with many other entities that provide similar
services and most of which have greater capital and other resources
than the Company and may choose to adopt a marketing plan similar to
that proposed by the Company.
Recent Business Activity
On December 11, 1998, the Company entered into an agreement with
World Telehealth Corporation, a Florida corporation ("WTH"), wherein
the Company would provide consulting, contracting services, project
management services, and operational services for telecommunictations
systems, network centric applications and information technology
including the management of business relationships. In consideration
of the foregoing, WTC would pay the Company $165,000 per month. The
term of the agreement was fourteen months. The material terms of
the agreement with World Telehealth included; building the
infrastructure of the Company, developing and implementing the
marketing, operations and technology functions of the Company. The fee
for delivering the work to World Telehealth was $165,000 per month and
as per section 1.6 of the contract, the Company had a responsibility to
raise the funds to pay for the management fee of $165,000. As per
section 1.6, should the fees not be raised by the Company, the amounts
would be accrued until the funds were raised. The Company did not raise
all of the funds to satisfy the payment of the $165,000 monthly fee.
$320,000 was paid to the Company. The salaries paid by the Company to
employees and other contractors was $70,000. There were no amendments
to the agreement which changed the obligations of the parties. The
World Telehealth contract was the only active project that the Company
had and therefore was the only revenue source. Since the suspension of
the World Telehealth contract, the Company has another contract with
Telemedica with an initial value of $500,000. The Company is actively
pursuing the collection of the World Telehealth receivable through
legal channels. On August 10, 1999, WTC stopped paying the
Company its monthly fee. The Company is attempting to collect the
receivable that is due. Legal action will be considered should this
receivable be uncollected by November 30, 1999.
The Company does not retain title to any material reusable
intellectual and other property from the World Telehealth contract, nor
can the Company reclaim anything of value if the contracts fail.
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The Company does not know if World Telehealth is having financial
difficulty. Non-payment by World Telehealth over the past two quarters
of 1999 has negatively affected the cash flow of the Company as been
reflected in the September 30, 1999 Financial Statements. The Company
expects its agreements to terminate as a part of the settlement
process. There is no assurance the matter will be settled or as a
matter of law that the contracts will be terminated. The Company does
not know if the termination of the contracts with World Telehealth will
impact the Company's business reputation, cause a default under any of
its credit agreements, however, the Company is obligated to its sub
contractors for approximately $41,000 for expenses incurred by it in
connection with the contracts. The Company has no liability to either
World Telehealth or its creditors in connection with the contracts.
The Company has collected a total of $323,490 pursuant to its
contracts with World Telehealth. The Company provided the following
services to World Telehealth: building a business operations plan,
building the Web Site, designing the telecommunications/Internet
networks and building the World Telehealth company infrastructure. The
cost to the Company of the services provided was $110,000 per month for
each month the contract was in effect. There are no material variances
from the World Telehealth contracts.
Services provided by the Company were terminated in August 1999 as
a result of World Telehealth to perform the terms of the contracts.
World Telehealth has alleged that the Company was obligated to raise
capital for it and did not perform. Pursuant to Section 1.6 of the
agreement, the Company is only accountable for raising funds to cover
the management fee of $165,000 per month. World Telehealth has not
threatened any action against the Company and the Company does not
anticipate any action by World Telehealth. The Company, however, is
contemplating initiating an action against World Telehealth. for
damages as a result of its breach. At no time either verbally or in
writing, has the Company received indication that the work performance
was anything less than exemplary.
On August 10, 1999, the Company acquired a fifty percent interest
in Community-Builder.com Inc., a privately held Internet company.
Community-Builder.com Inc. targets the medical community and the
interactive management of medical referrals and collaboration of
medical professionals working together on a common patient base. While
the healthcare industry is the Company's current main focus, this
application has the potential to be replicated in other industry
sectors such as travel and tourism, retail, and professional services,
(legal, consulting). Community-Builder.com Inc. is a Montreal based
start up company incorporated under the laws of the Province of Quebec,
Canada. It has no assets or liabilities and is currently in a very
early formative stage. The Company and Ms. Elizabeth Lepage of
Montreal, Canada entered into an agreement to incorporate Community
Builder.com and to build and market a set of internet tools that will
better enable professionals to communicate and collaborate via video
conferencing, audio conferencing, and text conferencing, and the secure
exchange of a variety of multi-media files. Ms. Elizabeth Lepage is
the current President Community-Builder.com. The Company agreed as
consideration for its 50% ownership interest to provide funding up to
$150,000 to build the initial prototype of the internet tools (the
$150,000 was an estimate for building the prototype). To date the
company has spent $20,000 on Community-Builder.com. The Company and
its officers and directors had no pre-existing relationship with Ms.
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Lepage or Community-Builder.com Inc. The Company will retain a 50%
share of the intellectual property for an internet service that can be
licensed to TeleMedica for enabling medical referrals to be handled
over the internet. This intellectual property will be used to develop
referrals management systems for other professional industries, such as
the legal profession. The company will benefit by receiving recurring
license fees from this internet service.
On September 14, 1999, the Company entered into an agreement, on
September 14, 1999 with the TeleMedica Group of Las Vegas, Nevada to
develop a business plan and operations plan for a new venture that will
be known as TeleMedica.com. TeleMedica is engaged in the business of
promoting medically related business opportunities. The first project
to be developed by the Company on behalf of the Telemedica Group will
be an Internet based service to facilitate e-commerce transactions
which include the distribution, sale and automated dispensing of
pharmaceuticals, nutritional supplements, and related medical supplies.
As part of this agreement the Company has negotiated the acquisition of
10% of the outstanding common stock of the Telemedica Group.
TeleMedica is a client of the Company. The Company received a 10%
equity interest through ownership of TeleMedica's common stock. The
Company received the common stock as consideration for services
rendered to TeleMedica. The Company will provide consultative support
and the development and marketing strategy for TeleMedica's initial
products and services. The Company will also assist in the general
management function into the first nine months of 2000. For these
services, the Company will be paid $60,000 per month for the nine
months beginning in October 1999. The Company plans to integrate
the systems developed by Community Builder.com into the operations of
the Telemedica Group.
Settlement
On October 1, 1998, the Company entered into an Agreement and
Release with Penta Deltex and Nick Plessas (collectively "Penta")
wherein the Company agreed to pay Penta $220,000 upon delivery of
626,000 shares of the Company's common stock and the settlement of all
outstanding expenses owed by Penta. To date, $45,000 has been held
back by the Company pending the confirmation of the settlement of
expenses by Penta. Penta was retained by the Company to assist it
entering the United States public securities market. Penta did not
perform the terms and conditions of its obligations and its agreement
with the Company was terminated by mutual agreement of parties. As
part of the settlement, Penta was obligated to pay certain expenses
incurred in connection with its services which it failed to do. Upon
payment of the foregoing expenses, the Company will complete its
obligations under the settlement agreement. There is no assurance that
Penta will complete its obligations under the settlement agreement. If
Penta does not complete its obligations as contracted, the Company is
contemplating legal action against it.
Employees
The Company has 15 full-time and contracted employees, 3 of which
are Officers of the Company and 12 of which are support staff.
Management may hire additional employees as the Company's operations
expand and management believes the expense of additional employees is
warranted.
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The Company operates as a virtual corporation. This means that
all individuals working under contract for the Company operate
primarily out of their homes using computer hardware, software
products, multiple telecom facilities, a dedicated and secure server,
and extensive use of secure e-mail and the Internet. The Company
believes that this form of conducting business will reduce operating
expenses and effectively manage companies which have geographically
dispersed personal. The Company has employees located in New York;
Florida; Las Vegas, Nevada; San Francisco, California; Ottawa, Ontario;
Toronto, Ontario; and Montreal, Quebec.
Lexxus Capital Corp.
The Company has engaged Lexxus Capital Corp. to promote the
interests of the Company. ^ Lexxus Capital Corp. is an investor
relations firm that was retained by the Company to interact with the
Company's shareholders. Lexxus Capital is reimbursed for out-of-pocket
expenses. Lexxus Capital also is retained to promote the Company's
business. Lexxus Capital is compensated for obtaining new business for
the Company on a case-by-case basis.
Facilities
The registered office of the Company is located at 5300 West
Sahara, Suite 101, Las Vegas, Nevada 89102. The Company's executive
offices are located at 405 Lexington Ave. New York, NY USA and at 50
Augusta Drive Way, Markham, Ontario, Canada. The telephone number of
the office in the USA is (212) 953-0865 and the telephone number of the
office in Canada is (905) 201-1952.
Year 2000 Compliance Statement
The Year 2000 issue is the result of computer programs written
using two digits rather than four to define the applicable year. As a
result, date sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in system
failures or miscalculations causing disruptions of operations,
including among others, temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
The Company uses standard software products for its operational
requirements in a distributed configuration. These systems from
Microsoft and others have been verified as year 2000 compliant. Other
systems for networking are obtained from providers such as the Stentor
Alliance and PSiNet. Any software that the Company develops as part of
its solutions programs will be Year 2000 compliant.
Though the Company has yet to acquire any additional hardware or
software technology in support of its services, the planned
acquisitions will most likely involve hardware or software which is
relatively new and therefore management does not anticipate that it
will incur significant operating expenses or be required to invest
heavily in computer systems improvements to be Year 2000 compliant. As
the Company makes arrangements with significant hardware and software
suppliers, the Company intends to determine the extent to which the
Company's systems may be vulnerable should those third parties fail to
address and correct their own Year 2000 issues and take measures to
reduce the Company's exposure, such as, finding alternative suppliers
or requiring the suppliers to correct Year 2000 compliance issues prior
to the Company acquiring the product. Should the Company have to find
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alternative suppliers the Company expects that it can find those
suppliers promptly and on terms that are similar to those being sought
at this time. Other than the foregoing measures, the Company has no
other contingency plans for dealing with third parties which do not
become Year 2000 compliant within a timely manner. The Company
anticipates that this will be an ongoing process through any project
implementation through 1999. There can be no assurances that the
systems of suppliers or other companies on which the Company may rely
on will be converted in a timely manner and will not have a materially
adverse effect on the Company's systems.
Additionally there can be no assurances that the computer systems
necessary to maintain the viability of the Internet will be Year 2000
compliant. The Company believes that it is taking the steps necessary
regarding Year 2000 compliance issues with respect to matters within
its control. However, no assurance can be given that the Company's
systems will be made Year 2000 compliant in a timely manner or that the
Year 2000 problem will not have a material adverse effect on the
Company's business, financial condition and results of operations.
Currency and Exchange Rates
All monetary amounts disclosed in this Form 10-SB are, unless
otherwise indicated, expressed in United States dollars.
As at March 31, 1999 and 1998, the exchange rates to convert
Canadian dollars into U.S. dollars are 1.5087 and 1.4198, respectively.
The average exchange rates for the three month periods ended March 31,
1999 and 1998 are 1.5115 and 1.4302. respectively.
As at December 31, 1998 and 1997, the exchange rates to convert
Canadian dollars into U.S. dollars are 1.5333 and 1.4305, respectively.
The average exchange rates for the years ended December 31, 1998 and
1997 are 1.4831 and 1.3844, respectively.
Governmental Regulation
The Company's proposed services would be transmitted to its
clients over dedicated and public telephone lines. These transmissions
are governed by regulatory policies establishing charges and terms for
communications. Changes in the legislative EDI or the Internet access
industry, including regulatory or legislative changes which directly or
indirectly affect telecommunication costs or increase the likelihood of
competition from regional telephone companies or others, could have an
adverse effect on the Company's business; as could potential
governmental actions outside of the United States.
^
Risk Factors
In any business venture, there are substantial risks specific to
the particular enterprise. At a minimum, the Company's present and
proposed business operations will be highly speculative and subject to
the same types of risks inherent in any new or unproven venture, and
will include those types of risk factors outlined below:
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1. Limited History of Operations and Reliance on Expertise of
Certain Persons. The Company has been conducting business since 1997
and is subject to all the risk inherent in the creation of a new
business. Since the Company has had limited record of operations,
there is limited data at this time upon which to base an assumption
that the Company's plans will prove successful. Accumulated Losses
per the Financial Statements since inception, amount to $6,452,418.
The management of the Company and the growth of the Company's business
depends on certain key individuals who may not be easily replaced if
they should leave the Company. Persons in management are currently
devoting full-time toward the business of the Company.
2. Limited Financial Resources. The Company has limited or no
financial resources and, if the business is not profitable, may not be
able to raise sufficient funds to sustain, continue or expand its
business. The Company currently has limited revenues and relies
principally on the issuance of common shares to raise funds to finance
the business of the Company. There is no assurance that market
conditions will continue to permit the Company to raise funds if
required. The Company has limited assets and has had limited
operational revenues since its inception in August 1997. The amount
of current asset that constitute accounts receivable is $913,202. The
Company believes that the likelihood of collecting the accounts
receivable is very high. The Company can provide no assurance
that any acquired technology will produce any material revenues for the
Company or its stockholders or that any such business will operate on
a profitable basis.
3. Technology. Management has acquired limited assets and
technology necessary to provide the services it proposes. The Company
may never acquire all of the necessary technology needed to maintain
the operations it desires.
4. Business Competition. The business of facilitating
business-to-business e-commerce is intensely competitive and
fragmented, and is characterized by rapidly evolving technology. In
addition, numerous companies, substantially all of which have
significantly greater financial and other resources than the Company,
are currently engaged in business-to-business e-commerce. These
companies provide a range of e-commerce functionality and applications
including, but not limited to, EDI-based VAN; Internet store-fronts;
Internet catalogues; secure Internet payment processing; Internet
transaction processing including ordering, fulfillment, shipping, and
confirmation elements; Internet database generation and analysis;
automated Internet marketing; and vertical Internet business
communities or exchanges. The Company anticipates that existing
competitors are likely to expand the range and scope of their
e-commerce offerings, and that new competitors, which may include
telephone companies, media companies, and industrial companies, are
likely to increasingly offer business- to-business e-commerce
applications that function similarly and compete with those proposed by
the Company.
5. Need for Additional Capital. In order to initiate operations,
the Company will have to raise additional capital for operations
through the issuance of securities or loans. There is no assurance that
the Company will be able to raise the additional capital.
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6. Rapid Technological Change; Need for New Products;
Introduction of Competitive Products. The market for the Company's
proposed services is characterized by rapidly changing technology and
frequent new product introductions. Even if the Company's proposed
e-commerce service gains initial acceptance, the Company's success will
depend on, among other things, its ability to enhance its products and
to develop and introduce new products and services that keep pace with
technological developments, respond to evolving customer requirements
and achieve continued market acceptance. There can be no assurance that
the Company will be able to identify, develop, market, support or
acquire new products or deploy new services successfully, that such new
products or services will gain market acceptance, or that the Company
will be able to respond effectively to technological changes or product
announcements by competitors. Any failure by the Company to anticipate
or respond adequately to technological developments and customer
requirements or any significant delays in product development or
introductions could result in a loss of market share or revenues.
7. Uncertainties Relating to Commercial Use of the Internet.
The Company's strategy is to apply its efforts to the development of
service products for use in connection with the Internet. The success
of these proposed products is dependent on the continued development
and acceptance of the Internet as a medium for the exchange of business
documents and effecting business-to-business transactions. The failure
of the Internet to be an effective channel could have a material
adverse effect on the Company's business and prospects. There can be
no assurance that business-to-business commerce over the Internet will
become widespread and it is not known whether this market will develop
to the extent necessary for demand for the Company's proposed services
to emerge and become commercially sustainable. Changes in or
insufficient availability of telecommunications services to support the
Internet also could result in slower response times which might
adversely affect customers' ability or willingness to use the Internet
as a commercial marketplace. In addition, the security and privacy
concerns of existing and potential customers, as well as concerns
related to computer viruses, may inhibit the growth of the Internet
marketplace.
8. Inadequacy of Public Market. There is no assurance that the
public market for the common shares of the Company will be maintained
or that the holder of common shares will be able to sell such shares in
the quantity and at the price desired by such holder.
9. Risks Associated with the Year 2000. With regard to risks to
the Company's business associated to Year 2000 compliance, there can be
no assurances that the systems of suppliers or other companies on which
the Company may rely on will be converted in a timely manner and will
not have a materially adverse effect on the Company's systems and
therefore the Company's ability to provide its services. Additionally
there can be no assurances that the computer systems necessary to
maintain the viability of the Internet will be Year 2000 compliant.
The Company believes that it is taking the steps necessary regarding
Year 2000 compliance issues with respect to matters within its control.
However, no assurance can be given that the Company's systems will be
made Year 2000 compliant in a timely manner or that the Year 2000
problem will not have a material adverse effect on the Company's
business, financial condition and results of operations.
<PAGE> 14
10. Dilutive Effect of Issuance of Additional Shares. In the
future, the Company may issue additional shares of common stock well
below the current market price. This will have a dilutive effect on
shareholders who purchase shares at or above the market price. The
Company currently has no plans to issue additional shares of common
stock at this time.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity and Capital Resources
The Company maintains a cash balance in order to fulfill its
financial commitments. The Company was in a liquid position at December
31, 1998, with no cash and accounts receivable of $214,691. This
compares to working capital at December 31, 1997 of $26,442. The
increase in working capital realized during 1998 was the result of the
Company realizing its first major contract in 1988 with its
accompanying revenues.
Current assets increased from $26,442 at December 31, 1997 to
$214,691 at December 31, 1998, an increase of approximately 7.12 times
the value at December 31, 1997. Current assets increased to $916,700 at
June 30, 1999, a increase of approximately 3.27 times the value at
December 31, 1998. Current liabilities at December 31, 1997 were
$18,400. These liabilities increased at December 31, 1998 to $76,178
then decreased to $55,728 at June 30, 1999. A major reason for the
increase in current assets was contracted business generating revenue
while the decrease in current liabilities was due to the pay down of
accounts payable and the elimination of bank indebtedness.
The Company has had limited activity since its incorporation and
hence has received limited revenues from operations. The Company
needs $965,000 to pursue its operations during the next twelve months.
The Company intends to obtain said funds from its operations. If its
does not obtain sufficient revenues to achieve the foregoing, it will
have to obtain funds through loans or the sale of additional shares of
common stock. The Company has no plans at the present time to raise
additional funds through loans or the sale of shares of common stock.
If the Company does not obtain additional funding, if needed, it may
have to cease operations. See "Item 7. Certain Relationships and
Related Transactions."
The Company has experienced losses in each fiscal period reported
on. At the end of the Company's 1998 fiscal year it had no cash and
$214,691 in accounts receivable. For the fiscal 1999 year, the Company
does not have sufficient funds to acquire and/or develop any business
without seeking additional funds. The Company relies principally on the
issuance of common shares by private placements to raise funds to
finance the business of the Company. There is no assurance that market
conditions will continue to permit the Company to raise funds if
required. The Company may issue more common shares at prices determined
by the Board of Directors, possibly resulting in dilution of the value
of common shares, and, given there is no preemptive right to purchase
common shares, if a member does not purchase additional common shares,
the percentage share ownership of the member in the Company will be
reduced.
<PAGE> 15
Management has determined that consistent with the Company's
business plan, part of its plan of operation for the next twelve months
is to secure the necessary technological assets to support the proposed
products and services to be offered by the Company. The Company has
taken the initial step of acquiring a fifty percent interest in
Community-Builder.com Inc., an Internet based applications developer
(which includes business process engineering, developing
Internet/Intranet platforms, and the use of security and e-commerce
technology) in order to obtain the core technology platform necessary
to support the services the Company intends to offer. ^ The
initial internet service or prototype consists of a set Internet tools
to enable professionals to communicate via video conferencing, audio
conferencing, and text conferencing, and the secure exchange of a
variety of multi-media files, such as patient records, x-rays or MRI
scans. This set of software internet tools will run on a Linux
Operating System server, in the network/internet, and support a new set
of intelligent and simple to use "internet appliances" (simple Internet
ready PCs) currently under development. Although these technologies
have been successfully used in other internet applications, they have
not been integrated for the purpose of enabling medical professionals
to transmit referrals and related patient information between each
other via the internet. The Company and Community-Builder will utilize
this technology to initially create a referrals and collaboration
application for Orthopedics medical professionals. It will cost
approximately $300,000 to $500,000 to make this service operational and
this development will be paid for by Telemedica. Under the terms
of the agreement, the Company purchased the right to use, modify,
customize, brand, sell and market the Base Technology to provide online
transaction processing functionality and features within the
applications and sites that the Company develops.
For a one time investment of $150,000, a fifty percent equity
ownership position was obtained in Community Builder.com by the
Company. This in turn allows the Company access to the products,
services and technologies developed by Community Builder.com. Any
license fees on a per usage basis for Community Builder products,
services and technologies will be born by COI's end clients.
The Company may acquire or license additional software technology
through a technology licensing or purchase agreement to ensure that
other proposed services offered by the Company are delivered in a
timely and useable manner during the plan of operation for the next
twelve months.
With regard to other necessary hardware assets, such as Internet
computer servers and desktop computers, which are necessary to support
the Company's products and services, the Company's focus will be on
leasing these assets from reliable yet unidentified lessors.
The current plan of operations for the next twelve months includes
several products or services advancing through the above-mentioned
phases of development, and being offered for sale, purchase, fee,
lease, license, or other appropriate revenue generating methods for
such e-commerce products and services.
Given the Company's current level of working capital and its
operations being conducted to develop its products, it is expected that
the Company will satisfy its cash requirements through the issuance of
common shares by private placements to raise funds rather than seeking
interest-bearing loans. However, the Company recognizes that as a
<PAGE> 16
result of its limited, financial, or other resources, the number of
suitable financing options may be limited. Should these additional
sources of capital not be found, the Company will modify its operations
to conserve working capital by concentrating on fewer products and/or
services being advanced. Additionally, should no further funds be
raised, the Company will consider whether to reduce employment and
other contract expense including the renegotiation of the terms of
their employment contracts on terms which are undetermined at this
time, but will be acceptable to both the Company and the respective
employee(s).
In October 1986, the Tax Reform Act of 1986 (the "Act") was
enacted. The Act reduces the maximum corporate tax rate, over a phase-
in period, to 34%. The resulting lower tax rates will affect amounts
that the Company has accrued for deferred tax liabilities. The
adjustment to the deferred tax liability has been addressed by a new
accounting standard issued by the Financial Accounting Standards Board
(FASB 96). The adjustment is to be made by a one time increase or
decrease to net income. FASB 96 is effective for fiscal years beginning
after December 15, 1988. The Company has elected to apply FASB 96 to
its financial statements for the fiscal year ended December 31, 1998,
the adjustment is reflected as an deficit of $(16,251,737).
Results of Operations
The Company derives its operating revenues from multiple contracts
with two clients in the telemedicine business. The value of these two
contracts is in excess of three million dollars. Two Telemedicine
clients, World Telehealth and TeleMedica Group make up the $3,000,000
revenue number. In each contract, the Company will provide general
management services, strategic marketing consulting, product and
service development management, and the establishment of the operating
infrastructures for these clients. The World Telehealth contract was
valued at $2.5 million, of which $320,000 has been collected. Due to
the dispute with World Teleheath, the balance of the $913,202
receivable is expected to be collected. Another $1,030,000 has been
placed in reserve allowance for non collectable amounts on the
September 30, 1999 Financial Statements. No revenue has been declared
on the Financial Statements from August, 1999 when the contract was
under dispute. This will be reflected in the December 31, 1999 year end
statements.
The TeleMedica contract is estimated at over $500,000. As of
the date hereof, $150,000 has been collected from the TeleMedica
contract.
The reference to multiple contracts with one client is to
TeleMedica. The contract with TeleMedica consists of four
separate sub-contracts as follows:
- General Management and Strategic Marketing Program
- Development of Orthopedics Referrals & Collaboration Service
- Development of TeleMedica Healthcare Insurance Service
- Development of Electronic Pharma Distribution and Dispensing
Service
<PAGE> 17
Fiscal 1998 Compared to Fiscal 1997
Revenues for the year ended December 31, 1998 totaled $458,441 as
compared to zero revenues for December 31, 1997. This was due to no
revenue in 1997 as a result of the start up of the Company and a
contract being negotiated in August 1998.
Operating expenses during the year ended December 31, 1998 were
$1,977,970 (4.31 that of operating revenues) as compared to $14,732,208
in the year ended December 31, 1997. The majority of this expense was
attributable to the application of general accepted accounting
practices (GAAP) where the issuance of shares for compensation were
added to operational expenses amounting to $14,579,706 in 1997 and
$1,650,650 in 1998.
Interim Periods Ended June 30, 1999 and 1998
Operating revenues for the six months ended June 30, 1999 totaled
$1,076,940 as compared to revenues of $105,102 earned during the same
quarter in the preceding fiscal year. The increase in operating
revenues of approximately 10.25 times was the result of a contract in
the telemedicine business. The Company's customer credit policy is
that payment is due within 30 days of the date of an invoice.
$856,140 of the operating revenues of the Company are accounts
receivable. The reason for Company has not collected its receivables
is because the World Teleheath Contract is under suspension and the
Company did not raise the funds that were required to pay for the
management Contract with World Telehealth as per Section 1.6 of the
agreement. Another $1,030,000 has been placed in reserve allowance for
non collectable amounts on the September 30, 1999 financial statements.
It is anticipated that the current receivable as outlined in the
September 30, 1999 financial statements will be collected.
Operating expenses increased from $118,533 at June 30, 1998 to
$3,396,402 at June 30, 1999. The majority of this increase in operating
expense was attributable to the application of general accepted
accounting practices (GAAP) where the difference between the price of
the shares issued in the placement and the market value of the shares
during the same period was assigned to operational expenses, amounting
to $2,431,782 in 1999.
The Company issued 1.22 million shares of common stock at a
78% discount to the market on April 7, 1999 in order to attract capital
required by the Company to sustain operations. There were four
purchasers of this stock. The Company received the $610,000. The cash
proceeds were applied to operating expenses. The Company may issue
shares of common stock at a discount from the market price if necessary
to continue its operations.
The cost of sales and operating margin for December 31, 1998 was
as follows: Cost of Sales (COS) $300,000, Operating Margin $158,000.
The cost of sales and operating margin for September 30, 1999 was
as follows: Cost of Sales (COS) $1,200,000, Operating Margin $562,000.
The overall operating loss was a result of the suspension of the
World Telehealth contract and the issuance of capital stock of at less
than market value.
<PAGE> 18
In future contracts, the Company intends to require advances
payment of at least 25% the total price of the contract.
The operating expenses in the September 30, 1999 financial
statements amounted to $6,542,887.
Effects of Inflation
Inflation and changing prices have not and are not expected to
have a significant effect on the Company's operations during the
foreseeable future.
ITEM 3. DESCRIPTION OF PROPERTIES
^
The Company's executive offices are located at the residence
of Robert Wilder, the Company's Chief Executive Officer at 50 Augusta
Drive Way, Markham, Ontario, Canada L6E 1B5. The Company utilizes
approximately 140 square feet of space on a rent free basis at Mr.
Wilder's home. The Company intends to find suitable office space when
it determines it can economically afford to do so.
All employees, either permanent or on part time or short duration
contracts operate out of their homes with late vintage PCs, printers,
fax machines, telephone systems and internet access.
The Company uses the term "virtual company" to define a company
that does not have a single specific operating location or a fixed set
of employees, but rather has a small contingent of permanent employees,
and a fluid set of contractors that operate out of their homes and
temporary project offices when they are established. This group of
contractors is further supported by a number of non-related companies
with which the Company has established alliance agreements to outsource
work, such as technology development, graphics and marketing collateral
multi-media publishing.
Currently, the Company's operations are being conducted only in
Markham, Ontario, Canada. The Company intends to expand to other
geographical locations as new business develops. Work assignments are
made and supervised via daily e-mails, weekly conference calls and a
minimum quarterly "face to face" meeting with each employee,
contractor, or outsourcer. Employees and contrators are chosen for
their ability to be results focussed and to operate independently,
however, significant collaboration occurs amongst the high performance
team through the communications mechanisms mentioned above.
Each project has an accounting module that feeds information to a
computer located at Mr. Wilder's home. Mr. Wilder monitors the
accounting at his home. Grant Thornton LLP performs audits and provide
financial advice when requested by the Company.
Customer contact typically occurs at the customer's locations or
on conference calls. Internet e-mail is also used extensively to
transmit information to customers. For projects underway these
customer interactions are tightly scheduled. Prospecting activities
are also conducted on the customer's premises, and are typically less
tightly scheduled.
<PAGE> 19
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The Company's securities are recorded on the books of its transfer
agent in registered form. However, a majority of such shares are
registered in the name of intermediaries such as brokerage houses and
clearing houses on behalf of their respective clients and the Company
does not have knowledge of the beneficial owners thereof. The Company
is not directly or indirectly owned or controlled by a corporation or
foreign government.
As of November 1, 1999, the Company had an authorized share
capital of 100,000,000 common shares with a par value of $0.001 per
share of which 4,078,122 shares were issued and outstanding. The
purchasers of the 1.22 million shares in April, 1999 were CYBERLINX,
INC., Macquesten Company, Philip Juliano and Quickphone, Inc. The
shares were sold pursuant to Reg. 504 of the Securities Act of 1933
(the "Act"). The Company was not subject to the reporting requirements
of section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); was not an investment company; and, was not a
development stage company that either had no specific business plan or
purpose or indicated that its business plan was to engage in a merger
or acquisition with an unidentified company or companies, or other
entity or person. The Company filed a Form D with the Securities and
Exchange Commission (the "Commission"). The aggregate price of the
offering of securities did not exceed $1,000,000, less the aggregate
offering price of all securities sold within the twelve months period
to the sale thereof, in reliance on any exemption under section 3(b) of
the Act or in violation of section 5(a) of the Act. The Company
does not know if the foregoing have made a further transfer of the
shares so acquired.
The following table sets forth, as of September 1, 1999, the
beneficial shareholdings of persons or entities holding five percent or
more of the Company's common stock, each director individually, each
named executive officer and all directors and officers of the Company
as a group. Each person has sole voting and investment power with
respect to the shares of Common Stock shown, and all ownership is of
record and beneficial.
Amount and
Nature of
Name and Address Beneficial Percent
of Beneficial Owner Owner Position of Class
Robert G. Jones 501,438 President and 12.30%
Director
Gary W. Evans 501,438 Vice President, 12.30%
Secretary/Treasurer,
Chief Financial Officer
and Director
Robert W. Wilder 502,563 Director 12.32%
All officers and 1,505,439 36.92%
directors as a group.
(3 persons)
<PAGE> 20
No arrangements exist which may result in a change in control of
the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
The name, age and position held by each of the directors and
officers of the Company are as follows:
Name Age Position Held
Robert G. Jones 44 President and a member of the Board
of Directors
Gary W. Evans 64 Vice President, Secretary/Treasurer
Chief Financial Officer and a
member of the Board of Directors
Robert W. Wilder 65 Chief Operating Officer and a
member of the Board of Directors
All directors have a term of office expiring at the next annual
general meeting of the Company, unless re-elected or earlier vacated in
accordance with the bylaws of the Company. All officers have a term of
office lasting until their removal or replacement by the board of
directors.
Biographical Information:
Robert G. Jones - President and a member of the Board of Directors
Mr. Jones has been a member of the Board of Directors since the
inception of the Company. From January 1998 to April 1999, Mr. Jones
was the Vice President of Sales and Marketing. Since April 1999, Mr.
Jones has been the President of the Company. From September 1974 to
May 1976, Mr. Jones worked as a senior operator/software support at IBM
in their operations group, of the VM 370 online environment. From June
1978 to May 1981, Mr. Jones worked as an engineer designing automated
and manually assisted assembly operations at General Motors in their
Windsor Trim Plant Operations and their Detroit Technical Center
departments. From March 1985 to October 1997, Mr. Jones became a Vice
President at Bell Canada. Mr. Jones' responsibilities included helping
to establish customer focused operations systems, engineering support,
and sales for large national and multi-national corporate customers,
notably the banks and financial institutions. From May 1994 to December
1996, Mr. Jones became the managing director of marketing - national
customers at the Stentor Alliance of Canadian Telephone companies. Mr.
Jones' responsibilities included product development, product support,
large corporate sales and the establishment of a technique to rapidly
design and implement networking solutions for these national customers.
From 1981 to 1985, Mr. Jones became a founding partner of Haljon
Controls, Inc. Haljon is a Canadian company engaged in the design and
deployment of fault tolerant, high reliability real time supervisory
control and data collection systems for use in oil movement and storage
applications and safety shutdown applications in the petroleum and
petrochemical field. Mr. Jones graduated from the University of
Waterloo, Canada in 1978 with a BASc. of Systems Engineering and from
the University of Toronto, Canada in 1989 with an Executive MBA.
<PAGE> 21
Gary W. Evans - Vice President, Secretary/Treasurer Chief Financial
Officer and a member of the Board of Directors.
Mr. Evans is a founder, the Vice President, Secretary/Treasurer,
Chief Financial Officer and a member of the Board of Directors since
inception of the Company. Since 1997, Mr. Evans has worked full
time as the Company Secretary and Vice President of Operations. Since
October 1993, Mr. Evans has been an independent telecommunications
consultant. From May 1990 to October 1993, Mr. Evans was a
Corporate Director with Cantel, Inc. Cantel is a cellular network
company in Canada. His responsibilities included standards,
performance parameters for planning/system engineering and operations.
From 1987 to 1990, Mr. Evans was the general operations manager with
Bell Canada International in Saudi Arabia. His responsibilities
included all aspects of operations including personnel, financial
management, pre-sale support, customer configuration design,
installation and in-service maintenance of PBX, key, facsimile and
other telecommunication network hardware and service. From 1986 to
1987, Mr. Evans was the general operations manager of CTG Toronto. CTG
is a international company that provides and services
telecommunications switching equipment. From February 1985 to October
1986, Mr. Evans was a general manager of network operations with Bell
Canada. From November 1982 to February 1985, Mr. Evans was director of
operations with Northern Telecom Inc., Dallas, Texas. His
responsibilities included financial management, installations, while
providing direct support for new products, project management, material
management, training centers and special engineering. From 1962 to
1982, Mr. Evans was employed in the operations department with Bell
Canada. Mr. Evans graduated from Columbia University in 1983 with a
Bachelor of Business Administration.
Robert W. Wilder - Chief Operating Officer and a member of the Board of
Director.
Mr. Wilder is a founder, the Chief Operating Officer and a member
of the Board of Directors since inception of the Company. From August
1997 to April 1999, Mr. Wilder was the President of the Company. From
January 1990 to August 1997, Mr. Wilder was President of CR&J
Management, Inc., a consulting firm that specialized in providing
business management consulting during the period of divestiture of the
North American telecommunications industry. His responsibilities
included specific services to Bell Canada, Telesat Canada and Telecom
Canada during the down sizing and re-structure of these companies.
From 1987 to January 1990, Mr. Wilder was director of business
operations for Telecom Canada. His responsibilities included sales,
marketing, technology payables/receivables and service operations.
From 1985 to 1987, Mr. Wilder was the director of engineering for
Telecom Canada. His responsible included systems engineering, design
and support of global telecommunications. From 1981 to 1985, Wilder
was Vice President - Service, for Northern Telecom, Richardson, Texas.
He was responsible for their subscriber based services and products
which included military projects, as well as, provisioning the
telecommunications systems for the 1984 Olympics, on the campus of
UCLA. From 1960 to 1981, Mr. Wilder worked for Bell Canada in a full
spectrum of functions including operations, engineering, marketing and
held the position of national sales director in 1981.
None of the individuals listed above are subject to any
anticipated or threatened legal proceedings of a material nature.
<PAGE> 22
The Company held its last annual meeting of shareholders on
August 1, 1999.
Messrs. Evans and Mr. Wilder have devoted full time to the to the
affairs of the Company since their employment.
ITEM 6. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the
Company from August 1, 1997 through December 31, 1998, for each officer
and directors of the Company. This information includes the dollar
value of base salaries, bonus awards and the number of stock options
granted, and certain other compensation, if any.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities All
Name and Annual Restricted Underlying Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert G.
Jones 1998 100,000 - - 501,438 - - -
President 1997 - - - - - - -
Gary W. 1998 100,000 - - 501,438 - - -
Evans 1997 75,000 - - - - - -
Secretary
Robert W.
Wilder 1998 100,000 - - 502,563 - - -
COO 1997 75,000 - - - - - -
</TABLE>
The Company anticipates paying the following salaries in 1999,
subject to the Company. ^ If the Company is unable to the salaries,
they will be accrued as debt.
Robert Jones President 1999 $120,000
Gary Evans Vice President 1999 $120,000
Robert Wilder Chief Operation Officer 1999 $120,000
The Company has entered into an employment agreement with Robert
Jones wherein the Company will pay Mr. Evans $120,000 per year as
Secretary of the Company. The employment agreement has a three year
term.
The Company has entered into an employment agreement with Gary
Evans wherein the Company will pay Mr. Evans $120,000 per year as
Secretary of the Company. The employment agreement has a three year
term.
<PAGE> 23
The Company has entered into an employment agreement with Robert
Wilder wherein the Company will pay Mr. Evans $120,000 per year as
Secretary of the Company. The employment agreement has a three year
term.
The Company has adopted a qualified stock option plan and a non-
qualified incentive stock option plan. Options granted to officers are
reflected below. There are no other stock option plans, retirement,
pension, or profit sharing plans for the benefit of the Company's
officers and directors other than as described herein.
Option/SAR Grants.
The following grants of stock options, whether or not in tandem
with stock appreciation rights ("SARs") and freestanding SARs have been
made to officers and/or directors:
<TABLE>
<CAPTION>
Number of
Securities
Number of Underlying
Securities Options/SARs
Underlying Granted Exercise Number of
Options During Last or Base Options Expiration
Name SARs Granted 12 Months[1] Price ($/Sh) Exercised Date
<S> <C> <C> <C> <C> <C>
Robert Wilder 500,000 500,000 $0.50 -0- 12/31/2001
Robert Jones 500,000 500,000 $0.50 -0- 12/31/2001
Gary Evans 500,000 500,000 $0.50 -0- 12/31/2001
</TABLE>
^ Other than as set forth above, the Company has not
granted any other stock options or stock appreciation rights to its
officers or directors since its inception on November 1, 1996.
There are no standard or other arrangements pursuant to which the
Company's directors were compensated in their capacity as such during
the 1999 fiscal year.
There are no compensation arrangements for employment, termination
of employment or change-in-control between the Company and the Named
Executive Officers.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On January 3, 1999, the Company entered into an employment
agreement with Robert Jones wherein the Company will pay Mr. Jones
$120,000 per year as ^ Treasurer of the Company. The
employment agreement has a three year term.
On January 3, 1999, the Company entered into an employment
agreement with Gary Evans wherein the Company will pay Mr. Evans
$120,000 per year as ^ President and Chief Executive Officer
of the Company. The employment agreement has a three year term.
On January 2, 1999, the Company entered into an employment
agreement with Robert Wilder wherein the Company will pay Mr. Wilder
$120,000 per year as Secretary of the Company. The employment
agreement has a three year term.
<PAGE> 24
ITEM 8. DESCRIPTION OF SECURITIES.
The Company's securities consist of common stock with a par value
of $0.001 per share. The Company's authorized capital is 100,000,000
common shares of which 4,078,122 common shares are issued and
outstanding. All of the Company's common stock, both issued and
unissued, is of the same class and ranks equally as to dividends,
voting powers and participation in the assets of the Company on a
winding-up or dissolution. No common shares have been issued subject
to call or assessment. Each common share is entitled to one vote with
respect to the election of directors and other matters. The shares of
common stock do not have cumulative voting rights. Therefore, the
holders of a majority of shares voting for the election of directors
can elect all the directors then standing for election, if they chose
to do so, and in such event the holders of the remaining shares will
not be able to elect any directors.
The common shares have no preemptive or conversion rights, and no
provisions for redemption, purchase for cancellation, surrender of
sinking fund or purchase fund. Provisions as to the creation or
modifications, amendments or variations of such rights or such
provisions are contained in the Private Corporations Act, Chapter 78,
Nevada Revised Statutes.
Neither the Articles of Incorporation nor the Bylaws of the
Company contain provisions which would delay, defer or prevent a
change in control of the Company.
The Company's transfer agent is American Securities Transfer &
Trust, Inc. 938 Quail Street, Suite 101, Lakewood, CO 80215, telephone
(303) 234-5300, facsimile (303) 234-5340.
The Company has issued options to purchase up to 2,385,000 shares
of its common stock pursuant to its 1999 Non-Qualifying Stock Option
Plan to 12 persons, three of which are its officers. The options are
exercisable at prices ranging from $0.50 to $2.00 per share. The
options expire at various dates ranging from December 31, 2001 to
December 31, 2002.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY
AND RELATED SHAREHOLDER MATTERS.
From January 1, 1999 to October 25, 1999, the Company' shares
traded on the Bulletin Board operated by the National Association of
Securities Dealers, Inc. under the trading symbol "COLS." On October
25, 1999, the Company's shares were delisted from the Bulletin Board as
a result of the Company's failure to file reports with the Securities
and Exchange Commission (the "Commission") pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"). On
October 26, 1999, the Company's shares began trading in the "Pink
Sheets" owned by the National Quotation Bureau. Summary trading by
quarter for the 1999 and 1998 fiscal years are as follows:
<PAGE> 25
Fiscal Quarter High Bid(1) Low Bid(1)
1999 Third Quarter $3.00 $0.50
Second Quarter $3.93 $2.12
First Quarter $9.00 $1.50
1998
Fourth Quarter $2.63 $0.05
Third Quarter $3.00 $0.31
Second Quarter Not Listed
First Quarter Not Listed
[1] These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual
transactions.
At November 4, 1999, there were 4,078,122 common shares of the
Company issued and outstanding.
At November 4, 1999, there were 112 holders of record including
common shares held by brokerage clearing houses, depositories or
otherwise in unregistered form. The beneficial owners of such shares
are not known by the Company.
No cash dividends have been declared by the Company nor are any
intended to be declared. The Company is not subject to any legal
restrictions respecting the payment of dividends, except that they may
not be paid to render the Company insolvent. Dividend policy will be
based on the Company's cash resources and needs and it is anticipated
that all available cash will be needed for property acquisition,
exploration and development for the foreseeable future.
The Company is not aware of any reason as to why the price of the
security would have appreciated from those prices reflected in the
summary trading table other than the demand for securities has been
greater than the available supply.
ITEM 2. LEGAL PROCEEDINGS
There are no material legal proceedings to which the Company is
subject to or which are anticipated or threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no disagreements on accounting and financial
disclosures from the inception of the Company through the date of this
Registration Statement.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The Company was incorporated in November 1996. In the past three fiscal
years, the Company has issued the following unregistered securities at
the following prices. There were no underwriters engaged and no
underwriting discounts or commissions paid. All of the issuances
were made pursuant to Section 4(2) of the Act promulgated thereunder.
<PAGE> 26
Certain shares were sold pursuant to Section 4(2) of the
Securities Act of 1933 (the "Act") as indicated below. The shares were
sold in a transaction not involving a public offering. The Company
supplied all information that would be disclosed in a registration
statement and the Company determined that each purchaser was
"sophisticated" in that he was able to read and understand the
information furnished and did not need the protection of the
registration provisions of Section 5 of the Act. All certificates
issued in connection with Section 4(2) transaction contained a legend
which prohibited transfer thereof unless such transfer was made
pursuant to an effective registration statement or an exemption
therefrom was available. If an exemption from registration was relied
upon, an opinion of counsel for the Company would be supplied to the
transfer agent prior to the transfer of a certificate.
Certain other shares were sold pursuant to Reg. 504 of the Act as
indicated below. The Company was not subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act"); was not an investment company; and, was not
a development stage company that either had no specific business plan
or purpose or indicated that its business plan was to engage in a
merger or acquisition with an unidentified company or companies, or
other entity or persons. The Company filed a Form D with the
Securities and Exchange Commission (the "Commission"). The aggregate
price of the offering of securities did not exceed $1,000,000, less the
aggregate offering price of all securities sold within the twelve
months prior to the sale thereof, in reliance on any exemption under
Section 3(b) of the Act or in violation of Section 5(a) of the Act.
Date Type of Security Number Proceeds Exemption
1997
08/97 Common shares 7,293,500 $ 7,293 Sec. 4(2)
10/97 Common Shares 76,625 $153,250 Reg. D (504)
1998
08/98 Common Shares 650,000 $ 650 Reg. D (504)
(Services)
11/98 1 for 400 reverse
stock split
12/98 Common Shares 1,200,000 $ 1,200 Reg. D (504)
(Services)
12/98 Common Shares 1,500,000 $ 1,500 Reg. D (504)
(Services)
1999
04/99 Common Shares 138,000 $ 138 Reg. D (504)
(Services)
04/99 Common Shares 1,220,000 $610,000 Reg. D (504)
<PAGE> 27
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Chapter 78, rules 78.7502, 78.751 and 78.752 of the Nevada Revised
Statutes contain the provisions which, subject to certain restrictions,
in general provide for the Company's ability to indemnify, and thereby
limit the personal liability of, the directors and officers of the
Company against certain liabilities. Officers and directors of the
Company are indemnified generally against expenses, actually and
reasonably, incurred in connection with proceedings, whether civil or
criminal, provided that it is determined that they acted in good faith,
were not found guilty and, in any criminal matter, had reasonable cause
to believe their conduct was not unlawful.
The indemnification provisions apply to officers and directors
of the Company. Neither the Company's Articles of Incorporation,
as amended nor the Company's bylaws provide for indemnification as set
forth above.
PART F/S
Contents
Page
Auditors' Report . . . . . . . F-1
Statement of Loss and Deficit . . . . . F-2
Statement of Stockholders Equity . . . . F-3
Balance Sheet . . . . . . . . F-4
Statement of Cash Flows . . . . . . F-5
Notes to the Financial Statements . . . . F-6 - F-10
<PAGE> 28
GRANT THORNTON
Auditors' Report
To the Shareholders of
COI Solutions Inc.
We have audited the accompanying balance sheets of COI Solutions Inc.
and a development stage company, as at December 31, 1998 and 1997 and
the related statements of loss and deficit, stockholders equity and
cash flows for the years ended December 31, 1998 and the period August
1, 1997 to December 31, 1997. These financial statements are the
responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, these financial statements referred to above present
fairly, in all material respects, the financial position of the company
as at December 31, 1998 and 1997 and the results of their operations,
changes in stockholders equity and cash flows for the year ended
December 31, 1998 and the period August 1, 1997 to December 31, 1997,
in conformity with generally accepted accounting principles in the
United States.
The accompanying financial statements have been prepared assuming that
the company will continue as a going concern. As discussed in Note 1
to the financial statements the company has suffered recurring losses
from operations that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these
matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Grant Thornton LLP
Markham, Canada
February 10, 1999 Chartered Accountants
F-1
<PAGE> 29
COI Solutions Inc.
(A Development Stage Company)
Statement of Loss and Deficit
<TABLE>
<CAPTION>
From inception From inception
August 1, August 1, 1997 to
Year Ended 1997 to December 31,
December 31, December 31, 1998
1998 1997 Cumulative
<S> <C> <C> <C>
Revenue $ 458,441 $ - $ 458,441
Operating expenses 1,977,970 152,502 2,130,472
------------ ---------- ------------
Loss for the period $ (1,519,529) $ (152,502) $ (1,672,031)
============ ========== ============
Loss per share,
basic and diluted
(Note 6) $ (6.72) $ (8.24) $ (14.96)
============ ========== ============
Deficit, beginning
of the period $ (152,502) $ - $ -
Loss for the period (1,519,529) (152,502) (1,672,031)
------------ ---------- ------------
Deficit,
end of the period $ (1,672,031) $ (152,502) $ (1,672,031)
============ ========== ============
</TABLE>
See accompanying notes to the financial statements.
F-2
<PAGE> 30
COI Solutions Inc.
(A Development Stage Company)
Statement of Stockholders Equity
Year Ended December 31, 1998
<TABLE>
<CAPTION>
Additional
Common Stock Paid in Total
Shares* Amount Capital Deficit Equals
<S> <C> <C> <C> <C> <C>
August 1, 1997
share issue (Note 5a) 18,305 18 $ 7,276 $ - $ 7,294
October 1997
share issue (Note 5b) 192 - 153,250 - 153,250
Loss August 1, 1997
to December 31, 1997 - - - (152,502)
(152,502)
--------- ----- ----------- ------------ ------------
Balance,
December 31, 1997 18,497 18 160,526 (152,502)
8,042
August 19, 1998
share issue (Note 5c) 1,625 2 974,998 - 975,000
December 3, 1998
share issue
(Note 5e) 1,200,000 1,200 298,800 - 300,000
December 3, 1998
share issue
(Note 5f) 1,500,000 1,500 373,500 - 375,000
Loss for year ended
December 31, 1998 - - - (1,519,529) (1,519,529)
--------- ----- ----------- ------------ ------------
Balance,
December 31, 1998 2,720,122 2,720 $ 1,807,824 $ (1,672,031) $ 138,513
========= ===== =========== ============ ============
</TABLE>
* After giving retroactive effect to the reverse stock split
effective December 3, 1998 outlined in Note 5(d).
See accompanying notes to the financial statements.
F-3
<PAGE> 31
COI Solutions Inc.
(A Development Stage Company)
Balance Sheet
December 31
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Assets
Current
Cash $ - $ 26,442
Accounts receivable (net of
allowance for doubtful
accounts (1998 - $200,000;
1997 - $Nil) 214,691 -
------------ ---------
$ 214,691 $ 26,442
============ =========
Liabilities and Shareholders' Equity
Current
Bank indebtedness $ 6,612 $ -
Accounts payable 27,315 -
Due to directors 42,251 18,400
------------ ---------
76,178 18,400
------------ ---------
Shareholders' Equity
Capital stock (Note 5) 2,720 18
Additional paid in capital
(Note 5) 1,807,824 160,526
------------ ---------
1,810,544 160,544
Deficit (1,672,031) 152,502
------------ ---------
138,513 8,042
------------ ---------
$ 214,691 $ 26,442
============ =========
</TABLE>
See accompanying notes to the financial statements.
F-4
<PAGE> 32
COI Solutions Inc.
(A Development Stage Company)
Statement of Cash Flows
<TABLE>
<CAPTION>
From inception
August 1,
Year Ended 1997 to
December 31, December 31,
1998 1997
<S> <C> <C>
Cash derived from
Operating
Loss $ (1,519,529) $ (152,502)
Share compensation 1,646,650 -
Change in
Accounts receivable (214,691) -
Accounts payable 27,315 -
Advances from shareholders 23,851 18,400
------------ ----------
(36,404) (134,102)
------------ ----------
Financing
Issue of common shares 3,350 160,544
Bank indebtedness 6,612 -
------------ ----------
9,962 160,544
------------ ----------
Net increase (decrease) in cash (26,442) 26,442
Cash, beginning of period 26,442 -
------------ ----------
Cash, end of period $ - $ 26,442
============ ==========
</TABLE>
See accompanying notes to the financial statements.
F-5
<PAGE> 33
COI Solutions Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
1. NATURE OF OPERATIONS
COI Solutions Inc. (formerly Expedia Com Global Inc.), a Development
Stage Company, was incorporated in Nevada on August 1, 1997. The
Company is an integrator of telecommunications products and services
enabling electronic communications of transactions based services,
voice synthesis and large project consulting. The Company has
currently established operations in Florida.
The Company is considered to be in the development stage and the
accompanying financial statements represent those of a development
stage enterprise, and therefore, is subject to the usual business risks
of development stage companies.
The company has sustained large accumulated losses since its inception
mainly due to capital stock being issued to providers of services at a
consideration below the current market price.
Management plans for the future to limited future losses is as follows:
1. To not issue a large number of shares at a consideration below the
current market price.
2. To continue to control overhead expenses and ensure that all
contract services provided to the company are charged directly to,
and billed to, specific contracts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting principles
The Company's accounting and reporting policies conform to generally
accepted accounting principles and industry practice in the United
States.
Use of estimates
In preparing the Company's financial statements, management is required
to make estimates and assumptions that affect the reported amounts in
the financial statements and accompanying notes to the financial
statements. Actual results may differ from those estimates.
Fair value of financial instruments
The Company's estimate of the fair value of cash, receivables, payables
and accruals approximates the carrying value.
F-6
<PAGE> 34
COI Solutions Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue recognition
Consulting revenue is based on fixed term contracts plus expenses.
Revenue is recognized on a straight-line basis over the term of the
contract which correlates to the anticipated schedule for delivery of
services under the contract. Contract progress is monitored and
revenue recognition is modified for unanticipated disruptions in
delivery of the contracted services. Net revenue recognized plus
expenses is limited to the amount of capital raised for the customer in
accordance with the contract.
Income taxes
The Company accounts for its income taxes under the liability method
specified by Statement of Financial Accounting Standards (SFAS) No.
109, Accounting for Income Taxes. Deferred tax assets and liabilities
are determined based on the difference between the financial statement
and tax bases of assets and liabilities as measured by the enacted tax
rates which will be in effect when these differences reverse. Deferred
tax expense is the result of changes in deferred tax assets and
liabilities.
3. CONCENTRATIONS
The Company currently has several contracts to provide management
services and consulting services with one major customer from which it
generates 100% of its revenue. The total amount of these contracts is
approximately $2.5M dollars. The current contracts which will expire
December 31, 1999 will provide general management services strategie
marketing consulting, product and service development management and
the establish of the operating infrastructures for this customer. As
part of the contract the company is required to raise the required
capital for the customer for the payment on the contract.
4. DIRECTORS ADVANCES
Directors have advanced funds for operating expenses amounting to
$42,251. The loans are unsecured, interest free and it is expected
they will be repaid within one year.
5. CAPITAL STOCK AND PAID IN CAPITAL
a) At inception August 1, 1997 the Company issued a total of
7,293,500 shares of common stock to its founders for cash
totalling $7,294.
b) In October 1997 the Company issued a total of 76,625 shares of
common stock to investors at $2 per share (76,625 x $2 =
$153,250). The shares have been issued at the par value of $.001
per share and the balance of $153,174 was credited to additional
paid up capital.
F-7
<PAGE> 35
COI Solutions Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
5. CAPITAL STOCK AND PAID IN CAPITAL (continued)
c) On August 19, 1998 a resolution was passed to issue 650,000 common
shares with a market value of $975,000 (650,000 x $1.50) for
consulting services rendered to the Company by outside
consultants. The shares have been issued for a cash consideration
at $.001 per share totalling $650 and the balance of $974,350 has
been charged as consulting fees and included in operating expenses
on the statement of loss and credited to additional paid up
capital.
d) On December 3, 1998 the Company passed a resolution to have a
reverse split on the common shares. The 8,020,125 common shares
issued were reduced to 20,122 common shares with a par value of
$.001.
e) On December 3, 1998 a resolution was passed to issue 1,200,000
common shares with a market value of $300,000 ($1,200,000 x $.25).
The shares have been issued for a cash consideration at the par
value of $.001 per share totalling $1,200 and the balance of
$298,800 has been charged as consulting fees and included in
operating expenses on the statement of loss and credited to
additional paid up capital.
f) On December 3, 1998 a resolution was passed to issue 1,500,000
restricted common shares with a market value of $375,000
(1,500,000 x $.25) as compensation to the officers of the company.
The shares have been issued for a cash consideration at the par
value of $.001 per share totalling $1,500 and the balance of
$373,500 has been charged as compensation and included in
operating expenses on the statement of loss and credited to
additional paid up capital.
Summary of stock and paid up capital:
<TABLE>
<CAPTION>
Additional
Number of Issued Paid in
Shares Value Capital
<S> <C> <C> <C>
Shares issued Note 5a above * 18,305 18 $ 7,276
Shares issued Note 5b above * 192 - 153,250
Shares Issued Note 5c above * 1,625 2 974,998
Shares issued Note 5e above 1,200,000 1,200 298,800
Shares issued Note 5f above 1,500,000 1,500 373,500
--------- ----- -----------
Totals 2,720,122 2,720 $ 1,807,824
========= ===== ===========
</TABLE>
* After retroactively applying the reverse stock split outlined in
Note 5(d).
F-8
<PAGE> 36
COI Solutions Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
6. LOSS PER SHARE
Net loss per share is calculated based on the weighted average common
shares outstanding. Weighted average common shares used in the
computation of basic loss per share are 226,171 for 1998 and 18,425 for
1997. There are no dilution affects to be recorded.
7. INCOME TAXES
The reconciliation of the statutory federal rate to the Company's
effective income tax rate is as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Statutory tax (benefit) provision $ (668,592) $ (67,100)
Non-deductable expenses 724,526 -
Tax benefit realized on
tax loss carryforward (48,270) -
Other (7,664) 7,664
Increase in valuation allowance - 59,436
---------- ---------
$ - $ -
========== =========
</TABLE>
Under SFAS No. 109, Accounting for Income Taxes, deferred tax assets
and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using
enacted tax rates.
The tax effect of temporary differences that give rise to deferred
income taxes is as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Deferred tax assets
Net operating loss carryforwards $ 11,168 $ 59,437
Valuation allowance (11,168) (59,437)
--------- ---------
$ - $ -
========= =========
</TABLE>
At December 31, 1998, the company, had approximately $25,000 of net
operating loss carryforwards which expire in 2012.
F-9
<PAGE> 37
COI Solutions Inc.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998
8. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed. In addition,
similar problems may arise in some systems which use certain dates in
1999 to represent something other than a date. The effects of the Year
2000 Issue may be experienced before, on, or after January 1, 2000,
and, if not addressed, the impact on operations and financial reporting
may range from minor errors to significant systems failure, which could
affect an entity's ability to conduct normal business operations. It
is not possible to be certain that all aspects of the Year 2000 Issue
affecting the company, including those relating to the efforts of
customers, suppliers, or other third parties will be fully resolved.
9. COMMITMENT
The company signed an agreement on August 14, 1998 with its investor
relation firm that 500,000 common shares would be issued to them at the
par value of $500 as a commission, if certain conditions were met on a
specific contract. The shares are to be issued within one year of
signing this agreement. To date the conditions have not been met and
none of the shares on this commitment have been issued.
If and when the shares are issued the $500 received for the shares will
be credited to capital stock and the excess of the market value at that
time will be charged to commission expense.
F-10
<PAGE> 38
Contents of Unaudited Financial Statements
Page
Letter from COi Solutions, Inc. . . . . 1
Statement of Loss and Deficit . . . . 2
Balance Sheet . . . . . . . 3
Statement of Cash Flows . . . . . . 4
Notes to Financial Statements . . . . . 5
<PAGE> 39
COi Solutions, Inc. R.W. Wilder
5300 West Sahara CEO
Suite 101 Email: [email protected]
Las Vegas, NV 89102
January 11, 2000
Reference : Unaudited Statements, COi Solutions, Inc.
Attached is the balance sheet of COi Solutions, Inc. (formerly
ExpediaCom Global Inc.) at September 30, 1999, and the related
statements of operations, cash flows and changes in stockholder equity
for the nine months ending September 30 for the same period.
COi Solutions, Inc. was incorporated in the State of Nevada on August
1, 1997. The Company is engaged as an integrator of telecommunications
systems solutions relating to community of interest networks.
While these statements was unaudited they are consistent with Generally
Accepted Accounting Principles (GAAP).
The 1997 and 1998 year end financial statements have been audited by
our International Accounting Firm, Grant Thornton LLP.
/s/ R.W. Wilder
CEO
1
<PAGE> 40
COi Solutions, Inc.
(A Development Stage Company)
Statement of Loss and Deficit
Nine Months ending September 30, 1999
<TABLE>
<CAPTION>
Period ending Year ended From inception
September 30, December 31, August 1997 to
1999 1998 September 30,
1999
Cumulative
<S> <C> <C> <C>
Revenue (Note 4) $ 1,762,500 $ 458,441 $ 2,220,941
Operating Expense 6,542,887 1,977,970 8,673,359
Loss for the period $ (4,780,387) $ (1,519,529) $ (6,452,418)
------------ ------------ ------------
Loss per share $ (1.32) $ (6.72) $ (16.28)
------------ ------------ ------------
Deficit, beginning
of the period $ (1,672,031) $ (152,502)
Loss for the period (4,780,387) (1,519,529) (6,452,418)
------------ ------------ ------------
Deficit,
end of the period $ (6,452,418) $ (1,672,031) $ (6,452,418)
============ ============ ============
</TABLE>
See accompanying notes to the financial statements
2
<PAGE> 41
COi Solutions, Inc.
(A Development Stage Company)
Statement of Shareholders Equity
September 30
<TABLE>
<CAPTION>
Additional
Common Stock Paid in Total
Shares Amount Capital Deficit Equals
<S> <C> <C> <C> <C> <C>
Balance
December 31, 1998 2,720,122 2,720 1,807,824 (1,672,031) 138,513
April 7, 1999
share issue
(Note 7a) 1,220,000 1,220 2,731,580 2,732,800
April 8, share
issue (Note 7b) 138,000 138 308,982 309,120
Stock options
issued per (Note 7c) 2,005,000 2,005,000
Loss for year ended
September 30 1999 (4,780,387) (4,780,387)
--------- ----- --------- ---------- ----------
Balance,
September 30, 1999 4,078,122 4,078 6,853,386 (6,452,418) 405,046
</TABLE>
See accompanying notes to the financial statements
3
<PAGE> 42
COi Solutions, Inc.
(A Development Stage Company)
Balance Sheet
September 30
<TABLE>
<CAPTION>
Period ended Year ended
September 30, December 31,
1999 1998
<S> <C> <C>
Assets
Current
Cash $ 20,095 $ -
Accounts receivable (less
allowance for doubtful
accounts 1999 1,230,000,
1998 200,000) 913,202 214,691
------------ ------------
$ 933,297 $ 214,691
============ ============
Liabilities and Shareholders' Equity
Current
Bank indebtedness $ - $ 6,612
Accounts payable (Note 5) 336,000 27,315
Due to directors (Note 6) 42,251 42,251
Loan payable 150,000 -
------------ ------------
528,251 76,178
Shareholders' Equity
Capital Stock (Note 7) 4,078 2,720
Additional paid in
capital (Note 7) 6,853,386 1,807,824
------------ ------------
6,857,464 1,810,544
Deficit (6,452,418) (1,672,031)
------------ ------------
405,046 138,513
------------ ------------
$ 933,297 $ 214,691
============ ============
</TABLE>
See accompanying notes to the financial statements
4
<PAGE> 43
COi Solutions, Inc.
(A Development Stage Company)
Statement of Cash Flows
Nine Months ended September 30
<TABLE>
<CAPTION>
Period ended Year ended
September 30, December 31,
1999 1998
<S> <C> <C>
Cash derived from
Operating
Loss $ (4,780,387) $ (1,519,529)
Share compensation 4,436,782 1,646,650
Change in
Accounts receivable (698,511) (214,691)
Accounts payable 308,685 27,315
Advances from shareholders - 23,851
------------
(733,431) (36,404)
Financing
Issue of common shares 610,138 3,350
Bank indebtedness (6,612) 6,612
Loan Payable 150,000 -
------------
752,526 9,962
------------ ------------
Net Increase (decrease) in cash 20,095 (26,442)
Cash, beginning of period - -
Cash end of period $ 20,095 $
------------ ------------
</TABLE>
See accompanying notes to the financial statements
5
<PAGE> 44
COi Solutions, Inc.
(A Development Stage Company)
Notes to the Financial Statements
September 30 1999
1. NATURE OF OPERATIONS
COI Solutions, Inc. (formerly Expedia Com Global, Inc.) was
incorporated in Nevada August 1, 1997. The company builds Internet-
based business solutions for global organizations using a 'community of
interest' model. This model provides electronic tools and creative
business networking solutions that allow large complex organizations to
operate in a fully integrated manner with its clients and suppliers in
both real and non-real time, no matter where they are in the world. The
Company had an operational project in Florida. With the suspension of
the World Telehealth project, this office has been closed. The Company
is currently assessing the project office location for the New York
based Telemedica Group project.
COi Solutions, Inc. is in the development stage and the accompanying
financial statements represent those of a development stage enterprise,
and therefore, is subject to the usual business risks of development
stage companies.
The Company has sustained large accumulated losses since its inception
mainly due to capital stock being issued to providers of services at a
consideration below the current market price.
Management plans for the future to limit future losses is as follows:
1. To not issue a large number of shares at a consideration below the
current market price.
2. To continue to control overhead expenses and ensure that all
contract services provided to the Company are charged directly to,
and billed to, specific contracts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICies
Accounting principles
The Company's accounting and reporting policies conform to generally
accepted accounting principles and industry practice in the United
States.
Use of estimates
In preparing the Company's financial statements, management is required
to make estimates and assumptions that affect the reported in the
financial statements and accompanying notes to the financial
statements. Actual results may differ from those estimates.
Fair value of financial statements
The Company's estimate of the fair value of cash, receivables, payables
and accruals approximate the carrying value.
6
<PAGE> 45
COi Solutions, Inc.
(A Development Stage Company)
Notes to the Financial Statements
September 30 1999
Revenue recognition
Consulting revenue is based on fixed term contracts plus expenses.
Revenue is recognized on a straight line basis over the term of the
contract which correlates to the anticipated schedule for delivery of
services under the contract. Contract progress is monitored and revenue
recognition is modified for unanticipated disruptions in delivery of
the contracted services. Net revenue recognized plus expenses is
limited to the amount of capital raised for the customer in accordance
with the contract.
Income Taxes
The Company accounts for its income taxes under the liability method
specified by Statement of Financial Accounting Standards (SFAS) No 109.
Accounting for Income Taxes. Deferred tax assets and liabilities are
determined based on the difference between the financial statement and
tax bases of assets and liabilities as measured by the enacted tax
rates which will be in effect when these differences reverse. Deferred
tax expense is the result of changes in deferred tax assets and
liabilities.
3. INCOME TAXES
The reconciliation of the statutory federal rate to the Company's
effective income tax is as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Statutory tax (benefit) provision $ (2,103,370) $ (668,592)
Non-deductible expense 1,952,184 724,526
Tax benefit realized on tax carryforward (48,270)
Other (7,664)
Increase in valuation allowance 151,186
------------ ----------
$ - $ -
------------ ----------
</TABLE>
Under SAFS No. 109, Accounting for Income Taxes, deferred tax assets
and liabilities are recognized for the future tax consequences
attributable to the differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates.
7
<PAGE> 46
COi Solutions, Inc.
(A Development Stage Company)
Notes to the Financial Statements
September 30 1999
The tax effect of temporary differences that give rise to deferred
income taxes is as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Deferred tax assets
Net operating loss carryforwards 162,354 11,168
Valuation allowance (162,354) (11,168)
---------- ---------
$ - $ -
---------- ---------
</TABLE>
At September 30, 1999 the Company had approximately $369,000 of net
operating loss carryforwards which expire as follows:
Carryforwards
Year Amount
2012 $ 25,000
2019 $ 344,000
4. REVENUE
The company currently has two major customers with multiple contracts
with each. The contract with World Telehealth is due to expire in
December, 1999 but was suspended in August, 1999 resulting in a dispute
between the parties. This dispute has not been resolved. The contract
with The TeleMedica Group has a value of $500,000 beginning in
September, 1999 with a nine month duration.
5. ACCOUNTS PAYABLE
Accounts payable includes consulting fees payable to the officers,
other outside contracts as a result of the World Telehealth contract
and a contract settlement to Penta Deltex.
6. DIRECTORS ADVANCES
The Directors have advanced funds for operating expenses amounting to
$42,251. The loans are interest free and it is expected they will be
repaid within one year.
7. CAPITAL STOCK AND PAID IN CAPITAL.
a. On April 7 1999, pursuant to Regulation D, Rule 504, a resolution
was passed to issue 1,220,000 common shares with a market value of
$2,732,800 (1,220,000 x $2.24). The shares have been issued for a
cash consideration of $610,000 and the balance of $2,122,800 has
been charged as consulting fees and the statement of loss and
deficit and credited to additional paid up capital.
8
<PAGE> 47
COi Solutions, Inc.
(A Development Stage Company)
Notes to the Financial Statements
September 30 1999
b. On April 8 1999, a resolution was passed to issue 138,000 common
shares with a market value of $309,120 (168 x $2.24) for services
rendered to the company. The shares have been issued for a cash
consideration of $0.001 per share and the balance of $308,982 has
been charged as consulting fees in the statement of loss and
deficit and credited to additional paid in capital.
c. On January 6 1999, a Nonqualifying Stock Option Plan was approved
for the Company. The total number of shares of the Company
available for grants of stock options under the plan is 5,000,000
common shares. As of June 30, 1999, 2,105,000 options have been
granted. No options have been exercised for conversion to shares.
Summary of stock and paid up capital
<TABLE>
<CAPTION>
Additional
Number of Issued Paid in
Shares Value Value
<S> <C> <C> <C>
Balance December 31, 1997 18,497 18 160,526
Shares issued August 19, 1998 1,625 2 974,948
Shares issued
December 31, 1998 1,200,000 1,200 298,800
Shares issued
December 31, 1998 1,500,000 1,500 373,500
---------- ----- ---------
Balance December 31,1998 2,720,122 2,720 1,807,824
Shares issued April 7, 1999 1,220,000 1,220 2,731,580
Shares issued April 8, 1999 138,000 138 308,982
--------- ----- ---------
4,078,122 4,078 4,848,386
Stock Options Issued 2,005,000
--------- ----- ---------
4,078,122 4,078 6,853,386
</TABLE>
8. SUMMARY OF STOCK OPTIONS
The market value of the options issued in excess of the exercise price
at the date the option was issued amounts to $2,005,000. This amount
has been charged as a remuneration expense in the statement of loss and
deficit and credited to additional paid up capital.
9
<PAGE> 48
COi Solutions, Inc.
(A Development Stage Company)
Notes to the Financial Statements
September 30 1999
Date of Option Grant
<TABLE>
<CAPTION>
Exercise Market Expiry Remuneration
Options price price date expense
<S> <C> <C> <C> <C> <C>
March 9, 1999
(Employee) 1,500,000 $ 0.50 $ 1.50 12/31/01 $ 1,500,000
March 9, 1999
(Service) 30,000 0.50 1.50 12/31/01 30,000
March 9, 1999
(Service) 475,000 0.50 1.50 12/31/02 475,000
April 9, 1999
(Service) 10,000 2.00 1.87 12/31/01 -
April 9, 1999
(Service) 90,000 2.00 1.87 12/31/02 -
--------- -----------
Totals 2,105,000 $ 2,005,000
</TABLE>
9. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed. In addition,
similar problems may arise in some systems which use certain dates in
1999 to represent something other than a date. The effects of the year
2000 Issue may be experienced before, on, or after January 1, 2000,
and, if not addressed, the impact on operations and financial reporting
may range from minor errors to significant systems failure, which could
affect an entity's ability to conduct normal business operations. It is
not possible to be certain that all aspects of the Year 2000 Issue
affecting the company, including those relating to the efforts of
customers, suppliers, or other third parties will be fully resolved.
10. COMMITMENT
The Company signed an agreement with its investor relations firm that
500,000 common shares would be issued to them as a commission if
certain conditions were met on a specific contract. To date no shares
of this commitment have been issued.
10
<PAGE> 49
PART III
ITEM 1. INDEX TO EXHIBITS
The following exhibits required by Item 601 of Regulation S-B are
filed herewith:
Exhibit
Number Description
3.1* Initial Articles of Incorporation, as filed August 1, 1997.
3.2* Bylaws.
3.3* Articles of Amendment to the Articles of Incorporation, as
filed on August 23, 1997.
3.4* Articles of Amendment to the Articles of Incorporation, as
filed on November 20, 1998.
10.1* Associate Agreement between World Telehealth Corporation and
the Company.
10.2* Management Agreement between World Telehealth Corporation and
the Company.
10.3* Addendum Agreement between World Telehealth Corporation and
the Company.
10.4* Associate Agreement between TeleMedica Group and the Company.
10.5 Agreement with BNT, Inc.
27.2 Financial Data Schedule.
99.1* Gary W. Evans Employment Agreement.
99.2* Robert G. Jones Employment Agreement.
99.3* Robert W. Wilder Employment Agreement.
99.4* Consulting Agreement with Lexxus Capital Corp.
99.5* 1999 Non-Qualified Stock Option Plan.
99.6* 1999 Qualified Stock Option Plan.
* Previously filed.
<PAGE> 50
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the Registrant has caused this signature page to be signed on its
behalf by the undersigned, thereunto duly authorized.
COI SOLUTIONS, INC.
By: /s/ Robert G. Jones
Robert G. Jones, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this Form 10-SB Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
Name Title Date
/s/ Robert G. Jones President and a member February 22, 2000
Robert G. Jones of the Board of Directors
/s/ Gary W. Evans Vice President, Secretary February 22, 2000
Gary W. Evans Treasurer and a member of
of the Board of Directors
/s/Robert W. Wilder Chief Executive Officer February 22, 2000
Robert W. Wilder and a member of the
Board of Directors
<PAGE> 51
EXHIBIT 10.5
Memorandum of Understanding
BETWEEN
BNT Inc.
AND
COi Solutions, Inc.
THIS ASSOCIATE AGREEMENT made as of the 16th day of October, 1999.
BETWEEN:
COi Solutions, Inc., a Company duly incorporated under the laws of
the United States of America, with its head office in the City of Las
Vegas in the State of Nevada, and the company's subsidiaries,
designates and associates, specifically including TeleMedica.com Inc.,
a company incorporated in the state of Nevada.
("COi") OF THE FIRST PART
AND:
BNT Inc., a Company duly incorporated under the laws of The
Bahamas. ("BNT") OF THE SECOND PART
WHEREAS COi is engaged in providing services which enable our
customers to access and interact with their customers, anywhere,
anytime. COi designs, builds and operates companies/organizations that
do their global business over the Internet or private Intranets. COi
is focused on four industry sectors: healthcare, retail, travel &
tourism, and telecommunications. Currently, COi is engaged in building
a number of "start up" organizations, however, we also do enhancement
projects with medium and large businesses.
AND WHEREAS BNT professes an expertise in working with business
and government organizations in over 140 countries around the world.
These relationships are primarily through the Worldwide Chambers of
Commerce, the World Bank and the United Nations Committee for Trade and
Development. BNT also has a focus on expansion of the internet and the
promotion of Electronic Commerce, Digital Certification for trade
activities and other Internet based services.
THIS AGREEMENT WITNESSES that BNT agrees to Associate with COi for
the purpose of providing business development services to bring
international projects to COi which will utilize COi expertise,
facilitation skills, program management skills, systems and services to
streamline and electronically enable the operations of BNT's clients.
BNT will introduce clients to COi, upon the following terms and
conditions;
<PAGE> 52
1. ROLES AND DELIVERABLES
A. In conjunction with COi, BNT will perform the following
functions:
(1) Assist COi to establish an international marketing plan,
including specific target markets by geography, industry
and business attributes (e.g. size, structure, etc.),
and the development of marketing collateral material to
suit the designated target markets.
(2) Identify specific international business clients in
around the world that would be good candidates for COi
consultative services in building sophisticated
marketing, commerce and customer support oriented web
sites and supporting networks and applications for these
clients.
(3) Meet with these clients to promote COi and its services,
then qualify them and assist in completing contract
negotiations between COi and these prospective clients.
(4) Work with COi to determine additional information
products that could be created by COi for distribution
by BNT.
(5) Work with COi and other strategic suppliers (e.g.
information technology or healthcare), as they are
identified, to co-design new electronic services. This
could involve assisting in performing the market
analysis, determining the scope and business case for
the opportunity, creating the design specifications and
workflow processes, identifying the technology
requirements (where appropriate), creating the marketing
and pricing plan, the building of a prototype service,
determining market response to the prototype, and
participating in establishing the operational service
for delivery to specified markets.
(6) Assist COi in generally promoting COi as a new emerging
company in the business of developing electronic
services, and focused on becoming an industry leader on
a global scale. This promotion would be done through
attending trade shows, providing testimonials and
attending other promotional events. As an Alliance
Partner, the BNT brand would be promoted at these
events. BNT would be responsible for all expenses
incurred by its people in attending these events. These
expenses will typically exclude COi collateral marketing
materials and the corporate trade show registration
fees.
(6) Support the development of other agreed to markets
around the world.
<PAGE> 53
(7) Collaborate on the development of other opportunities
through reviewing both organizations' competencies and
contacts. Based on this review, both organizations
could propose joint development projects for approval by
both organizations, and then managed by a joint senior
steering committee.
(8) Accept accountability and then contribute resources,
based on the aligned Statement of Work contained in
Schedule A.
B. In the event that BNT or COi desire to change the scope of
work as is set out above, then in such event the following
shall occur:
(1) Both parties shall agree in writing to any amendment to
either a segment of paragraph 1 (a) or the insertion of
a new segment; through the modification of the attached
Statement of Work / Deliverable Results (Schedule A)
that defines the detailed events and costs for each
phase of the overall project. This Statement of Work /
Deliverables will be co-developed by COi and BNT.
(2) Remuneration levels / revenue sharing formulas will be
periodically reviewed and revised in accordance with the
revised scope of work proposed.
2. BNT OBLIGATIONS
BNT shall ensure at all times that COi has access to such
information, employees of BNT, partners, vendors and related
organizations of BNT or any other personnel involved in the projects as
set out in Item 1. or the Statement of Work (Schedule A), and as may be
required by COi to perform the activities as set out in Item 1. or the
Statement of Work (Schedule A).
3. DURATION OF THIS AGREEMENT
The duration of this agreement is two years, with the ability to
negotiate longer timeframes and renewals after a period of one year.
4. BNT / COi REVENUES AND DEVELOPMENT COSTS
Revenues and development costs for BNT and COi will be negotiated
for each contracted project.
5. COi ALLIANCE PARTNER BENEFITS TO BNT
The following is a brief summary of the components, capabilities
and benefits of being a COi Alliance Partner, which would apply to BNT:
A. Use of the COi Brand Name (and affiliated organizations) to
associate with the BNT Organization identity and BNT
services.
<PAGE> 54
B. The BNT corporate identity will be referenced on the COi
Marketing Websites and on other web presence locations (e.g.
Portals which COi are associated with or subscribe to).
C. The COi Websites will provide a hyperlink to one BNT
designated Website (including addressing appropriate
performance levels through mirrored sites around the world,
etc.).
D. Participation / Invitations for Conferences (e.g.
International Trade or Healthcare Conferences). This includes
BNT corporate brand visible in COi presentations, press
releases, demonstration facilities, hospitality suites, and
trade show booths. This also includes attendance at
conference roundtables, and workshops where applicable.
E. Participation in the charitable foundation established to
promote the development of affordable electronic services to
disadvantaged peoples around the world.
F. Access to other COi Alliances (eg. TeleMedica Group, etc.),
for the purposes of co-developing new products and services,
or establishing new markets for existing products and
services. Any revenue sharing that may result from these
collaborations would be negotiated on a "project by project"
basis.
G. Access to COi / TeleMedica technical and facilitation
competencies and the company's technical partners (such as
IBM, GLG, Community-Builder.com, etc.). Development projects
which involve extensive workflow analysis, extensive
adaptation to electronic distribution techniques, or
significant marketing research / marketing development will
be subject to development program fees to be determined and
negotiated.
6. COMPENSATION FOR BNT, INC.
BNT, Inc. will receive thirty percent (30%) of all pretax profits
for each project that it assists in gaining a signed contract for COi
Consulting Services. All monies shall be paid net 30 days, in progress
payments commensurate with monies COi receives from the contracted
client.
7. DISBURSEMENTS
COi agrees to retain BNT, Inc. with a $10,000.00 annual fee, and
agrees to cover appropriate expenses to gain contracts for COi. These
expenses will submitted monthly and will be identified for a specific
project, and must be approved by Robert G. Jones, President of COi.
<PAGE> 55
8. AMENDMENT OF THIS AGREEMENT
Any changes to this Agreement must be in writing and signed by
both parties in order to be effective. The party wishing to amend this
Agreement shall serve notice on the other party in accordance with the
notice provision set out below.
9. EARLY TERMINATION OF THIS AGREEMENT
To be negotiated for the final contract.
10. EFFECTS OF TERMINATION
Upon termination of this Agreement, as herein above provided,
neither party shall have any further obligation hereunder except for:
A. obligations accruing prior to the date of termination; or
B. obligations, promises, or covenants contained herein which
are expressly made to extend beyond the term of this
Agreement, including, without limitation, confidentiality of
information, and indemnities.
11. NOTICE
Any notice of a proposed amendment or notice of termination, early
or otherwise, as set out in the appropriate sections herein, shall
require Thirty (30) days written notice prior to the date on which the
amendment or termination is to take effect and shall be required in
written form, and delivered to the business address of the parties to
this Agreement set forth below:
BNT, Inc.
16 Leslie Road
Framingham, Massachusetts
USA 01702
Attention: Dr. William Tiga Tita, CEO
COi Solutions, Inc.
5300 West Sahara
Suite 101
Las Vegas, Nevada
USA 89102
Attention: Mr. R. G. (Bob) Jones, President
Any notice which is required to be served under this Agreement shall be
served by registered mail at the address as set forth above and the
party upon whom the notice is being served shall have been deemed to
have received the notice on the fifth day following the day on which
this notice was mailed.
<PAGE> 56
12. CONFIDENTIALITY
A. Any information discussed at Business Development Meetings or
any other information obtained by either party as a result of
this Agreement shall, at all times, be considered
confidential. In the course of working together and during
any Business Development Meetings, either party will or have
become aware or have access to financial, business, marketing
and other information, data, reports, tenders, opinions and
other materials and documents, tangible or intangible, oral
or written, which is the proprietary information of either
party or their clients shall be considered Confidential
Information.
B. Both parties agree to keep in strictest confidence all
Confidential Information (as defined above) which either
party may acquire in connection with or as a result of
performance of this Agreement and agrees not to publish,
communicate, divulge or disclose to any unauthorized third
party or parties any information, without the prior written
consent of the other party, during the term of this Agreement
or at any time subsequent to it.
C. Both parties agree not to use any of the foregoing
Confidential Information except for the furtherance of its
obligations under this Agreement.
13. ASSIGNMENT
No assignment of this Agreement or the rights and obligations
hereunder shall be valid without the specific written consent of both
parties hereto.
14. WAIVER OF BREACH
The waiver by any party of a breach or violation of any provision
of this Agreement shall not operate as, or be construed to be, a waiver
of any subsequent breach of the same or other provision hereof.
15. GENDER AND NUMBER
Whenever the context hereof requires, the gender of all words
shall include the masculine, feminine and neuter and the number of all
words shall include the singular and the plural.
16. SEVERABILITY
In the event any provision of this Agreement is held to be
unenforceable for any reason, the unenforceability thereof shall not
affect the remainder of this Agreement, which shall remain in full
force and effect and enforceable in accordance with its terms.
<PAGE> 57
17. ARTICLES AND OTHER HEADINGS
The articles and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. ENTIRE AGREEMENT
This Agreement supersedes all previous contracts and constitutes
the entire agreement between the parties. No oral statements or prior
written material not specifically incorporated herein shall be of any
force and effect and no changes in or additions to this Agreement shall
be recognized unless incorporated herein by amendment as provided
herein, such amendment(s) to become effective on the date stipulated in
such amendments. BNT specifically acknowledges that in entering into
and executing this Agreement, COi is relying solely upon the
representations and agreements contained in this Agreement and no
others.
21. INTERPRETATION
It is mutually agreed between the parties that this Agreement
shall be interpreted in accordance with the laws of the State of Nevada
and that the jurisdiction for any action commenced by either party as
against the other shall be the appropriate Court at the City of Las
Vegas in the State of Nevada.
IN WITNESS WHEREOF the parties hereunto affixed their hands and
seals, and the Corporation has hereunto affixed its corporate seal
under the hands of its duly authorized officers in that behalf.
DATED at Framingham, MA, this 16th day of October, 1999.
SIGNED, SEALED AND DELIVERED )
in the presence of:
) BNT, Inc.
) Per:
)
)
)
) __________________________________
) Dr. William Tiga Tita, CEO
) COi Solutions, Inc.
) Per:
)
)
)
) ___________________________________
) Robert G. Jones, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at December 31, 1998 Audited and September 30,
1999 (Unaudited) and the Statement of Income for the year ended December 31,
1998 Audited and the nine months ended September 30, 1999 (Unaudited) and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-END> DEC-31-1998 SEP-30-1999
<CASH> 0 20,095
<SECURITIES> 0 0
<RECEIVABLES> 414,691 1,943,202
<ALLOWANCES> (200,000) (1,030,000)
<INVENTORY> 0 0
<CURRENT-ASSETS> 214,691 933,297
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 214,691 933,291
<CURRENT-LIABILITIES> 76,178 528,251
<BONDS> 0 0
0 0
0 0
<COMMON> 2,720 4,078
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 214,691 933,297
<SALES> 0 0
<TOTAL-REVENUES> 458,441 1,762,500
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 1,977,970 6,542,887
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,519,529) (4,780,387)
<EPS-BASIC> (0.672) (1.32)
<EPS-DILUTED> (0.672) (1.32)
</TABLE>
