U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-31343
OZOLUTIONS INC.
(Exact name of small business issuer as specified in its charter)
Delaware 98-0229321
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
30 Denver Crescent, Suite 200, Toronto, Ontario, Canada M2J 1G8
(Address of principal executive offices)
(416) 490-0254
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act
during the preceding 12 months (or for such shorter period
that the issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past
90 days. Yes [ X ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or
15(d) of the Exchange Act subsequent to the distribution
of securities under a plan confirmed by a court. Yes [
] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: At January 10, 2001, there were
18,999,133 shares of common stock outstanding.
<PAGE>
FORM 10-QSB
OZOLUTIONS, INC.
INDEX
Page
PART I. Item 1. Financial Information 3
Independent Accountants' Report 3
Balance Sheets at November 30, 2000 (Unaudited) 4
and August 31, 2000
Statements of Changes in Stockholders' Equity (Deficit) 5
for the Three Months Ended November 30, 2000
and 1999 and for the Period from Date of Inception
(January 10, 1996) through November 30, 2000 (Unaudited)
Statements of Operations for the Three Months Ended 7
November 30, 2000 and 1999 and for the Period from
Date of Inception (January 10, 1996)through
November 30, 2000 (Unaudited)
Statements of Cash Flows for the Three Months Ended 8
November 30, 2000 and 1999 and for the Period from
Date of Inception (January 10, 1996) through
November 30, 2000 (Unaudited)
Notes to Financial Statements 10
Item 2. Management's Discussion and Analysis or 11
Plan of Operation
PART II. Other Information 13
Signatures
2
<PAGE>
PART I.
Item 1. Financial Information
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
Ozolutions, Inc.
(A Development Stage Company)
(A Delaware Corporation)
Toronto, Ontario, Canada
We have reviewed the accompanying balance sheet of
Ozolutions, Inc. (A Development Stage Company) (A Delaware
Corporation) as of November 30, 2000, and the related
statements of operations, changes in stockholders' equity (deficit),
and cash flows for the three months ended November 30, 2000 and 1999
and for the period from date of inception (January 10, 1996) through
November 30, 2000. All information included in these financial
statements is the responsibility of the management of
Ozolutions, Inc.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying analytical
procedures to financial data and of making inquiries of persons responsible
for financial and accounting matters. It is substantially less in
scope than an audit conducted in accordance with generally accepted
auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements in order
for them to be in conformity with the generally accepted accounting
principles.
We have previously audited, in accordance with generally
accepted auditing standards, the balance sheet of Ozolutions, Inc. as
of August 31, 2000, and the related statements of operations, changes
in stockholders' equity (deficit), and cash flows for the year then
ended (not presented herein); and in our report dated October
5, 2000, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in
the accompanying balance sheet as of as of August 31, 2000 is fairly
stated, in all material respects. No auditing procedures have been
performed subsequent to the date of our report.
The accompanying financial statements have been prepared assuming
Ozolutions, Inc. (A Development Stage Company) (A Delaware Corporation)
will continue as a going concern. As more fully described
in Note B, the Company has incurred lossed that have resulted in
a retained deficit. This condition raises substantial doubt about the
Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Rotenberg & Company, LLP
Rotenberg & Company, LLP
Rochester, New York
January 10, 2001
3
<PAGE>
OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
BALANCE SHEETS
(U.S. Dollars)
(Unaudited)
November 30, August 31,
2000 2000
ASSETS
Cash and Cash Equivalents $ 291 $ -
Marketing Rights 1,025,217 1,025,217
Deposits 22,292 -
Total Assets $1,047,800 $1,025,217
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable $ 13,950 $ 6,845
Due to 1421209 Ontario Limited -Due Within One Year 800,000 800,000
Due to Director 10,055 -
Due to Stockholders 81,700 28,883
Total Current Liabilities 905,705 835,728
Other Liabilities
Due to 1421209 Ontario Limited -Due After One Year 200,000 200,000
Total Liabilities 1,105,705 1,035,728
Stockholders' Equity (Deficit)
Common Stock: $.001 Par; 50,000,000 Shares Authorized 18,999 18,999
18,999,133 Issued and Outstanding
Additional Paid-In Capital 42,217 33,217
Deficit Accumulated During Development Stage (119,121) (62,727)
Total Stockholders' Equity (Deficit) (57,905) (10,511)
Total Liabilities and Stockholders' Equity (Deficit) 1,047,800 1,025,217
The accompanying notes are an integral part of this
financial statement.
See Accountants' Review Report
4
<PAGE>
OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DEFICIT) FOR THE THREE MONTHS ENDED NOVEMBER
30, 2000 AND 1999 AND FOR THE PERIOD FROM DATE OF
INCEPTION (JANUARY 10, 1996) THROUGH NOVEMBER 30,
2000 (UNAUDITED)
(U.S. Dollars)
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Additional During Stockholders'
Number Par Common Paid-In Development Equity
of shares Value Stock Capital Stage (Deficit)
<S> <C> <C> <C> <C> <C> <C>
Balance- January 10, 1996 - $ - $ - $ - $ - $ -
January 11, 1996
Common Stock Issued in
Exchange for Expenses Paid by
Stockholders 10,999,133 0.001 10,999 - - 10,999
Net Loss for the Period - - - - (11,049) (11,049)
Balance - August 31, 1999 10,999,133 0.001 10,999 - (11,049) (50)
Net Loss for the Period - - - - - -
Balance - November 30, 1999 10,999,133 0.001 10,999 - (11,049) (50)
June 21, 2000
Common Stock issued as partial
consideration for acquisition of
marketing contracts 8,000,000 0.001 8,000 - - 8,000
Cash Contribution of Capital - - - 17,217 - 17,217
Capital
Territory Fee Paid by
Stockholder of Behalf of the
Corporation - - - 10,000 - 10,000
Consulting Services Contribution
by Stockholders - - - 6,000 - 6,000
Net Loss for the Period - - - - (51,678) (51,678)
Balance - August 31, 2000 18,999,133 $0.001 $ 18,999 $ 33,217 $ (62,727) $(10,511)
</TABLE>
The accompanying notes are an integral part of this financial statement.
See Accountants' Review Report
5
<PAGE>
OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) FOR THE
THREE MONTHS ENDED NOVEMBER 30, 2000 AND 1999 AND FOR THE PERIOD
FROM DATE OF INCEPTION (JANUARY 10, 1996) THROUGH
NOVEMBER 30, 2000 (UNAUDITED) continued
(U.S. Dollars)
<TABLE>
<CAPTION>
Deficit
Accumulated Total
During Stockholders'
Additional Developement Equity
Number Par Common Paid-in Stage (Deficit)
Of Shares Value Stock Capital
<C> <C> <C> <C> <C> <C>
Balance - August 31, 2000 18,999,133 $0.001 $ 18,999 $ 33,217 $ (62,727) $ (10,511)
Consulting Services Contributed
by Stockholder - - - 9,000 - 9,000
Net Loss for the Period - - - - (56,394) (56,394)
Balance - November 30, 2000 18,999,333 $0.001 $ 18,999 $ 42,217 $ (119,121) $ (57,905)
</TABLE>
The accompanying notes are an integral part of this financial statement.
See Accountants' Review Report
6
<PAGE>
OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2000
AND 1999 AND FOR THE PERIOD FROM DATE OF INCEPTION
(JANUARY 10, 1996) THROUGH NOVEMBER 30, 2000 (UNAUDITED)
(U.S. Dollars)
Date of
Inception Three Months Ended
Through November 30,
November 30,
2000 2000 1999
Revenues $ $ $
- - -
Expenses
Consulting Fees 40,500 34,500 -
Professional Fees 37,733 11,400 -
Organization Costs 11,049 - -
Territory Fee 10,000 -
Transfer Agent Fees 8,050 1,015 -
General and Administrative 6,189 3,879 -
Marketing 5,600 5,600 -
Total Expenses 19,121 56,394 -
Net Loss for the Period $ $ $
(119,121) (56,394) -
Weighted Average of Common 11,728,848 18,999,133 10,999,133
Shares Outstanding
Net Loss per Common Share-
Basic and Diluted $(0.010) $(0.003) $ (0.000)
The accompanying notes are an integral part of this financial statement.
See Accountants' Review Report
7
<PAGE>
OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2000
AND 1999 AND FOR THE PERIOD FROM DATE OF INCEPTION (JANUARY 10, 1996)
THROUGH NOVEMBER 30, 2000 (UNAUDITED)
(U.S. Dollars)
Date of Inception
Through Three Months Ended
November 30, November 30,
2000 2000 1999
Cash Flows from Operating Activities
Net Loss for the Period $(119,121) $(56,394) $ -
Adjustments:
Contributed Services 15,000 9,000 -
Changes in Assets and Liabilities:
Marketing Rights (17,217) - -
Deposits (22,292) (22,292) -
Accounts Payable 13,950 7,105 -
Due to Director 10,055 10,055 -
Due to Stockholders 81,700 52,817 -
Net Cash Flows from Operating (37,925) 291 -
Activities
Cash Flows from Investing - - -
Activities
Cash Flows from Financing Activities
Paid-In Capital 27,217 - -
Proceeds from Common Stock 10,999 - -
Net Cash Flows from Financing 38,216 - -
Activities
Net Increase in Cash and Cash 291 291 -
Equivalents
Cash and Cash Equivalents - - - -
Beginning of Period
Cash and Cash Equivalents -
End of Period $ 291 $ 291 -
The accompanying notes are an integral part of this financial statement.
See Accountants' Review Report
8
<PAGE>
OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Date ofInception
Through Three Months Ended
November 30, November 30,
2000 2000 1999
Acquisition of Marketing Contracts
Assets Purchased $ 1,025,217 $ $
- -
Less: Purchase Price Financed via
Payable to 1421209 Ontario Limited (1,000,000) - -
Less: Purchase Price Paid via (8,000) - -
Stock Issuance
Cash Paid - Non-Refundable Deposit $ 17,217 $ - $ -
The accompanying notes are an integral part of this financial statement.
See Accountants' Review Report
9
<PAGE>
OZOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Toronto, Ontario, Canada
NOTES TO FINANCIAL STATEMENTS
Note A - Basis of Presentation
The condensed financial statements of Ozolutions,Inc.(the"Company")
included herein have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC"). Certain information and
footnote disclosures normally included in financial statements
prepared in conjunction with generally accepted accounting
principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that
the disclosures are adequate to make the information presented
not misleading. These condensed financial statements should be
read in conjunction with the annual audited financial
statements and the notes thereto included in the Company's
Form 10SB, and other reports filed with the SEC.
The accompanying unaudited interim financial statements
reflect all adjustments of a normal and recurring nature
which are, in the opinion of management, necessary to
present fairly the financial position, results of
operations and cash flows of the Company for the interim
periods presented. The results of operations for these
periods are not necessarily comparable to, or indicative
of, results of any other interim period of or for the
fiscal year taken as a whole. Factors that affect the
comparability of financial data from year to year and for
comparable interim periodsinclude non recurring expenses
associated with the Company's registration with the
Securities and Exchange Commission and costs incurred
to raise capital and acquisitions of patents and trademarks.
Certain financial information thatis not required for
interim financial reporting purposes has been omitted.
Note B - Other Matters
Deposits
During the three months ended November 30, 2000, the
Company deposited $22,292 with vendors to purchase twenty
five (25) OzoTitan Water Treatment Systems.
Additional Capital Contribution
During the three months ended November 30, 2000, the
Company received an additional capital contribution of $9,000
in the form of services contributed by a stockholder.
Going Concern
The Company's financial statements have been presented
on the basis that it is a going concern, which contemplates
the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company reported
net losses of $119,121 for the period from date of inception
(January 10,1996) through November 30, 2000. As a result
there is a retained deficit of $119,121 at November 30,
2000.
The Company's continued existence is dependent upon its
ability to raise capital or to successfully market and
sell its products. The financial statements do not include
any adjustments that might be necessary should the Company
be unable to continue as a going concern.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
At the present time Ozolutions, Inc., is in the
development stage and does not provide any product or service.
We intend to be an international marketer and distributor of
water purification systems using ozone technology. The markets
we will target are Mexico, the Caribbean Zone, and Ontario, Canada.
Ozolutions acquired distribution rights to Hankin products
from 1421209 Ontario Limited for 8,000,000 shares of Ozolutions
common stock, or approximately 42% of the outstanding shares,
$17,217 (CDN$25,000) paid at closing, and an additional
$1,000,000 payable in installments.
Ozolutions was originally required to make a payment of
$550,000 to 1421209 Ontario Limited no later than November 21,
2000, as part of the purchase price for the distribution rights
it acquired from 1421209 Ontario Limited, but this payment
deadline was extended in November 2000 to June 30, 2001, to provide
Ozolutions additional time to commence operations and raise capital.
Additional payments of $250,000 and $200,000 are due no later than
August 30, 2001 and September 30, 2001. There was no affiliation
between 1421209 Ontario Limited and Ozolutions prior to the purchase
of the distribution rights.
There is no assurance that we will be able to generate
sufficient revenue from operations within a time frame that will
allow for timely payment of our obligations to 1421209 Ontario
Limited. If this occurs, we will seek financing from outside
sources to make these payments, but we have not identified any
sources of financing, and there is no assurance any financing
will be available on terms acceptable to Ozolutions. If we are
unable to locate financing, Ozolutions will seek an extension
of our payment obligations from 1421209 Ontario Limited. We have
already obtained one extension from 1421209 Ontario Limited, but
there is no assurance that 1421209 Ontario Limited will grant us
another extension should we request it. Failure to make our
June 2001 payment to 1421209 Ontario Limited as required under
our purchase agreement would give rise to a claim against
Ozolutions, which could result in a loss of our marketing rights
and effectively terminate our business.
1421209 Ontario Limited has agreed to loan to Ozolutions up
to $300,000 at our option to provide financing for our operations
at the time 1421209 Ontario Limited receives its first payment of
$550,000 from us under the purchase agreement for the distribution
rights to Hankin products. The loan will be represented by a note
due in two years bearing interest at an annual rate of 6.5% and
payable quarterly in arrears.
Until Ozolutions receives outside financing to fund its capital
commitments, its operations will be limited to those that can be
effected through its officers, directors and consultants. These persons,
except for Edward G. Deans and Ronald L. Larocque & Associates, have
verbally agreed to defer payment of compensation from Ozolutions until
revenue generated from sales of product and financing from outside
sources provides sufficient working capital to fund operations and
payment of their compensation. From June 1 through November 30, 2000,
D. Brian Robertson and Joseph Cira, both stockholders of Ozolutions,
advanced $78,367 and $3,333, respectively, to Ozolutions to cover
administrative expenses and an intial deposit of $22,292 made by
Ozolutions for the purchase of 25 OzoTitan water treatment systems.
The advances do not bear interest and no payment terms have been set
by the parties. This individual has indicated verbally his willingness
to make further advances in the future as required to fund administrative
operating costs. These advances are the sole source of capital
to fund thes costs. However, there is no written or fixed obligation to
make further advances, so there is no assurance that Ozolutions will have
capital to fund its operations over the next 12 months.
11
<PAGE>
Under distribution agreements with Hankin, product is shipped by
Hankin against purchase orders we place either directly to the end
user or dealer or to us for delivery to the end user or dealer.
Accordingly, we do not require any significant amount of capital for
inventory or facilities required to maintain and distribute inventory.
Based solely on Management's evaluation of the potential market,
Ozolutions believes 125 OzoTitan units can be sold in Ontario by
the end of April 2001. In January and February 2001 we plan
on taking delivery of the first 25 units, which will be sold and
delivered directly to consumers and to our independent dealers
for their initial inventory. An additional 100 units have been
ordered for delivery in the first four months of 2001 against purchase
orders from our independent dealers. If we have significantly over
estimated the potential market for the OzoTitan, our need for capital
could increase by as much as $170,000 to purchase and hold in inventory
the OzoTitan units ordered.
From the date of inception (January 10, 1996) through November
30, 2000, Ozolutions has not generated any revenue from the sale
of water treatment systems. Total expenses during the period were
$119,121, consisting of consulting and professional fees totaling
$78,233, organization costs of $11,049, a territory fee pertaining
to our marketing rights of $10,000, marketing costs of $5,600,
transfer agent fees of $8,050, and general and administrative
expenses of $6,189. As a result, Ozolutions recognized a net
loss from inception through November 30, 2000 of $119,121.
Ozolutions believes its general, selling and administrative
expenses during the 12-month period following the date it can obtain
additional financing of at least $300,000 will be $255,000.
Approximately $75,000 will be used for marketing and sales expenses,
including:
* production of printed sales materials,
* advertising in industry publications,
* travel expenses associated with advancing proposed
projects in Mexico and the Caribbean Zone, and
* travel expenses associated with establishing dealers
in Ontario.
Approximately $102,0000 will be used to make payments under consulting
contracts with Edward G. Deans and Ronald L. Larocque & Associates, who
have assisted Ozolutions in formulating marketing plans and will assist
in implementing those plans. The remaining $78,000 is the estimated cost
of clerical and management staff and facilities required to operate over
the next year. This increase in general, selling and administrative
expenses will be attributable to implementation of our marketing plans
for Hankin ozone products.
Forward-Looking Statements
All statements, other than statements of historical fact,
which address activities, actions, goals, prospects, or new developments
that Ozolutions expects or anticipates will or may occur in the future,
including such things as expansion and growth of its operations and other
such matters are forwardlooking statements. Any one or a combination of
factors could materially affect Ozolutions' operations and financial
condition. These factors include competitive pressures, success or failure
of marketing programs, changes in pricing and availability of products,
and conditions in the capital markets. Forward-looking statements made by
Ozolutions are based on knowledge of its business and the environment in
which it operates as of the date of this report. Because of the factors
listed above, as well as other factors beyond its control, actual results
may differ from those in the forward-looking statements.
12
<PAGE>
PART II. OTHER INFORMATION
EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
None.
Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OZOLUTIONS, INC.
Date: January 11, 2001 By: /s/ Max Weissengruber, President
13
<PAGE>
