SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED MARCH 31, 1999
ZEROS & ONES, INC.
(Exact Name of Registrant as specified in its Charter)
COMMERCIAL LABOR MANAGEMENT, INC.
(Former Name: Change Effective July 1, 1999)
Nevada 88-241079
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(State or other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification No.)
208 Mira Mar Avenue, Suite One, Long Beach, California 90703
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (562) 987-5443
Indicate by check mark whether the Registrant (i) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (ii) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock
Common Stock, $.001 par value 4,564,741
- ----------------------------- ---------
Title of Class Number of Shares Outstanding
at March 31, 1999
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ZEROS & ONES, INC.
(Formerly Commercial Labor Management, Inc.)
BALANCE SHEET
ASSETS
March 31, 1999 December 31, 1998
(Unaudited)
CURRENT ASSETS $0 $0
TOTAL CURRENT ASSETS 0 0
FIXED ASSETS
Tax benefit 0 0
Land 0 0
TOTAL OTHER ASSETS 0 0
TOTAL ASSETS $0 $0
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
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<CAPTION>
ZEROS & ONES, INC.
(Formerly Commercial Labor Management, Inc.)
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, 1999 December 31, 1998
(Unaudited)
<S> <C> <C>
Current Liabilities:
Accounts payable $57,750 $57,750
LIABILITIES $57,750 $57,750
TOTAL LIABILITIES $57,750 $57,750
STOCKHOLDERS' EQUITY:
Common stock, $.001 par 231,813 231,813
value, 50,000,000 shares
authorized, 8,173,804
issued and outstanding at
March 31, 1998
Preferred Class A stock 0 0
Paid-in Capital 572,506 572,506
Accumulated Deficit (862,069) (862,069)
TOTAL STOCKHOLDER'S EQUITY (57,750) (57,750)
TOTAL LIABILITIES AND $0 $0
STOCKHOLDERS' EQUITY
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</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
<PAGE>
<TABLE>
<CAPTION>
ZEROS & ONES, INC.
(Formerly Commercial Labor Management, Inc.)
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
March 31, 1999 March 31, 1998
(Unaudited) (Unaudited)
<S> <C> <C>
Expenses $0 $0
NET INCOME (LOSS) 0 0
Weighted Average Number of
Shares Outstanding 4,564,741 1,634,760*
Income (Loss) Per Share of
Common Stock 0.00 0.00
=============================== ===============================
</TABLE>
*Adjusted for reverse split
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
<PAGE>
<TABLE>
<CAPTION>
ZEROS & ONES, INC.
(Formerly Commercial Labor Management, Inc.)
STATEMENT OF CASH FLOW
March 31, March 31,
1999 1998
(unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES 0 0
NET CASH FROM OPERATING ACTIVITIES 0 0
CASH FLOWS USED IN INVESTING 0 0
ACTIVITIES
NET CASH FROM INVESTING ACTIVITIES 0 0
CASH FLOWS FROM FINANCING ACTIVITIES 0 0
NET CASH FROM FINANCING ACTIVITY 0 0
NET INCREASE (DECREASE) IN CASH 0 0
CASH AT BEGINNING OF YEAR 0 0
CASH AT END OF YEAR 0 0
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</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
<PAGE>
<TABLE>
<CAPTION>
ZEROS & ONES, INC.
(Formerly Commercial Labor Management, Inc.)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FROM DECEMBER 31, 1994 TO MARCH 31, 1999
Common Stock Preferred Stock
Additional
Number of Paid-in Treasury Stock &
Number of Shares Shares Capital Stock Accumulated
Amount Amount & Adj's Deficit Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE - Dec. 31, 1994
883,526 $51,813 $864,217 0 ($485,480) $430,550
1995 ACTIVITY
3-for-1 reverse split 3/20
1995 Net Transactions
Issuance of Preferred Stock (589,018)
Loss for the period ended
9/30/95 8,970,076
180,000 180,000 180,000
(6,513) (6,513)
BALANCE - Dec. 31, 1995 9,264,584 $51,813 180,000 180,000 $864,217 0 ($491,993) $604,037
1996 ACTIVITY
Loss for the year ended
12/31/96 (135,875) (135,875)
BALANCE - June 30, 1996 9,264,584 $51,813 180,000 180,000 $864,217 0 ($627,868) $468,162
1997 ACTIVITY
Cancellation of land
transaction
General cancellations (291,711) (291,711)
<PAGE>
BALANCE - Mar. 31, 1997 6,661,036 $51,813 180,000 180,000 $572,506 0 ($627,868) 176,451
Cancellations (4,425,000)
Issuances/Conversions 10,628,048 180,000 180,000 180,000 $572,506 0 ($627,868) 176,451
BALANCE - June 30, 1997 12,864,048 231,803 0 0 $572,506 0 ($627,868) 176,451
BALANCE - Sept. 30, 1997 12,864,048 231,803 0 0 $572,506 0 ($627,868) 176,451
20-for-1 reverse split
New issuances (12,220,880)
7,530,600
BALANCE -
Dec. 31, 1997 8,173,804 231,803 0 0 $572,506 0 (627,868) 176,451
1998 ACTIVITY
20-for-1 reverse split
Cancellation of shares (6,539,043) (234,201) (234,201)
New issuances
(1,270,020)
4,200,000
BALANCE -
Dec. 31, 1998 4,564,741 231,803 0 0 572,506 0 0
Cancellation of Shares 0 0 (862,069)
New Issues 0 0 0 0 0 0 0
Balance 4,564,741 231,813 0 0 572,506 0 (862,069) (47,750)
March 31, 1999
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The Accompanying Notes are an Integral Part of This Statement
<PAGE>
ZEROS & ONES, INC.
(Formerly Commercial Labor Management, Inc.)
NOTES TO THE FINANCIAL STATEMENT
MARCH 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
GENERAL:
Zeros & Ones, Inc. (formerly Commercial Labor Management, Inc.) is a Nevada
corporation (the "Company") organized on October 19, 1988 under the name Tokyo
Raiders. In 1990, the Company acquired certain rights to a pizza franchise and
changed its name to Club USPN, Inc. In June of 1993, the Company acquired Sono
International, Inc., but those operations were discontinued and the shares of
Sono were sold to the original shareholders of Sono. In March of 1995 the Board
approved the merger with Commercial Labor Management which was handled as a
reverse merger, and also approved a name change to Commercial Labor Management.
However, that merger was rescinded. The Company is currently seeking other
potential mergers of acquisitions.
INCOME TAX REPORTING:
The Company files a corporate tax return in the U.S.
EARNINGS PER SHARE:
The calculations of earnings per share was determined by dividing the net income
or loss by the computed weighted average number of common shares outstanding
during the applicable period. At March 31, 1999 the shares outstanding are
4,564,741.
INCOME TAXES:
In December 1992 the Financial Accounting Standards Board issued Statement of
Accounting Standards Number 109, "Accounting for Income Taxes" (FASB 109).
Adoption of FASB 109 is required for fiscal years beginning after December 15,
1992. The Company follows the requirements set forth in FASB 109.
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
<PAGE>
ZEROS & ONES, INC.
(Formerly Commercial Labor Management, Inc.)
NOTES TO THE FINANCIAL STATEMENT
MARCH 31, 1999
INTERIM FINANCIAL STATEMENTS (UNAUDITED):
The accompanying unaudited condensed financial statements for the interim
periods ending March 31, 1999 and 1998 have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Regulation SX. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management all
adjustments (consisting of normal recurring accruals)considered necessary for a
fair presentation have been included. Operating results for the three months
ended March 31, 1999 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999.
2. PAID IN CAPITAL:
Paid in capital is made up in part by cash contributions of office furniture &
equipment, manufacturing equipment, trade receivable, and accounts payable in
exchange for common stock. Common stock was issued to shareholders of record in
exchange for these assets.
3. CAPITAL STOCK:
PREFERRED STOCK
The authorized capital stock of the Company includes 2,000,000 shares of
Preferred Stock, par value $.001 per share. The Company has no outstanding
shares of Preferred Stock as of March 31, 1999.
COMMON STOCK
The authorized capital stock of the Company includes 50,000,000 shares of Common
Stock, par value $.001 per share. As of March 31, 1999, 4,564,741 shares of the
Company's Common Stock were outstanding.
In 1997 and 1998, the Company effected two reverse stock splits, a one for 20
reverse split and a one for five reverse split. On November 3, 1998, the NASDAQ
Stock Market, Inc. issued a Uniform Practice Advisory (UPC #084-98) advising
NASDAQ members that the effective date of the one for 20 reverse stock split for
settlement purposes would be revised to occur on October 14, 1998 rather than
September 22, 1998, because NASDAQ believes that "a sufficient lack of
information and uncertainty existed in the marketplace to warrant a revision."
Certain members of the NASDAQ disagree with the NASDAQ's ruling. There is no
assurance regarding the final outcome of the NASDAQ's UPC #084-98,
<PAGE>
ZEROS & ONES, INC.
(Formerly Commercial Labor Management, Inc.)
NOTES TO THE FINANCIAL STATEMENT
MARCH 31, 1999
or the effect that the ruling and dispute will have on the Company. In addition,
the Company entered into a Plan of Reorganization and Stock Exchange Agreement
with DNG Communications, Inc. and the sole shareholder of CNG Communications,
Inc. ("CNG") pursuant to which the Company planned to issue 4,200,000 shares of
its Common Stock to the sole shareholder of CNG, and cancel a sufficient number
of outstanding shares to result in the CNG shareholder owning an agreed upon
percentage of the Company on the closing of the transactions. As a result of the
breach of that agreement by CNG and the CNG shareholder, the Company did not
issue any shares of its Common Stock to the CNG shareholder. Shares which were
surrendered for have been reissued and are currently being held by the principle
shareholders of the Company, pending another business combination.
4. Related Party Transactions:
On July 31, 1998 the Company canceled 6,539,044 shares due to the
reverse split (one for five) to facilitate the proposed CNG acquisition. On
October 27, 1998, the Company reissued 4,200,000 shares consisting of 2,100,000
shares each to Mark Richardson, a shareholder holding more than ten percent of
the outstanding shares of the corporation, and Ed Torres, President and
Director, pending another business combination which has not yet been
identified.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
BACKGROUND
During the fiscal quarter ended March 31, 1999, management continued to seek an
operating business to acquire or with which to enter into a business
combination. There is no assurance that the Company will be able to make a
business acquisition in the future.
RESULTS OF OPERATIONS FOR PERIOD ENDED MARCH 31, 1999 COMPARED TO THE SAME
PERIOD IN 1998.
The Company incurred no operating expenses and earned no revenues during the
quarter ended March 31, 1999. In the same period in 1998 it had no revenues or
expenses. The Company does not have the funds to pay any of its accounts payable
at this time. Accounts payable to the independent certified public accounting
firm will only be paid in cash if and when cash is available. Operating
profit/loss for the first three months in 1999 was $0 compared to $0 in the
first three months of 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a working capital deficit of $57,750 as of March 31, 1999,
comprised of accounts payable for accounting and legal services rendered
transfer fees and miscellaneous corporate expenses for the Company. As of March
31, 1999, the Company has no tangible assets and total liabilities of $57,750.
The Company presently has no operating businesses and no sources of revenue,
capital or financing. If the Company identifies a business to acquire and needs
cash to accomplish the acquisition, then it will have to issue stock or incur
borrowings in order to obtain such funds. There is no assurance that the Company
will be able to obtain additional funding, if required. There is no assurance
that the Company will be able to acquire an operating business.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
/s/ Steve Schklair
Date: November 8, 1999 By: ----------------------------
Steve Schklair
President and Chief
Financial Officer
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 57750
<BONDS> 0
0
0
<COMMON> 231813
<OTHER-SE> (289563)
<TOTAL-LIABILITY-AND-EQUITY> (57750)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
