<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO _______________
COMMISSION FILE NUMBER 0-18824
CORPORATE VISION, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OKLAHOMA 73-1579755
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6130 S. MEMORIAL DR.
TULSA, OK 74133
(Address of principal executive offices)
(Zip Code)
(918) 307-2243
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As of June 30, 2000, there were 13,483,557 shares outstanding of the
registrant's common stock, $0.001 par value.
================================================================================
<PAGE> 2
THE COMPANY
The Company is a developmental stage holding company and venture capital and
investment banking company. Its current and future assets consist primarily of
investments in its subsidiaries, or purchasing assets in potential subsidiaries,
and/or high yield income producing real estate properties. The Company focuses
on smaller companies of less than $10,000,000 market value. Corporate Vision
will direct our human and capital resources toward high value-added activities.
Our growth strategy is based on leveraging our leadership positions to pursue
growth opportunities in both existing and new markets whereas the company
believes it can earn higher returns.
Corporate Vision Inc. was incorporated in 1990, domiciled in Oklahoma. The
executive offices of the company are located at 6130 S. Memorial Drive, Tulsa OK
74133. The Company phone number is 918-307-2243.
RISKS ASSOCIATED WITH MANAGING GROWTH
The Company's anticipated level of growth, should it occur, will challenge the
Company's management and its sales and marketing, customer support, and finance
and administrative operations. The Company's future performance will depend in
part on its ability to manage any such growth, should it occur, and to adapt its
operational and financial control systems to respond to changes resulting from
any such growth. There can be no assurance that the Company will be able to
successfully manage any future growth or to adapt its systems to manage such
growth, if any, and its failure to do so would have a material adverse effect on
the Company's business, financial condition, and results of operations.
MARKET FOR COMMON STOCK
The Common Stock is currently quoted on the Bulletin Board maintained by the
National Association of Security Dealers, Inc. ("NASDAQ"), and there is
presently only a very limited market for the Common Stock. Historically the
spread between the bid and asked price of The Company's Common Stock has been
large, reflecting limited trading in the stock. The trading price for the Common
Stock has fluctuated widely in the recent past, ranging from a high bid of $4.50
and a low bid of $0.125 per share in the past fiscal year. The Common Stock is
traded on the Bulletin Board under the symbol "CVIA." The above prices represent
inter-dealer quotations without retail mark-up/mark-down or commission, and may
not necessarily represent actual transactions. At June 30, 2000, the company had
approximately 662 shareholders of record for its common stock. The Preferred
Shares have never been offered to the public therefore have never been publicly
traded.
SELECTED FINANCIAL DATA
From June 1995 to August 1997 Corporate Vision Inc. was the producer and
manufacturer of CD Roms'. In August, 1997, The Company ceased all operations in
this
<PAGE> 3
area. From August 1997 to August 1998 The Company had no operations and produced
no revenue as it searched for mergers with successful private companies. No
suitable companies were found and, in August 1998, new officers and a new Board
of Directors was appointed changing Corporate Visions direction into the Venture
Capital field.
Result of operations ended December 31, 1999, and March 31, 2000 are not
necessarily indicative of results to be expected for the year ending December
31, 2000. The selected financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the financial statements, notes thereto, and the
independent auditors' report included in the December 31, 1999 Form 10-K.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following reaction contains forward-looking statements that involve risks
and uncertainties including those during the period of time the company's
existing capital resources will meet the company's future capital needs. Other
risks include the Company's future operating results, marketing acceptance,
prudent investment decisions which includes research and development with regard
to future endeavors.
The Company has incurred losses since inception and, therefore, has not been
subject to federal income taxes. As of June 30, 2000, the Company had generated
net operating loss carry forwards for financial reporting purposes in excess of
$ 5 million, and this amount may be available to reduce future federal income
taxes. These carry forwards will begin to expire in 2010.
GROWTH STRATEGY
The Company's strategy is to focus principally on (i) expanding the range of
ancillary and other diversified services and manufacturing companies, (ii)
providing these companies access to equity capital by preparing these companies
for public offerings, (iii) retaining minority stock ownership in these
companies after the public stock offerings, (iii) continued guidance and
corporate assistance and support for these companies.
Corporate Vision is focusing on acquiring ownership in private companies that
express interests and a desire to take the Private Company public. Corporate
Vision will prepare these companies from the initial preparations of a Public
Offering through the completion of the offering. Corporate Visions goals are to
be able to recover the cash outlay, plus 20% or less return on this money, by
selling a portion of the private company holdings during the initial public
offering retaining a 5 to 15 percent ownership holding in the company. Corporate
Vision also intends to distribute the secondary public offering shares to
Corporate Vision shareholders, allowing both Corporate Vision shareholders and
the new company shareholders to realize the benefits of our operations.
<PAGE> 4
Corporate Vision, Inc, is using a revenue model that incorporates "The Buildup
Strategy" which will allow The Company to identify emerging private companies,
while retaining a large restricted and liquid percentage ownership of the
secondary company equity stock. Corporate Vision, Inc. will help guide the
secondary company in its future operations.
The Company feels that, with the increase in financing complexity and demands
placed on private companies in this current environment, it has identified a
number of worthwhile under performing companies or marginally performing
companies, which could become emerging companies in their field of experience.
We offer the services and financing options to these Companies by employing the
above mentioned "Buildup Strategy."
The Company will continue to build an investment banking institution of top
professional(s) executing a well-defined, profitable strategy. A large number of
acquisition companies will be facing major growth, developmental and internal
infrastructure needs in the next three years. We are offering them alternatives
to fund their needs and growth, through these public offerings of their equity
securities, to fund their essential projects.
RESULTS OF OPERATIONS
The company did not meet second quarter revenue projections due to a series of
factors, including production delayed and turnover of key positions within the
Company. These delays caused revenue projections to be re-evaluated and the
projections have been delayed to the third fiscal quarter.
On August 18, 2000 the board of directors approved an Agreement of Merger with
Venture Planning Inc., a privately held Oklahoma Corporation. The consummation
of the merger is subject to the fulfillment of a number of conditions set forth
in the Agreement of Merger. The new company will retain the Corporate Vision,
Inc. name and stock symbol. Among other benefits this merger, if consummated,
will bring the following assets to Corporate Vision, Inc. - Approximately 2000
miles of intra-state Oklahoma natural gas pipeline and New England based
agri-farming, residential and commercial real-estate developments and natural
resource reserves. Corporate Vision, Inc. will seek shareholder approval of the
merger via proxy vote on or before October 1, 2000. Although no definitive
agreement has been reached, Keith Anderson will remain as CEO and President of
the new company
CVIA Resources, a wholly owned subsidiary of CVIA has begun initial production,
on a limited basis, in both its mineral and gemstone mine and oil field
holdings. Due to the complexities and cost over runs of bringing the Hodges X-1
well online, the company opted to reduce it's exposure and risk factor in its
ownership position in the Hodges oil well from 30% to 13% in return for $ 60,000
dollars of negotiable securities which represented 80% of CVIR resources initial
investment in the project. This transaction significantly reduced both
additional cost and risk exposure to the company. The Hodges
<PAGE> 5
X-1 well is currently producing approximately 10 barrels of oil per day until a
decision is made to "pull up" to pay zone number four.
In June 2000, CVIA made a separate investment of $30,000 to purchase a supply of
semi-precious gems produced by the Blue Crystal Mine. These stones are not
covered by the original agreement with the landowner and have been purchased
separately for resale at the retail and wholesale level.
Clickgarden.com, a software producer specializing in Internet productivity
solutions, is a company of which CVIA currently owns approximately 5%, or
740,000 shares. CVIA had the option to purchase additional shares of
Clickgarden.com but did not exercise this option due to limited resources and a
desire not to invest too heavily in one single entity. Clickgarden.com has been
actively building its management team and recently announced the addition of two
seasoned veterans to its staff. Gary Luick has joined Clickgarden.com as
President and Mehran Hamidi is the Vice President of e-Commerce. William Sherman
remains Chairman and CTO. Clickgarden.com is currently establishing appointments
for a "Press Tour" during which influential reviewers, editorialists and
columnists will be given an opportunity to see and use the Clickgarden.com
products in advance of general distribution. It is anticipated that the reviews
will commence after August 21, 2000. Once reviewed, the product will be assigned
a rating level of 1 to 5 stars. Clickgarden.com and CVIA management are
anticipating a favorable review and rating. Additional information about
Clickgarden.com may be found on the companies website, www.clickgarden.com.
In the first fiscal quarter the Company acquired the following internet sites,
Ireplymail.com Seek-N-Search.com and megacdstore.com from a third party venture
capital group, the estimated costs of these purchases were $8,833. Currently
Corporate Vision is renegotiating revenue production with various vendors,
brokers and service providers.
In April 2000 the Company formed a strategic alliance with E-commerce West
(OTCBB:ECEE) in both a stock and services exchange equating to $100,000 dollars.
Corporate Vision issued 64,100 free trading common shares to E-commerce West and
in return Corporate Vision received 100,000 common shares of ECEE. Of the
100,000 shares, 30,000 thousand shares are unrestricted free trading shares and
70,000 shares are 144 restricted shares for the duration of the fiscal year.
The company invested $60,562.50 seed capital in E-cointrust.com during the first
fiscal quarter. A Portland, Oregon based company, E-cointrust.com deals in the
wholesale trading of investor grade bullion and rare coinage. To date,
E-cointrust.com has conducted extensive mail order services and has planned to
expand to internet bullion and coinage brokering. E-cointrust.com is currently
dealing exclusively with the United States Mint located in San Francisco CA.
with the exception of a select group of
<PAGE> 6
wholesale bullion and coinage brokerages. E-cointrust.com is a joint venture
between Corporate Vision, Country Coins and private entities.
In April 2000 the Company invested $50,000 in free trading CVIA shares for equal
value of Cyber Citi Inc. common shares. This investment represented seed funding
for Cyber Citi Inc.'s NerdCard.com project. NerdCard is a crossover traditional
commerce and e-commerce membership discount card. In addition to the capital
investment, the Company is in negotiations with Cyber Cities Inc. for certain
rights to NerdCard. or NerdCard usage with the Company's internet sites. Cyber
Cities currently has a base of 250 traditional and e-commerce shops and sites
including many nationally recognized Fortune 100 to Fortune 1000 companies. An
additional investment of $35,400 was made in June of 2000.
ArchivalCD Inc. The Company has made additional expenditures of $21,000 in
Initial Public Offering preparations of ArchivalCD Inc. This additional
expenditure brings the total additional expenditure for 2000 to approximately
$74,000. The Company expects that ArchivalCD Inc. will begin public trading in
the Company's third fiscal quarter. The Company currently owns 2,993,121 or
approximately 20% ownership of ArchivalCD Inc. before the offering.
In the third fiscal quarter of 1999 and the first fiscal quarter the Company has
invested a total of $300,000 into minority (12%) owned CVI Development, a
Manchester NH based Housing and Commercial land development company. During the
first fiscal quarter, CVI Development acquired $350,000 in developmental real
estate and is currently actively negotiating further real estate, construction
and managerial acquisitions.
Although the Company has made no additional investments in T.L. Phipps and
Company, currently Corporate Vision owns 25% of this film and multimedia
production firm. T.L. Phipps has not reported their annual revenues as of the
end of Corporate Vision's fiscal quarter. Management does not expect T.L. Phipps
to report a profit.
The company has made no additional expenditures into Great Mane, Inc. Corporate
Vision currently owns approximately 5% of Great Mane. Great Mane is a bio
medical company currently seeking United States Federal Drug Administration
approval on its product.
The Company has retained The Stock Advisor during the first Quarter. The Company
pre-paid the Stock Advisor $50,000 in cash and negotiable securities for the
upcoming year of investor relations services.
At the beginning of the second fiscal quarter the Company opened a cash stock
account with A.G. Edwards and Sons. This account contains approximately $40,000
in negotiable third party securities.
At the beginning of the second fiscal quarter the company elected to convert a
note owed to it buy Saratoga Holdings Inc. (OTCBB: SHCC) for the total amount of
$135,987. The
<PAGE> 7
payment of this note may be made to the Company either in cash or free trading
Saratoga securities. The note was paid to the Company in free trading Saratoga
securities during the second quarter and approximately half of the securities
have been liquidated as of this filing.
Raymond Hall resigned as Chairman and COO effective April 31,2000. Dale Ogden
resigned as Director and CFO effective April 31, 2000. The Company has the
option to re-purchase up to 200,000 shares each from Hall and Ogden. The Company
has purchased 100,000 shares from Ogden and 30,000 shares from Hall at $1.00 per
share. Any other terms or conditions of the resignation are undetermined at this
time.
The following changes in management and directors took place during the second
quarter: Craig Treiber relinquished his duties as President of CVI resources but
remains Corporate Secretary and Board member for CVIA, Joseph Seibert resigned
as Acting Chairman and Board member effective July 27, 2000 and Robert Hildinger
was appointed by the Board to fill a vacant seat as July 2000.
DIRECTORS AND EXECUTIVE OFFICERS
The executive officers and directors of the Company and their ages are as
follows:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Keith A. Anderson 38 President/Chief Executive Officer and Director
Craig L. Treiber 53 Secretary of the Board of Directors
William Hale 67 Assistant Secretary of the Board of Directors
Robert Hildinger 41 Board Member
</TABLE>
There are currently three open board positions to be filled at the next Annual
Meeting of the Corporation.
FAMILY RELATIONSHIPS
There are no family relationships among any of the Directors or Executive
Officers.
<PAGE> 8
COMPENSATION OF DIRECTORS
The Company's directors currently receive $400.00 per Board meeting either in
cash or the common stock equivalent. The Directors are reimbursed for any
reasonable expenses incurred in the connection with attendance at the Board or
committee meetings or any expenses generated on the behalf of Corporate Vision.
BENEFIT PLAN
Stock Options Plan. On September 1, 1995, the Board of Directors and
shareholders of the Company adopted an incentive stock option plan ("ISOP") for
employees of the Company by providing those intended to advance the best
interests of the Company by providing those persons who have a substantial
responsibility for its management and growth with additional incentive by
increasing the interest in the success of the Company, thereby encouraging them
to remain in its employ. Further the availability of options under the ISOP
supports and increases the ability to the Company to attract and retain
individuals of exceptional managerial talent upon whom, in large measure, the
sustained progress, growth and profitability of the Company depends. Only
employees who have contributed to the profitability or administration of the
Company and /or its subsidiaries are eligible to participate and are entitled to
receive that number of share which fairly reflects that value of their services.
The ISOP is presently being administered by the Board of Directors. The 200,000
Common share available for grant under the ISOP have been registered under the
Securities Act. All options granted under the ISOP will be evidenced by
agreements which will be subject to the provisions of the ISOP, as well as such
further provisions as may subsequently be adopted. The option price per share
will be determined by the Board of Directors at the date of grant, but will at
least equal the fair market value of the common stock which fairly reflects the
value of their services. The 200,000 shares available for grant under the ISOP
have been registered under the Securities Act. All options granted under the
ISOP will be evidenced by agreements which will be subject to the provisions of
the ISOP, as well as such further provisions as may subsequently be adopted.
LIMITATIONS ON LIABILITY AND INDEMNIFICATION MATTERS
The Company's Amended and Restated Articles of Incorporation provide that to the
fullest extent permitted by the Oklahoma Business Corporation Act, the Company's
Directors will not be liable for monetary damages to the Company or its
shareholders. The Company's Bylaws provide that the Company will indemnify its
directors and, by action of the Board of Directors, may indemnify its officers,
employees, and other agents of the Company to the fullest extent permitted by
applicable law, except for any legal proceeding that is initiated by such
Director, Officers, employees or agents without the authorization of the Board
of Directors. The Company has entered into indemnification agreements with its
officers and Directors containing provisions which require the Company, among
other things, to indemnify the officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers (other than liabilities arising from willful misconduct of a culpable
nature) and to advance their expense incurred as a result of any proceeding
against them as to which they could be indemnified.
<PAGE> 9
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 50,000,000 shares of
common stock .01 par value and 1,000,000 shares of Preferred stock .01 par
value.
COMMON STOCK
As of June 30, 2000 there were approximately 13,483,557 shares of Common stock
outstanding held by 662 shareholders of record. The holders of Common Stock are
entitled to one vote per share on all matters to be voted on by stockholders.
Subject to preferences that may be applicable to any outstanding Preferred
stock, if any, the holders of Common stock are entitled to receive ratably such
dividends, if any, as may be declared from time to time by the Board of
Directors in its discretion out of funds legally available. See "Dividend
Policy." In the event of a liquidation, dissolution or winding up of the
Company, the holders of share ratably in all assets remaining after payment of
liabilities, subject to prior rights of Preferred Stock, if any, then
outstanding. The Common Stock has no preemptive or other subscription rights and
there are no conversions rights or redemption or sinking fund provisions with
respect to such shares. All of the outstanding shares of common stock are fully
paid and non-assessable.
PREFERRED STOCK
The Board of Directors, without further action by the shareholders, is
authorized to issue up to 1,000,000 shares of Preferred Stock in one or more
series and to fix and determine, in its sole discretion and on a blank check
basis, as to any series, any and all of the relative rights and preferences of
shares in such series, including, without limitation, preferences, limitations
or relative rights with respect to redemption rights, conversion rights, voting
rights, dividend rights and preferences on liquid assets.
SERIES A PREFERRED STOCK
Of the 1,000,000 shares of Preferred Stock authorized, the Company has
designated 150,000 shares as Series A Preferred Stock, 150,000 of such Preferred
Shares to be issued in this offering. Each share of Series A Preferred Stock
will automatically convert into ten shares of Common Stock on September 1, 2003.
The Class A Preferred Stock is essentially a non-voting stock. The Board of
Directors reserves the right to convert or amend these terms or to activate the
voting rights of the Preferred Shares.
SHAREHOLDER REPORTS
The Company will furnish to its shareholders annual reports containing audited
financial statements reported on by independent public accountants for each
fiscal year and will make available quarterly reports containing un-audited
financial information for the first three quarters of each fiscal year.
<PAGE> 10
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common and Preferred Stock is Transfer
Online.Com, Inc. 227 SW Pine Street, Suite 300 Portland OR 97204.
<PAGE> 11
CORPORATE VISION, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(Unaudited)
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash $ --
Receivable from related parties (Note 3) 12,962
Advances to affiliates 65,074
Note receivable 125,108
Note receivable from affiliate 15,000
Accrued interest receivable 4,979
-----------
TOTAL CURRENT ASSETS 223,122
-----------
INVESTMENTS, NET (NOTE 2) 2,073,300
-----------
PROPERTY AND EQUIPMENT, NET 39,175
-----------
NOTE RECEIVABLE 146,866
-----------
OTHER ASSETS 3,000
-----------
TOTAL ASSETS $ 2,485,463
===========
</TABLE>
Accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 12
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
CURRENT LIABILITIES
Cash overdrafts $ 5,998
Accounts payable and accrued liabilities 38,297
-----------
TOTAL CURRENT LIABILITIES 44,295
-----------
SHAREHOLDERS' EQUITY
Series A non-cumulative convertible preferred stock,
$0.01 par value; 1,000,000 shares authorized;
152,889 shares issued and outstanding 1,529
Common stock, $0.01 par value, 50,000,000 shares authorized
13,483,557 shares issued and outstanding 134,836
Additional paid-in capital 8,537,161
Treasury stock, 165,019 shares (180,428)
Subscriptions receivable (86,874)
Retained earnings (deficit) (4,722,355)
Deficit accumulated during the development stage (1,242,701)
-----------
TOTAL STOCKHOLDERS' EQUITY 2,441,168
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,485,463
===========
</TABLE>
Accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 13
CORPORATE VISION, INC.
(A Development Stage Company)
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
OPERATING REVENUE $ 26,530 $ 7,637
GENERAL AND ADMINISTRATIVE
EXPENSES 406,199 136,154
------------ ------------
OPERATING LOSS (379,669) (128,517)
OTHER INCOME (EXPENSES)
Interest income 6,428 --
Interest expense (2,193) --
Share of loss of Blue Crystal Mining -- --
------------ ------------
NET LOSS $ (375,434) $ (128,517)
============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 13,313,557 7,851,396
NET LOSS PER SHARE $ (0.03) $ (0.02)
============ ============
</TABLE>
Interim results are not indicative of the
results expected for a full year.
Accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 14
CORPORATE VISION, INC.
(A Development Stage Company)
CONSOLIDATED INCOME STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 AND
FOR THE DEVELOPMENT STAGE PERIOD JANUARY 1, 1998 TO JUNE 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
DEVELOPMENT
2000 1999 STAGE PERIOD
---- ---- ------------
<S> <C> <C> <C>
OPERATING REVENUE $ 33,741 $ 7,637 $ 454,016
GENERAL AND ADMINISTRATIVE
EXPENSES 770,990 154,806 1,708,574
------------ ------------ ------------
OPERATING LOSS (737,249) (147,169) (1,254,558)
OTHER INCOME (EXPENSES)
Interest income 20,370 -- 60,808
Interest expense (2,954) -- (3,304)
Share of loss of Blue Crystal Mining (11,870) -- (45,649)
------------ ------------ ------------
NET LOSS $ (707,962) $ (147,169) $ (1,242,702)
============ ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 13,133,013 6,896,298 8,045,283
NET LOSS PER SHARE $ (0.05) $ (0.02) $ (0.14)
============ ============ ============
</TABLE>
Interim results are not indicative of the
results expected for a full year.
Accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 15
CORPORATE VISION, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 AND
FOR THE DEVELOPMENT STAGE PERIOD JANUARY 1, 1998 TO JUNE 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
DEVELOPMENT
2000 1999 STAGE PERIOD
---- ---- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income (loss) $ (707,962) $ (147,169) $ (1,242,702)
Adjustments to reconcile net loss to net
Cash used by operating activities:
Depreciation 4,005 -- 7,517
Provision for bad debt -- -- 3,326
Non-cash stock issues 197,168 132,090 493,458
Services provided for
non-cash consideration -- -- (300,000)
Fixed assets exchanged for services -- -- 3,022
Increase in cash overdrafts 5,998 -- 5,998
(Increase) decrease in related
party receivables (12,602) -- (12,962)
(Increase) decrease in accrued interest 10,132 -- (4,978)
Share of loss of Blue Crystal Mine 11,870 -- 56,899
(Increase) decrease in other assets (1,783) -- (4,783)
Increase (decrease) in current liabilities (372,170) (136,716) (441,388)
----------- ----------- ------------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (865,344) (151,795) (1,436,592)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in affiliates (436,352) (45,140) (735,614)
Cash advances to other entities (7,878) -- (71,973)
Loans to other entities -- -- (220,354)
Principal reductions of notes receivable 105,768 42,364 83,380
Purchases of equipment (17,228) (8,886) (43,528)
----------- ----------- ------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (355,690) (11,662) (988,089)
----------- ----------- ------------
</TABLE>
Accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 16
<TABLE>
<CAPTION>
DEVELOPMENT
2000 1999 STAGE PERIOD
---- ---- ------------
<S> <C> <C> <C>
NET CASH PROVIDED BY FINANCING ACTIVITIES:
Issuance of common stock 602,299 463,756 2,259,872
Purchase of treasury stock (180,428) -- (180,428)
----------- ----------- -----------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES 421,871 463,756 2,079,444
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH (799,163) 300,299 (345,237)
CASH AT BEGINNING OF PERIOD 799,163 569 345,237
----------- ----------- -----------
CASH AT END OF PERIOD $ -- $ 300,868 $ --
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 2,954 $ -- $ 3,304
Noncash Investing and Financing Activities:
Common stock issued as investment
in affiliated companies $ 370,344 $ 800 $ 715,904
</TABLE>
Accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 17
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000
NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION
Corporate Vision, Inc. (referred to herein as "CVI" or "the
Company") was incorporated in Oklahoma on November 20, 1990 as a video
production company. In 1992, the Company began developing custom
CD-ROM and CD-i products for corporate clients.
In December 1994, the Company purchased 90% of the outstanding
common stock of Trident Enterprises, Inc. (Trident), a publicly traded
Nevada corporation. In May 1995, the shareholders of CVI and Trident
approved a merger of the companies. As a result, the minority
shareholders of Trident received 86,694 common shares of CVI in
exchange for their ownership of Trident common stock. Subsequent to
the merger and share exchange, Trident ceased to exist as a separate
entity and CVI remained as the surviving corporation. In June 1995,
CVI's common stock began trading on the OTC Bulletin Board under the
symbol "CVIA."
The Company continued to develop and produce custom CD-ROM, CD-i,
on-line, and Internet products for the corporate and consumer markets
until 1997, when the Company discontinued its primary operations and
liquidated the majority of its assets.
In 1998, the Company reentered the development stage after the
remaining board members reactivated the Company and changed its
primary business focus to providing investment and merchant banking
services to privately held companies interested in making an initial
public offering.
The accompanying unaudited consolidated financial statements
reflect all adjustments which, in the opinion of management, are
necessary for a fair presentation of the results of operations for the
periods shown and include the accounts and results of the Company's
wholly-owned subsidiary, CVI Resources and its majority-owned
subsidiary IPOSITE.com, both Delaware corporations. The Company
established both subsidiaries in 1999 as vehicles for future business
ventures. All material intercompany transactions and balances have
been eliminated in consolidation. The results of operations for such
periods are not necessarily indicative of the results expected for the
full fiscal year of for any future period.
<PAGE> 18
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000
NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION (CONTINUED)
These financial statements should be read in conjunction with the
consolidated financial statements and related notes included in the
Company's Annual Report on Form 10-K for the year ended December 31,
1999. The financial statements of the Company have been prepared 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. However, because of the Company's
discontinuance of historical operations and new strategic direction,
such realization of assets and liquidation of liabilities is subject
to significant uncertainty. Further, the Company's ability to continue
as a going concern is highly dependent on its ability to continue to
raise sufficient operating capital.
NOTE 2 - INVESTMENTS
The Company has made the following investments in affiliated
companies, recorded at cost, during the six month period ended June
30, 2000:
In February 2000, the Company issued 54,750 common shares valued
at $75,281 to TL Phipps and Company, Inc.
In March 2000, the Company issued 28,500 common shares valued at
$60,562 to E-cointrust.com, Inc.
In March 2000, the Company issued 64,100 common shares valued at
$64,100 to E-Commerce West Corp.
In April 2000, the Company issued 50,000 common shares valued at
$50,000 and in June 2000, issued 60,000 common shares valued at
$35,400 to Cyber Citi, Inc.
In June 2000, the Company issued 70,000 shares valued at $30,000
to purchase a supply of semi-precious gems produced by the Blue
Crystal Mine.
<PAGE> 19
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000
NOTE 2 - INVESTMENTS (CONTINUED)
In conjunction with the stock purchase agreement disclosed in
Note 5, the Company has purchased an additional 240,000 shares of
common stock of Clickgarden.com, Inc. for $300,000. At June 30, 2000,
the Company held a total of 740,000 shares of Clickgarden.com stock
and had paid a total of $800,000 for these shares.
In April 2000, the Company received common stock valued at
$135,987 from Saratoga International Holdings Corp. as payment against
a promissory note held by the Company. The promissory note had a
remaining principal balance of $271,974 at June 30, 2000.
The Company owns a 45% net operating interest in the Blue Crystal
Mining Limited Partnership ("Blue Crystal"), which controls a mining
operation in the state of Utah. The Company accounts for this
investment under the equity method. Accordingly, the Company's initial
investment of $50,000 plus cash advances of $64,797 made to Blue
Crystal is reduced by its percentage share of Blue Crystal's net
operating loss. At June 30, 2000, the Company's initial investment in
Blue Crystal had effectively been reduced to zero and the carrying
amount of the Company's cash advances had been reduced to $57,898.
NOTE 3 - RELATED PARTY TRANSACTIONS
During the first fiscal quarter, the Company made cash advances
to its officers and employees totaling $51,382. The balance due from
officers and employees at June 30, 2000 was $537.
During the period ended June 30, 2000, the Company made an
unsecured loan to a shareholder totaling $20,000, which matures August
20, 2000, with interest at 10%. The outstanding principal balance at
June 30, 2000 was $12,425.
On February 7, 2000, the Company purchased 35,019 shares of stock
from its Chief Executive Officer. The treasury stock was purchased for
$50,428 and is carried at cost.
<PAGE> 20
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000
NOTE 4 - EARNINGS PER SHARE
The computations of basic and dilutive loss per share from
continuing operations for the six months ended June 30, 2000 and 1999
were as follows:
<TABLE>
<CAPTION>
2000 1999
---------- -----------
<S> <C> <C>
Net income (loss) attributable to
Common shares $ (707,962) $ (147,169)
========== ===========
Weighted average common
Shares outstanding 13,133,013 6,896,298
========== ===========
Basic and dilutive income (loss)
per common share $ (0.05) $ (0.02)
========== ===========
</TABLE>
Weighted average common shares outstanding for the period ended
June 30, 1999 have been adjusted for the three common stock splits
that were recorded in 1999.
The Company's outstanding convertible preferred shares were not
included in the computation of weighted average shares outstanding
because the effect of their inclusion would be antidilutive.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
LEGAL PROCEEDINGS
The Company has filed a legal claim against its former officers,
directors, consultants, and related entities alleging negligence and
breach of fiduciary duty by the defendants. The individual defendants
have filed counterclaims seeking past salary and expense reimbursement
and further alleging defamation of character by Corporate Vision. Both
Corporate Vision and the defendants are seeking damages in excess of
$1 million. In the opinion of management, the outcome of this matter
will not have a material effect on the financial position of the
Company.
<PAGE> 21
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000
NOTE 5 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
In the first fiscal quarter, the Company filed a legal claim
seeking recovery of common stock and funds advanced to an unrelated
company. As the defendant has used the stock as collateral for a loan,
management believes that it may cost the Company as much as $30,000 to
recover the stock. Accordingly a valuation allowance of $30,000 has
been applied to the carrying value of CVI's investment in the
defendant company. Legal proceedings commenced in August 2000, the
outcome of which had not been determined at the date of the filing.
LEASE
The Company leases its operating facility under a non-cancellable
lease which expires June 30, 2002. The Company's future minimum
obligation under the lease is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
<S> <C>
2000 $ 44,315
2001 46,531
2002 23,833
--------
$ 20,252
========
</TABLE>
STOCK PURCHASE AGREEMENT
On December 7, 1999, the Company entered into an agreement with
an internet company, whereby CVI is to purchase 900,000 shares of the
internet company's common stock at a price of $1,000,000, payable in
cash. As of June 30, 2000, the Company had paid $800,000 in cash and
had received 740,000 shares of the internet company's stock.
<PAGE> 22
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000
NOTE 6 - RESIGNATION OF OFFICERS
In April, the Company's Chief Financial Officer and Chief
Operating Officer submitted their resignations to the board of
directors. The total amount of severance for the officers had not been
determined as of the filing date, however the Company had purchased a
total of 130,000 shares of CVI stock from these officers at $1.00 per
share as of the date of this filing
NOTE 7 STOCK OPTIONS EXERCISED
On June 30, 2000, 195,000 options granted to current and former
officers of the Company on December 23, 1998 were exercised at a price
of $0.25 per share. As a result the Company issued 195,000 shares of
its common stock and recognized compensation expense in the amount of
$66,300.
NOTE 8 SUBSEQUENT EVENTS
On August 18, 2000, the board of directors approved an Agreement
of Merger with Venture Planning, Inc., a privately held Oklahoma
corporation. The consummation of the merger is subject to the
fulfillment of a number of conditions set forth in the Agreement of
Merger. The new company is to retain the Corporate Vision, Inc. name
and stock symbol.
<PAGE> 23
PART II -- OTHER INFORMATION
ADDITIONAL INFORMATION
Legal Actions
The Company has filed suit as a plaintiff against former management and
associates of the former management for breach of fiduciary duties,
mismanagement of Corporate funds, diversion of Corporate funds, which the
Company believes lead to the eventual closure of the its operations in the
summer of 1997.
The defendants have counter sued the company claiming slander, non-payment of
salaries, non-payment of expenses and other items.
The company feels not only can it very easily defend itself against this counter
suit, but will prevail in winning this legal actions it has chosen to enter
into.
The Company filed a legal claim seeking recovery of common stock and funds
advanced to Impressive Products, Inc. The stock was used by the defendant as
collateral for a loan and management believes that it may cost the Company as
much as $30,000 to recover the stock. Legal proceedings commenced in August 2000
and the final outcome has not been determined as of the date of this filing.
The Company is currently organizing the annual shareholders meeting, though no
date has yet been set.
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Corporate Vision, Inc.
DATE: August 21, 2000
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
Chief Executive Officer
/s/ Keith A. Anderson
-------------------------------
Keith A. Anderson
</TABLE>
12
<PAGE> 25
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
