<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 SEPTEMBER 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 September 30, 2000, there were 14,139,120 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
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 September 30, 2000, the
company had approximately 779 shareholders of record for its common stock. The
Preferred Shares have never been offered to the public therefore have never been
publicly traded.
<PAGE> 3
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 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 September 30, 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 September 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
<PAGE> 4
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.
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 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 third quarter revenue projections due to a series of
Factors, including production delays 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 fourth 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. 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 once all pertinent details are finalized and due diligence has
been completed. Although no definitive agreement has been reached, Keith
Anderson has been asked to remain as CEO and President of the new company and no
guarantees can be made. Due diligence is ongoing currently and additional
information will be released when available.
CVIA Resources, a wholly owned subsidiary of CVIA had begun initial production,
on a limited basis, in both its mineral and gemstone mine and oil field
holdings. Due to
<PAGE> 5
reclamation, equipment and personnel problems mining operations have been
temporarily suspended while the Company reviews the viability of alternate
methods of production methods in its mining operations. 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 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. On
September 27, 2000 the company accepted $20,000 in negotiable securities for its
remaining ownership position in the Hodges X-1 well. This sale represents an
overall profit of approximately $10,000 for the Company.
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.
CVIA currently owns 740,000 shares of Clickgarden, Inc. Clickgarden has
introduced the release of a new class of desktop application software that puts
users in greater control of the way they access and use electronic information.
This application suite makes it easier to search, organize and secure electronic
information in a way unlike that of other software applications. Clickgarden has
dropped the ".com" from its name due to negative events taking place in the
".com" industry. Clickgarden is, in reality, a software company producer and
should be properly identified as such. In addition, Clickgarden's marketing
thrust will be aimed at business to business users since it was felt that this
segment of the market presents the most opportunity with lower expenses.
Accessing the business to business market will also requires less time. 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
recently displayed their software package at the November Comdex Trade Show, the
annual extravaganza for new and innovative products. Additional information
about Clickgarden 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. These sites
were purchased for future development.
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
<PAGE> 6
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 issued and additional 100,000 shares in July of 2000 to fulfill the
dollar investment amount agreed upon in the original terms of the agreement.
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 mail order services and plans to expand to
internet bullion and coinage brokering. E-cointrust.com is currently dealing
with the United States Mint located in San Francisco CA.. 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 in order fulfill the
dollar investment amount agreed upon in the original terms of the agreement.
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 fourth 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 (30% currently, fully diluted to no
less than 12%) owned CVI Development, a Manchester NH based Housing and
Commercial land development company. During the first fiscal quarter, CVI
Development has acquired approximately $419,000 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.
<PAGE> 7
The company has made no additional expenditures into Great Mane, Inc. Corporate
Vision currently owns approximately 13.5% 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.
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 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 November 2000, the company still
holds 457,418 shares.
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 of 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, CEO, Director
Craig Treiber 54 Secretary, Director
William R. Hale 69 Treasurer, Asst Secretary
Director
Robert Hildinger 41 Director
</TABLE>
There are currently three open board positions to be filled at the next Annual
Meeting of the Company.
<PAGE> 8
FAMILY RELATIONSHIPS
There are no family relationships among any of the Directors or Executive
Officers.
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
<PAGE> 9
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.
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 September 30, 2000 there were approximately 14,139,120 shares of Common
stock outstanding held by 779 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.
<PAGE> 10
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.
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
SEPTEMBER 30, 2000
(Unaudited)
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash $ 5,528
Receivable from related parties (Note 3) 15,692
Advances to affiliates 71,474
Note receivable 125,108
Note receivable from affiliate 15,000
Accrued interest receivable 11,252
----------
TOTAL CURRENT ASSETS 244,054
----------
INVESTMENTS, NET (NOTE 2) 2,060,495
----------
PROPERTY AND EQUIPMENT, NET 37,173
----------
NOTE RECEIVABLE 146,866
----------
OTHER ASSETS 3,000
----------
TOTAL ASSETS $2,491,588
==========
</TABLE>
Accompanying notes are an integral part
of the consolidated financial statements.
<PAGE> 12
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 168,615
------------
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
14,193,739 shares issued and outstanding. 141,937
Additional paid-in capital 8,763,185
Treasury stock, 165,019 shares. (180,428)
Subscriptions receivable (86,874)
Retained earnings (deficit) (4,722,355)
Deficit accumulated during the development stage (1,594,022)
------------
TOTAL STOCKHOLDERS' EQUITY 2,322,973
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,491,588
============
</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 SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
OPERATING REVENUE $ 10,522 $ 7,637
GENERAL AND ADMINISTRATIVE
EXPENSES 368,118 136,154
------------ ------------
OPERATING LOSS (357,595) (128,517)
OTHER INCOME (EXPENSES)
Interest income 6,275 --
------------ ------------
NET LOSS $ (351,320) $ (128,517)
============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 13,841,746 10,408,486
NET LOSS PER SHARE $ (0.03) $ (0.03)
============ ============
</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 NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 AND
FOR THE DEVELOPMENT STAGE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
DEVELOPMENT
2000 1999 STAGE PERIOD
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING REVENUE $ 44,264 $ 13,747 $ 464,539
GENERAL AND ADMINISTRATIVE
EXPENSES 1,139,108 502,741 2,076,692
------------ ------------ ------------
OPERATING LOSS (1,094,844) (488,994) (1,612,153)
OTHER INCOME (EXPENSES)
Interest income 26,645 -- 67,083
Interest expense (2,954) -- (3,304)
Share of loss of Blue Crystal Mining (11,870) -- (45,649)
------------ ------------ ------------
NET LOSS $ (1,059,282) $ (488,994) $ (1,594,022)
============ ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 13,369,257 8,067,027 8,590,484
NET LOSS PER SHARE $ (0.08) $ (0.06) $ (0.19)
============ ============ ============
</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 NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 AND
FOR THE DEVELOPMENT STAGE PERIOD JANUARY 1, 1998 TO SEPTEMBER 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
DEVELOPMENT
2000 1999 STAGE PERIOD
----------- ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(1,059,282) $ (488,994) $ (1,594,021)
Adjustments to reconcile net loss to net
Cash used by operating activities:
Depreciation 6,008 1,826 9,520
Provision for bad debt -- -- 3,326
Non-cash stock issues 333,293 193,903 629,583
Services provided for
non-cash consideration -- -- (300,000)
Fixed assets exchanged for services -- -- 3,022
(Increase) decrease in related
party receivables (15,332) (25,873) (15,692)
(Increase) decrease in accrued interest 3,857 5,885 (11,253)
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 (241,852) (127,621) (311,070)
----------- ----------- ------------
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (963,221) (440,874) (1,534,469)
----------- ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in affiliates (436,352) (178,167) (735,614)
Cash advances to other entities (14,277) -- (78,373)
Loans to other entities -- -- (220,354)
Principal reductions of notes receivable 105,768 93,806 83,380
Purchases of equipment (17,228) (17,794) (43,528)
----------- ----------- ------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (362,090) (102,155) (994,489)
----------- ----------- ------------
</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 604,299 559,750 2,261,872
Proceeds from sales of marketable securities 81,305 -- 81,305
Loans from stockholders 26,500 -- 26,500
Purchase of treasury stock (180,428) -- (180,428)
----------- ----------- ------------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES 531,676 559,750 2,189,249
----------- ----------- ------------
NET INCREASE (DECREASE) IN CASH (793,634) 16,721 (339,709)
CASH AT BEGINNING OF PERIOD 799,163 569 345,237
----------- ----------- ------------
CASH AT END OF PERIOD $ 5,528 $ 17,290 $ 5,528
=========== =========== ============
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 2,954 $ -- $ 3,304
Noncash Investing and Financing Activities:
Common stock issued as investment
in affiliated companies $ 388,844 $ -- $ 784,404
</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
NINE MONTHS ENDED SEPTEMBER 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
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.
<PAGE> 18
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000
NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION
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-KSB for the year ended December 31,
1999. The 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. 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.
NOTE 2 - INVESTMENTS
The Company has made the following investments in affiliated
companies, recorded at cost, during the nine month period ended
September 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. ("E-Commerce") in exchange for
100,000 shares of E-Commerce stock. During the three months ended of
September 30, 2000, the Company recognized total proceeds of $16,253
from the sale of E-Commerce stock.
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 common 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
NINE MONTHS ENDED SEPTEMBER 30, 2000
NOTE 2 - INVESTMENTS (CONTINUED)
In July 2000, the Company issued 100,000 common shares valued
at $44,000 to E-Commerce West Corp.
In August 2000, the Company issued 64,500 common shares valued
at $24,500 to E-cointrust.com, Inc.
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 September 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. ("Saratoga") as
payment against a promissory note held by the Company. As of September
30, 2000, the Company had sold 474,000 shares of the Saratoga stock for
a total of $65,052.
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 September 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 September 30, 2000 was $3,267
<PAGE> 20
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000
NOTE 3 - RELATED PARTY TRANSACTIONS
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
September 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.
NOTE 4 - EARNINGS PER SHARE
The computations of basic and dilutive loss per share from
continuing operations for the nine months ended September 30, 2000 and
1999 were as follows:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Net income (loss) attributable to
Common shares $ (351,320) $ (128,517)
=========== ===========
Weighted average common
Shares outstanding 13,841,746 10,408,486
=========== ===========
Basic and dilutive income (loss)
per common share $ (0.03) $ (0.03)
=========== ===========
</TABLE>
Weighted average common shares outstanding for the period
ended September 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.
<PAGE> 21
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000
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.
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>
<PAGE> 22
CORPORATE VISION, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000
NOTE 5 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
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 September 30, 2000, the Company had paid $800,000 in
cash and had received 740,000 shares of the internet company's stock.
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. Due diligence was ongoing as of September 30, 2000.
<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: November 20, 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>
