UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Form 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1999
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 0-15179
OFFICELAND INC.
(Name of small business issuer in its charter)
Ontario, Canada 10397 6668
(State or other jurisdiction of (Canadian Federal
incorporation or organization) Tax Account No.)
312 Dolomite Drive, Downsview, Ontario, Canada M3J 2N2
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (416) 736-4000
Check whether the issuer (1) filed all reports required to be filed by Section
13 of 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 / /
On July 19, 1999, the registrant had 5,545,257 outstanding shares of common
stock.
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Earnings and Deficit -
Fiscal quarters and two fiscal quarters ended
May 31, 1999 and May 31, 1998 2
Consolidated Balance Sheets -
May 31, 1999 and November 30, 1998 3
Consolidated Statement of Cash Flows -
Two fiscal quarters ended May 31, 1999 and May 31, 1998 4
Notes to Financial Statements 5-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 10 - 11
PART II- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES
ITEM 1. FINANCIAL STATEMENTS
OFFICELAND INC.
CONSOLIDATED STATEMENT OF EARNINGS AND DEFICIT
(Expressed in U. S. dollars)
Fiscal quarters ended Two fiscal quarters ended
(Unaudited) MAY 31, May 31, May 31, May 31,
1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------
SALES $ 7,510,624 $ 4,228,909 $ 14,422,284 $ 8,020,522
------------ ------------ ------------ ------------
COST OF SALES 4,931,246 3,400,919 9,466,914 6,607,043
--------- --------- --------- ---------
Gross profit 2,579,378 827,990 4,955,370 1,413,479
--------- ------- --------- ---------
EXPENSES
General and administrative 1,668,367 348,169 3,081,951 661,813
Selling 984,150 283,519 1,859,328 447,032
Depreciation and amortization 100,978 13,443 195,258 25,854
------- ------ ------- ------
2,753,495 645,131 5,136,537 1,134,699
--------- ------- --------- ---------
Earnings (loss) before the following (174,117) 182,859 (181,167) 278,780
-------- ------- -------- -------
Foreign exchange remeasurement loss (gain) (19,682) 31,118 12,505 43,196
Interest on debt 58,862 -- 85,671 --
Interest income -- (8,025) (11,909) (18,574)
------- ------ ------- -------
39,180 23,093 86,267 24,622
------ ------ ------ ------
Net earnings (loss) before income taxes (213,297) 159,766 (267,434) 254,158
Income taxes (recovery) (91,215) 70,345 (94,025) 117,201
------- ------ ------- -------
NET EARNINGS (LOSS) $ (122,082) $ 89,421 $ (173,409) $ 136,957
------------ ------------ ------------ ------------
- -------------------------------------------------------------------------------------------------------------
Net earnings (loss) per common share $ (0.02) $ 0.01 $ (0.03) $ 0.02
------------ ------------ ------------ ------------
Fully diluted net earnings (loss) per
common share $ (0.02) $ 0.01 $ (0.03) $ 0.01
------------ ------------ ------------ ------------
Deficit, beginning of the period $ (4,124,294) $ (4,406,862) $ (4,072,967) $ (4,182,484)
Net earnings (loss) (122,082) 87,421 (173,409) 136,957
-------- ------ -------- -------
Deficit, end of the period $ (4,246,376) $ (4,319,441) $ (4,246,376) $ (4,319,441)
------------ ------------ ------------ ------------
See accompanying notes to the financial statements.
2
OFFICELAND INC.
CONSOLIDATED BALANCE SHEET
(Expressed in U.S. dollars) MAY 31, Nov. 30,
1999 1998
(unaudited)
ASSETS
Current
Cash $ 1,157,060 $ 72,649
Receivables 4,360,009 4,768,790
Income tax receivable 425,579 234,730
Inventory of goods for resale 4,473,614 3,413,157
Prepaid and other charges 689,085 218,077
Future income taxes 304,392 360,229
------- -------
11,409,739 9,067,632
Investments 118,521 118,521
Capital assets 410,534 256,592
Future income taxes 242,151 242,151
Other assets 563,307 504,284
Goodwill 9,333,704 6,639,851
--------- ---------
$ 22,077,956 $ 16,829,031
--------------- ---------------
- -----------------------------------------------------------------------------------------------------
LIABILITIES
Current
Bank credit facilities $ 3,380,065 $ 1,346,349
Accounts payable and accrued liabilities 3,132,633 4,242,498
Income taxes payable 312,513 -
Current portion of long term debt 220,587 302,435
------- -------
7,045,798 5,891,282
Long term debt 2,249,868 216,751
--------- -------
9,295,666 6,108,033
--------- ---------
SHAREHOLDERS' EQUITY
Convertible debt 7,583,217 5,351,218
Capital stock 9,445,449 9,442,747
Deficit (4,246,376) (4,072,967)
---------- ----------
12,782,290 10,720,998
---------- ----------
$ 22,077,956 $ 16,829,031
--------------- ---------------
- -----------------------------------------------------------------------------------------------------
See accompanying notes to the financial statements
3
OFFICELAND INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in U. S. dollars) MAY 31, May 31,
Fiscal Quarter Ended 1999 1998
(unaudited)
- ------------------------------------------------------------------------------------
Cash derived from (applied to)
OPERATING
Net earnings (loss) $ (173,409) $ 136,957
Depreciation and amortization 100,978 25,854
------- ------
(72,431) 162,811
Changes in
Receivables 799,141 335,640
Inventory of goods for resale (287,675) (1,408,229)
Prepaid and other charges (404,395) (129,749)
Other assets (59,020) (158,515)
Accounts payable and accruals (1,940,353) 592,110
Income taxes payable (receivable) 121,664 (177,148)
Future income taxes 55,837 398,665
------ -------
(1,714,801) (547,226)
---------- --------
FINANCING
Increase in bank credit facilities 1,683,715 -
Repayment of long term debt (48,731) -
Issuance of term note 2,000,000 -
Convertible debentures 1,125,000 -
Issuance of common shares 2,702 228,596
----- -------
4,762,686 228,596
--------- -------
INVESTING
Acquisition of Eastern Equipment
Brokers Inc. (Note 2) (1,454,575) -
Acquisition of Digital Document
Solutions Inc. (Note 2) (469,092) -
Acquisition of The Wholesale Group Inc. - (258,826)
Purchase of capital assets (86,556) (75,500)
------- -------
(2,010,223) (334,326)
Effect of foreign exchange remeasurement 119,180 11,372
------- ------
Net increase (decrease) in cash 1,084,411 (478,773)
Cash and short term investments
Beginning of year 72,649 1,041,203
------ ---------
End of year $ 1,157,060 $ 562,430
--------------- -------------
See accompanying notes to the financial statements.
4
OFFICELAND INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(unaudited)
- -----------------------------------------------------------------
NATURE OF OPERATIONS
Officeland Inc. (the Company) is a Canadian corporation. The Company, and
certain of its subsidiaries are engaged in the business of the purchasing,
refurbishing and selling of used photocopiers and fax machines. Those
subsidiaries are located in the United States. The primary activity of the
Company and those subsidiaries is within the United States. The Company also has
another subsidiary located in Canada which provides agency and collection
services in the Province of Ontario.
- -----------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying interim consolidated financial statements of the Company have
been prepared in accordance with accounting principles generally accepted in
Canada for interim financial information. These acounting principles are also
generally accepted in the United States ("U.S. GAAP") in all material respects.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of all companies in
which the Company has a controlling interest, after elimination of inter-company
transactions and balances.
USE OF ESTIMATES
In preparing the Company's financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVENTORIES
Inventories, consisting of equipment for resale, are valued at the lower of cost
and net realizable value. Cost is determined on a specific item basis for
certain equipment and on the first-in, first-out method for other categories of
inventory.
5
OFFICELAND INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(unaudited)
- -----------------------------------------------------------------
1. ACCOUNTING POLICIES (CONTINUED)
DEPRECIATION
Rates of depreciation are applied to write off the cost of capital assets less
estimated salvage value over their estimated useful lives. Furniture and
equipment are depreciated on the diminishing balance basis at 20% per year.
Automotive equipment is depreciated on the diminishing balance basis at 20% per
year. Computer equipment is depreciated on the diminishing balance basis at 30%
per year.
AMORTIZATION OF INTANGIBLES
Goodwill is amortized on a straight line basis over its estimated life of 40
years. On an ongoing basis, the Company reviews the measurement of goodwill for
possible impairment based primarily on the ability to recover the balance of
goodwill from expected future operating cash flows on an undiscounted basis.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's estimate of the fair value of cash and short term investments,
receivables, payables and accruals and long term debt approximates the carrying
value.
REVENUE RECOGNITION
Agency and collection fees revenue is recognized when a client receivable is
collected from the debtor and remitted to the client. Legal expenses are
expensed at the same time as revenue is recognized. Prior to collection, legal
expenses are identified on a debtor by debtor basis and are deferred. The
deferred amounts, net of estimated allowance for non-recovery, are included in
prepaid expenses until expensed. Amounts which are considered non-recoverable
are expensed and included in cost of sales.
Equipment revenue is recognized at the time of sale of the equipment.
Commissions on the sale of consignment office equipment are recorded at the time
of sale. Commissions for auction services are recorded when the services are
rendered.
6
OFFICELAND INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(unaudited)
- -----------------------------------------------------------------
1. ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company has recorded tax benefits of the net operating losses that are
available to offset future income taxes because it is the Company's belief,
beyond a reasonable doubt, that these benefits will be realized in future
periods.
The Company has provided for the tax benefits of temporary timing differences
related primarily to differing bases of certain assets and liabilities for
financial statement and income tax reporting purposes.
BARTER TRANSACTIONS
The Company engages in barter sales and purchases, whereby it exchanges for
goods and services the right to acquire other goods and services. For income tax
purposes, the transactions are recorded in the accounts at the notional amounts
reflected in the respective transaction documents. Under generally accepted
accounting principles, these amounts are discounted to fair values.
- -----------------------------------------------------------------
2. BUSINESS ACQUISITIONS
A) ACQUISITION OF EASTERN EQUIPMENT BROKERS INC.
On January 1, 1999, the Company acquired a 100% equity interest in Eastern
Equipment Brokers Inc., a wholesaler and re-manufacturer of used photocopiers
located in Bridgeport, Connecticut, for consideration of $1,400,000 cash and
675,000 common shares of Officeland Inc. (market value at the date of
acquisition $1,107,000) for total consideration of $2,603,886 including costs to
efect the acquisition, plus additional earn out consideration. The 675,000
common shares are placed in escrow and will be issued on January 1, 2001.
The vendor shall be paid an additional amaount of shares for the three year
period commencing December 1, 1998. The additional consideration is based on
annual profits in excess of predefined base amounts. The additional
consideration is subject to a maximum of 350,000 earn out shares in value. The
additional consideration cannot be reasonably determined at this time.
The acquisition was accounted for by the purchase method of accounting. The
purchase price included professional fees and othe direct costs of the
acquisition. Goodwill is being amortized on a straight line basis over it's
estimated useful life of 40 years.
7
OFFICELAND INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(unaudited)
- -----------------------------------------------------------------
2. BUSINESS ACQUISITIONS (CONTINUED)
B) ACQUISITION OF DIGITAL DOCUMENT SOLUTIONS, INC.
On January 1, 1999 the Company acquired all of the assets of Digital Document
Solutions, Inc. a closely held Connecticut corporation. Digital Document
Solutions, Inc. is in the business of selling, leasing and servicing
re-manufactured photocopiers. The assets of Digital Document Solutions, Inc.
were purchased for consideration of $665,000 in cash and for total consideration
of $690,306 including costs to effect the acquisition.
The acquisition was accounted for by the purchase method of accounting. The
purchase price included professional fees and other direct costs of the
acquisition. Goodwill is being amortized on a straight line basis over it's
estimated useful life of 40 years.
C) THE ALLOCATION OF THE COMPANY'S INVESTMENTS IS AS FOLLOWS:
EASTERN DIGITAL
EQUIPMENT DOCUMENT
BROKERS INC. SOLUTIONS, INC.
--------------- ---------------
Non-cash current assets $ 867,851 $ 421,905
Capital assets 51,768 113,328
Goodwill arising from acquisition 2,762,386 53,913
--------- ------
Total assets 3,622,065 589,146
--------- -------
Bank indebtedness (net of cash) assumed 307,690 (221,214)
Accounts payable and other liabilities 710,430 120,054
------- -------
1,018,120 (101,160)
--------- --------
Total purchase price $ 2,603,885 $ 690,306
--------------- --------------
Consideration
Cash paid, including costs to effect acquisition $ 1,496,885 $ 690,306
Shares to be issued 1,107,000 -
---------
Total consideration $ 2,603,885 $ 690,306
--------------- --------------
Net cash paid
Cash, per above $ 1,496,885 $ 690,306
Less: Cash acquired (42,310) (221,214)
------- --------
Net cash paid $ 1,454,575 $ 469,092
--------------- --------------
8
OFFICELAND INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(unaudited)
3. EARNINGS (LOSS) PER SHARE
Under Canadian GAAP earnings (loss) per share are based on the weighted average
common shares outstanding. Weighted average common shares used in the
computation of earnings (loss) per share are 5,540,886 and 5,394,952 for May 31,
1999 and May 31, 1998 respectively. The weighted average common shares plus
dilutive shares used in the computation of fully diluted earnings (loss) per
share are 7,672,801 and 6,930,207 for May 31, 1999 and May 31, 1998
respectively.
4. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 Issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure, which
could affect an entity's ability to conduct normal business operations. It is
not possible to be certain that all aspects of the Year 2000 Issue affecting the
company, including those related to the efforts of customers, suppliers, or
other third parties will be fully resolved.
- -----------------------------------------------------------
5. RECONCILIATION TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED
STATES OF AMERICA
In certain respects, Canadian generally accepted accounting principles
("Canadian GAAP") differ from United States generally accepted accounting
principles ("US GAAP").
(a) Statement of earnings:
Fiscal quarter ended May 31, May 31,
1999 1998
---- ----
Net earnings (loss) according to Canadian GAAP $(122,082) $ 89,421
--------- --------
Goodwill adjustments (i) 750 773
--- ---
750 773
--- ---
Net earnings (loss) according to US GAAP $(121,332) $ 90,194
--------- --------
Deficit, beginning of period $(6,239,495) $(5,671,505)
----------- -----------
Deficit, end of period $(6,360,827) $(5,581,311
----------- -----------
Basic earnings (loss) per share $(0.02) $0.01
------ -----
Diluted earnings (loss) per share $(0.02) $0.01
------ -----
(i) Goodwill has been adjusted at each balance sheet date for the effect of
goodwill valuation adjustment at the date of acquisition, less the
adjustment to the goodwill amortization thereon.
9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements contained herein are not based on historical facts, but are
forward-looking statements that are based upon numerous assumptions about future
conditions that could prove not to be accurate. Actual events, transactions and
results may materially differ from the anticipated events, transactions or
results described in such statements. The Company's ability to consummate such
transactions and achieve such events or results is subject to certain risks and
uncertainties. Such risks and uncertainties include, but are not limited to, the
existence of demand for and acceptance of the Company's products and services,
regulatory approvals and developments, economic conditions, the impact of
competition and pricing results of financing efforts and other factors affecting
the Company's business that are beyond the Company's control. The Company
undertakes no obligation and does not intend to update, revise or otherwise
publicly release the result of any revisions to these forward-looking statements
that may be made to reflect future events or circumstances.
The information contained herein is presented in United States dollars in
accordance with Canadian GAAP except where specifically noted.
Officeland Inc. acquired The Wholesale Group on May 12, 1998, Telecom
Corporation of Chicago on October 9, 1998, Eastern Equipment Brokers Inc., and
Digital Solutions, Inc. on January 1, 1999. These businesses have been accounted
for under the purchase method of accounting. As a result, the operations of the
acquired businesses have been included in the unaudited interim consolidated
financial statements from the date of acquisition.
RESULTS OF OPERATIONS
Sales were $7,510,624 for the second quarter of fiscal 1999 compared to
$4,228,909 for the second quarter of fiscal 1998. The increase in sales is
primarily due to the contribution of the newly acquired businesses. Contribution
by each company is as follows; core operations, $1,125,014, The Wholesale Group,
Inc., $1,535,032, Telecom Corporation of Chicago, $3,345,260 and Eastern
Equipment Brokers, Inc., $1,505,318.
Cost of sales were $4,931,246 or 66% for the second quarter of 1999 compared to
$3,400,919 or 80% for the second quarter of 1998.
Contribution by each company to cost of sales is as follows; core operations,
$874,564, The Wholesale Group, Inc., $971,438, Telecom Corporation of Chicago,
$2,150,965 and Eastern Equipment Brokers, Inc., $934,279.
Gross profit for the second quarter of 1999 was $2,579,378 or 34% compared to
$827,990 or 20% for the second quarter of 1998 reflecting an increase of
$1,751,388. The Company's gross profit as a percentage of sales has increased
from the second three months of 1999 compared to the second three months of 1998
principally due to higher margins being realized on increased end user sales.
The Company expects to continue to realize increased gross profit percentages in
fiscal 1999 compared to fiscal 1998 due to new channels of distribution and
increased end user sales. Contribution by each company to gross profit is as
follows; core operations, $250,450, The Wholesale Group, Inc., $563,594, Telecom
Corporation of Chicago, $1,194,295, and Eastern Equipment Brokers, Inc.,
$571,039.
The Company is no longer reporting segmented financial information for it's
subsidiary Metropolitan Collection Service Inc. since it contributes less than
1% of total revenues.
General and Administrative Expenses incurred during the second quarter of 1999
were $1,668,367 compared to $348,169 for the second quarter of fiscal 1998
reflecting an increase of $1,320,198. This increase is a result of the addition
of management and technical support personnel to support the newly acquired
businesses.
Selling expenses for the second quarter 1999 were $984,150 compared to $283,519
for the first second 1998 representing an increase of $700,631. The increase was
primarily due to an increase in expenses incurred as a result of the
acquisitions, and the addition of a marketing department.
The depreciation and amortization expenses, including amortization of goodwill
from the acquisitions, were $100,978 for the second quarter 1999 compared to
$13,443 for the second quarter 1998.
The Company recorded a loss before income taxes, interest charges and foreign
exchange remeasurement loss for the second quarter 1999 of $174,117 compared to
earnings of $182,859 for the second quarter 1998. The decrease was due to the
increase in support costs incurred to provide a management and staffing
structure that can sustain the growth expected from acquisitions.
10
The Company recorded a foreign exchange remeasurement gain for the second
quarter 1999 in the amount of $19,682, compared to a remeasurement loss of
$31,118 for the second quarter 1998.
The Company recorded a net loss of $122,082 or ($0.02) per common share (
($0.02) fully diluted) compared to a net earnings of $89,421 or $0.01 per common
share ($0.01 fully diluted).
The foregoing operations have impacted the Balance Sheet as at May 31, 1999 from
November 30, 1998 as follows:
Cash at May 31, 1999 was $1,157,060 compared to $72,649 at November 30, 1998. At
May 31, 1999 the Company's trade receivables were $4,360,009 compared to
$4,768,790 at November 30, 1998 an decrease of $408,781. Inventory was
$4,473,614 at May 31, 1999 compared to $3,413,157 at November 30, 1998
increasing $1,060,457. Inventory levels have increased as a result of purchasing
additional equipment for end user sales. Capital assets have increased $153,942
mainly as a result of the acquisition of Eastern Equipment Brokers, Inc. and
Digital Document Solutions, Inc. The Company has a future income tax benefit in
the amount of $546,543 as at May 31, 1999. The company has other assets
representing $563,307 of costs incurred related to the issuance of the
Convertible Note offerings, which will be recorded to retained earnings when the
Notes are converted. The Company has recorded goodwill as a result of the
acquisition of Eastern Equipment Brokers, Inc and Digital Document Solutions,
Inc. in the amount of $2,884,557 that has increased the balance at November 30,
1998 of $6,639,851 net of amortization. The Company's total assets have
increased to $22,077,956 at May 31, 1999 from $16,829,031 at November 30, 1998,
due to an increase in receivables, inventory and goodwill recorded from the 1999
acquisitions.
The Company had a bank credit facility utilized at May 31, 1999 in the amount of
$3,380,065 compared to $1,346,349 at November 30, 1998 (see liquidity and
capital resources below). The Company's accounts payable and accrued liabilities
are $3,132,633 at May 31, 1999 compared to $4,242,498 at November 30, 1998. The
Company had Long Term Debt of $2,249,868 compared to $519,502 at November 30,
1998.
The Company's equity has increased from November 30, 1998 due to the common
shares issued pursuant to the acquisition of Eastern Equipment Brokers, Inc. and
from the issuance of $1,125,000 worth of Convertible Notes.
Liquidity and Capital Resources
During the second quarter of 1999 the Company renegotiated it's existing credit
facilities and obtained a $5.6 million working capital line of credit and a two
year $2.0 million term loan. The term loan was used to partially fund both the
Eastern Equipment Brokers Inc. and Digital Document Solutions Inc. acquisitions.
The working capital line of credit bears interest at the Prime Rate of the Bank
and the term loan bears interest at Prime plus 1/2% in year one and Prime in
year two.
On April 21, 1999 the Company received an additional $1.2 million through the
sale of Convertible Notes which represents the third and final tranche of
financing from the Company's private investors.
The Company presently has sufficient cash on hand to sustain its operations at
current levels and will be able to sustain its operations for the next twelve
months through internally generated funds and from it's working capital line of
credit.
At May 31, 1999 the Company had working capital of approximately $4.3 million.
The Company does not believe inflation has materially affected its past
operations nor does it anticipate inflation to materially affect future
operations.
YEAR 2000 ("Y2K") COMPLIANCE
Many computer systems experience problems handling dates beyond the year 1999.
The Company and its subsidiaries have a program to assess the readiness of its
internal computer systems and products and believes it is taking the necessary
actions to modify or replace software as required. The Company expects to
successfully implement the systems and programming changes necessary to address
possible Y2K problems, and does not believe that the cost of such actions will
have a material effect on the Company's business, results of operations or
financial condition. There can be no assurance, however, that there will not be
a delay in, or increased costs associated with, the implementation of such
changes. The Company has assessed its readiness for Y2K compliancy issue and
feels confident based on vendor and customer representations that it has been
pro-active in addressing present issued and has developed a program to assess
future issues as they develop through the year 2000.
11
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit 27 - Financial Data Schedule
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.
OFFICELAND INC.
(Registrant)
Date: July 20, 1999 By: /s/ Marvyn A. Budd
Marvyn A. Budd
--------------
Chief Executive Officer/President
Date: July 20, 1999 By: /s/ Christopher Walker
----------------------
Vice President Finance
12
EXHIBIT INDEX
27 Financial Data Schedule