SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002
[ ] Transition report under Section 13 or 15(d) of the Exchange
Act
For the transition period from __________ to __________
Commission file number 0-29485
COLUMBIALUM STAFFING, INC.
--------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
NEVADA 33-0850639
- ------------------------------- --------------------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) identification No.)
310 East Harrison Street
Tampa, Florida 33602
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(Address of Principal Executive Offices)
(813) 225-1200
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(Issuer's Telephone Number, Including Area Code)
N/A
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(Former Name, Former Address and Former Fiscal Year,
If changed since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of May 13, 2002 there were
outstanding 10,051,000 shares of common stock, par value $0.001, and no shares
of preferred stock.
Part I Financial Information
Item 1. Consolidated Financial Statements
Consolidated balance sheets as of March 31, 2002 and
December 31, 2001
Consolidated statements of operations for the three
months ended March 31, 2002 and 2001
Consolidated statements of cash flows for the three
months ended March 31, 2002 and 2001
Consolidated statements of stockholders' equity for the
three months ended March 31, 2002
Notes to consolidated financial statements
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COLUMBIALUM STAFFING, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2002 (UNAUDITED) AND DECEMBER 31, 2001
March 31, December 31,
ASSETS 2002 2001
-------------------- ------------------
CURRENT ASSETS
Cash $ 43,887 $ 19,467
Accounts receivable, net of allowance
for bad debts 51,589 30,069
Prepaid and other assets 96,821 8,317
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Total current assets 192,297 57,853
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PROPERTY AND EQUIPMENT
Property and equipment 28,382 28,382
Less: Accumulated depreciation 9,682 8,202
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Net property and equipment 18,700 20,180
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TOTAL ASSETS $ 210,997 $ 78,083
==================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 9,803 $ 23,698
Accrued payroll taxes 6,781 17,171
Insurance financing 62,204 -
Debentures payable 11,150 18,450
Notes payable 158,400 -
Other current liabilities 1,828 642
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Total current liabilities 250,166 59,961
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STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.0001 par value, 50,000,000
shares authorized, issued and outstanding: 2002
- 10,051,000 shares; 2001 - 2,500,000 shares (restated) 10,051 2,500
Paid-in capital 464,871 422,975
Retained earnings (deficit) (514,091) (407,403)
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Total stockholders' equity (deficit) (39,169) 18,072
-------------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 210,997 $ 78,033
==================== ==================
See accompanying notes to these consolidated financial statements.
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COLUMBIALUM STAFFING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
2002 2001
--------------------- ------------------
SERVICE REVENUES $ 85,540 $ 175,875
DIRECT COST OF SERVICES 55,458 130,995
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GROSS MARGIN 30,082 44,880
OPERATING EXPENSES
Legal & professional fees 53,385 2,575
Advertising/Promotion 2,648 7,918
Salaries and benefits 49,125 49,407
Payroll taxes 3,337 6,375
Penalties - 20,417
Rent & leases 9,328 4,931
Travel & entertainment 2,035 1,929
Administrative expenses 15,111 8,886
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Total operating expenses 134,969 102,438
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LOSS FROM OPERATIONS (104,887) (57,558)
OTHER INCOME (EXPENSES)
Interest and other income - 209
Interest expense (1,802) (2,304)
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Net other income (expenses) (1,802) (2,095)
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NET INCOME (LOSS) $ (106,689) $ (59,653)
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LOSS PER SHARE
Basic $ (.04) $ (.02)
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Fully diluted $ (.04) $ (.02)
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AVERAGE NUMBER OF SHARES OUTSTANDING
Basic 2,657,076 2,525,000
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Fully diluted 2,768,576 2,500,000
===================== ==================
See accompanying notes to these consolidated financial statements.
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COLUMBIALUM STAFFING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
2002 2001
-------------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (106,688) $ (59,653)
Adjustments to reconcile net loss to cash used in
operating activities:
Depreciation 1,480 672
Allowance for bad debt - 1,800
Interest converted to capital stock 251 -
Contributed services 19,800 -
Decrease (increase) in current assets:
Accounts receivable (21,520) (33,176)
Prepaid and other assets (88,504) (2,519)
Increase (decrease) in current liabilities:
Accounts payable (13,895) (34,465)
Payroll tax accruals (10,390) 13,257
Other current liabilities 1,186 (321)
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Total adjustments 111,592 (54,752)
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Net cash (used) by operating activities (218,280) (114,405)
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment - (208)
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Net cash (used) by investing activities - (208)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from receivable financing 62,204 86,436
Loan from stockholder, net 158,400 -
Capital contribution 22,096 16,300
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Net cash provided by financing activities 242,700 102,736
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NET INCREASE (DECREASE) IN CASH 24,420 (11,877)
CASH, BEGINNING OF THE PERIOD 19,467 19,698
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CASH, END OF THE PERIOD $ 43,887 $ 7,821
==================== ===================
See accompanying notes to these consolidated financial statements.
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COLUMBIALUM STAFFING, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001
COMMON STOCK PAID-IN RETAINED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
--------------- -------------- --------------- --------------- ---------------
BALANCE, DECEMBER 31, 2001 2,500,000 $ 2,500 $ 422,975 $ (407,402) $ 18,071
Issuance of common stock
for services 100,000 100 - - 100
Donated services - - 19,800 - 19,800
Contributed capital by
shareholder - - 22,096 - 22,096
Issuance of common stock in
conversion of debenture 7,451,000 7,451 - - 7,451
Net loss during period - - - (106 ,689) (106,689)
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BALANCE, MARCH 31, 2002
(Unaudited) 10,051,000 $ 10,051 $ 464,871 $ (514,091) $ (39,169)
========== ======== ========= =========== =========
See accompanying notes to these consolidated financial statements.
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COLUMBIALUM STAFFING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002 AND 2001
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and the instructions to Form 10-QSB.
Accordingly, they do not include all the information and footnotes required by
accounting principles generally accepted in the United States of America for
complete financial statements. In the opinion of management, the interim
financial statements include all adjustments considered necessary for a fair
presentation of the Company's financial position, results of operations and cash
flows for the three and nine months ended March 31, 2002. These statements are
not necessarily indicative of the results to be expected for the full fiscal
year. These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-KSB for the year
ended December 31, 2001 as filed with the Securities and Exchange Commission.
Nature of Operations
Columbialum Staffing, Inc., formerly Columbialum, Ltd., was organized under the
laws of the State of Nevada on April 9, 1998. Integra Staffing, Inc., was
organized under the laws of the State of Florida corporation, was organized on
August 16, 1999 (collectively referred to as "Columbialum").
Columbialum, Ltd. was in the development stage until its merger with Integra
Staffing, Inc. on December 10, 2001. Integra Staffing, Inc. (Integra) is a
temporary staffing company. Integra's strategy has been to provide efficient and
affordable solutions to its customers' employment and labor force needs.
Reverse Merger Method of Accounting
In accordance with accounting principles generally accepted in the United States
of America, Columbialum's acquisition of Integra has been accounted for as a
reverse merger. As a result, Integra has been treated as the acquiring entity
and Columbialum has been treated as the acquired entity for accounting purposes.
The historical financial statements of Integra have become the historical
financial statements of Columbialum in connection with the acquisition.
Similarly, the historical equity and retained deficit of Integra prior to the
acquisition have been retroactively restated for the equivalent number of shares
issued in connection with the acquisition.
Principles of Consolidation
The consolidated financial statements include the accounts of Columbialum
Staffing, Inc. (formerly Columbialum, Ltd.) and its wholly owned subsidiary
Integra Staffing, Inc. All significant intercompany accounts and transactions
have been eliminated.
NOTE B - CONVERTIBLE DEBENTURES PAYABLE
On November 16, 2001, Columbialum borrowed $7,300 from former shareholders of
Integra and unrelated individuals secured by a 5% convertible debenture due
December 31, 2002. The debenture is convertible into Columbialum's common stock
at $0.001 per share through the debenture's maturity date.
On March 30, 2002, Columbialum issued 7,451,000 shares of its common stock to
the holders of the 5% convertible debentures in exchange for the conversion of
the $7,300 principal amount and the accrued interest to date.
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COLUMBIALUM STAFFING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2002 AND 2001
NOTE B - CONVERTIBLE DEBENTURES PAYABLE (Continued)
On December 6, 2001, Columbialum borrowed $11,150 from unrelated individuals
secured by a 6% convertible debenture due June 30, 2003. The debenture is
convertible into Columbialum's $0.001 par value common stock at $0.10 per share
through the debenture's maturity date.
NOTE C - SUBORDINATED CONVERTIBLE NOTES
The Board of Directors authorized the issue and sale of its 18% Subordinated
Convertible Note due October 1, 2002 in the aggregate principal amount of not
more than U.S. $250,000. Columbialum has the option to extend the maturity date
for up to two successive three months periods ending January 1, 2003 and April
1, 2003. The principal amount of the notes are convertible into shares of
Columbialum's $0.001 par value common stock at $2 per share. As of March 31,
2002, notes have been issued in the amount of $100,000.
NOTE D - RELATED PARTIES TRANSACTIONS
During the period ended March 31, 2002, Columbialum borrowed $23,000 from its
president, R. Gale Porter, and $35,400 from other shareholders. The debt is
evidenced by unsecured promissory, including interest at the rate of 12% per
annum. The full amount of the notes remain outstanding at March 31, 2002.
During the three months ended March 31, 2002, the President and CFO provided
services to Columbialum valued at $19,800, which were donated to the Company.
NOTE E - RESIGNATION OF OFFICER AND DIRECTOR
Mr. Charles Lincoln resigned as an officer and director of Columbialum by letter
dated March 18, 2002, citing disagreements with matters relating to the
Columbialum's operations, policies, practices, and lack of confidence in the
management of the Columbialum and solely to comply with the terms of a funding
offer approved by the Board of Directors. Management believe Mr. Lincoln's
assertions are without merit and responded to Mr. Lincoln's assertions in an
information statement filed with the Securities and Exchange Commission on Form
8-K.
NOTE F - SUBSEQUENT EVENTS
Subsequent to March 31, 2002, by written consent, the majority of shareholders
voted to (1) elect two directors, (2) amend the Articles of Incorporation to (a)
change the name of the company to Resolve Staffing, Inc., (b) reverse split the
outstanding common stock one-for-thirty, (c) maintain the par value of the
Columbialum's common stock at $.0001 per share, (d) restore the number of shares
of common stock Columbialum is authorized to issue at 50,000,000, and (3) amend
Columbialum's 2001 Stock Incentive Plan to restore the number of shares which
may be issued under the plan to 3,000,000.
Additionally, the Board of Directors agreed to waive the anti-dilution
provisions of Columbialum's 6% convertible debentures due June 30, 2003 and to
fix the conversion price of such debentures at $.10 per share.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Note Regarding Forward Looking Statements
You should read the following discussion in conjunction with the
Company's unaudited consolidated financial statements and notes included herein.
The results described below are not necessarily indicative of the results to be
expected in any future period. Certain statements in this discussion and
analysis, including statements regarding our strategy, financial performance and
revenue sources, are forward-looking statements based on current expectations
and entail various risks and uncertainties that could cause actual results to
differ materially from those expressed in the forward-looking statements.
Readers are referred to our Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2001 and to the section entitled "Risk Factors" contained
herein which identify important risk factors that could cause actual results to
differ from those contained in the forward looking statements.
GENERAL
Columbialum Staffing, Inc., formerly Columbialum, Ltd. was organized as
a Nevada corporation on April 9, 1998 and since its inception until its
acquisition of Integra Staffing, Inc. on December 10, 2001, had been devoting
most of its efforts developing its business plan, raising capital, obtaining
financing, establishing its accounting systems, and other administrative
functions.
Integra Staffing, Inc., ("Integra") was organized under the laws of the
State of Florida corporation, on August 16, 1999. Integra is a temporary
staffing company. Integra's strategy has been to provide efficient and
affordable solutions to its customers' employment and labor force needs.
On September 27, 2001, the shareholders of Columbialum entered into a
Securities Exchange Agreement, as amended, to exchange 100% of the issued and
outstanding common stock of Integra for an aggregate of 1,500,000 shares of
Columbialum's $0.001 par value common stock.
During the year ended December 31, 2001, Columbialum approved an
amendment its articles of incorporation to (a) change the name of the company
from Columbialum, Ltd. to Columbialum Staffing, Inc.; (b) reduce the par value
of its common stock and preferred stock from $0.01 to $0.001; (d) increase the
number of common shares Columbialum is authorized to issue from 20,000,000 to
50,000,000; and (e) increase the number of preferred shares Columbialum is
authorized to issue from 2,000,000 to 10,000,000 shares.
During the year ended December 31, 2001, Columbialum adopted a 2001
Equity Incentive Plan ("Incentive Plan") for the benefit of key employees
(including officers and employee directors) and consultants of Columbialum and
its affiliates. The Board of Directors reserved 3,000,000 shares of
Columbialum's $0.001 par value common stock for grants under the Incentive Plan.
The Incentive Plan is intended to provide those persons who have substantial
responsibility for the management and growth of Columbialum with additional
incentives and an opportunity to obtain or increase their proprietary interest
in Columbialum, encouraging them to continue in the employ of Columbialum.
Subsequent to March 31, 2002, by written consent, the majority of
shareholders voted to (1) elect two directors, (2) amend the Articles of
Incorporation to (a) change the name of the company to "Resolve Staffing, Inc.,"
(b) reverse split the outstanding common stock one-for-thirty, (c) maintain the
par value of the Columbialum's common stock at $.0001 per share, (d) restore the
number of shares of common stock Columbialum is authorized to issue at
50,000,000, and (3) amend Columbialum's 2001 Stock Incentive Plan to restore the
number of shares which may be issued under the plan to 3,000,000. These actions
are expected to be effective 20 days after the mailing of an Information
Statement to shareholders, on or about May 28, 2002.
9
The Board of Directors also agreed to waive the anti-dilution
provisions of Columbialum's 6% convertible debentures due June 30, 2003 and to
fix the conversion price of such debentures at $.10 per share. It is also
negotiating with holders of 18% subordinated notes to adjust the conversion
price of their notes. At this time no agreement has been reached.
RESULTS OF OPERATIONS
Revenues for the quarter ended March 31, 2002 to 2001 decreased from
$175,875 to $85,540 or a 51% decrease reflecting a slow down in the industry and
in the economy, especially subsequent to the September 11, 2001 disaster.
During the same period cost of revenues decreased from $130,995 to
$55,458 reflecting a commensurate decrease in relative costs of providing
services to our customers. The major components of costs of revenues decreased
as follows: labor, $116,612 to $51,177; workers compensation insurance $795 to
$355, and payroll taxes and benefits $13,003 to $3,894.
For this period salaries remained constant at $49,000 reflecting the
same salary structure for office and management personnel.
During the same period, legal and accounting expenses increased by
$50,810 reflecting substantially higher legal expenses incurred to discharge
Company's legal obligations under the Securities Exchange Act of 1934, including
mailings to shareholders,, quarterly and annual reports, and the cost of
auditing the Company's financial statements for 2001.
Additionally, for the same period, public company expense increased by
$1,700 reflecting filing fees and expenses in connection with the Company's
filing of compliance reports with the Securities and Exchange Commission. Rent
expense increased by $4,395 reflecting the increase in rent as well as
allocation of common area maintenance. Insurance increased by $5,000, reflecting
a more adequate level of coverage than previously available.
Other expenses decreased: Penalties decreased by $20,416 reflecting
better cash management and better funding. Advertising decreased $5,270
reflecting a cost reduction program and a more targeted advertising program.
LIQUIDITY AND CAPITAL RESOURCES
In March 2002, our Board of Directors authorized the sale of up to
$250,000 of its 18% Subordinated Convertible Notes due October 1, 2002. We have
the option to extend the maturity date for up to two successive three
month-periods ending January 1, 2003 and April 1, 2003. The holders have the
option to convert the principal and interest into our common stock at $2 per
share. As of March 31, 2002, we received $100,000 of proceeds from the sale of
two such notes.
We also borrowed approximately $65,000 from officers, directors and
shareholders. This debt is evidenced by unsecured promissory notes with interest
at the rate of 12% per annum.
At the current level of operations we do not have sufficient resources
on hand, including cash and accounts receivables to operate for the next 12
months, without additional sources of capital. We are exploring financing
alternatives including but not limited to selling additional equity, bank or
private borrowing, or from officers, directors or shareholders. We do not have
any commitments in this regard and no assurance can be given that our financing
efforts will be successful.
At May 8, 2002, the Company had no material commitments for capital
expenditures.
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Part II Other Information
Item 2. Changes in Securities
In March 2002, the Company issued two 18% Notes in the aggregate
principal amount of $100,000 to two accredited investors. The Notes were sold
without any placement agent or underwriting and the sale is claimed to be exempt
from registration under the Securities Act of 1933, as amended, pursuant to
Section 4(2) for sales of securities not involving any public offering. The
Notes are convertible into shares of the Company's common stock at $2.00 per
share.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K dated March 1, 2002
reporting a change in auditors.
The Company filed a report on Form 8-K dated March 18, 2002
reporting the resignation of one of its officers and directors.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
COLUMBIALUM STAFFING, INC.
Dated: May 14, 2002 /s/ R. Gale Porter
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By: R. Gale Porter
President
Dated: May 14, 2002 /s/ Cristino L. Perez
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By: Cristino L. Perez
Chief Financial Officer
12