U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: December 31, 2004
Commission file no.: 33-25126-D
Bio-Solutions International, Inc.
-----------------------------------------------
(Name of Small Business Issuer in its Charter)
Nevada 85-0368333
- ------------------------------ ---------------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
1161 James Street
Hattiesburg, MS 39402
- -------------------------------------- ---------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (601) 582-4000
Securities registered under Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None None
- ------------------------- --------------------------
Securities registered under Section 15(g) of the Act:
Common Stock, $0.0001 par value per share
----------------------------------------------
(Title of class)
Copies of Communications Sent to:
Wayne Hartke
The Hartke Building
7637 Leesburg Pike
Falls Church, VA 22043
Indicate by 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 [_]
As of January 15, 2005, there were 196,235 post-split shares of voting
stock of the registrant issued and outstanding. In August 2004, the Company
completed a one for five-hundred reverse split of its common stock reducing its
issued and outstanding .
SAFE HARBOR STATEMENT
This quarterly report on Form 10-QSB includes forward-looking statements.
All statements, other than statements of historical fact made in this Quarterly
Report on Form 10- QSB are forward-looking. In particular, the statements herein
regarding industry prospects and future results of operation or financial
position are forward-looking statements. Forward-looking statements reflect
management's current expectations based on assumptions believed to be reasonable
and are inherently uncertain as they are subject to various known and unknown
risks, uncertainties and contingencies, many of which are beyond the control of
Bio-Solutions International, Inc. The Company's actual results may differ
significantly from management's expectations.
In some cases, you can identify forward-looking statements by terminology
such as "may", "will", "should," "expects," "plans," "intends," "anticipates,"
"believes," "estimates," "predicts," "potential," or "continue" or the negative
of such terms or other comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, events, levels of
activity, performance, or achievements. We do not assume responsibility for the
accuracy and completeness of the forward- looking statements. We do not intend
to update any of the forward-looking statements after the date of this quarterly
report to conform them to actual results.
The discussion of results, causes and trends should not be construed to
imply that such results, causes or trends will necessarily continue in the
future.
PART I
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Consolidated Balance Sheets..................................................F-2
Consolidated Statements of Operations........................................F-3
Consolidated Statements of Stockholders' Deficiency..........................F-4
Consolidated Statements of Cash Flows........................................F-5
Notes to Consolidated Financial Statements...................................F-6
F-1
Bio-Solutions International, Inc.
Balance Sheets
December 31, June 30,
2004 2004
---------------------- ----------------------
(unaudited)
ASSETS
CURRENT ASSETS
Assets held for disposal $ 0 $ 0
Accounts receivable - trade 0 0
Inventory 0 0
---------------------- ----------------------
Total current assets 0 0
---------------------- ----------------------
PROPERTY AND EQUIPMENT
Net of accumulated depreciation 0 0
---------------------- ----------------------
Total property and equipment 0 0
---------------------- ----------------------
OTHER ASSETS
Security deposits 0 0
Investments 0 0
Product formulation 0 0
Goodwill 0 0
---------------------- ----------------------
Total other assets 0 0
---------------------- ----------------------
Total Assets $ 0 $ 0
====================== ======================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Liabilities held for disposal $ 0 $ 0
Accounts payable 21,865 4,865
Prepaid franchise sale income 0 0
Accrued interest 178,320 158,070
Notes and loan payable 404,997 404,997
---------------------- ----------------------
Total current liabilities 605,182 567,932
---------------------- ----------------------
Total Liabilities 605,182 567,932
---------------------- ----------------------
STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.001 par value, authorized 10,000,000 shares;
none issued and outstanding 0 0
Common stock, $0.0001 par value, authorized 100,000,000 shares;
196,235 and 57,809,083 issued and outstanding shares; respectively 20 5,782
Additional paid-in capital 1,700,676 1,694,914
Accumulated deficit (2,305,878) (2,268,628)
---------------------- ----------------------
Total stockholders' deficit (605,182) (567,932)
---------------------- ----------------------
Total Liabilities and Stockholders' Deficit $ 0 $ 0
====================== ======================
The accompanying notes are an integral part of the financial statements
F-2
Bio-Solutions International, Inc.
Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------------- -------------------------------
2004 2003 2004 2003
--------------- ---------------- -------------- ---------------
REVENUES
Sales of franchises $ 0 $ 0 $ 0 $ 0
Product and service sales 0 0
--------------- ---------------- -------------- ---------------
Total revenues 0 0 0 0
--------------- ---------------- -------------- ---------------
EXPENSES
Cost of products 0 0
Operating expenses 0 17,000
--------------- ---------------- -------------- ---------------
Total expenses 0 0 17,000 0
--------------- ---------------- -------------- ---------------
Net income (loss) before other income (expense)
and provision for income taxes 0 0 (17,000) 0
--------------- ---------------- -------------- ---------------
OTHER INCOME (EXPENSE):
Operating loss on discontinued operations 0 (69,108) 0 (115,100)
Interest expense (10,125) (10,298) (20,250) (21,876)
--------------- ---------------- -------------- ---------------
Total other income (expense) (10,125) (79,406) (20,250) (136,976)
--------------- ---------------- -------------- ---------------
Net income (loss) before provision for income taxes (10,125) (79,406) (37,250) (136,976)
--------------- ---------------- --------------- ---------------
Provision for income taxes 0 0 0 0
--------------- ---------------- -------------- ---------------
Net income (loss) $ (10,125) $ (79,406) $ (37,250) $ (136,976)
=============== ================ ============== ===============
Net income (loss) per weighted average share, basic $ (0.05) $ (0.01) $ (0.10) $ (0.01)
=============== ================ ============== ===============
Weighted average number of shares 196,235 57,680,713 196,235 57,680,713
=============== ================ ============== ===============
The accompanying notes are an integral part of the financial statements
F-3
Bio-Solutions International, Inc.
Statements of Stockholders' Deficit
Additional Total
Number of Common Paid-in Deferred Stockholders'
Shares Stock Capital Compensation Deficit Deficiency
------------ --------- ------------- ---------------- ------------- ---------------
BEGINNING BALANCE, June 30, 2002 50,168,557 $ 5,017 $ 1,576,516 $ 0 $ (1,869,855)$ (288,322)
Shares issued to settle debt 210,526 21 39,979 0 0 40,000
Shares issued for services 7,000,000 700 74,300 0 0 75,000
Net loss 0 0 0 0 (268,366) (268,366)
------------ --------- ------------- ---------------- ------------- ---------------
BALANCE, June 30, 2003 57,379,083 5,738 1,690,795 0 (2,138,221) (441,688)
Shares issued for settlement of dispute 375,000 38 3,712 0 0 3,750
Shares issued with franchise repurchase 55,000 6 407 0 0 413
Net loss 0 0 0 0 (130,407) (130,407)
------------ --------- ------------- ---------------- ------------- ---------------
BALANCE, June 30, 2004 57,809,083 5,782 1,694,914 0 (2,268,628) (567,932)
Shares issued for debt collateral 40,000,000 4,000 (4,000) 0 0 0
Reverse split - one for 500 (97,612,848) (9,762) 9,762 0 0 0
Net loss 0 0 0 0 (37,250) (37,250)
------------ --------- ------------- ---------------- ------------- ---------------
ENDING BALANCE, December 31, 2004
(unaudited) 196,235 $ 20 $ 1,700,676 $ 0 $ (2,305,878)$ (605,182)
============ ========= ============= ================ ============= ===============
The accompanying notes are an integral part of the financial statements
F-4
Bio-Solutions International, Inc.
Statements of Cash Flows
Six Months Ended December 31,
(Unaudited)
2004 2003
--------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (37,250) $ (136,976)
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 0 0
Stock issued for services 0 0
Stock issued for interest expense 0 0
Stock issued to settle dispute 0 3,750
Changes in operating assets and liabilities:
(Increase) decrease in assets held for disposal - net 0
(Increase) decrease in inventory 0 0
(Increase) decrease in security deposits 0 0
Increase (decrease) in liabilities held for disposal - net 0 118,210
Increase (decrease) in accounts payable 17,000 0
Increase (decrease) in accrued interest 20,250 21,876
--------------------- --------------------
Net cash used for operating activities 0 6,860
--------------------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Writeoff of goodwill 0 0
Investments 0 0
Acquisition of fixed assets 0 0
--------------------- --------------------
Net cash used by investing activities 0 0
--------------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of bank overdraft 0 (6,860)
Proceeds of note and loan payable 0 0
Proceeds of common stock 0 0
--------------------- --------------------
Net cash provided by financing activities 0 (6,860)
--------------------- --------------------
Net increase in cash 0 0
CASH, beginning of period 0 0
--------------------- --------------------
CASH, end of period $ 0 $ 0
===================== ====================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Non-Cash Financing Activities:
Stock issued in conjunction with repurchase franchise $ 0 $ 0
===================== ====================
Stock issued to retire debt $ 0 $ 0
===================== ====================
The accompanying notes are an integral part of the financial statements
F-5
Bio-Solutions International, Inc.
Notes to Financial Statements
Information with respect to the six months
ended December 31, 2004 and 2003 is unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES
Organization and operations
Septima Enterprises, Inc. (Company) was incorporated on September 12, 1988
under the laws of the State of Colorado for the purpose of acquiring interests
in other business entities and commercial technologies. Operations to date have
consisted of acquiring capital, evaluating investment opportunities, acquiring
interests in other businesses and technologies, establishing a business concept,
conducting research and development activities, and manufacturing.
The Company, due to the unsuccessful nature of its initial operations,
ceased all operations in February 1998. In September 1998, creditors of the
Company were successful in obtaining a judgment against the Company for unpaid
debts. In October 1998, the Company was subject to a Judicial Sale whereby all
assets of the Company were sold in satisfaction of the September 1998 judgment.
Accordingly, the aggregate adjusted balance of open trade payables, as of
December 31, 2000, of approximately $134,000 was the only remaining identifiable
liability of the Company.
During the first quarter of Fiscal 2001, the Company's legal counsel began
to negotiate the settlement of the outstanding trade accounts payable. As a
result of these efforts, the Company was able to negotiate settlements during
the second quarter of Fiscal 2001, using cash, the Company's restricted and
unregistered common stock and combinations thereof, to satisfy approximately
$122,700 of open trade payables Additionally, unaffiliated third parties have
agreed to assume the remaining approximately $11,000 of trade payables owed to
unlocated vendors.
The Company held a Special Meeting of the Shareholders on January 22, 2001.
The shareholders approved the following items: 1) Authorized the Company to
effect a 1 for 100 reverse split of the Company's issued and outstanding common
stock as of February 5, 2001; 2) authorized the Company to reincorporate in the
State of Nevada thereby changing the corporate domicile from Colorado to Nevada;
and 3) approved changing the par value of the common shares from no par value to
$0.0001 per share. The effects of these actions are reflected in the
accompanying financial statements as of the first day of the first period
presented.
The Company changed its state of incorporation from Colorado to Nevada by
means of a merger with and into a Nevada corporation formed on January 26, 2001
solely for the purpose of effecting the reincorporation. The Certificate of
Incorporation and Bylaws of the Nevada corporation are the Certificate of
Incorporation and Bylaws of the surviving corporation. Such Certificate of
Incorporation changed the Company's name to Bio- Solutions International, Inc.
and modified the Company's capital structure to allow for the issuance of
100,000,000 total equity shares consisting of no shares of preferred stock and
100,000,000 shares of common stock, with a par value of $0.0001 per share.
Principles of consolidation
The financial statements formerly were consolidated and included the
accounts of Bio-Solutions International, Inc. and its wholly-owned subsidiary,
Bio-solutions Franchise Corporation. As of June 30, 2004, the Company no longer
had any subsidiaries.
F-6
Bio-Solutions International, Inc.
Notes to Financial Statements
(1) SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock-based compensation
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, which establishes a fair value based method for financial
accounting and reporting for stock-based employee compensation plans and for
transactions in which an entity issues its equity instruments to acquire goods
and services from non-employees.
However, the new standard allows compensation to employees to continue to
be measured by using the intrinsic value based method of accounting prescribed
by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, but requires expanded disclosures. The Company has elected to
continue to apply to the intrinsic value based method of accounting for stock
options issued to employees. Accordingly, compensation cost for stock options is
measured as the excess, if any, of the estimated market price of the Company's
stock at the date of grant over the amount an employee must pay to acquire the
stock. No compensation expense has been recorded in the accompanying statements
of operations related to stock options issued to employees. All transactions in
which goods or services are the consideration received for the issuance of
equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instruments issued,
whichever is more reliably measurable.
Net loss per share
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common stock
equivalents (primarily outstanding options and warrants). Common stock
equivalents represent the dilutive effect of the assumed exercise of the
outstanding stock options and warrants, using the treasury stock method. The
calculation of fully diluted earnings (loss) per share assumes the dilutive
effect of the exercise of outstanding options and warrants at either the
beginning of the respective period presented or the date of issuance, whichever
is later.
Income taxes
Deferred income taxes are provided on a liability method whereby deferred
tax assets are recognized for deductible temporary differences and operating
loss and tax credit carry-forwards and deferred tax liabilities are recognized
for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Fair value of financial instruments
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments: Cash, accounts receivable and accounts
payable. The carrying amounts approximated fair value because of the demand
nature of these instruments.
Organization and start-up costs
In accordance with Statement of Position 98-5, the organization and
start-up costs have been expensed in the period incurred.
F-7
Bio-Solutions International, Inc.
Notes to Financial Statements
(1) SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Interim financial information
The financial statements for the six months ended December 31, 2004 and
2003 are unaudited and include all adjustments which in the opinion of
management are necessary for fair presentation, and such adjustments are of a
normal and recurring nature. The results for the six months are not indicative
of a full year results.
(2) INCOME TAXES
In accordance with FASB 109, deferred income taxes and benefits are
provided for the results of operations of the Company. As of September 30, 2004,
the Company has incurred cumulative net operating losses of approximately
$2,300,000. At this time, due to the uncertainty of future profitable
operations, a valuation allowance of 100% will be reflected as an offset against
the tax benefit attributed to this loss. This potential tax benefit may be
carried forward for up to twenty years.
(3) CAPITAL TRANSACTIONS
On October 10, 2000, the Company issued an aggregate 939 post-reverse split
shares (93,880 pre-reverse split shares) of the Company's restricted,
unregistered common stock in settlement of outstanding trade accounts payable in
the amount of approximately $93,880.
In February 2001, the Company changed its state of incorporation from
Colorado to Nevada by means of a merger with and into a Nevada corporation
formed on January 26, 2001 solely for the purpose of effecting the
reincorporation. The Certificate of Incorporation and Bylaws of the Nevada
corporation are the Certificate of Incorporation and Bylaws of the surviving
corporation. Such Certificate of Incorporation changed the Company's name to
Bio-Solutions International, Inc. and modified the Company's capital structure
to allow for the issuance of 100,000,000 total equity shares consisting of no
shares of preferred stock and 100,000,000 shares of common stock. Both classes
of stock have a par value of $0.0001 per share.
On February 13, 2001, the Company issued an aggregate 6,300,000
post-reverse split shares of restricted, unregistered common stock for
professional consulting services related to the reinitialization of the Company,
preparation of all delinquent SEC filings and search activities related to the
potential acquisition of a privately- owned operating entity. This transaction
was valued at an estimated "fair value" of $0.01 per share, or $63,000.
On February 16, 2001, the Company filed with the Securities and Exchange
Commission a Form S-8 Registration Statement. The Registration Statement
registered 12,000,000 post-reverse split shares of the Company's common stock,
reserved for the Company's Year 2001 Employee/Consultant Stock Compensation Plan
for the Company's current employees, directors, consultants and advisors.
Through June 30, 2002, a total of 12,000,000 shares under this Registration
Statement have been issued.
In February 2001, the Company issued 11,140,000 shares of restricted common
stock in the reverse acquisition with Paradigm Sales and Marketing, Inc. On
March 14, 2001, the Company issued 100,000 shares of restricted common stock as
a sign-on bonus in conjunction with an employment agreement. On May 1, 2001, the
Company exchanged 12,859,980 restricted shares of common stock for the assets
and liabilities of Biosolutions, Inc. (a New Jersey Co.). On May 10, 2001, the
Company issued 5,000 post-reverse split shares of restricted,
F-8
Bio-Solutions International, Inc.
Notes to Financial Statements
(3) CAPITAL TRANSACTIONS, continued
unregistered common stock for consulting services valued at $50. On June 7,
2001, two (2) stockholders agreed to return to treasury 15,692,910 restricted
shares of common stock. No consideration was given for these shares.
For the period July through September 2001, the Company issued 650,000
shares of S-8 common stock for services.
In September 2001, the Company received $40,000 for 210,526 restricted
shares of common stock. In September 2001, the Company issued 800,000 restricted
shares of common stock for a mobile laboratory. In October 2001, the Company
issued 450,000 shares of S-8 common stock for services. In December 2001, the
Company issued 300,000 shares of restricted common stock for $20,000 in cash. In
December 2001, the Company issued 1,200,000 shares of S-8 common stock for
services. In December 2001, the Company issued 1,270,000 shares of restricted
common stock for services. In December 2001, the Company issued 3,554,560 shares
of restricted common stock to convert $355,391 of Notes Payable and accrued
interest from related parties. In January 2002, the Company issued 100,000
shares of S-8 common stock for services. In February 2002, the Company issued
252,500 shares of restricted common stock for services. In April 2002, the
Company issued 400,000 shares of restricted common stock for services. In May
2002, the Company issued 7,500 shares of restricted common stock for services.
In June 2002, the Company issued 300,000 shares of S-8 common stock for
services. In June 2002, the Company released from escrow 3,467,862 shares of
previously issued common stock for the acquisition of assets.
In October 2002, the Company issued 210,526 shares of restricted common
stock to satisfy $40,000 of advances made by a stockholder. In October 2002, the
Company issued 2,000,000 shares of restricted common stock to a stockholder for
his services. In April 2003, the Company issued 5,000,000 shares of restricted
common stock to 5 stockholders for their services.
In July 2003, the Company issued 375,000 shares of restricted common stock
to settle a business dispute. In January 2004, the Company issued 55,000 shares
of restricted common stock in conjunction with the repurchase a franchise.
In July 2004 the Company issued 40,000,000 shares of restricted common
stock in exchange for the agreement of the Company's largest creditors to cease
collection proceedings until December 31, 2004. These shares are also being used
as collateral for those creditors.
In August 2004, the Company completed a one for 500 reverse split of its
common stock, and restated it capital stock at 110,000,000 authorized shares, of
which 10,000,000 are preferred stock and 100,000,000 are common.
(4) RELATED PARTIES
On May 16, 2001, the Company entered into an employment agreement with a
shareholder commencing May 1, 2001 for a term of five (5) years. In addition,
there was a sign-on bonus of 100,000 shares of restricted common stock and an
additional 100,000 shares upon completion of the manufacturing of a specific
quality of product. The annual compensation was fixed at $60,000 per annum. This
employment agreement was assigned to BSFC.
F-9
Bio-Solutions International, Inc.
Notes to Financial Statements
(5) NOTES PAYABLE
2004
Unsecured promissory notes, bearing interest at
10% per annum, convertible into restricted
shares of common stock at $.10 per share. $ 404,997
---------------
$ 404,997
===============
(6) GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company's financial position and
operating results raise substantial doubt about the Company's ability to
continue as a going concern, as reflected by the net loss of $2,300,000
accumulated through December 31, 2004. The ability of the Company to continue as
a going concern is dependent upon commencing operations, developing sales and
obtaining additional capital and financing. As of December 31, 2004, has no
operations and is in the process of building and establishing a new business
plan and seeking funding. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
(7) SALE OF MANUFACTURING DIVISION
On March 12, 2004, the Company sold its manufacturing division to
Bio-Solutions Manufacturing, Inc. (a Nevada Company ) effective March 1, 2004.
The assets sold consisted of all the Company's fixed assets, inventory products
and its various product formulations. The gross sales price was $ 809,711 which
consisted of $ 250,000 cash at closing, $ 100,000 installment obligation (
payable in monthly installments of $ 25,000 ) assumption of $ 309,711 of
accounts payable and $ 50,000 reduction of the Company's note obligation. The
gain recognized on this sale was $ 380,675. The estimated tax affect of this
gain is $ 125,000 which will be offset by the company's net operating losses.
The purchaser of the manufacturing operations is considered a related party
due to some common ownership of the Company. The agreement provides for an
exclusive sale of the Bio-Solution products to the Company at a pre-determined
fixed pricing which allocates the potential gross profit previously realized
between both parties. In addition, the Company will be allowed to use its
existing office facilities at no charge. Various non- manufacturing operating
expenses incurred will be allocated to the Company's accordingly.
(8) SPIN OFF OF FRANCHISE DIVISION
Bio-Solutions International, Inc. (the "Company") has spun-out its formerly
wholly-owned subsidiary, Bio-Solutions Franchise Corp. ("Franchise") to all of
its stockholders of record as of July 20, 2004. The effective date of the
spin-out was June 30, 2004. The spin-out was effectuated through a pro-rata
distribution of 100% of the capital stock of Franchise. The distribution of the
shares of capital stock of Franchise will be pro rata to such existing
stockholders of the Company and left each existing stockholder of the Company
with the same interest in assets and liabilities of the Company that each
shareholder held prior to such distribution. The shares of Franchise capital
stock so distributed are "restricted" securities and cannot be resold without
registration under the Securities Act of 1933, as amended, unless an exemption
from registration is available. Neither Franchise nor any class of its capital
stock is registered under the Securities Exchange Act of 1934, as amended. There
is no public market for the shares of capital stock of Franchise, nor will there
be in the foreseeable future.
F-10
Item 2. Management's Discussion and Analysis
THE FOLLOWING ANALYSIS OF THE OPERATIONS AND FINANCIAL CONDITION OF THE COMPANY
SHOULD BE READ IN CONJUNCTION WITH THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO, OF THE COMPANY CONTAINED ELSEWHERE IN
THIS FORM 10-QSB.
General
In March 2004, the Company sold certain of its assets associated with the
manufacturing portion of its business to Bio Solutions Manufacturing, Inc., a
Nevada corporation ("BSMI"). As a part of such agreement, BSMI agreed to assume
certain liabilities totaling $309,709.60 to be paid within six (6) months of
closing, with no less than $25,000 being paid each month until all the
liabilities are satisfied. BSMI issued 2,000,000 shares of the restricted common
stock of Single Source Financial Services, Inc., paid the Company $250,000.00
cash and agreed to make payments in the amount of $25,000.00 per month for a
period of four (4) months as payment for the assets.
Also in March 2004, BSMI entered into a marketing/manufacturing agreement
with Bio-Solutions Franchise Corp. ("BSFC"). As a part of the agreement, BSMI
will manufacture, test, research and develop environmental products for BSFC to
market and sell. The term of the agreement is for a period of ten (10) years.
The Company recorded a gain on disposed of operations in the amount of
$330,375, net of income tax effects.
Bio-Solutions International, Inc. (the "Company") has spun-out its formerly
wholly-owned subsidiary, Bio-Solutions Franchise Corp. ("Franchise") to all of
its stockholders of record as of July 20, 2004. The effective date of the
spin-out was June 30, 2004. The spin- out was effectuated through a pro-rata
distribution of 100% of the capital stock of Franchise. The distribution of the
shares of capital stock of Franchise will be pro rata to such existing
stockholders of the Company and left each existing stockholder of the Company
with the same interest in assets and liabilities of the Company that each
shareholder held prior to such distribution. The shares of Franchise capital
stock so distributed are "restricted" securities and cannot be resold without
registration under the Securities Act of 1933, as amended, unless an exemption
from registration is available. Neither Franchise nor any class of its capital
stock is registered under the Securities Exchange Act of 1934, as amended. There
is no public market for the shares of capital stock of Franchise, nor will there
be in the foreseeable future.
The Company recorded a loss on disposed of operations in the amount of
$324,690, net of income tax effects.
Discussion and Analysis
The discussion contained herein reflects the Results of Operations of the
Company for the three and six months ended December 31, 2004 and 2003. The
following discussion and analysis should be read in conjunction with the
financial statements of the Company and the accompanying notes appearing in the
previous section. The following discussion and analysis contains forward-looking
statements, which involve risks and uncertainties in the forward-looking
statements. The Company's actual results may differ significantly from the
results, expectations and plans discussed in the forward-looking statements.
The Company has sold and spun-off its two operating subsidiaries and
developing its business plan for future operations.
13
The Company's principal place of business is 1161 James St., Hattiesburg,
MS 39402, and its telephone number at that address is (601) 582-4000. The
Company is quoted on the Over the Counter Bulletin Board ("OTCBB") under the
symbol "BSLU".
Results of Operations - For the THREE MONTHS Ended December 31, 2004 and 2003
Financial Condition, Capital Resources and Liquidity
At December 31, 2004, the Company has $0 in total assets.
The Company has negative working capital of $605,200, and recorded a net
loss from continuing operations of $10,000 and $10,000 for the three months
ended December 31, 2004 and 2003, respectively.
The Company has no prospects at present to raise additional capital, in any
form. The Company expects to continue to record losses for the foreseeable
future.
Net Income / Loss
The Company recorded a net loss from continuing operations of $10,000 and
$10,000 for the three months ended December 31, 2004 and 2003, respectively.
Results of Operations - For the SIX MONTHS Ended December 31, 2004 and 2003
Financial Condition, Capital Resources and Liquidity
At December 31, 2004, the Company has $0 in total assets.
The Company has negative working capital of $605,200, and recorded a net
loss from continuing operations of $20,000 and $22,000 for the six months ended
December 31, 2004 and 2003, respectively.
The Company has no prospects at present to raise additional capital, in any
form. The Company expects to continue to record losses for the foreseeable
future.
Net Income / Loss
The Company recorded a net loss from continuing operations of $20,000 and
$22,000 for the six months ended December 31, 2004 and 2003, respectively.
Employees
The Company has no employees at December 31, 2004.
Research and Development Plans
The Company currently has no research and development plans.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
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expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), expansion
and growth of the Company's business and operations, and other such matters are
forward- looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future developments as
well as other factors it believes are appropriate in the circumstances. However,
whether actual results or developments will conform with the Company's
expectations and predictions is subject to a number of risks and uncertainties,
general economic market and business conditions; the business opportunities (or
lack thereof) that may be presented to and pursued by the Company; changes in
laws or regulation; and other factors, most of which are beyond the control of
the Company.
Consequently, all of the forward-looking statements made in this Form
10-QSB are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or operations.
ITEM 3. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Exchange Act, within the 90 days prior
to the filing date of this report, the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. This evaluation was carried out under the supervision and with
the participation of the Company's management, including the Company's President
and Chief Executive Officer along with the Company's Chief Financial Officer.
Based upon that evaluation, the Company's President and Chief Executive Officer
along with the Company's Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective. There have been no significant
changes in the Company's internal controls or in other factors, which could
significantly affect internal controls subsequent to the date the Company
carried out its evaluation.
Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in Company
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in Company reports filed under the Exchange
Act is accumulated and communicated to management, including the Company's Chief
Executive Officer and Chief Financial Officer as appropriate, to allow timely
decisions regarding required disclosure.
PART II
Item 1. Legal Proceedings.
In October 2003, Bio-Solutions of Northern Virginia, LLC and Joel H.
Bernstein filed a Motion for Judgment in the Circuit Court for the City of
Alexandria, Virginia alleging breach of contract, promissory estoppel,
fraudulent inducement to contract, fraud and misrepresentation and violation of
Virginia Retail Franchise Act. Additionally, also in October 2003, The
Commonwealth of Virginia State Corporation Commission issued a Rule to Show
Cause regarding the Company's failure to register the sale of a Virginia
franchise to one of its residents. The hearing on the Rule to Show Cause was
held in January 2004. Any and all obligations under the settlement agreement of
this action have been assumed by BSFC.
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Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults in Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
On July 20, 2004, the Company filed a Schedule 14C approving by shareholder
consent a reverse split of the common stock of 1 for 500, the increase of
authorized preferred stock and approved a restatement of the authorized shares
after the reverse split of 110,000,000, of which 10,000,000 is preferred and
100,000,000 is common, and approved the spinout of BSFC to existing
shareholders. All of which actions have been taken.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are incorporated herein by
reference, as follows:
Exhibits
Number Description
- ------ -------------------------------
31.1 * Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.2 * Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
- ------------------------------
* Filed Herewith
(b) The Company filed a Form 8-K on October 14, 2004, reporting on the
spin-off of BSFC.
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.
Bio-Solutions International, Inc.
----------------------------------
(Registrant)
Date: January 31, 2005
/s/ Louis H. Elwell
- ---------------------------------------
Louis H. Elwell
Sole Officer and Director
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