-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M6RADbNWDUJaseYMwhO5USSPjZ97M0jVh0rndD9y2yH/KTHBaTpKeXdilF+33hkI verOhY0uzVbXAZf6kTt8/A== 0001169232-02-000139.txt : 20020715 0001169232-02-000139.hdr.sgml : 20020715 20020715161044 ACCESSION NUMBER: 0001169232-02-000139 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020531 FILED AS OF DATE: 20020715 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SWORD COMP SOFT CORP CENTRAL INDEX KEY: 0001126162 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 980229951 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-33271 FILM NUMBER: 02703006 BUSINESS ADDRESS: STREET 1: 9055 ST. CATHERINE W. ST. STREET 2: SUTIE 133 H3Z 3J8 CITY: MONTREAL QUEBEC CANA BUSINESS PHONE: 5149401098 MAIL ADDRESS: STREET 1: 9055 ST. CATHERINE W. ST. STREET 2: SUTIE 133 H3Z 3J8 CITY: MONTREAL QUEBEC CANA 10-Q 1 d51091_10q.txt QUARTERLY REPORT SWORD COMP-SOFT CORP. (Exact name of Small Business Issuer as Specified in its Charter) DELAWARE 98-0229951 (state or other Jurisdiction of (I.R.S Employer Incorporation or Organization) Identification No.) 4055 Ste Catherine st. suite 133, Montreal, Quebec H3Z 3J8 (Address of Principal Executive Offices) (514) 821-5151 Issuer's Telephone Number Including Area Code) State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date : At May 31, 2002 Issuer had 48,742,500 outstanding shares of Common Stock. INDEX PART I: FINANCIAL INFORMATION Item 1. Financial Statements Balance sheet (Unaudited) at May 31, 2002 Statements of Operations (Unaudited) for the three and six months ended and May 31, 2002 and May 31, 2001and from inception (November 2, 1998) to May 31, 2002 Statement Cash flows (Unaudited)for the six month ended May 31, 2002 and May 31, 2001 and from inception (November 2, 1998) to May 31, 2002. Notes to the financial statements (Unaudited). Item 2. Plan of Operations PART II: OTHER INFORMATION Item 2. Sale of Unregistered Securities Item 6. Exhibits and Reports on Form Signatures SWORD COMP-SOFT CORP. (A COMPANY IN THE DEVELOPMENT STAGE) BALANCE SHEET AT MAY 31, 2002 (UNAUDITED) Assets Current Assets Cash $ -- Accounts receivable 109,500 Note Receivable - Parent company 189,043 Note Receivable - Related Party 169,154 ----------- Total current assets 467,697 Property and equipment, net 43,757 Investment in Parent 129,478 ----------- Total assets 640,932 =========== Liabilities and Shareholder's Equity Current Liabilities Bank Indebtedness 6,153 Accounts payable and accrued liabilities 44,301 Note Payable - Related party 188,542 ----------- Total current liabilities 238,996 Shareholder's Equity Common Stock, $.0001 par value; authorized 4,874 70,000,000 shares; issued and outstanding 48,742,500 Paid in Capital 1,036,105 Share Subscription Receivable (636,500) Deficit accumulated during the development stage (2,543) ----------- Total Shareholder's Equity 401,936 Total liabilities and shareholder's equity $ 640,932 =========== Read the accompanying summary of significant accounting notes to financial statements, which are an integral part of this financial statement. SWORD COMP-SOFT CORP. (A COMPANY IN THE DEVELOPMENT STAGE) STATEMENT OF OPERATIONS FOR THE 3 MONTHS AND SIX MONTHS ENDED MAY 31, 2002 AND 2001 FROM INCEPTION NOVEMBER 2, 1998 THROUGH MAY 31, 2002 (UNAUDITED)
Three months Six Months Inception ended Ended November 2, 1998 31-May 31-May Through ------ ------ 2002 2001 2002 2001 May 31, 2002 ------------ ------------ ------------ ------------ --------------- Revenues: $ 58,128 $ 59,655 $ 170,696 $ 153,464 $ 710,905 Cost of Revenues: 32,096 52,103 72,250 156,208 479,210 ------------ ------------ ------------ ------------ ------------ 26,032 7,552 98,446 (2,744) 231,695 Operating Expenses: Marketing -- -- -- 1,255 46,649 Rent -- 4,500 4,500 9,000 37,760 Selling, general and administrative expenses 11,444 7,778 31,341 16,651 165,799 ------------ ------------ ------------ ------------ ------------ Total Operating Expenses 11,444 12,278 35,841 26,906 250,208 ------------ ------------ ------------ ------------ ------------ Income/(Loss) before other income (expense) 14,588 (4,726) 62,605 (29,650) (18,513) Other income (expense): Interest income - Parent 3,251 1,167 6,446 2,417 21,398 Interest income - Related party 2,851 1,426 5,629 2,670 18,060 Interest expense - Related party (3,229) (3,427) (6,403) (6,895) (23,488) ------------ ------------ ------------ ------------ ------------ Total other income (expense) 2,873 (834) 5,672 (1,808) 15,970 Net income/(Loss) 17,461 (5,560) 68,277 (31,458) (2,543) ============ ============ ============ ============ ============ Basic weighted average common shares outstanding 48,742,500 46,700,000 48,742,500 46,700,000 44,081,714 ============ ============ ============ ============ ============ Basic Loss per common share $ 0.0004 $ (0.0001) $ 0.0014 $ 0.0007 $ 0.0000 ============ ============ ============ ============ ============
Read the accompanying summary of significant accounting notes to financial statements, which are an integral part of this financial statement. SWORD COMP-SOFT CORP. (A COMPANY IN THE DEVELOPMENT STAGE) STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED MAY 31, 2002 AND 2001 FROM INCEPTION NOVEMBER 2, 1998 THROUGH MAY 31, 2002 (UNAUDITED)
Inception Six months ended November 2, 1998 through May 31, 2002 May 31, 2001 May 31, 2002 ------------ ------------ ---------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ 68,277 $(31,458) (2,543) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 6,770 13,898 32,180 Accrued interest expense-related party 6,403 6,895 23,488 Accrued interest income-related part and parent (12,075) (5,807) (39,458) Changes in Operating assets and liabilities: Note Receivable - Parent Company 14,323 -- (167,645) Note Receivable - Related Party (5,430) -- (151,094) Accounts Receivables (79,823) (365) (109,500) Accounts Payables 26,204 10,041 44,301 -------- -------- -------- Net cash provided by/(used in) operating activities 24,649 (6,076) (370,271) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Property and equipment -- (1,333) (60,937) -------- -------- -------- Net cash provided by/(used in) investing activities -- (1,333) (60,937) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from: Sales of common stock -- -- 156,262 Payment of common stock subscriptions receivable -- -- 103,739 Notes payable, related party (29,242) (6,613) 165,054 Bank Indebtedness 4,593 $ -- 6,153 -------- -------- -------- Net cash provided by/(used in) financing activities (24,649) (6,613) 431,208 -------- -------- Net increase (decrease) in cash and cash equivalents -- (14,022) -- Cash and cash equivalents, beginning of period -- 14,140 -- -------- -------- -------- Cash and cash equivalents, end of period $ -- $ 118 -- ======== ======== ======== Supplemental Schedule of noncash investing and financing activities: 15,000 15,000 On April 30, 2000, the company issued 600,000 shares of common stock in settlement of computer equipment purchased from its officers.
* The information from inception (November 02, 1998) through April 30, 2000 is the same as the information provided for the twelve months ended April 30, 2000. Read the accompanying summary of significant accounting notes to financial statements, which are an integral part of this financial statement. NOTE 1 -BASIS OF PRESENTATION The accompanying Unaudited financial statements of Sword Comp-Soft Corp. have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-X. The financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the audited financial statements and footnotes thereto included in Sword Comp-Soft Corp's 10KSB as filed with the Securities and Exchange Commission. 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 and disclosure of contingent assets and liabilities at the date of the financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - Revenue Recognition The company recognizes revenue from technology related services, such as internet site hosting and software consulting. Revenue is recognized when the service is performed. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB 101 outlines the basic criteria that must be met to recognize revenue and provide guidance for disclosures related to revenue recognition policies. Management believes that Sword Comp-Soft Corp's revenue recognition practices are in conformity with the guidelines of SAB 101. NOTE 3 - NET LOSS PER SHARE Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Options and warrants are not considered since considering such items would have an antidilutive effect. NOTE 4 - GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The company reported net income of $17,461 and $68,277 for the three and six months ended May 31, 2002 as well as reporting net (losses) of $(2,543) from inception (November 2, 1998) to May 31, 2002. As reported on the statement of cash flows, the Company had cash flows from operating activities of $24,649 for the six months ended May 31, 2002 and has reported deficient cash flows from operating activities of $(370,271) from inception (November 2, 1998). To date, these losses and cash flow deficiencies have been financed principally through the sale of common stock $260,000 and notes payable, principally related party debt $165,054. Item 2. Plan of Operation. The following discussion should be read in conjunction with the financial statements and related notes which are included elsewhere in this prospectus. Statements made below which are not historical facts are forward-looking statements. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, general economic conditions and our ability to market our product. Some of the statements hereunder are forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements about our plans, objectives, expectations, intentions and assumptions and other statements contained herein that are not statements of historical fact. You can identify these statements by words such as "may," "will," "should," "estimates," "plans," "expects," "believes," "intends" and similar expressions. We cannot guarantee future results, levels of activity, performance or achievements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. Sword Comp-soft Corp.'s main goal is to bring interactive healthcare information services utilizing the Internet to the consumer, in lay terms, to allow the consumer to make educated choices in the area of health care. Its plan is to offer knowledge and service databases that allows the end user to access what they, as individuals, need. Sword has developed technology, now in its final testing stage, that combines a large volume of healthcare information in conjunction with the ability to selectively generate only that which the consumer wishes to know. The programs, known as ASPs, are geared to very specific areas and, thus, allows the subscriber to pick and choose, as per their healthcare preference. The interactivity means that the program will keep prompting consumers until their questions have been fully answered or their needs met to the consumer's satisfaction. We now have what we believe is some of the most advanced technology currently available in our area of e-healthcare and our interactive website is expected to be operational by 3rd quarter 2002. The methodology of empowering the consumer, vis-a-vis their own health needs, broadens the overall health sector knowledge base and allows for intelligent, well thought out courses of action by the consumer when dealing with their professional health provider. Eachof the applications is uniquely tailored to the particular needs of that consumer and their areas of concern. Our on-line medical services will be interactive, a dialogue between the consumer and the applications. There are over 15,000 health-based internet sites as reported by Business 2.0 magazine, in its March 1999 edition. Almost all of these are what Jupiter Communications dubbed "informational" i.e., they are one-way content providers and serve essentially the function of being an electronic medical encyclopedia. The e-healthcare industry is adopting new business models and we believe that these new trends will provide significant investments opportunities. The ASP system works as a communication program, which accumulate data for individuals through a question and answer interface, much like mimicking the Patient/Doctor interaction. On May 29, 2000, Millenia Hope Inc. acquired thirty-five million seven hundred thousand (35,700,000) shares of SWORD COMP-SOFT INC., this being the 76.5% of SWORD's issued capital, in exchange for five million (5,000,000) common shares, valued at $129,478 based on the net tangible asset value of Millenia Hope and five million warrants (5,000,000) entitling the registered holder thereof to purchase at any time from that date for a period of three (3) years, one share of common stock at a price of two dollars (2). We hope to benefit from our relationship with Millenia Hope, Inc., our controlling shareholder, in several ways. Millenia's scientific advisory committee, comprised of MD's and P.H.D.s with a wide range of expertise, will lend valuable assistance to Sword, as it brings to the market its medical ASPs. Further, their breadth of knowledge and varied specializations should help to generate ideas and data to aid in the production of other medical ASPs. Our first application service is currently expected to be available by the 3rd quarter of 2002. The marketing plan for the first year of operations is to concentrate on the North American market and to focus, particularly during the balance of this year, on opportunities that have been identified for or by the top pharmaceutical companies. We will try to complete formal contracts with a few of the major pharmaceutical companies, and also market directly to consumers on an annual fee or pay per use basis. Initially, our interactive health service applications will be promoted primarily via our web site, internet on-line advertising and by an aggressive effort to recruit specific web communities (a group of like minded Internet users with similar interests) that are health and well being oriented. Co-parenting, the joining of two products/services or ideas presented as a single corporate message, will be employed in tandem with major medical and not for profit organizations to raise the profile of our offering. As interest grows commensurately, we will employ a wider choice of media outlets to promote our website, Medicocenter.com A recent American Medical Association survey that shows fewer than 40 percent of doctor's use the Web as part of their practice contrasts with the fact that more than 100 million consumers are looking to the Internet for health information. Health Information on-line is a huge and growing segment of the Healthcare industry, whose sales are predicted to rise to $10 billion by the year 2004. In the same release (Jupiter Communications Inc. January 2000) reported that 45% of on-line consumers access the Internet for health information. Based on our internal financial and marketing studies, we believe that our sales targets are achievable taking into account market trends and the quality of our products. We hope to have revenues from several sources, including but not exclusive of Internet site hosting, software consultations and our ASPs during fiscal 2002. The latter source, we expect, will become our primary revenue producer. We anticipate that our monthly rate of expenditures, once we commence sales, will be approximately $60,000 and $80,000 depending on such variables as our level of advertising and marketing. SWORD generates funds in a number of ways. As previously mentioned, we already earn some revenue from Internet hosting and software consulting. These revenues helped us to break even on our day to day operations for the fiscal year ended, November 30, 2001. Our APS's with which we expect to generate the bulk of our income in the future, will be available to the individual consumer usage. Also, consumers could access an individual ASP on a pay per use basis. We will also be soliciting pharmaceutical and other healthcare corporations to purchase advertising space on our website, a natural fit as the consumers accessing our website will be interested in health and wellness. As various ASPs come on line we will gear our sales efforts to mesh the individual ASP to the Company whose market is the specific area covered by that particular ASP. Sword is planning to hold discussions with insurance carriers to have them pay the company directly for their customer's use of our medical site. This should be a mutually beneficial arrangement, as the insurance company will have better educated customers, making more intelligent wellness choices and saving their corporations money in the future. The Company gains by having a solid steady fee base. We also hope to enter into agreement with pharmaceutical and other health care corporations to sell them the raw data we collect, i.e. number of people with questions relating to a specific illness, how many people on our database have pre-operative problems etc. Liquidity and cash flow needs of the company From December 1st, 2001 to May 31, 2002 the company incurred operating expenses and net interest expenses in the amount of $102,419 while recording net cash revenues of $170,696. From June 1st, 2002 to November 30th, 2002, the fiscal year end, the company anticipates that its net cash flow needs, will be $167,000 primarily to cover day to day operating expenses. These funds will be covered by revenue received and any shortfalls will be met by the officers and certain shareholders as previously outlined. Part II other information Item 2: Sales of Unregistered securities Date of Title of Number Consideration Exemption From Sale Security Sold Received Registration Claimed 12/01/01 Common Shares 1,632,500 $326,500 Regulation S (b) Reports on Form 8-K None 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. SWORD COMP-SOFT CORP. (Registrant) Dated July 15, 2002 By: /s/ Leonard Stella -------------------------- Chief Operating Officer -----END PRIVACY-ENHANCED MESSAGE-----