UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly year ended: March 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from: ------------ to ------------
Commission File Number: 0-31813
ONCOURSE TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 91-1922441
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3106 South 166th Street
New Berlin, WI 53151
(Address of principal executive offices)
Issuer's telephone number: (262) 860-0565
Issuer's facsimile number: (262) 860-0561
NOT APPLICABLE
(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. [ X ] Yes [ ] No
Number of shares outstanding of each of the issuer's class of common equity, as
of May 11, 2001: 17,879,008
Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [ X ]
Page 1
ONCOURSE TECHNOLOGIES, INC.
FORM 10-QSB
TABLE OF CONTENTS
ITEM PAGE
---- ----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Page 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
OnCourse Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
As of March 31, 2001 (Unaudited) and December 31, 2000
March 31, December 31,
Assets 2001 2000
------ ------------ ------------
Current Assets:
Cash $ 154,273 $ 200,411
Accounts Receivable, Less Allowance for
Doubtful Accounts of Approximately $44,927 1,140,927 1,105,908
and $24,889, Respectively
Prepaids and Other Assets 229,967 306,939
Deferred Income Tax Asset 445,667 389,670
----------- -----------
Total Current Assets 1,970,834 2,002,928
Note Receivable from Shareholder 45,979 45,041
Capitalized Software, Less Accumulated
Amortization of $1,667,560 and
$1,422,334, Respectively 4,975,075 4,873,769
Property and Equipment, at Cost:
Computer Equipment and Purchased Software 406,765 377,217
Furniture, Fixtures and Vehicles 131,938 151,471
----------- -----------
Total Property and Equipment 538,703 528,688
Less- Accumulated Depreciation (205,780) (180,126)
----------- -----------
Net Property and Equipment 332,923 348,562
Goodwill, Less Accumulated Amortization of
$1,276,305 and $976,606, Respectively 6,859,517 7,256,424
Assembled Workforce, Less Accumulated
Amortization of $36,667 and $28,810, 183,333 191,190
Respectively
Trade Names, Less Accumulated Amortization of
$42,778 and $33,611, Respectively 507,222 516,389
Distribution Network, Less Accumulated
Amortization of $100,000 and $78,572, 500,000 521,428
Respectively
Other Assets 163,952 178,291
----------- -----------
Total Assets $15,538,835 $15,934,022
----------- -----------
----------- -----------
The accompanying consolidated notes to financial statements are an
integral part of these consolidated balance sheets.
Page 3
ONCOURSE TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of March 31, 2001 (Unaudited) and December 31, 2000
March 31, December 31,
Liabilities and Shareholders' Equity 2001 2000
------------------------------------ ------------ ------------
Current Liabilities:
Current Portion of Long-Term Debt $ 49,985 $ 52,318
Current Portion of Capital Leases 14,067 13,060
Accounts Payable 922,310 823,754
Accrued Income Taxes -- 14,833
Accrued Commissions 64,147 84,210
Accrued Wages and Other Liabilities 178,668 207,347
Notes Payable to Shareholders and Employees 148,642 154,587
Deferred Revenue 1,660,924 1,623,982
----------- -----------
Total Current Liabilities 3,038,743 2,974,091
Line of Credit 989,818 787,818
Notes Payable to Shareholders and Employees, 1,724 6,757
Less Current Portion
Long-Term Debt, Less Current Portion 348,243 375,914
Capital Lease Obligations, Less Current Portion 1,132 4,758
Deferred Income Tax Liability 895,650 1,042,770
Shareholders' Equity:
Common Stock, $0.001 Par Value, 50,000,000
Shares Authorized, 17,879,008 and 17,751,227
Shares Issued and Outstanding, Respectively 17,879 17,751
Additional Paid-In Capital 14,709,815 14,662,217
Warrants 799,748 713,886
Retained Deficit (5,263,917) (4,651,940)
----------- -----------
Total Shareholders' Equity 10,263,525 10,741,914
----------- -----------
Total Liabilities and Shareholders' Equity $15,538,835 $15,934,022
----------- -----------
----------- -----------
The accompanying consolidated notes to financial statements are an
integral part of these consolidated balance sheets.
Page 4
OnCourse Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three Months Ended March 31, 2001 and 2000 (Unaudited)
Three Months Ended
March 31,
--------------------------
2001 2000
----------- -----------
Net Sales $1,271,231 $ 949,573
Cost of Sales 413,241 359,539
---------- ----------
Gross Profit 857,990 590,034
Selling Expenses 579,036 576,115
Research and Development 74,828 42,503
Purchased In-Process Research & Development - 270,000
Goodwill and Other Intangible Amortization 338,151 183,634
General and Administrative Expenses 582,304 393,312
---------- ----------
Operating Loss (716,329) (875,530)
Interest Expense 28,325 19,249
---------- ----------
Loss Before Income Taxes (744,654) (894,779)
Income Tax Benefit 132,678 161,597
---------- ----------
Net Loss $ (611,976) $ (733,182)
---------- ----------
---------- ----------
Basic and Diluted Loss Per Share $(0.03) $(0.14)
---------- ----------
---------- ----------
The accompanying consolidated notes to financial statements are an
integral part of these consolidated statements.
Page 5
OnCourse Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2001 and 2000 (Unaudited)
Three Months Ended
March 31,
-------------------------
2001 2000
---------- ----------
Cash Flows from Operating Activities:
Net Loss $(611,976) $(733,182)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities-
Depreciation and Amortization 614,550 381,266
Loss on Disposal of Property and Equipment 1,795 -
Non-Cash Compensation - 46,605
Non-Cash Consulting Services 111,587 28,848
Purchased In-Process Research & Development - 270,000
Deferred Income Taxes, Net (105,909) (174,595)
Changes in Current Assets and Liabilities-
Accounts Receivable (35,019) 42,715
Prepaids and Other Current Assets (1,028) 1,353
Accounts Payable 98,555 (165,493)
Accrued Liabilities (63,573) 11,600
Deferred Revenue 36,942 352,853
--------- ---------
Net Cash Provided by Operating Activities 45,924 61,970
--------- ---------
Cash Flows From Investing Activities:
Capitalized Software Development Costs (346,533) (234,429)
Purchase of Property and Equipment (17,329) (30,815)
Other Assets 14,340 (33,353)
Acquisition of TekSoft, Inc. - 65,526
--------- ---------
Net Cash Used in Investing Activities (349,522) (233,071)
--------- ---------
Cash Flows From Financing Activities:
Proceeds From Line of Credit, Net 202,000 134,958
Proceeds from Long-Term Debt - 14,091
Payments on Long-Term Debt and Notes Payable to (40,983) (28,244)
Shareholders and Employees
Payments on Capital Lease Obligation, Net (2,619) (3,952)
Proceeds from Stock Issuance 100,000 49,084
Exercise of Warrants - (2,928)
Increase in Notes Receivable from Shareholder (938) (831)
--------- ---------
Net Cash Provided by Financing Activities 257,460 162,178
--------- ---------
Net Decrease in Cash (46,138) (8,923)
Cash, Beginning of Year 200,411 91,684
--------- ---------
Cash, End of Year $ 154,273 $ 82,761
--------- ---------
--------- ---------
The accompanying consolidated notes to financial statements are an
integral part of these consolidated statements.
Page 6
OnCourse Technologies, Inc. and Subsidiaries
Consolidated Notes to Financial Statements
For the Three Months Ended March 31, 2001 and 2000 (Unaudited)
(1) Basis of Presentation-
---------------------
The accompanying unaudited condensed consolidated financial statements of
OnCourse Technologies, Inc. ("Company") have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission.
The information furnished herein reflects all adjustments and accruals that
management believes is necessary to fairly state the operating results for
the respective periods. Certain information and footnote disclosures
normally included in annual financial statements prepared in accordance
with generally accepted accounting principles have been omitted pursuant to
such rules and regulations of the Securities and Exchange Commission under
item 310 of Regulation S-B. The notes to the condensed financial
statements should be read in conjunction with the notes to the consolidated
financials contained in the Company's Form 10-KSB for the year ended
December 31, 2000. The Company's management believes that the disclosures
are sufficient for interim financial reporting purposes. The results of
operations for any interim period are not necessarily indicative of the
results for the year.
(2) Liquidity-
---------
The Company has incurred losses over the last two years and has negative
working capital. Based upon its current plans, the Company believes it has
sufficient funds and borrowing availability to meet its operating expenses
and capital requirements through fiscal year 2001 and into fiscal year
2002. However, the Company intends to seek such additional funding from
equity offerings to existing shareholders or other third parties during
2001. There is no assurance that such additional funds will be available
on acceptable terms, if at all. Should the plans contemplated by
management not be consummated, the Company may have to seek alternative
sources of capital, affect borrowings under its line of credit or
reevaluate its operating plans.
(3) Summary of Significant Accounting Policies-
------------------------------------------
(a) Revenue Recognition-
-------------------
Revenue from product sales is recognized upon customer acceptance and
delivery of the product provided that no significant contractual
obligations remain. Customer acceptance is realized after either the
customer pays for the software or upon receiving a document from the
customer stating that the product has been accepted by the customer.
Included in deferred revenues as of March 31, 2001 and December 31, 2000 is
approximately $762,000 and $684,000, respectively, of products which have
been delivered and invoiced but for which the Company has not been notified
of customer acceptance.
Revenues also include separate maintenance fees whereby the Company
provides ongoing customer support and product upgrades. Such contracts are
reflected as deferred revenue and amortized ratably over the term of the
maintenance period ranging from 12 to 60 months, which begins after the
expiration of the one-year of free support included with the initial
purchase of the software for some of the Company's products.
(b) Software Development Costs-
--------------------------
Software development costs incurred in the research and development of new
software products and enhancements to existing software products are
expensed as incurred until technological feasibility of the product is
established. From the time technological feasibility is established until
the product is released, all software costs are capitalized. In addition,
capitalized software includes software acquired in the acquisition of a
subsidiary. Capitalized costs are reported at the lower of unamortized
costs or net realizable value. The costs are amortized over the greater of
the amount computed using (a) the ratio that current gross revenues for the
product bear to the total of current and anticipated
Page 7
future gross revenues for that product or (b) the straight-line method over
the remaining estimated economic life of the product. During the three
months ended March 31, 2001 and 2000, the Company amortized the capital
software costs straight-line over five years.
Costs incurred up to technological feasibility are considered research and
development costs. These costs are expensed as incurred. Research and
development costs were approximately $75,000 and $43,000 for the three
months ended March 31, 2001 and 2000, respectively.
Computer software development costs capitalized in the three months ended
March 31, 2001 and 2000 were approximately $347,000 and $234,000,
respectively. Amortization expense for the three months ended March 31,
2001 and 2000 of approximately $245,000 and $171,000, respectively, is
included in cost of sales in the consolidated statements of operations.
(4) Shareholders' Equity-
--------------------
During the three months ended March 31, 2001, the Company offered and
issued on various dates Units in a private placement to selected
individuals deemed financially capable of making the investment. The units
include one share of Company common stock and one Class A common stock
purchase warrant and one Class B common stock purchase warrant. The
Company issued and sold 100,000 units at $1.00 per unit during the three
months ended March 31, 2001. The warrants were issued with initial
estimated values (based on Black-Scholes valuation model) of $.85 for each
Class A warrant and $.95 for each Class B warrant and expire in 2004 and
2006, respectively. Each warrant represents the right to purchase one
share of the Company's common stock at an exercise price of $1.75.
During the three months ended March 31, 2001, the Company offered and
issued 27,781 shares of Company common stock, 27,781 Class A stock purchase
warrants and 27,781 Class B stock purchase warrants as payment of $33,587
in professional services to three vendors. The warrants were issued with
initial estimated values (based on Black-Scholes valuation model) ranging
from $.85 to $1.72 for each Class A warrant and $.95 to $1.90 for each
Class B warrant and expire in 2004 and 2006, respectively. Each warrant
represents the right to purchase one share of the Company's common stock at
an exercise price ranging from $1.75 to $3.00.
(5) Deferred Savings Plan-
---------------------
Effective April 1, 2001, the Company will implement a 401(k) deferred
savings plan with discretionary profit sharing and matching features
covering substantially all employees of the Company. This plan will
replace the deferred savings plan which was in place at one of the
acquired subsidiaries.
(6) Subsequent Events-
-----------------
Stock Option Plan-
-----------------
Subsequent to March 31, 2001, the Company adopted a Stock Option Plan (the
"Plan) with an effective date of January 1, 2001. The primary purpose of
the Plan is to provide an incentive for employees of the Company and its
subsidiaries. One million shares of the Company's common stock, $.001 par
value per share, were reserved for issuance pursuant to the terms of the
Plan. Unless earlier terminated by the Board of Directors, the Plan will
terminate on December 31, 2010.
Subsequent to March 31, 2001, the Company granted 643,330 options to
employees at an exercise price of $.65, and which vest ranging from zero to
five years and expire December 31, 2010.
Authorization of Preferred Stock-
--------------------------------
Subsequent to March 31, 2001, the Company amended its Articles of
Incorporation to authorize 10,000,000 shares of Preferred Stock.
Page 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The following discussion and analysis should be read in conjunction with the
Company's Consolidated Financial Statements and notes, thereto and the other
financial information appearing elsewhere in this filing. In addition to
historical information, the following discussion and other parts of this filing
contain forward-looking information that involves risks and uncertainties. The
Company's actual results could differ materially from those anticipated by such
forward-looking information due to competitive factors, risks associated with
the Company's plans and other information expressed or implied by these forward-
looking statements. There may be other risks and circumstances that management
is unable to predict. When used in this Quarterly Report, the words "believes",
"expects", "intends", "plans", "anticipates", "estimates" and similar
expressions are intended to identify forward looking statements, although there
may be some forward-looking statements not accompanied by these expressions.
All forward-looking statements are intended to be covered by the safe harbor
created by Section 21E of the Securities Exchange Act of 1934.
The Company's goal is to become the collaborative business partner for the metal
working industry by providing technology products and services that improve the
profitability and efficiency of metal component manufacturers. On January 31,
2000, the Company acquired TekSoft, Inc.. This acquisition has moved the
Company closer to its goal of becoming a business partner for the metal working
industry. This acquisition also helped complement its existing product
offerings as well as broaden the base necessary for implementing its Internet
strategy utilizing a business-to-business electronic-commerce site.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
The Company's net sales increased from $950,000 for the three months ended March
31, 2000 to $1,271,000 for the same period in 2001 for a 34% increase. When
considering the $353,000 increase in deferred revenue for the three months ended
March 31, 2000 as well as only having two months of TekSoft sales for the same
period in 2000, net sales for the three months ended March 31, 2001 declined
from 2000's level. Management believes that the sales decline reflected the
general concerns and conservative outlook that the metal working industry had
given to the many negative domestic and global economic indicators reported
prior to and during the three month period ended March 31, 2001. Deferred
revenue of $1,661,000 as of March 31, 2001 reflects an increase of $37,000 over
deferred revenue of $1,624,000 as of March 31, 2000.
Cost of sales consist primarily of amortization of capitalized software
development costs, royalties paid for third party software included in the
Company's products, direct materials used to transfer and support the Company's
software products, equipment and allocated overhead. Cost of goods sold was
$413,000 or 32% of net sales for the three months ended March 31, 2001 as
compared to the $360,000 or 38% of net sales for the three months ended March
31, 2000. The gross margin percentage for the three months ended March 31, 2001
improved over the same period in 2000 largely related to increased revenues with
relatively fixed costs primarily amortization of capitalized software costs
which are amortized on a straight-line basis.
Selling expenses increased slightly to $579,000 for the three months ended March
31, 2001 as compared to $576,000 for the same period in 2000. Selling expenses
as a percentage of net sales was 46% and 61% for the three months ended March
31, 2001 and 2000, respectively.
During the three months ended March 31, 2001 and 2000, the Company's
subsidiaries devoted significant time and resources to finalizing the release of
its new products. During the three months ended March 31, 2001 and 2000, the
Company invested over 33% and 57%, respectively, of net sales or $421,000 and
$547,000, respectively, in the forms of capitalized software development costs
and research and development activities. Total research and development costs
expensed during the three months ended March 31, 2001 and 2000, were $75,000 and
$313,000, respectively. Total costs capitalized as software development costs
were $346,000 and $234,000, for the three months ended March 31, 2001 and 2000,
respectively, and will be amortized over five years.
Goodwill and other intangible amortization expenses were $338,000 and $184,000
for the three months ended March 31, 2001 and 2000, respectively. The largest
factor in the increase related to the TekSoft acquisition, which had three
months on amortization expenses included in the three months ended March 31,
2001 compared to only two months for the same period in 2000. Goodwill
amortization was $300,000 and $158,000 for the three months ended March 31, 2001
and 2000, respectively. Other intangible amortization was comprised of
amortization of the assembled workforce, trade names and distribution network
intangible assets established as part of the TekSoft acquisition.
Page 9
General and administrative expense increased to $582,000 or 49% of net sales for
the three months ended March 31, 2001 compared to the $393,000 or 41% of net
sales for the same period in 2000. The increase can be partially attributed to
the three months ended March 31, 2001 having three months of TekSoft's general
and administrative expenses as compared to only two months for the same period
in 2000. In addition, the Company amortized $78,000 during the three months
ended March 31, 2001 of a twelve-month contract with a professional services
firm for consulting services. The Company issued 300,000 shares of common stock
for these services at a value of $2.00 per share on May 19, 2000. This contract
was subsequently extended to February 19, 2002, for no additional consideration,
which reduced the monthly expense from $50,000 to $14,000 per month starting in
February 2001. Also contributing to the increase is legal and professional fees
incurred to manage the Company's preparation and filing of the Company's 10-SB
registration statement, fund raising activities and the ongoing integration of
the subsidiaries.
Operating expenses, including purchased in-process research and development,
goodwill and other intangible asset amortization were $1,574,000 for the three
months ended March 31, 2001 as compared to $1,466,000 for the three months ended
March 31, 2000.
Interest expense increased to $28,000 for the three months ended March 31, 2001
from $19,000 for the same period in 2000. This increase is attributed to
additional debt incurred by the Company that was used to finance the development
of the Company's computer-aided-manufacturing and computer-aided-engineering
software products. After interest expenses, the Company had a pre-tax loss of
$745,000 for the three months ended March 31, 2001 as compared to the $895,000
pre-tax loss for the same period in 2000.
The net loss after tax benefits was $612,000 and $733,000 for the three months
ended March 31, 2001 and 2000, respectively.
LIQUIDITY AND CAPITAL RESOURCES
OnCourse has incurred losses over the last two years and has negative working
capital. Based upon its current plans, the Company believes it has sufficient
funds and borrowing availability to meet its operating expenses and capital
requirements through fiscal year 2001 and into fiscal year 2002. However, the
Company intends to seek such additional funding from equity offerings to
existing shareholders or other third parties during 2001. There is no assurance
that such additional funds will be available on acceptable terms, if at all.
Should the plans contemplated by management not be consummated, the Company may
have to seek alternative sources of capital, affect borrowing under its line of
credit or reevaluate its operating plans.
The Company's cash position as of March 31, 2001 was approximately $154,000 as
compared to $200,000 as of December 31, 2000. During the three months ended
March 31, 2001, net cash provided by operating activities was $46,000 versus
$62,000 for the three months ended March 31, 2000. Cash flows used in investing
activities were $350,000 and $233,000 for the three months ended March 31, 2001
and 2000, respectively. The Company invested $347,000 in capitalized software
development costs for the three months ended March 31, 2001 compared to $234,000
for the same period in 2000. The Company had positive cash flows from financing
activities of $257,000 and $162,000 for the three months ended March 31, 2001
and 2000, respectively. The increase in cash flows from financing was due to
proceeds from sale of stock and use of the line of credit.
The Company's working capital as of March 31, 2001 was a negative $1,068,000 as
compared to the negative working capital of $971,000 as of December 31, 2000.
The $97,000 decrease in working capital over the December 31, 2000 balance is
largely attributed to a $77,000 decrease in prepaid and other current assets
coupled with a $35,000 increase in accounts payable and other accrued
liabilities. Working capital, excluding deferred revenue, was $593,000 at
March 31, 2001.
The Company had total interest bearing debt of $1,554,000 and $1,395,000 as of
March 31, 2001 and December 31, 2000, respectively, consisting of current and
long-term portions of a line of credit, term debt, capital leases and notes
payable to shareholders. This represents an increase of $159,000 during the
three months ended March 31, 2001, which was largely made up of a $202,000
increase in the Company's long-term line of credit facility that was partially
offset by payments towards its various term debt loans.
Shareholder's Equity decreased from $10,742,000 as of December 31, 2000 to
$10,264,000 as of March 31, 2001. The decrease in Shareholder's Equity since
December 31, 2000 is largely attributed to a $612,000 loss incurred during the
three months ended March 31, 2001 offset by $100,000 of additional proceeds from
the sale of common stock and $33,000 of common stock issued for services
performed.
The Company invested $347,000 in capitalized software for the three months ended
March 31, 2001. This compares to $234,000 for the same period in 2000. The
significant investment during the three months ended March 31, 2001 was mostly
attributed to feature enhancements to TekSoft's computer-aided-manufacturing
software. The Company expects to release new versions of its CAMWorks'
computer-aided-manufacturing software and Machine Shop Estimating computer-
aided-engineering software by the end of May 2001.
Page 10
The Company intends on financing future expenditures for property and equipment,
capitalized software and sales growth using internally generated cash flows from
operations. The Company has approximately $110,000 available as of March 31,
2001 under its long-term revolving line of credit facility. Additional sales of
common stock, if any, through private placement activities will help supplement
internally generated cash flows in meeting its operating and growth needs.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Neither the Company nor any of its subsidiaries are involved in any legal
proceedings the resolution of which would have a material adverse effect on the
business or financial condition of the Company.
ITEM 2. CHANGES IN SECURITIES
During the three months ended March 31, 2001, the Company offered and issued on
various dates Units in a private placement to selected individuals deemed
financially capable of making the investment. The units include one share of
Company common stock and one Class A common stock purchase warrant and one Class
B common stock purchase warrant. The Company issued and sold 100,000 units at
$1.00 per unit during the three months ended March 31, 2001. The warrants were
issued with initial estimated values (based on Black-Scholes valuation model) of
$.85 for each Class A warrant and $.95 for each Class B warrant. Each warrant
represents the right to purchase one share of the Company's common stock at an
exercise price of $1.75.
During the three months ended March 31, 2001, the Company offered and issued
27,781 shares of Company common stock, 27,781 Class A stock purchase warrants
and 27,781 Class B stock purchase warrants as payment of $33,587 in professional
services to three vendors. The warrants were issued with initial estimated
values (based on Black-Scholes valuation model) ranging from $.85 to $1.72 for
each Class A warrant and $.95 to $1.90 for each Class B warrant. Each warrant
represents the right to purchase one share of the Company's common stock at an
exercise price ranging from $1.75 to $3.00.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company was not in default with regards to its debt facilities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted during the three months ended March 31, 2001
covered by this report to a vote of security holders, through the solicitation
of proxies or otherwise.
ITEM 5. OTHER INFORMATION
None applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-B
EXHIBIT DESCRIPTION
------- -----------
None required by the Company in the three months ended March 31, 2001.
Page 11
(b) REPORTS ON FORM 8-K
None filed by the Company in the three months ended March 31, 2001.
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.
OnCourse Technologies, Inc.
a Nevada Corporation
By: /s/ Bernard A. Woods III Date: May 15, 2001
--------------------------- --------------------
Bernard A. Woods III, CEO
By: /s/ Charles W. Beyer Date: May 15, 2001
--------------------------- --------------------
Charles W. Beyer, President
By: /s/ William C. Brown Date: May 15, 2001
--------------------------- --------------------
William C. Brown, CFO
Page 12