U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2002
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission File No.
0-31377
COLE, INC.
(Name of Small Business Issuer in its Charter)
UTAH 87-0642556
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
4848 South Highland Dr. #140
Salt Lake City, UT 84117
(Address of Principal Executive Offices)
Issuer's Telephone Number: (310) 795-0252
COLE, INC.
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Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: $0.01 par value
common stock
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 Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: December 31, 2002
- 266.
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
December 31, 2002 - $5,525. There are approximately 55,250 shares of common
voting stock of the Company not held by affiliates. Because there has been no
"public market" for the Company's common stock during the past five years, the
Company has arbitrarily valued these shares at par value of $0.01 per share.
March 27, 2003 - $5,525. There are approximately 55,250 shares of common
voting stock of the Company held by non-affiliates. These computations are based
upon the bid price for the common stock of the Company on the OTC Bulletin Board
of the National Association of Securities Dealers, Inc. ("NASD") on March 27,
2003.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
None, Not applicable.
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
March 27, 2003
1,085,051
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained in Item
13 of this Report.
Transitional Small Business Issuer Format Yes X No
--- ---
PART I
Item 1. Description of Business.
------------------------
Business Development.
---------------------
Organization, Charter Amendments and General History
----------------------------------------------------
Cole, Inc., a Utah corporation (the "Company"), was organized under the
laws of the State of Utah on November 3, 1999.
General History
---------------
Prior to the Company's organization, the Company sold 50,000 "unregistered"
and "restricted" shares of common stock at $0.01 per share, with the Company
having received gross proceeds of $500.
Following the Company's organization, it conducted an offering of 1,000,000
shares of common stock at a price of $0.01 per share. This offering was
conducted under Rule 504 of Regulation D of the Securities and Exchange
Commission, and applicable provisions of Rule 144-14-25s of the Utah Division of
Securities, which provides for sales of securities by public solicitation to
"accredited investors." The offering was subsequently closed, with the Company
having received gross proceeds of $10,000.
Sales of "Unregistered" and "Restricted" Securities Over the Past Three
Years
-------
For information concerning sales of "unregistered" and "restricted"
securities during the past three years, see the caption "Recent Sales of
Unregistered Securities."
Business.
---------
The Company was organized to offer formatting and EDGAR filing services for
companies and individuals that desire to submit electronic filings to the
Securities and Exchange Commission.
Risk Factors
------------
EARLY STAGE OF DEVELOPMENT
The Company was formed in November, 1999, and is at a very early stage of
development. It is subject to all of the risks inherent in any new business.
These risks include:
The need for substantial capital to support its development
efforts; the need to attract and retain qualified personnel and
experienced management; losses associated with start-up; and
competition.
LOSSES ASSOCIATED WITH START-UP
The Company was formed recently and has limited operating history. The
purchase of the necessary computer and office equipment and software has
required large up front expenditures and working capital during the initial
start-up period. The Company expects that its initial expenses will result in
losses early in its development. It cannot guarantee that it will become
profitable after it completes its initial purchases. See "Management's
Discussion and Analysis or Plan of Operation," Part I, Item 2.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS AND MARGINS; SEASONALITY OF
BUSINESS
The Company's operating results are likely to fluctuate in the future as a
result of a variety of factors, many of which will be outside the Company's
control. Some of these factors may include material reduction or cancellation of
major projects or the loss of a major client; the amount and timing of the
receipt of new business; timing of hiring or loss of personnel; the amount and
timing of the opening or closing of an office; the amount and the relative mix
of high-margin creative or strategy consulting projects as compared to lower
margin projects, capital expenditures and other costs relating to the expansion
of operations; the level of demand for EDGAR formatting and filing; the ability
to maintain adequate staffing to service clients effectively; the cost of
advertising and related media; the amount and timing of expenditures by clients
for professional services; the introduction of new products or services by
competitors; pricing changes in the industry; relative mix of lower cost
full-time employees versus higher cost independent contractors; and general
economic conditions. Due to all of the foregoing factors, the Company's
operating results in any given quarter may fall below expectations. In such an
event, any future trading price of the Company's common stock would likely be
materially and adversely affected.
EVOLVING BUSINESS MODEL
The Company and its prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in an early stage
of development. Such risks for the Company include, but are not limited to, an
evolving business model. To address these risks the Company must, among other
things, develop strong business development and management activities, develop
the strength and quality of its operations, maximize the value delivered to
clients by the Company's service solutions, respond to competitive developments
and attract, retain and motivate qualified employees. There can be no assurance
that the Company will be successful in meeting these challenges and addressing
such risks and the failure to do so could have a material adverse effect on the
Company's business, financial condition, result of operations and prospects.
RISKS RELATED TO FUTURE ACQUISITIONS
A key component of the Company's growth strategy is expected to be the
acquisition of firms that meet the Company's goals for strategic growth. The
successful implementation of this strategy will depend on the Company's ability
to identify suitable acquisition candidates, acquire such companies on
acceptable terms and integrate their operations successfully with those of the
Company. There can be no assurance that the Company will be able to identify
additional suitable acquisition candidates or that the Company will be able to
acquire such candidates on acceptable terms. Moreover, in pursuing acquisition
opportunities, the Company may compete with other companies with similar growth
strategies, certain of which competitors may be larger and have greater
financial and other resources than the Company. Competition for these
acquisition targets may also result in increased prices of acquisition targets
and a diminished pool of companies available for acquisition. Acquisitions also
involve a number of other risks, including adverse effects on the Company's
reporting operating results from increases in goodwill, amortization, acquired
in-process technology, stock compensation expense resulting from newly hired
employees, the diversion of management attention, potential disputes with the
sellers of one or more acquired entities and the possible failure to retain key
acquired personnel. Lack of client satisfaction or performance problems with an
acquired firm could also have a material adverse impact on the reputation of the
Company as a whole, and any acquired subsidiary could significantly underperform
relative to the Company's expectations. For all of these reasons, the Company's
pursuit of an overall acquisition strategy or any individual pending or future
acquisition may have a material adverse effect on the Company's business,
financial condition, results of operations and prospects. Management expects
that, for the foreseeable future, shares of the Company's common stock will be
the sole consideration for any such acquisition. As the Company issues stock to
complete any future acquisition, existing shareholders will experience ownership
dilution.
RISKS ASSOCIATED WITH FAILURE TO MANAGE GROWTH
At present, the Company's employees include and are limited to its
President, James P. Doolin. Any expansion of the Company's operations would
place a significant strain on its limited personnel, management and other
resources. Depending on the success of its planned operations, the Company may
be required to attract, train, motivate and manage new employees successfully
and to develop operational, management and information systems and controls.
There can be no assurance that the Company's systems, procedures or controls
will be adequate to support its operations or that its management will be able
to achieve the rapid execution necessary to exploit the market for the Company's
business model. The failure to effectively manage growth could have a material
adverse effect on the Company's business, financial condition, results of
operation and prospects.
COMPETITION; LOW BARRIERS TO ENTRY
The market for formatting and filing EDGAR documents is relatively new,
intensely competitive, rapidly evolving and subject to rapid technological
change. The Company expects competition to persist, intensify and increase in
the future. The Company's competitors can be divided into several groups: law
firms, independent contractors, financial consultant firms and wide variety of
other professional services firms. Many of the Company's current and potential
competitors have longer operating histories, larger installed customer bases,
longer relationships with clients and significantly greater financial,
technical, marketing and public relation sources than the Company and could
decide at any time to increase their resource commitments to the Company's
target market. In addition, the market for EDGAR formatting and filing is
relatively new and subject to continuing definition, and, as a result, may
better position the Company's competitors to compete in this market as it
matures. As a strategic response to changes in the competitive environment, the
Company may from time to time make certain pricing, service technology or
marketing decisions or business or technology acquisitions that could have a
material adverse effect on the Company's business, financial condition, results
of operations and prospects. Competition of the type described above could
materially adversely affect the Company's business, results of operations,
financial conditions and prospects.
In addition, the Company's ability to maintain future client relationships
and generate new clients will depend to a significant degree on the quality of
its services and its reputation among its clients and potential clients,
compared with the quality of its services provided by, and the reputations of,
the Company's competitors. To the extent the Company loses clients to its
competitors because of dissatisfaction with the Company's services or its
reputation is adversely affected for any other reason, the Company's business,
result of operations, financial conditions and prospects could be materially
adversely affected.
There are relatively low barriers to entry into the Company's business.
Because firms such as the Company rely on the skill of their personnel and the
quality of their client service, they have no patented technology that would
preclude or inhibit competitors from entering their markets. The Company is
likely to face additional competition from new entrants into the market in the
future. There can be no assurance that existing or future competitors will not
develop or offer services that provide significant performance, price or other
advantages over those offered by the Company, which could have a material
adverse effect on its business, financial condition, results of operations and
prospects.
RAPID TECHNOLOGY CHANGE
The market for EDGAR formatting and filing services is characterized
by rapid technological change, changes in user and client requirements and
preferences, frequent new product and service introductions embodying new
processes and technologies and evolving industry standards and practices that
could render the Company's service practices and methodologies
obsolete. The Company's success will depend, in part, on its ability to develop
services and solutions that address the increasingly sophisticated and varied
needs of its prospective clients, and respond to technological advances,
emerging industry standards, practices and competitive service offerings.
Failure to do so could result in the loss of existing customers or the inability
to attract and retain new customers, either of which developments could have a
material adverse effect on the Company's business, financial condition, results
of operations and prospects. There can be no assurance that the Company will be
successful in responding quickly, cost-effectively and sufficiently to these
developments. If the Company is unable, for technical, financial or other
reasons, to adapt in a timely manner in response to change in market conditions
or client requirements, its business, financial condition, result of operations
and prospects would be materially adversely affected.
POTENTIAL LIABILITY TO CLIENTS
Many of the Company's service engagements will involve the development,
formatting and filing that are critical to the reporting of its clients'
businesses. Its failure or inability to meet a client's expectations in the
performance of its services could injure the Company's business reputation or
result in a claim for substantial damages, regardless of its responsibility for
such failure. In addition, the Company will possess technologies and content
that may include confidential or proprietary client information. Although the
Company has implemented policies to prevent such client information from being
disclosed to unauthorized parties or used inappropriately, any such unauthorized
disclosure or use could result in a claim for substantial damages. The
successful assertion of one or more large claims against the Company that are
uninsured, exceed available insurance coverage or result in changes to the
Company's insurance policies, including premium increases or the imposition of a
large deductible or co-insurance requirements, could adversely affect the
Company's business, results of operations and financial conditions. The Company
does not currently have any "errors and omissions" policies that would cover any
such claim, and does not expect to obtain any such insurance until it can pay
for such coverage from revenues, as to which there can be no assurance.
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING
The Company currently anticipates that its available cash resources will be
sufficient to meet its presently anticipated working capital and capital
expenditure requirements for the next fiscal year. However, the Company may need
to raise additional funds in order to support expansion, develop new or enhanced
services and products, respond to competitive pressures, acquire complimentary
businesses or technologies or take advantage of unanticipated opportunities. The
Company's future liquidity and capital requirements will depend upon numerous
factors, including the success of its proposed service offerings and competing
technological and market developments. The Company may be required to raise
additional funds through public or private financing, strategic relationships or
other arrangements. There can be no assurance that such additional funding, if
needed, will be available on terms acceptable to the Company, or at all.
Furthermore, any additional equity financing may be dilutive to stockholders,
and debt financing, if available, may involve restrictive covenants, which may
limit the Company's operating flexibility with respect to certain business
matters. If additional funds are raised through the issuance of equity
securities, the percentage ownership of the stockholders of the Company will be
reduced, stockholders may experience additional dilution in net book value per
share and such equity securities may have rights, preferences or privileges
senior to those of the holder of the Company's common stock. If adequate funds
are not available on acceptable terms, the Company may be unable to develop or
enhance its services and products, take advantage of future opportunities or
respond to competitive pressures, any of which could have a material adverse
effect on its business, financial condition, results of operations and
prospects.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
The Company is not currently subject to direct government regulation, other
than the securities laws and the regulations thereunder applicable to all
publicly owned companies; however, it is likely that a number of laws and
regulations may be adopted at the local, state, national and international
levels. Moreover, the adoption of any such laws or regulations may decrease the
services provided by the Company, which could in turn decrease the demand for
the Company's services or increase cost of doing business or in some other
manner have a material adverse effect on the Company's business, financial
conditions results of operations or prospects.
CONCENTRATION OF STOCK OWNERSHIP
Four entities beneficially own a majority of the Company's outstanding
common stock. As a result, the entities will be able to exercise significant
influence over all matters requiring stockholder approval, including the
election of directors and approval of significant corporate transactions. Such
concentration of ownership may also have the effect of delaying or preventing a
change in control of the Company.
DIVIDENDS
The Company does not expect to pay dividends on its common stock in the
foreseeable future. Future dividends, if any, will depend upon the Company's
earnings, if any.
AUDITOR'S "GOING CONCERN" OPINION
The independent auditor's report issued in connection with the audited
financial statements of the Company for the period ended December 31, 2002,
expresses "substantial doubt about its ability to continue as a going concern,"
due to the Company's status as a development stage company and its lack of
significant operations. See the index to financial statements, Part F/S of this
filing.
DEPENDENCE ON MANAGEMENT
For the foreseeable future, the Company will be entirely dependent upon the
services of its officers and directors. The Company has no employment agreement
with its only employee, James P. Doolin, and does not maintain "key man" life
insurance for him.
PENNY STOCK
The Company's common stock is "penny stock" as defined in Rule 3a51-1 of
the Securities and Exchange Commission. This designation may adversely affect
the development of any public market for the Company's shares of common stock
or, if such a market develops, its continuation. Broker-dealers are required to
personally determine whether an investment in "penny stock" is suitable for
customers.
Penny stocks are securities (i) with a price of less than five dollars per
share; (ii) that are not traded on a "recognized" national exchange; (iii) whose
prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed
stocks must still meet requirement (i) above); or (iv) of an issuer with net
tangible assets less than $2,000,000 (if the issuer has been in continuous
operation for at least three years) or $5,000,000 (if in continuous operation
for less than three years), or with average annual revenues of less than
$6,000,000 for the last three years.
Section 15(g) of the Securities Act of 1934, as amended (the "1934 Act");
and Rule 15g-2 of the Securities and Exchange Commission require broker-dealers
dealing in penny stocks to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account. Potential investors in the Company's common
stock are urged to obtain and read such disclosure carefully before purchasing
any shares that are deemed to be "penny stock."
Rule 15g-9 of the Securities and Exchange Commission requires
broker-dealers in penny stocks to approve the account of any investor for
transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for the Company's
stockholders to resell their shares to third parties or to otherwise dispose of
them.
SALE OF "RESTRICTED" SHARES
Some of the outstanding shares of the Company's common stock are
"restricted securities" within the meaning of Rule 144 of the Securities Act of
1933, as amended (the "1933 Act"). If a market for the Company's common stock
ever develops, these shares may be sold under Rule 144, and sales may have a
negative effect on the Company's stock price.
PRINCIPAL PRODUCTS AND SERVICES
The Company has engaged in the business of formatting and filing EDGAR
documents for companies and individuals.
RECENT PUBLIC ANNOUNCEMENTS
None; not applicable.
DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES
Management plans to advertise the Company's services through mailings to
businesses, principally in Utah. Information on businesses is readily available
from various governmental agencies, such as Secretaries of State and local
business licensing offices. The Company also plans on advertising direct to
future clients through its own web site. The Company plans on "word of mouth"
advertising to help create and sustain much of the Company's business.
The Company has determined that in order to develop a larger client base it
must increase its advertising budget. Therefore the Company has budgeted $3,000
in advertising costs during its this coming year. These funds will come
principally from the net proceeds of its recent securities offering and then,
and if neccessary the Company may seek to raise more capital. There can be no
assurance that the Company will raise sufficient capital to meet its intended
advertising budget; if it is not successful in this regard, the Company may be
unable to attract a sufficient number of new clients to allow its business to
continue.
COMPETITIVE BUSINESS CONDITIONS
The Company's industry is highly competitive. Many of the Company's
existing and potential competitors have financial, personnel, marketing and
other resources significantly greater than those of the Company, as well as
other competitive advantages including customer bases. See the Risk Factor
"Competition; Low Barriers of Entry" Part 1, Item 1.
PATENTS, TRADEMARKS, LICENSES, FRANCHISEES, CONCESSIONS, ROYALTY
PAYMENTS OR LABOR CONTRACTS
None; not applicable.
NEED FOR GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES
Upon the effective date of this Registration Statement, the Company will
become subject to Regulation 14A promulgated by the Securities and Exchange
Commission under the 1934 Act. Section 14(a) of the 1934 Act requires all
companies with securities registered pursuant to Section 12(g) thereof to comply
with the rules and regulations of the Securities and Exchange Commission
regarding proxy solicitations as outlined in Regulation 14A. Matters submitted
to stockholders of the Company at a special or annual meeting thereof or
pursuant to a written consent shall require the Company to provide its
stockholders with the information outlined in Schedules 14A or 14C of Regulation
14; preliminary copies of this information must be submitted to the Securities
and Exchange Commission at least 10 days prior to the date that definitive
copies of this information are forwarded to stockholders. See the Risk Factor
"Government Regulation and Legal Uncertainties," Part 1, Item 1.
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON BUSINESS
Other than maintaining its good standing in the State of Utah; complying
with applicable local business licensing requirements; complying with all state
and federal tax requirements; preparing its periodic reports under the 1934 Act,
and complying with other applicable securities laws, rules and regulations as
set forth above, the Company does not believe that existing or probable
governmental regulations will have a material effect on its operations. See the
Risk Factor "Government Regulation and Legal Uncertainties," Part 1, Item 1.
RESEARCH AND DEVELOPMENT
Although the Company's industry relies on the technical knowledge of
computers and software, management does not believe that the Company's proposed
operations will require research and development in the traditional sense. The
Company's President, James P. Doolin has training in formatting and filing EDGAR
documents and will be responsible for all of the Company's services offered in
the foreseeable future.
NUMBER OF EMPLOYEES
Other than its President, James P. Doolin, the Company currently has no
employees. Mr. Doolin will be responsible for all of the Company's proposed
operations for the foreseeable future. The Company will hire an additional
clerical worker if necessary, and if it is able to pay that worker's wages or
salary from operating revenues.
Item 2. Description of Property.
-----------------------
The Company currently owns a formatting software. Its business address is
the home office address of its President, James P. Doolin, and is provided
rent-free. The Company has free access to his telephone system, computer system
and free access to the Internet. Depending on its growth, the Company may find
it necessary to acquire an office and telephone system of its own, but
management does not believe that this will be necessary in the near future.
Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
During the fourth quarter of the year ended December 31, 2002, no matter
was submitted to a vote of the Company's securities holders, whether through the
solicitation of proxies or otherwise.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information
------------------
The Company shares are traded on the OTC Bulletin Board, the symbol is
COLH. The Company shares have been traded on the OTC Bulletin Board since May
24, 2001. The following quotes are through the most recent year end:
CLOSING BID CLOSING ASK
HIGH LOW HIGH LOW
MAY 24, 2001 .06 .06 .00 .00
THRU
DEC 01, 2001
JAN 01, 2002 .10 .02 .00 .00
THRU
DEC 31, 2002
Holders
-------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 42.
Dividends
---------
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty,
and until the Company completes any acquisition, reorganization or merger, as to
which no assurance may be given, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its common stock.
Sales of "Unregistered" and "Restricted" Securities Over The Past Three Years.
------------------------------------------------------------------------------
On May 12, 2000, the Company issued 35,051 shares pursuant to Rule 701 of
the 1933 Act. These shares were issued to the Company's attorney, in accordance
with a written plan adopted by the Board of Directors for services in the amount
of $3,505.10, rendered to the Company, issued at $.10 per share.
For Further information see the following table: "Common Stock"
Common Stock
------------
Date Number of Aggregate
Name Acquired Shares Consideration
---- -------- --------- -------------
JAMES P. DOOLIN 11/05/99 25,000 $ 250
MICHAEL J. DOOLIN 11/05/99 25,000 $ 250
PURCHASERS UNDER 12/20/99 1,000,000 $ 10,000
RULE 504 OFFERING*
SHARES ISSUED UNDER 05/12/00 35,051 $ 3,505
RULE 701
*The offer and sale of these securities are believed to have been exempt
from the registration requirements of Section 5 of the 1933 Act, pursuant to
Sections 3(b) and/or 4(2) thereof, and from similar applicable states securities
laws, rules and regulations exempting the offer and sale of these securities by
available state exemptions from registration by reason of the fact that all
purchasers had access to research of the Company, and were "Accredited
Investors" as defined in Regulation D of the Securities and Exchange Commission.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
Plan of Operation.
------------------
The Company is a development stage company. Management believes that in
light of the large number of companies and individuals that are responsible for
filing with the Securities and Exchange Commission, the size of the potential
market for services may continue to grow. Accordingly, the volume of business
available to those who can provide quality and timely service will also increase
rapidly over the next several years.
The Company plans to provide a narrow range of services to a broad range of
customers. In addition, the Company may seek to expand its operations by
acquiring, joint venturing or merging with other document service providers or
other types of companies in exchange for the issuance of shares of its common
stock. As of the date of this Registration Statement, the Company has not
entered into any agreements in this regard, and there is no assurance that the
Company will be successful in entering into a transaction with any such entity.
During the next 12 months, management plans to spend approximately $3,000
in advertising expenses. Methods of advertising will include further development
of the Company's website, brochures and print advertisement in local newspapers.
The foregoing contains "forward-looking" statements and information,
all of which is modified by reference to the caption "Risk Factors."
Results of Operations.
----------------------
At December 31, 2002, the Company's had $ 98 in assets. See the Index to
Financial Statements, Item 7 of this Report.
During the period ended December 31, 2002, the Company had a net loss of
$3,185. The Company has received $266 in revenues in the period ended December
31, 2002. See the Index to Financial Statements, Item 7 of this Report.
Liquidity.
---------
As of December 31, 2002, the Company had cash on hand of $98. The Company's
cash on hand will not be sufficient to allow it to further operations, it may
look to raise more capital and will have access to additional funds through
loans from the Company's president; however, the Company's success in its
planned business endeavors will depend entirely on its ability to attract and
maintain a sufficient client base. The Company has commenced operations, but it
cannot provide any assurances that it will be successful in this effort.
Item 7. Financial Statements.
---------------------
Financial Statements for the years ended December 31, 2002 and 2001
Independent Auditors' Report
Balance Sheets - December 31, 2002
Statements of Operations for the years ended
December 31, 2002 and 2001
Statements of Stockholders' Equity for the
years ended December 31, 2002 and 2001
Statements of Cash Flows for the years ended
December 31, 2002 and 2001
Notes to the Financial Statements
COLE, INC.
[A Development Stage Company]
FINANCIAL STATEMENTS
December 31, 2002
[WITH INDEPENDENT AUDITORS' REPORT]
COLE, INC.
[A Development Stage Company]
Table of Contents
Page
Independent Auditors' Report . . . .. . . . . . . . . . . . . . . . . . . 1
Balance Sheet - December 31, 2002 . . . . . . . . . . . . . . . . . . . . 2
Statements of Stockholders' Equity/(Deficit) for the period from
Inception [November 3, 1999] through December 31, 2002 . .. . . . 3
Statements of Operations for the years ended December 31, 2002 and 2001, and for
the period from Inception [November 3, 1999]
through December 31, 2002 . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Cash Flows for the years ended December 31, 2002 and 2001 and for
the period from Inception [November 3, 1999]
through December 31, 2002. . . . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . 6 - 8
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Cole, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Cole, Inc. [a development
stage company] as of December 31, 2002, and the related statements of
stockholders' equity/(deficit), operations, and cash flows for the years ended
December 31, 2002 and 2001, and for the period from inception [November 3, 1999]
through December 31, 2002. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cole, Inc. as of December
31, 2002, and the results of operations and cash flows for the years ended
December 31, 2002 and 2001, and for the period from inception [November 3, 1999]
through December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that
Cole, Inc. will continue as a going concern. As discussed in Note D to the
financial statements, the Company has accumulated losses and has not had
significant operations since inception. These issues raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note D. The financial statements do not
include any adjustment that might result from the outcome of this uncertainty.
/S/MANTYLA MCREYNOLDS
Mantyla McReynolds
March 21, 2003
Salt Lake City, Utah
COLE, INC.
[A Development Stage Company]
Balance Sheet
December 31, 2002
ASSETS
Current Assets:
Cash-Note A $ 98
--------------------------
--------------------------
Total Current Assets 98
Property & Equipment-Note F 1,410
Less: Accumulated Depreciation (1,410)
---------------------------
---------------------------
0
TOTAL ASSETS $ 98
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
Current Liabilities:
Payable to shareholder - Note E $ 3,600
Accrued liabilities 250
Taxes payable - Notes A & C 100
---------------------------
---------------------------
Total Current Liabilities 3,950
---------------------------
---------------------------
Total Liabilities 3,950
Stockholders' Equity/(Deficit) - Notes B & E
Common stock, $.01 par value;
authorized 50,000,000 shares; issued
and outstanding 1,085,051 10,850
Additional paid-in capital 3,155
Deficit accumulated during development stage (17,857)
----------------------------
----------------------------
Total Stockholders' Equity/(Deficit) (3,852)
----------------------------
----------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
$ 98
===========================
COLE, INC.
[A Development Stage Company]
Statements of Stockholders' Equity/(Deficit)
For the period from Inception [November 3, 1999] through December 31, 2002
Deficit
Accumulated
Additional During Total
Number of Common Paid-in Development Stockholders'
Shares Stock Capital Stage Equity/(Deficit)
-------------- ----------------- ---------------- ------------------- ----------------------
-------------- ----------------- ---------------- ------------------- ----------------------
Balance, November 3, 1999 0 $0 $0 $0 $0
Issued stock for cash, at par, $.01 10,500 10,500
per share 1,050,000
Net loss for 1999 (4,042) (4,042)
-------------- ----------------- ---------------- ------------------- ----------------------
-------------- ----------------- ---------------- ------------------- ----------------------
Balance, December 31, 1999 1,050,000 10,500 0 (4,042) 6,458
Issued shares for debt, at $.10 per 35,051 350 3,155 3,505
share
Net loss for 2000 (3,558) (3,558)
-------------- ----------------- ---------------- ------------------- ----------------------
-------------- ----------------- ---------------- ------------------- ----------------------
Balance, December 31, 2000 1,085,051 10,850 3,155 (7,600) 6,405
Net loss for 2001 (7,072) (7,072)
-------------- ----------------- ---------------- ------------------- ----------------------
-------------- ----------------- ---------------- ------------------- ----------------------
Balance, December 31, 2001 1,085,051 $10,850 $3,155 ($14,672) ($667)
Net loss for 2002
(3,185) (3,185)
-------------- ----------------- ---------------- ------------------- ----------------------
-------------- ----------------- ---------------- ------------------- ----------------------
Balance, December 31, 2002 1,085,051 $10,850 $3,155 ($17,857) ($3,852)
============== ================= ================ =================== ======================
COLE, INC.
[A Development Stage Company]
Statements of Operations
For the years ended December 31, 2002 and 2001
and for the Period from Inception [November 3, 1999] through December 31, 2002
From Inception
[11/3/99] through
12/31/02
2002 2001
---------------- ------------------ --------------------
---------------- ------------------ --------------------
Revenues $ 266 $ 903 $ 2,311
General and Administrative Expenses 3,304 7,875 19,721
---------------- ------------------ --------------------
----------------- ------------------ --------------------
Net Loss from Operations (3,038) (6,972) (17,410)
---------------- ------------------ --------------------
----------------- ------------------ --------------------
Net Loss Before Income Taxes (3,038) (6,972) (17,410)
Provision for Income Taxes - Notes A&C 147 100 447
---------------- ------------------ --------------------
---------------- ------------------ --------------------
Net Loss $ (3,185) $ (7,072) $ (17,857)
================= ================== ===================
Loss Per Share $ (.01) $ (.01) $ (.02)
================= ================== ===================
================ =================== ===================
Weighted Average Shares Outstanding 1,085,051 1,085,051 1,079,250
COLE, INC.
[A Development Stage Company]
Statements of Cash Flows
For the years ended December 31, 2002 and 2001
and for the Period from Inception [November 3, 1999] through December 31, 2002
For the
period from
Inception
[11/3/99]
through
Cash Flows Provided by/(Used for) Operating Activities 2002 2001 12/31/02
------------------------------------------------------
----------- ------------- ---------------
----------- ------------- ---------------
Net Loss $ (3,185) $ (7,072) $ (17,857)
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 471 470 1,410
Increase in income taxes payable 0 0 100
Expenses paid on behalf of Company by shareholder 0 0 3,505
Increase(decrease) in accrued liabilities (61) 311 250
----------- ------------- ---------------
----------- ------------- ---------------
Net Cash used in Operating Activities (2,775) (6,291) (12,592)
Cash Flows Used for Investing Activities
Purchased property & equipment 0 0 (1,410)
----------- ------------- ---------------
----------- ------------- ---------------
Net Cash Used in Investing Activities 0 0 (1,410)
Cash Flows Provided by Financing Activities
Increase in loans from shareholder 2,100 1,500 3,600
Issued stock for cash 0 0 10,500
----------- ------------- ---------------
----------- ------------- ---------------
Net Cash Provided by Financing Activities 2,100 1,500 14,100
Net Increase(decrease) in Cash (675) (4,791) 98
Beginning Cash Balance 773 5,564 0
----------- ------------- ---------------
----------- ------------- ---------------
Ending Cash Balance $ 98 $ 773 $ 98
=========== ============= ===============
=========== ============= ===============
Supplemental Disclosure Information:
Cash paid during the year for interest 0 0 0
Cash paid during the year for income taxes 147 100 347
Issued stock to shareholder for debt 0 0 3,505
COLE, INC.
[A Development Stage Company]
Notes to Financial Statements
December 31, 2002
NOTE A Summary of Significant Accounting Policies
Company Background
The Company incorporated under the laws of the State of Utah on
November 3, 1999. The Company was organized to engage in any
lawful activity for which corporations may be organized under the
Utah Revised Business Corporation Act. Cole, Inc., is in the
development stage and is commencing its planned principal
operations, which are essentially to advertise and offer
formatting and EDGAR(R) filing services for public companies.
The financial statements of the Company have been prepared in
accordance with U. S. generally accepted accounting principles.
The following summarizes the more significant of such policies:
Statement of Cash Flows
Cash is comprised of cash on hand or on deposit in banks. The
Company has $98 as of December 31, 2002.
Property & Equipment
Property and equipment are stated at cost. Depreciation is
provided using the straight-line basis over the useful lives of
the related assets. Expenditures for maintenance and repairs are
charged to expense as incurred.
Income Taxes
The Company applies Statement of Financial Accounting Standard
(SFAS) No. 109, "Accounting For Income Taxes," which requires the
asset and liability method of accounting for income taxes. The
asset and liability method requires that the current or deferred
tax consequences of all events recognized in the financial
statements are measured by applying the provisions of enacted tax
laws to determine the amount of taxes payable or refundable
currently or in future years. (See Note C below).
Net Loss Per Common Share
Net loss per common share is based on the weighted average number
of shares outstanding.
Revenue Recognition
The Company recognizes revenue when earned, which is when
services are rendered to the customer.
NOTE A Summary of Significant Accounting Policies[continued]
------------------------------------------
Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with U. S.
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE B Issuance of Common Shares
In November, 1999, pursuant to a Preorganization Subscription
Agreement and a Subscription Agreement and Summary Offering
Document, the Company authorized and issued 1,050,000 shares of
common stock at par ($.01) to approximately 38 "accredited"
investors for cash.
On May 12, 2000, the Company issued 35,051 shares of common stock
in settlement of debt incurred for legal services. These shares
were issued at $.10 per share for a total value of $3,505 (see
NOTE E).
NOTE C Accounting for Income Taxes
No provision has been made in the financial statements for income
taxes because the Company has accumulated losses from operations
since inception. Any deferred tax benefit arising from the
operating loss carried forward is offset entirely by a valuation
allowance since it is currently not likely that the Company will
be sufficiently profitable in the near future to take advantage
of the losses.
Deferred tax assets Balance Tax Rate
------------------------------------------------------------- ----------------- ------------ -----------
------------------------------------------------------------- ----------------- ------------ -----------
Federal Loss carryforward (expires through 2021) $17,857 $2,679 15%
State Loss carryforward (expires through 2016) 17,457 873 5%
Valuation allowance (3,552)
------------
------------
Deferred tax asset $0
============
The allowance has increased $633 from $2,919 as of December 31,
2001. The amount shown on the balance sheet for income taxes
payable represents the annual minimum amount due to the State of
Utah.
NOTE D Liquidity
The Company has accumulated losses since inception totaling
$17,857, and minimal operations through December 31, 2002.
Financing for the Company's limited activities to date has been
provided primarily by the issuance of stock and by advances from
a stockholder(see NOTE E). The Company's ability to achieve a
level of profitable operations and/or additional financing
impacts the Company's ability to continue as it is presently
organized. Management continues to develop its planned principal
operations. Should management be unsuccessful in its operating
activities, the Company may experience material adverse effects.
NOTE E Stockholder Loan/Related Party Transactions
A stockholder advanced legal services to the Company in the
amount of $5, and $3,500 during the years ended December 31, 2000
and 1999. The Company settled the related party debt through the
issuance of common stock as described in Note B.
In March of 2001and 2002 and December 2002, a stockholder
advanced $1,500, $2,000 and $100, respectively to the Company for
the purpose of paying expenses. This balance is outstanding as of
December 31, 2002, is unsecured, non-interest bearing, and is
payable on demand.
All of the current year revenue and approximately $450 of revenue
in 2001 was derived from performing services for a corporation
which shares common ownership and management with the Company. If
this entity were to cease to do business with the Company, there
could be a material impact. As of December 31, 2002 there are no
balances due to or from this company.
NOTE F Property & Equipment
The Company currently has one class of assets as follows:
Accumulated
Asset Class Cost Depreciation Method/Life
------------------------------------ --------------- -------------------- -----------------
------------------------------------ --------------- -------------------- -----------------
Software $1,410 $1,410 SL/3
Depreciation expense was $471 and $470 for the years ended
December 31, 2002 and 2001, respectively.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
------------------------------------------------------------------------
None; not applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Identification of Directors and Executive Officers.
---------------------------------------------------
The following table sets forth the name of the Company's current directors
and executive officers. These persons will serve until the next annual meeting
of the stockholders or until their successors are elected or appointed and
qualified, or prior resignation or termination. Their Date of Date of Positions
Election or Termination
Name Held Designation or Resignation
---- ---- ----------- --------------
JAMES P. DOOLIN DIRECTOR & NOV-02-99 *
PRESIDENT
SHANE E. THUESON DIRECTOR & NOV-02-99 *
VICE PRESIDENT
LUKE BRADLEY DIRECTOR & NOV-02-99 *
SECRETARY
* These persons presently serves in the capacities indicated.
Business Experience.
--------------------
James P. Doolin, President and a director is 26 years of age. Mr Doolin
graduated from the University of Utah, in Salt Lake City. He graduated with a
bachelor of science, finance degree. Mr. Doolin received his masters in business
administration from the Graziadio School of Business Managment at Pepperdine
University. Mr. Doolin has been working as an investment consultant since 1998.
Luke Bradley, Vice President and a director is 26 years of age. Mr. Bradley
graduated in June of 2002, with a bachelor of science, finance degee from the
University of Utah. Mr. Bradley has been working for a promotional merchandising
firm in Salt Lake City, Utah for more than three years.
Shane Thueson, Secretary and a director is 27 years of age. Mr. Thueson
graduated from Brigham Young University, in Provo, Utah. He graduated with a
bachelor of arts, history degree. Mr. Thueson is currently self-employed as a
free-lance writer.
Significant Employees.
----------------------
Other than James P. Doolin, the Company has no employees.
Family Relationships.
---------------------
Thre are no family relationships that exist between the directors and the
executive officers of the Company.
Involvement in Certain Legal Proceedings.
-----------------------------------------
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of the
Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy or
two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
(4) was found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the judgment has
not been reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
Each of the Company's directors have filed a Form 3, Statement of
Beneficial Ownership, with the Securities and Exchange Commission; there have
been no changes in their beneficial ownership of shares of common stock of the
Company since the filing of their Form 3.
Item 10. Executive Compensation.
-----------------------
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
-----------------------------------------------------------------
James P.
Doolin, 12/31/00 0 0 0 0 0 0 0
Director, 12/31/01 0 0 0 0 0 0 0
President 12/31/02 0 0 0 0 0 0 0
Shane E.
Thueson
Director, 12/31/00 0 0 0 0 0 0 0
Vice 12/31/01 0 0 0 0 0 0 0
President 12/31/02 0 0 0 0 0 0 0
Luke
Bradley, 12/31/00 0 0 0 0 0 0 0
Director, 12/31/01 0 0 0 0 0 0 0
Secretary 12/31/02 0 0 0 0 0 0 0
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the years ended
December 31, 2000, 2001 or 2002. However, if the Company decides to compensate
Company's current and/or future employees it will not under any circumstances
exceed the amount paid to other persons with similar experience and expertise
performing similar services in the text formatting industry. No employee,
director, or executive officer have been granted any option or stock
appreciation rights; accordingly, no tables relating to such items have been
included within this Item.
Compensation of Directors.
--------------------------
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as a director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
------------------------------------------------------------------------
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his resignation, retirement or other termination of
employment with the Company, any change in control of the Company, or a change
in the person's responsibilities following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
------------------------------------------------
The following table sets forth the share holdings of those persons who
own more than five percent of the Company's common stock as of the date hereof:
Number of Shares Percentage
Name Beneficially Owned of Class
---------------- ------------------ --------
LEONARD W. BURNINGHAM, ESQ. 235,051 22%
SHARLENE T. DOOLIN 200,000 18%
DUANE S. JENSON 200,000 18%
QUAD D PARTNERSHIP* 333,500 31%
* Sharlene T. Doolin may be deemed the beneficial owner of Quad D Partnership's
shares, as she is the majority partner of Quad D Partnership; and the mother of
James P. Doolin.
Security Ownership of Management.
---------------------------------
The following table sets forth the share holdings of the Company's
directors and executive officers as of the date hereof:
Number of Shares Percentage of
Name and Address Beneficially Owned of Class
---------------- ------------------ -------------
JAMES P. DOOLIN 51,250 5%
SHANE E. THUESON 5,000 .5%
LUKE BRADLEY 5,000 .5%
TOTAL OFFICERS & DIRECTORS 61,250 6%
Changes in Control.
-------------------
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
----------------------------------------
For a description of transactions between members of management, five
percent stockholders, "affiliates", promoters and finders, see the caption
"Sales of 'Unregistered' and 'Restricted' Securities Over the Past Three Years"
of Item I.
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
None, not applicable;
Item 14. Controls and Procedures
-----------------------
(a) Evaluation of Disclosure Controls and Procedures. The Company's Chief
Executive Officer and Chief Financial Officer has conducted an evaluation of the
Company's disclosure controls and procedures as of a date (the "Evaluation
Date") within 90 days before the filing of this annual report. Based on his
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
applicable Securities and Exchange Commission rules and forms.
(b) Changes in Internal Controls and Procedures. Subsequent to the
Evaluation Date, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect these controls, nor
were any corrective actions required with regard to significant deficiencies and
material weaknesses.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
COLE, INC.
Date:3/30/03 /S/JAMES DOOLIN
James Doolin
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
COLE, INC.
Date:3/30/03 /S/JAMES DOOLIN
James Doolin
President and Director
Date:3/30/03 /S/LUKE BRADLEY
Luke Bradley
Secretary and Director
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James Doolin, Chief Executive Officer of Cole, Inc., certify that:
1. I have reviewed this Quarterly Report on Form 10-KSB of Cole, Inc.;
2. Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this Annual Report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this Quarterly Report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
Annual Report (the "Evaluation Date"); and
c) presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent function);
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal controls; and
6. The Registrant's other certifying officer and I have indicated in this Annual
Report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Dated:3/30/03 /S/ James Doolin
---------------------------
James Doolin
Chief Executive Officer
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James Doolin, Chief Financial Officer of Cole, Inc., certify that:
1. I have reviewed this Annual Report on Form 10-KSB of Cole, Inc.;
2. Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this Annual Report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this Annual Report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this Annual
Report (the "Evaluation Date"); and
c) presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent function);
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal controls; and
6. The Registrant's other certifying officer and I have indicated in this Annual
Report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Dated:3/30/03 /S/ James Doolin
---------------------
James Doolin
Chief Financial Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBARNES OXLEY ACT OF 2002
In connection with the Annual Report of Cole, Inc.(the "Registrant") on
Form 10-KSB for the year ending November 30, 2002, as filed with the Securities
and Exchange Commision on the date hereof(the "Annual Report"), I, James Doolin,
Chief Executive Officer, and Chief Financial Officer of the Registrant, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Annual Report fully complies with the requirments of section
13(a) or 15(d) of the Securities Exchange Act of 1934, and
(2) The information contained in the Annual Report fairly represents, in all
material respects, the financial condition and result of operations of
the Registrant.
Dated:3/30/03 /S/ James Doolin
---------------------
James Doolin
Chief Executive Officer
Chief Financial Officer