SSP read the conclusion on the bottom of this CCGI PR and let me know what you think.
Thank you.And did you get your 1 million shares of CHIP yet?They are killing us.What is your view?
May 15, 2000
COMTECH CONSOLIDATION GROUP
INC/DE (CCGI.OB)
Quarterly Report (SEC form 10QSB)
2- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS
OF OPERATIONS.
THE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED
MARCH 31, 1999
Total revenues for the three months ended March 31, 2000 and 1999 were $525,162 and $4,974,608,
respectively, which is a decrease of $4,449,446 or approximately 89%. This decrease was primarily
attributable to the disposal of the majority of the Company's healthcare facilities, which represented
approximately 96% of the revenues for the three-month period ended March 31, 1999.
Net earnings for the three months ended March 31, 2000 and 1999 was $19,330 and $747,879
respectively, which represents a decrease of $728,549, or 97%. The decrease in net earnings for this
period is primarily attributable to the disposal of the majority of the Company's healthcare facilities,
which represented approximately 96% of the net earnings for the three-month period ended March
31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
During February and March 2000, the Company raised $200,000 through a private placement. The
Company sold 2,000 shares of its Class E preferred stock at $100 per share. The funds were used to
pay for corporate operations. The Company is currently in negotiations with a current investor to
raise additional equity capital for the Company. The Company also plans to obtain additional equity
financing through a secondary offering within the next sixty days. There can be no assurance that the
Company will be successful in these efforts.
SUBSIDIARY OVERVIEW
NETWORKS ON-LINE, INC. (NOL) is a wholly owned subsidiary of Comtech whose primary
business is providing high speed Internet Access, Video Conferencing, Web Hosting and other
bundled Internet Services. Management's goal is to build the revenue base of Networks On-line, Inc.
from its current base of approximately $550,000 annually, to over $2 million annually during the next
twelve months. To accomplish this task, management will hire an experienced ISP operator whose
compensation will be performance based and incentive laden to promote achievement of Company's
goals. Comtech will also seek to grow NOL through acquisitions and groom NOL for a potential
spin-off to increase shareholder value.
A1-BAYOU is a wholly owned subsidiary of Comtech. A-1 Bayou operates in the home health care
industry. A-1 Bayou has grown its current operations to
generate annual revenues of approximately $1.5 million. Last year the company opened a second
office in the Jeanerette, Louisiana area. A-1 Bayou is managed and operated by Karvett Queen. Ms.
Queen is responsible for the growth of A-1 Bayou, having opened the second branch office last year
and continues to manage the day-to-day operations of A-1 Bayou.
E-MEDICAL/HME-DME DIVISION (E-MEDICAL) - Comtech currently has an outstanding letter
of Intent to acquire all the operating assets of Gold Cross Medical and affiliated web sites.
E-Medical will concentrate its efforts on the development of Independenceworld.com and
Drynight.com. E-Medical will seek to build independenceworld.com into the Web's most successful
healthcare superstore, taking a "clicks and bricks" approach to the business. A chain of retail
facilities located strategically as necessary will support both sites. The Web superstore currently
offers thousands of name brand products for sales in a secure environment. Shoppers can view
products' detailed photos, descriptions and pricing information from the Web's superstore 24 hours
a day, seven day's a week. This subsidiary has the potential to contribute tremendous revenue
growth to ComTech's bottom line.
MARKETING ANALYSIS
Comtech subsidiaries operate in two basic market segments: technology and healthcare. Each
segment is highly fragmented with the major players putting tremendous pressure on the smaller
companies to complete. As a Micro-cap company, Comtech is always searching for under served or
niche sectors of the market. By identifying these opportunities, Comtech seeks to provide the
consumer with superior service while also partnering with the smaller retailers nationally, giving them
a competitive edge as they compete for market share against the larger companies.
One such sector management has identified is the e-medical sector. This sector has been slow to see
the value of the New Economies convergence of "clicks and bricks." Due to the tremendous
pressure e-commerce only companies are currently experiencing management feels that the
predictable revenue stream the retail locations will provide should help offset those net-only
challenges. This strategy will also give Comtech a national distribution channel for the Web sites.
Comtech mission in the e-medical sector is to provide the consumer with the benefits of the Internet
without losing the personal service touch and local feel of the business.
The expertise of the professionals in the field will be an invaluable resource to the success of the
Web superstore. Comtech will build a national support channel of retail DME/HME retail locations to
support the Web e - medical superstore through organic growth as well as acquisitions.
Management will also build out a business-to-business opportunity by providing smaller DME/HME
facilities with the ability to auction off used equipment or excess inventory to other operators
nationally. In addition to the auction capabilities of the site, Comtech will buy and sell used and
excess inventory as needed. The site will also provide customers with valuable regional content
targeted at the problems facing today's senior population.
MARKETING PLAN
NETWORKS ON-LINE, INC.
The Company intends to increase marketing efforts across the board for all subsidiaries in a
cost-effective manner. Management will develop a defined and targeted marketing campaign for
Networks On-Line, Inc. through a variety of print and media advertising and marketing programs.
These programs will be designed to grow the subscriber base of NOL, while seeking to develop
added revenue streams available to the company.
E-MEDICAL DIVISION
Comtech will seek to market this division mainly through the Internet and targeted Media. As this
division develops into an e-medical portal site, Comtech will implement marketing programs and
partnerships designed to drive significant Internet traffic to these sites. The company is currently
planning to leverage the talent of Web developer and Internet marketing firm Interlucent.com in
addition to Networks On-Line, Inc. to complete an overhaul of the current sites and implement an
Internet marketing strategy.
FINANCIAL PLAN
Management's goals are to increase revenues to $10 to $12 million dollars over the next 12-month
period, with revenues increasing to over $20 million dollars in 24 months. The company plans to
grow revenue through internal growth and acquisitions, with the acquisitions financed primarily
through the issuance of restricted common shares or preferred stock. Management plans to complete
a private placement of common stock to properly fund the operations of the parent company.
The increase in profits generated by acquiring profitable companies and providing superior, cost
effective management and back office functions will provide Comtech with the necessary capital to
grow the company.
CONCLUSION
By successfully executing the company's business plan Comtech will be able to grow the company
into a valuable profitable entity. With the tremendous
consolidation and spin-off opportunities available to the Company and its shareholders, Comtech
will play a major role in revolutionizing the e-medical industry and at the same time provide its
customers the best service and content in the industry. |
