10-Q 1 d55249_10qsb.txt FORM 10-Q SWORD COMP-SOFT CORP. (Exact name of Small Business Issuer as Specified in its Charter) DELAWARE 98-0229951 (state or other Jurisdiction of (I.R.S Employer Incorporation or Organization) Identification No.) 4055 Ste Catherine st. suite 133, Montreal, Quebec H3Z 3J8 (Address of Principal Executive Offices) (514) 821-5151 Issuer's Telephone Number Including Area Code) State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date : At February 28, 2003 Issuer had 47,657,700 outstanding shares of Common Stock. INDEX PART I: FINANCIAL INFORMATION Item 1. Financial Statements Balance sheet (Unaudited) at February 28, 2003 Statements of Operations (Unaudited) for the three months ended and February 28, 2003 and February 28, 2002 and from inception (November 2, 1998) to February 28, 2003 Statement Cash flows (Unaudited)for the three month ended February 28, 2003 and February 28, 2002 and from inception (November 2, 1998) to February 28, 2003. Notes to the financial statements (Unaudited). SWORD COMP-SOFT CORP. (A COMPANY IN THE DEVELOPMENT STAGE) BALANCE SHEET AT FEBRUARY 28, 2003 (UNAUDITED) Assets Current Assets Cash $ -- Accounts receivable $ 76,147 Note Receivable - Parent company 99,906 Note Receivable - Related Party 99,316 --------- Total current assets 275,369 Property and equipment, net 31,528 Investment in Parent 129,478 --------- Total assets 436,375 ========= Liabilities and Shareholder's Equity Current Liabilities Bank Indebtedness 4645 Accounts payable and accrued liabilities 53,231 Note Payable - Related party 100,374 --------- Total current liabilities 158,250 Shareholder's Equity Common Stock, $.0001 par value; authorized 70,000,000 shares; issued and outstanding 48,742,500 4,766 Paid in Capital 597,088 Share Subscription Receivable (78,750) Deficit accumulated during the development stage (244,979) --------- Total Shareholder's Equity 278,125 Total liabilities and shareholder's equity $ 436,375 ========= Read the accompanying summary of significant accounting notes to financial statements, which are an integral part of this financial statement SWORD COMP-SOFT CORP. (A COMPANY IN THE DEVELOPMENT STAGE) STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED FEBRUARY 28, 2003 AND FEBRUARY 28, 2002 FROM INCEPTION (NOVEMBER 02, 1998) THROUGH FEBRUARY 28, 2003 (UNAUDITED)

From inception Three months (November 02, 1998) ended through February 28, 2003 February 28, 2002 February 28, 2003 ----------------- ----------------- ----------------- Revenues: $ 45,130 $ 112,658 $ 917,848 Cost of Revenues: 24,352 40.154 597,111 ---------------- ---------------- ---------------- 20,778 72.504 320,737 Operating Expenses: Marketing 48,750 0 147,516 Rent -- 4500 37,305 Professional fees 750 0 90,974 Selling, general and administrative expenses 5,379 19897 302,201 ---------------- ---------------- ---------------- Total Operating Expenses 54,879 24.397 577,996 ---------------- ---------------- ---------------- Income/(Loss) before other income (expense) (34,101) 48.107 (257,259) Other income (expense): Interest income -Parent company 1,728 3.195 29,426 Interest income - Related party 1,708 2.778 14,139 Interest expense - Related party (1,711) (3,174) (31,285) ---------------- ---------------- ---------------- Total other income (expense) 1,725 2.799 12,280 Net income/(Loss) $ (32,376) 50.906 $ (244,979) ================ ================ ================ Basic weighted average common shares outstanding 47,657,700 48,742,500 47,161,804 ================ ================ ================ Basic (Loss) Income per common share $ (0.0007) $ 0.0010 $ (0.0052) ================ ================ ================

Read the accompanying summary of significant accounting notes to financial statements, which are an integral part of this financial statement SWORD COMP-SOFT CORP. (A COMPANY IN THE DEVELOPMENT STAGE) STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED FEBRUARY 28, 2003 AND FEBRUARY 28, 2002 FROM INCEPTION (NOVEMBER 02, 1998) THROUGH FEBRUARY 28, 2003 (UNAUDITED)

From inception Three months Three months (November 02, 1998) ended ended through February 28, 2003 February 28, 2002 February 28, 2003 ----------------- ----------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) (32,376) 50.906 $(244,979) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 3140 3.385 41,746 Issuance of Capital Stock for Marketing and Consulting Fees 48,750 -- 118,625 Write down - leaseholds -- -- 2,663 Write down - Note Receivable -- -- 70,000 Accrued interest expense-note payable, related party 1711 3.174 31,285 Accrued interest income-note receivable, parent company (1,728) (3,195) (29,426) Accrued interest income-note receivable, related party (1,708) (2,778) (14,139) Changes in Operating assets and liabilities: Note Receivable - Parent company -- 14,233 (153,841) Note Receivable - Related party -- (1,266) (155,177) Accounts Payable 5,386 9.564 53,231 Accounts Receivable (24,350) (42,792) (76,147) -------- -------- --------- Net cash provided by/(used in) operating activities (1,175) 31.231 (356,159) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Property and equipment -- -- (60,937) -------- -------- --------- Net cash provided by/(used in) investing activities -- -- (60,937) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from, (Used in) Sales of common stock -- -- 156,262 Payment of common stock subscriptions receivable -- -- 103,739 Notes payable, related party 900 (30,022) 152,450 Bank Indebtedness 275 (1,209) 4,645 -------- -------- --------- Net cash provided by/(used in) financing activities 1,175 (31,231) 417,096 -------- -------- --------- Net increase (decrease) in cash and cash equivalents -- -- -- Cash and cash equivalents, beginning of period -- -- -- -------- -------- --------- Cash and cash equivalents, end of period $ -- $ -- $ -- ======== ======== ========= Supplemental Schedule of noncash investing and financing activities: On April 30, 2000, the company issued 600,000 shares of 15,000 common stock in settlement of computer equipment purchased from its officers.

Read the accompanying summary of significant accounting notes to financial statements, which are an integral part of this financial statement NOTE 1 -BASIS OF PRESENTATION The accompanying Unaudited financial statements of Sword Comp-Soft Corp. have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-X. The financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the audited financial statements and footnotes thereto included in Sword Comp-Soft Corp's 10KSB as filed with the Securities and Exchange Commission. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - Revenue Recognition The company recognizes revenue from technology related services, such as internet site hosting and software consulting. Revenue is recognized when the service is performed. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. SAB 101 outlines the basic criteria that must be met to recognize revenue and provide guidance for disclosures related to revenue recognition policies. Management believes that Sword Comp-Soft Corp's revenue recognition practices are in conformity with the guidelines of SAB 101. NOTE 3 - NET LOSS PER SHARE Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Options and warrants are not considered since considering such items would have an antidilutive effect. NOTE 4 - GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The company reported net loss of $(32,376) for the three months ended Feb 28, 2003 as well as reporting net losses of $(244,979) from inception (November 2, 1998) to February 28, 2003. As reported on the statement of cash flows, the Company had negative cash flows from operating activities of $1,175 for the three months ended February 28, 2003 and has reported deficient cash flows from operating activities of $356,159 from inception (November 2, 1998). To date, these losses and cash flow deficiencies have been financed principally through the sale of common stock $260,000 and notes payable, principally related party debt $152,450. Item 2. Plan of Operation. The following discussion should be read in conjunction with the financial statements and related notes which are included elsewhere in this prospectus. Statements made below which are not historical facts are forward-looking statements. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, general economic conditions and our ability to market our product. SWORD COMP-SOFT CORP. was an (ASP) Application Service Provider incorporated in November 1998 specializing in the E-Healthcare sector. On May 29, 2000, Millenia Hope Inc. acquired thirty-five million seven hundred thousand (35,700,000) shares of SWORD COMP-SOFT INC., this being the 76.5% of SWORD's issued capital, in exchange for five million (5,000,000) common shares, valued at $129,478 based on the net tangible asset value of Millenia Hope and five million warrants (5,000,000) entitling the registered holder thereof to purchase at any time from that date for a period of three (3) years, one share of common stock at a price of two (2) dollars. As of March 5, 2003 this business was sold along with the assumption of a promise to pay $ 700,000 to Millenia Hope Inc., its former parent corporation. In exchange, Sword received 30.7 million shares of its outstanding common shares held by Millenia Hope Inc. Sword intends to utilize those shares to purchase a technologically advanced consumer product to be marketed to the public. To this end, Sword is involved in ongoing negotiations to purchase a technologically advanced consumer product and hopes to have concluded such a purchase before the end of the 2nd quarter of 2003. Sword's registration statement with the Security and Exchange Commission was accepted on July 16, 2001 and it is now a reporting company. It is presently in the process of applying to the NASD to be able to trade their shares on the over The Counter Market. Liquidity and cash flow needs of the company From December 1st, 2002 to February 28, 2003 the company incurred operating expenses and interest expenses in the amount of $77,506 while recording net cash revenues of $45,130. From March 1st, 2003 to November 30th, 2003, the fiscal year end, the company anticipates that its net cash flow needs, will be $200,000 primarily to cover day to day operating expenses. These funds will be covered by revenue received and any shortfalls will be met by the officers and certain shareholders as previously outlined. Part II Other Information Item 2: Sales of Unregistered securities Date of Title of Number Consideration Exemption From Sale Security Sold Received Registration Claimed 12/05/02 Common Shares 250,000 $25,000 Regulation S in settlement of marketing expenses (b) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SWORD COMP-SOFT CORP. (Registrant) Dated April 15, 2003 By: /s/ Leonard Stella Chief Operating Officer