cyta10qsb

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the quarterly period ended March 31, 2002

Commission file Number 0 5388

CYTATION CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware

16-0961436

(State or Other Jurisdiction of Incorporation)

(I.R.S. Employer Identification Number)

251 Thames Street, Bristol, RI 02809
(Address of Principal Executive Offices) (Zip Code)

(401) 254-8800
(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.

YES [X] NO [ ]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date:

Common Stock, $.001 Par Value - 37,361,857 shares as of March 31, 2002.

FORWARD-LOOKING INFORMATION

THIS FORM 10-QSB AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY CYTATION CORPORATION OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FIFTEEN U.S.C.A. SECTIONS 77Z-2 AND 78U-5 (SUPP. 1996). THOSE STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT EXPECTATIONS OF CYTATION CORPORATION AND MEMBERS OF ITS MANAGEMENT TEAM AS WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED. PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS, THE OCCURRENCE OF UNANTICIPATED EVENTS OR CHANGES TO FUTURE OPERATING RESULTS OVER TIME.

 

PART 1 FINANCIAL INFORMATION

Item 1. Financial Statements.

Cytation Corporation (Formerly CollegeLink.com Incorporated)

CONTENTS

UNAUDITED FINANCIAL STATEMENTS

     Balance Sheets as of  March 31, 2002 and December 31, 2001

      Statements of Operations - For the Three Months Ended March 31, 2002 and 2001

      Statements of Cash Flows - For the Three Months Ended March 31, 2002 and 2001

Cytation Corporation (Formerly CollegeLink.com Incorporated)

Balance Sheets
 
 

ASSETS

March 31,

December 31,

         2002       

        2001      

(Unaudited)

(Audited)
CURRENT ASSETS:
     Cash $

  32,185

   $

79,861
     Cash in escrow account

427,502

424,781
     Notes receivable, stockholders

21,598

21,598
     Notes receivable, others

180,405

180,405
     Prepaid expenses and other current assets

               30,136

            154,637
          Total Current Assets

691,826

            861,282
PROPERTY AND EQUIPMENT, Net

              24,727

             31,687
          TOTAL ASSETS

$

716,553

  $

892,969
==========

==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable and accrued expenses

$

             249,528

   $

            211,273
COMMITMENTS AND CONTINGENCIES

-

                      -
STOCKHOLDERS' EQUITY:
     Series A convertible preferred stock, $4.00 stated value, $0.01 par value;
         2,500,000 shares authorized, 1,140,000 shares issued and outstanding

        (Liquidation value = $4,560,000) 4,584,980 4,584,980
     Series B convertible preferred stock, $7.625 stated value, $0.01 par value;
         300,000 shares authorized, -0- shares issued and outstanding

  -

   -
     Series C convertible preferred stock, $4.00 stated value, $0.01 par value;

       1,000,000 shares authorized, -0- shares issued and outstanding

 -

-
     Common stock, $0.001 par value, 100,000,000 shares authorized,
         37,361,857 shares issued and outstanding

37,361

37,361
     Additional paid-in capital

28,467,440

28,467,440
     Deferred compensation

(240,000)

(410,000)
     Accumulated deficit

     (32,382,756)

(31,998,085)
          TOTAL STOCKHOLDERS' EQUITY

           467,025

            681,696
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

 716,553

  $

892,969

=========

=========
See notes to financial statements.


 
Cytation Corporation (Formerly CollegeLink.com Incorporated)
Statements of Operations
For The Three Months Ended March 31, 2002 and 2001
(Unaudited)
 
     2002         2001  
 
REVENUES:          
     College and high school programs $ - $ 1,301,182
     Other revenues                        -                  44,326
    -   1,345,508
COST OF GOODS SOLD                          -               905,038
         
          GROSS PROFIT                        -               440,470
         
OPERATING EXPENSES:          
     Technology   -   31,263
     Depreciation and amortization   6,960   161,826
     Sales and marketing   -   139,368
     General and administrative             379,417             1,337,834
         
          TOTAL OPERATING EXPENSES             386,377             1,670,291
         
          OPERATING LOSS   (386,377)   (1,229,821)
         
OTHER INCOME (EXPENSES):          
     Interest income (expense), net                 1,706               (16,554)
         
          LOSS BEFORE INCOME TAXES   (384,671)   (1,246,375)
         
INCOME TAXES                            -                               -
         
          NET LOSS   (384,671)   (1,246,375)
         
PREFERRED STOCK DIVIDEND EARNED                 68,775                128,775
         
          NET LOSS ATTRIBUTABLE TO COMMON SHARES $ (453,446) $ (1,375,150)
    =========   =========
Net Loss Per Share (Basis and Diluted)   $ (0.01) $ (0.09)
    =========   =========
Weighted Average Common Shares Outstanding     37,361,857   15,363,098
    =========   =========

  See notes to financial statements. 


 

Cytation Corporation (Formerly CollegeLink.com Incorporated)
Statements of Cash Flows
For the Three Months Ended March 31, 2002 and 2001
(Unaudited)
 
         

               2002       

  

          2001    
 
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss $ (384,671) $ (1,246,375)
     Adjustments to reconcile net loss to net cash        
        used in operating activities:        
            Depreciation and amoritzation   6,960   161,826
            Amortization of deferred compensation   170,000   140,797
            Accrued interest on note payable   -   16,729
     Changes in operating assets and liabilities:        
            Accounts receivable   -   (119,190)
            Prepaid expenses and others   124,501   93,199
            Cash in escrow account   (2,721)   -
            Accounts payable and accrued expenses   38,255   372,516
            Unearned revenue  

                         -

  

          193,561
 
               NET CASH USED IN OPERATING ACTIVITIES              (47,676)          (386,937)
         
CASH FLOWS FROM INVESTING ACTIVITIES:                
     Purchases of property and equipment   -   (30,196)
     Collection on notes receivable   -   25,000
     Capitalization of software development costs                          -              (4,995)
 
               NET CASH USED IN INVESTING ACTIVITIES                           -            (10,191)
         
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from (payments of) note payable and debt   -   425,000
     Proceeds from issuance of common stock                           -                   641
         
               NET CASH PROVIDED BY FINANCING ACTIVITIES                           -            425,641
         
               NET INCREASE (DECREASE) IN CASH   (47,676)   28,513
         
CASH, Beginning                 79,861            161,481
         
CASH, Ending         $ 32,185 $ 189,994
    =========   =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:      
 
     Cash paid during the periods for:        
            Interest $ - $ -
========= =========
            Taxes $ - $ -
    =========   =========
     Non-cash investing and financing activities:        
            Offset note receivable with accrued expenses $ - $ 10,000
            =========   =========
See notes to financial statements.

Notes To Financial Statements

1.   The Company:

Until June 20, 2001, the Company provided an extensive range of in-school and online services directed at high school students and their parents, high school counselors, college admissions officers and corporations which target the teen marketplace. On June 20, 2001, the Company sold all of its assets associated with these activities to TMP Worldwide Inc.

2.   Deferred Compensation:

On July 2, 2001, the Company's board of directors authorized advances to two officers of the Company in the aggregate amount of $600,000. These advances are repayable by the either officer if the officer leaves the employment of the Company before January 2003, unless certain events occur before such date. These advances have been booked as deferred compensation and amortize over fifteen (15) months. In addition, the Company also advanced $50,000 to one of the officers in lieu of his participation in the Company's retirement plans, which amount has been recorded as compensation expense in the quarter ended March 31, 2002.

Item 2. Management's Discussion and Analysis or Plan of Operation

The Company sold all of its revenue producing assets on June 20, 2001. Accordingly, the following should be read in conjunction with Item 5 hereof.

Results of Operations

As a result of the sale in June 2001 by the Company of substantially all of its assets (including all of its revenue generating assets) to TMP and the prior sales of the Company's Internet services businesses, the Company no longer is engaged in any business in which it was engaged during its three fiscal years ended June 30, 1998, 1999 and 2000, its six-month transition period ending December 31, 2000 or its fiscal year ended December 31, 2001. Accordingly, management does not believe that it is informative or useful to compare the results of operations of the principal business which it conducted until June 20, 2001 but which it no longer owns with the results of operations of this business and other discontinued businesses for prior periods, including the three month period ended March 31, 2001.

Liquidity and Capital Resources

Net cash used in operating activities was $47,676 for the three month period ended March 31, 2002 compared to $386,937 for the three month period ended March 31, 2001, when the Company was still carrying on its former business. As of March 31, 2002, the Company had positive working capital of $442,298 compared to negative working capital of $2,529,332 as of March 31, 2001.

PART II OTHER INFORMATION

Item 1. Legal Proceedings.

On February 7, 2002, Gerald Paxton, a former consultant to the Company, filed a demand for arbitration arising under his consulting agreement with the Company. Mr. Paxton claims the Company owes him $239,059, plus interest. On March 4, 2002, the Company responded and denied any liability to Mr. Paxton. The Company intends to vigorously defend itself against all of the claims raised in the demand for arbitration.

Item 2. Change in Securities

None

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

On June 20, 2001, Cytation Corporation (then known as CollegeLink.com Incorporated) and its wholly owned subsidiary Cytation Bristol Corporation (then known as CollegeLink Corporation) sold substantially all of their respective assets, including all of their respective operating assets, to TMP. TMP is the parent corporation of TMP Interactive Inc. d/b/a Monster.com. As consideration for the sale, TMP paid Cytation Corporation approximately $4,202,000 in cash and assumed approximately $3,062,000 of Cytation's liabilities. Among the liabilities that TMP assumed were notes issued by Cytation to TMP in the aggregate principal amount of $1,000,000.

On May 22, 2001, the Company's common stock stopped trading on the American Stock Exchange where it had traded under the symbol "APS". From May 22, 2001 through June 21, 2001, the Company's common stock traded on the Nasdaq Over the Counter Bulletin Board under the symbol "CLGK". Since June 21, 2001, the Company's common stock has traded on the Nasdaq Over the Counter Bulletin Board under the symbol "CYTY".

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:

The following exhibits are filed as part of or incorporated by reference into this Report:

Exhibit

Description

3.1

Amended and Restated Certificate of Incorporation of the Company(2)

3.2

Articles of Merger between the Company and Cytation Corporation, dated February 11, 1999(1)

3.3

Articles of Merger between CollegeLink.com Incorporated and ECI, Inc., dated August 10, 1999(2)

3.4

Certificate of Merger of CollegeLink.com Incorporated and ECI, Inc., dated August 10, 1999(2)

3.5

Certificate of Ownership and Merger between the Company and CollegeLink.com Incorporated, dated November 15, 1999(2)

3.6

By-Laws of the Company(2)

4.1

Please see Exhibits 3.1 and 3.6 for provisions of the Amended and Restated Certificate of Incorporation and By-Laws of the Company defining the rights of holders of the common stock of the Company

10.1

Consulting Agreement by and among CollegeLink.com Incorporated and Gerald A. Paxton, dated August 10, 1999(2)

10.2

Amended and Restated Asset Purchase Agreement by and among TMP Worldwide, Inc., CollegeLink.com Incorporated and CollegeLink Corporation, dated May 2, 2001(3)

10.3

Escrow Agreement by and among the Company, TMP Worldwide, Inc, and Eastern Bank and Trust Company, dated June 20, 2001 

10.4

Bill of Sale and Assignment, by and among TMP Worldwide, Inc., CollegeLink.com Incorporated and CollegeLink Corporation, dated June 20, 2001

10.5

Non-Competition and Non-Solicitation Agreement between TMP Worldwide and Richard A. Fisher, dated June 20, 2001

10.6

Non-Competition and Non-Solicitation Agreement between TMP Worldwide and Kevin J. High, dated June 20, 2001

10.7

Employment Agreement, dated October 15, 2001, between the Company and Richard A. Fisher

10.8

Employment Agreement, dated October 15, 2001, between the Company and Kevin High

10.9

Lease dated September 22, 1999 between the Company and Midview, LLC

24.1

Power of Attorney (contained on the signature page of this Form 10-KSB)

                                                                       
(1)  Incorporated by reference from the Company's Form 8-K, Current Report, filed March 18, 1999, and later amended on April 2, 1999.

(2)  Filed as Exhibit to the Company's Registration Statement No. 333-85079 on Form SB-2 and incorporated herein by reference.

(3)  Filed as an Exhibit to the Company's Proxy Statement filed May 25, 2001 and incorporated herein by reference.

(b)   Reports on Form 8-K

            None

SIGNATURE

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 hereunto duly authorized.

                                                                    CYTATION CORPORATION

 

                                                                   By: /s/ Richard A Fisher
                                                                   -------------------------------
                                                                   Name: Richard A. Fisher
                                                                   Title: Chairman
                                                                   Date: May 13, 2002