UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) | ||
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended: April 30, 2009 | ||
Or | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from ____________ to _____________ | ||
Commission File Number: 333-100137 | ||
SITESEARCH CORPORATION | ||
(Exact name of registrant as specified in its charter) | ||
Nevada | 20-5422795 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
2850 W. Horizon Ridge Parkway Suite 200 Henderson, NV | 89052 | |
(Address of principal executive offices) | (Zip Code) | |
(602) 840-0668 | ||
(Registrant's telephone number) | ||
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 o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer o Accelerated filer o
Non-accelerated filer o Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No x
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 8,089,677 as of June 9, 2009.
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SITESEARCH CORPORATION
Table of Contents
Page | |
PART I – FINANCIAL INFORMATION | 1 |
Item 1. Unaudited Financial Statements | 2 |
Consolidated Balance Sheets | 2 |
Consolidated Statement of Operations and Comprehensive Loss | 3 |
Consolidated Statements of Cash Flows | 4 |
Notes to Unaudited Consolidated Financial Statements | 5 |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 8 |
Item 4. Controls and Procedures | 10 |
PART II – OTHER INFORMATION | 10 |
Item 1. Legal Proceedings | 10 |
Item 1A. Risk Factors | 10 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 10 |
Item 3. Defaults Upon Senior Securities | 10 |
Item 4. Submission of Matters to a Vote of Security Holders | 11 |
Item 5. Other Information | 11 |
Item 6. Exhibits | 11 |
SIGNATURES | 12 |
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PART I – FINANCIAL INFORMATION
Forward-Looking Information
The statements contained in this Quarterly Report on Form 10-Q that are not historical fact are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are based on current expectations that involve a number of risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “intend,” “plan,” “could,” “is likely,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The Company wishes to caution the reader that these forward-looking statements that are not historical facts are only predictions. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these projections and other forward-looking statements are based upon a variety of assumptions relating to the business of the Company, which, although considered reasonable by the Company, may not be realized. Because of the number and range of assumptions underlying the Company’s projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this report. These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information. Therefore, the actual experience of the Company and the results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected. Consequently, the inclusion of projections and other forward-looking statements should not be regarded as a representation by the Company or any other person that these estimates and projections will be realized, and actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate.
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Item 1. Financial Statements.
SITESEARCH CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
April 30, 2009 | July 31, 2008 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 423,213 | $ | 1,025,558 | ||||
Other current assets | — | 184 | ||||||
Taxes receivable | 21,925 | 21,917 | ||||||
Total current assets | 445,138 | 1,047,659 | ||||||
Fixed assets (net of accumulated depreciation of $18,442 and $12,252) | 31,869 | 35,116 | ||||||
Deposits | 12,020 | 16,189 | ||||||
TOTAL ASSETS | $ | 489,027 | $ | 1,098,964 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
LIABILITIES | ||||||||
Accounts payable | $ | 20,019 | $ | 8,841 | ||||
Accrued payroll | — | 3,276 | ||||||
Total current liabilities | 20,019 | 12,117 | ||||||
Total liabilities | 20,019 | 12,117 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock, $0.001 par value; 55,000,000 shares authorized; | ||||||||
8,089,677 and 7,794,677 shares issued and outstanding | 8,090 | 7,795 | ||||||
Additional paid-in capital | 2,650,742 | 2,303,888 | ||||||
Accumulated other comprehensive loss | (20,482 | ) | 3,136 | |||||
Accumulated deficit | (2,169,342 | ) | (1,227,972 | ) | ||||
Total stockholders' equity | 469,008 | 1,086,847 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 489,027 | $ | 1,098,964 | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements. | ||||||||
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SITESEARCH CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2009 AND APRIL 30, 2008
AND AUGUST 21, 2006 (INCEPTION) TO APRIL 30, 2009
(UNAUDITED)
Three months ended April 30, | Nine months ended April 30, | August 21, 2006 (Inception) to April 30, | ||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | ||||||||||||||||
REVENUES | $ | — | $ | — | $ | — | $ | — | $ | 222 | ||||||||||
OPERATING EXPENSES | ||||||||||||||||||||
Selling, general and administrative | 300,216 | 219,810 | 932,441 | 650,164 | 2,158,321 | |||||||||||||||
Depreciation | 2,729 | 2,499 | 8,189 | 6,002 | 20,441 | |||||||||||||||
Total costs and expenses | 302,945 | 222,309 | 940,630 | 656,166 | 2,178,762 | |||||||||||||||
OPERATING LOSS | (302,945 | ) | (222,309 | ) | (940,630 | ) | (656,166 | ) | (2,178,540 | ) | ||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||||
Other income | 38 | (15 | ) | 38 | 600 | 1,257 | ||||||||||||||
Interest income (expense) | (544 | ) | 874 | (778 | ) | 8,085 | 7,941 | |||||||||||||
Total other (expenses) | (506 | ) | 859 | (740 | ) | 8,685 | 9,198 | |||||||||||||
NET LOSS BEFORE | ||||||||||||||||||||
PROVISION FOR INCOME TAXES | (303,451 | ) | (221,450 | ) | (941,370 | ) | (647,481 | ) | (2,169,342 | ) | ||||||||||
NET LOSS | (303,451 | ) | (221,450 | ) | (941,370 | ) | (647,481 | ) | (2,169,342 | ) | ||||||||||
Foreign currency translation adjustments | (149 | ) | (2,735 | ) | (23,618 | ) | (2,208 | ) | (20,482 | ) | ||||||||||
Comprehensive loss | $ | (303,600 | ) | $ | (224,185 | ) | $ | (964,988 | ) | $ | (649,689 | ) | $ | (2,189,824 | ) | |||||
NET LOSS PER COMMON SHARE - BASIC & DILUTED | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.12 | ) | $ | (0.10 | ) | $ | (0.27 | ) | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||||||
BASIC & DILUTED | 8,102,149 | 6,639,566 | 8,039,237 | 6,539,984 | 8,102,149 | |||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements. | ||||||||||||||||||||
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SITESEARCH CORPORATION
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED APRIL 30, 2009 AND APRIL 30, 2008
AND AUGUST 21, 2006 (INCEPTION) TO APRIL 30, 2009
(UNAUDITED)
Nine months ended April 30, | August 21, 2006 (Inception) to April 30, | |||||||||||
2009 | 2008 | 2009 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net loss | $ | (941,370 | ) | $ | (647,481 | ) | $ | (2,169,342 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||||||
Stock based compensation | 52,149 | 160,336 | 452,078 | |||||||||
Depreciation | 8,189 | 2,499 | 20,441 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Taxes receivable | (8 | ) | (11,285 | ) | (26,370 | ) | ||||||
Deposits | 4,169 | (900 | ) | (11,879 | ) | |||||||
Accounts payable | 11,178 | 5,685 | 20,019 | |||||||||
Other assets | 184 | 646 | - | |||||||||
Taxes payable and accrued payroll | (3,276 | ) | 2,081 | 4,305 | ||||||||
Net cash used in operating activities | (868,785 | ) | (488,419 | ) | (1,710,748 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisitions of fixed assets | (3,446 | ) | (5,352 | ) | (41,064 | ) | ||||||
Net cash used in investing activities | (3,446 | ) | (5,352 | ) | (41,064 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from issuance of common stock and warrants | 295,000 | 229,501 | 2,172,749 | |||||||||
Proceeds from contributed capital | — | 6,910 | 24,254 | |||||||||
Net cash provided by financing activities | 295,000 | 236,411 | 2,197,003 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (25,114 | ) | 273 | (21,978 | ) | |||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | (602,345 | ) | (257,087 | ) | 423,213 | |||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 1,025,558 | 341,256 | — | |||||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 423,213 | $ | 84,169 | $ | 423,213 | ||||||
SUPPLEMENTAL SCHEDULE OF CASH PAID FOR: | ||||||||||||
Interest | $ | — | $ | — | $ | — | ||||||
Income taxes | $ | — | $ | — | $ | — | ||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES: | ||||||||||||
Receipt of fixed assets as contributed capital | $ | — | $ | — | $ | 9,750 | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements. |
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SITESEARCH CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1 – BACKGROUND AND BASIS OF PRESENTATION
Sitesearch Corporation (the “Sitesearch”) is a Nevada Corporation founded on August 21, 2006 with a focus on helping users find the most useful information and websites on the internet. Through the editorial process, Sitesearch encourages its users to identify the best websites as they relate to popular informational topics. Revenues are generated through online advertisements and agreements with third-parties on a “per-click” basis. The website was placed online during April of 2007. Sitesearch is headquartered in Henderson, Nevada, with a branch office in Phoenix, Arizona and technical operations in Sonora, Mexico.
The accompanying unaudited financial statements as of April 30, 2009 and for the three and nine months ended April 30, 2009 and 2008 and period from August 21, 2006 (Inception) to April 30, 2009, respectively, have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for audited financial statements. In the opinion of management, the interim information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The footnote disclosures related to the interim financial information included herein are also unaudited. Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto as of July 31, 2008 and for the year then ended included in Sitesearch’s Form S-1 filed on November 4, 2008.
NOTE 2 - GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming Sitesearch will continue as a going concern. Sitesearch is in the development stage and has incurred losses from continuing operations and operational cash outflows since inception, and does not have historical revenues from continuing operations. All losses accumulated since the inception of business ($2,169,342 through April 30, 2009) have been considered as part of development stage activities.
Sitesearch’s ability to fund working capital, capital expenditures and business development efforts will depend on its ability to generate cash from operating activities which is subject to, among other things, its future operating performance, as well as to general economic, financial, competitive, legislative, regulatory and other conditions, some of which may be beyond its control. If Sitesearch fails to generate sufficient cash from operations, it will need to raise additional equity or borrow additional funds to achieve its objectives. There can be no assurance that Sitesearch will generate sufficient revenues or that equity or borrowings will be available or, if available, will be at rates or prices acceptable to Sitesearch. These conditions raise substantial doubt about Sitesearch’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
NOTE 3 - STOCKHOLDERS’ EQUITY
During the nine months ended April 30, 2009, Sitesearch received proceeds of $295,000 from the sale of 295,000 shares of common stock to a small group of accredited investors. In connection with the issuance of stock, Sitesearch also issued warrants to purchase an aggregate of 57,500 shares of their common stock, with an exercise price of $2.25 per share, exercisable for a period of ten years. All warrants are immediately exercisable. Sitesearch allocated $20,773 of the proceeds to the warrants based on their relative fair value using the Black-Scholes pricing model using the assumptions in the table below. The amount of proceeds allocated to the warrants has been reflected as additional paid in capital in the accompanying consolidated financial statements.
During the nine months ended April 30, 2009, Sitesearch also issued 25,000 shares and warrants to purchase 25,000 shares to consultants. All warrants are immediately exercisable. The aggregate fair value of the warrants equals $9,035 based on the Black-Scholes pricing model using the assumptions in the table below. Professional service fees of $0 and $31,785, respectively, has been recognized in the three months and nine months ended April 30, 2009, respectively. The amount of proceeds allocated to the warrants has been reflected as additional paid in capital in the accompanying consolidated financial statements. In conjunction with the resignation of one of the Board of Directors on April 21, 2009, 25,000 shares were returned to the Company and were cancelled. No consideration was paid for these shares.
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On February 1, 2008, Sitesearch issued 120,000 stock options to its Chief Financial Officer. All options were issued with an exercise price of $1.00 and expire in four years (or earlier in the event of termination). The stock options vest and become exercisable in tranches of 15,000 shares every 90 days over a two year period from the date of grant. For the three months ended April 30, 2009 and April 30, 2008, Sitesearch recognized $4,480 and $16,965, respectively of stock based compensation relative to this grant. For the nine month period ending April 30, 2009 and April 30, 2008, Sitesearch recognized $19,506 and $16,965, respectively of stock based compensation relative to this grant. Unamortized stock option expense as of April 30, 2009 is $6,265. In the absence of historical experience regarding option exercise, SAB 107 allows for estimation of the expected life using the simplified method computed as the average between the vesting term and the contractual term.
The fair value of each stock option and warrant grant is estimated on the date of grant using the Black-Scholes option pricing model with the following range of assumptions:
Nine Months Ended April 30, | ||||||||
2009 | 2008 | |||||||
Volatility | 73 | % | 73 | % | ||||
Expected life (years) | 4.6 | 5.0 | ||||||
Risk-free rate of return | 2.9 | % | 4.5 | % | ||||
Forfeiture rate | 0 | % | 0 | % |
A summary of stock option transactions follows:
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (In-The-Money) Options | |||||||||||||
Outstanding at July 31, 2008 | 120,000 | |||||||||||||||
Grants | — | |||||||||||||||
Outstanding at April 30, 2009 | 120,000 | $ | 1.00 | 2.8 | $ | — | ||||||||||
Exerciseable at April 30, 2009 | 60,000 | $ | 1.00 | 2.8 | $ | — | ||||||||||
The following summarizes Sitesearch’s outstanding options and their respective exercise prices:
Exercise Price | Number of Shares | |||||
$ | 1.00 | 120,000 |
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The following is a summary of warrant activity:
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (In-The-Money) Warrants | |||||||||||||
Outstanding at July 31, 2008 | 1,381,401 | $ | 2.25 | |||||||||||||
Grants | 82,500 | $ | 2.25 | |||||||||||||
Outstanding at April 30, 2009 | 1,463,901 | $ | 2.25 | 8.3 | $ | — | ||||||||||
Exerciseable at April 30, 2009 | 1,463,901 | 2.25 | 8.3 | $ | — |
The following summarizes Sitesearch’s outstanding warrants and their respective exercise prices:
Exercise Price | Number of Shares | |||||
$ | 2.25 | 1,463,901 |
NOTE 4 – RELATED PARTY TRANSACTIONS
During the three months ended April 30, 2009, Sitesearch reimbursed a related party for $50,000 in legal expenses paid on its behalf.
One of the founders paid monthly lease payments for Sitesearch’s branch office throughout the twelve month period ending November 15, 2007.
NOTE 5 – COMMITMENTS AND CONTINGENCIES
Operating leases
Sitesearch leases office space in Phoenix under a month-to-month operating lease with a 60 day termination notice period and office space in Neveda under a one-year term operating lease. Sitesearch also leases office space in Mexico under a non-cancelable operating lease expiring in February 2010.
Future minimum lease payments under non-cancelable operating leases as of April 30, 2009 is as follows:
Operating leases | ||||
Remainder of 2009 | $ | 21,839 | ||
2010 | 3,078 | |||
2011 | — | |||
Thereafter | — | |||
$ | 24,917 |
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis provides information that management believes is relevant for an assessment and understanding of our results of operations and financial condition. The following selected financial information is derived from our historical financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein and the “Forward-Looking Statements” explanation included herein. This information should also be read in conjunction with our audited historical consolidated financial statements which are included in our Form S-1filed with the Securities and Exchange Commission on November 4, 2008.
Overview
We have launched and continue to develop a proprietary online community and virtual world that combines various emerging Internet business models: Social bookmarking, social networking, original user generated content, and other services, all under our Sitesearch brand. Sitesearch users organize, share, and rank web links, interact with each other through online social networking and are able to create, post, and collaboratively edit online data and documents. Since our users are able to discover, dynamically organize and rank content using non-standard methods and technologies, we offer an alternative to standard search engines for organizing online information.
We were incorporated in August 2006 as a Nevada corporation. We are headquartered in Henderson, Nevada, with a branch office in Phoenix, Arizona and technical operations in Sonora, Mexico.
Results of Operations
General and Administrative
General and Administrative Expenses | ||||||||||||||||
2009 | 2008 | Change | Percent | |||||||||||||
Three Months Ended April 30, | $ | 300,216 | $ | 219,810 | $ | 80,406 | 37 | % | ||||||||
Nine Months Ended April 30, | $ | 932,441 | $ | 650,164 | $ | 282,277 | 43 | % |
Our general and administrative expenses increased to $300,216 for the three months ended April 30, 2009 as compared to $219,810 for the three months ended April 30, 2008. This increase is mainly attributable to professional fee expenses of $84,215 for the three months ended April 30, 2009 as compared to $46,033 for the three months ended April 30, 2008. These expenses were incurred in the process of becoming effective on the Over the Counter Bulletin Board. Employee related costs and executive compensation also increased to $152,510 for the three months ended April 30, 2009 as compared to $120,595 for the three months ended April 30, 2008. Travel expenses increased to $9,285 for the three months ended April 30, 2009 as compared to $3,052 for the three months ended April 31, 2008 due to increased travel to the Sonoran facility and to Hong Kong for investor meetings.
Our general and administrative expenses increased to $932,441 for the nine months ended April 30, 2009 as compared to $650,164 for the nine months ended April 30, 2008. This increase is mainly attributable to professional fee expenses of $319,411 for the nine months ended April 30, 2009 as compared to $127,307 for the nine months ended April 30, 2008. These expenses were incurred in the process of becoming effective on the Over the Counter Bulletin Board. Executive compensation also increased to $127,622 for the nine months ended April 30, 2009 as compared to $69,000 for the nine months ended April 30, 2008. Travel expenses increased to $34,477 for the nine months ended April 30, 2009 as compared to $7,944 for the nine months ended April 31, 2008 due to increased travel to the Sonoran facility and to Hong Kong for investor meetings.
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Net Loss
Net Loss | ||||||||||||||||
2009 | 2008 | Change | Percent | |||||||||||||
Three Months Ended April 30, | $ | (303,451 | ) | $ | (221,450 | ) | $ | (82,001 | ) | 37 | % | |||||
Nine Months Ended April 30, | $ | (941,370 | ) | $ | (647,481 | ) | $ | (293,889 | ) | 45 | % | |||||
Our net loss increased for the three and nine months ended April 30, 2009 as compared to the three and nine months ended April 30, 2008, primarily due to the increase in operating expenses which is discussed above.
Liquidity and Capital Resources
At April 30, 2009, we had working capital of $425,119, comprised of $445,138 of current assets and $20,019 of current liabilities. We expect our working capital balance to fluctuate significantly as we develop our business.
All of our capital resources to date have been provided exclusively through the sale of equity securities. From our inception through April 30, 2009, we received cash proceeds of $2,172,749 from the sale of our common stock.
We expect to need additional funding to achieve our business development goals. Our ability to continue as a going concern is contingent upon our ability to obtain capital through the sale of equity or issuance of debt, and ultimately attaining profitable operations. There is no assurance that we will be able to successfully complete these activities.
The report of our registered independent public accountants on our financial statements at July 31, 2008 contains a qualification about our ability to continue as a going concern. This qualification is based on our lack of operating history and negative operating cash flows, among other things.
Sources and Uses of Cash
We require cash to fund our technical development activities, to build our operating infrastructure, to pay our personnel and management team and to finance continued growth.
We expect that the cash flows from our financing activities will permit us to finance our existing operating activities for the next twelve months.
Analysis of Cash Flows
Net cash used in operating activities was $868,785 during the nine months ended April 30, 2009. These cash flows consisted of payments for legal, professional and consulting expenses, executive compensation, salaries, rent and other expenditures necessary to develop our business infrastructure. Net cash used in investing activities was $3,446 for the nine months ended April 30, 2009, consisting of acquisitions of fixed assets. Net cash provided by financing activities was $295,000 during the nine months ended April 30, 2009 consisting of proceeds from the issuance of common stock and warrants.
Net cash used in operating activities was $488,419 during the nine months ended April 30, 2008. These cash flows consisted of payments for legal, professional and consulting expenses, executive compensation, salaries, rent and other expenditures necessary to develop our business infrastructure. Net cash used in investing activities was $5,352 for the nine months ended April 30, 2008, consisting of acquisitions of fixed assets. Net cash provided by financing activities was $236,411 during the nine months ended April 30, 2008 consisting of proceeds from the issuance of common stock and warrants of $229,501 and proceeds from contributed capital of $6,910.
9
We do not currently have any off-balance sheet arrangements.
Recent Accounting Pronouncements
We do not believe the adoption of any recently issued accounting pronouncements to have a significant impact on our financial position or results of operations.
Inflation and Seasonality
We do not believe that our operations are significantly impacted by inflation. Our business is not seasonal in nature.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q, Sitesearch’s management evaluated, with the participation of Sitesearch’s principal executive officer and principal financial officer, the effectiveness of the design and operation of Sitesearch’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act). Based on their evaluation of these disclosure controls and procedures, Sitesearch’s chief executive officer and chief financial officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There has been no change in Sitesearch’s internal control over financial reporting that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, Sitesearch’s internal control over financial reporting.
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless how remote.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
As of the date of this report, Sitesearch Corporation is not currently involved in any legal proceedings.
Item 1A. Risk Factors.
There have been no changes to the risk factors identified in our Form S-1 filed on November 4, 2008 and they are hereby incorporated by reference herein.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
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Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
Exhibit Number | Description | By Reference from Document |
31.1 | Certification of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934 | * |
31.2 | Certification of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934 | * |
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | * |
32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | * |
* Filed herewith
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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.
SITESEARCH CORPORATION | ||
(Registrant) | ||
Signature | Title | Date |
/s/ Jeffrey S. Peterson | Chief Executive Officer | June 9, 2009 |
Jeffrey S. Peterson | ||
/s/ Humberto Garcia Borbon | Chief Financial Officer | June 9, 2009 |
Humberto Garcia Borbon |
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