UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the quarterly period ended August 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
Commission file number:
SUPERIOR NETWORKS, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA 98-0339543
- --------------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
Suite 3670, 130 King Street West
Toronto, Ontario M5X 1B1
(416) 863-0101
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
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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: A total of 22,305,000 common shares
were issued and outstanding as at October 17, 2002.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
- -----------------------------
SUPERIOR NETWORKS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
August 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
Balance Sheet
(Unaudited)
August 31 May 31
2002 2002
--------- ----------
ASSETS
Current
Cash -- --
Software Developmental Cost $ 4,807 $ 4,807
--------- ---------
Total Assets $ 4,807 $ 4,807
========= =========
LIABILITIES
Current
Accounts Payable 4,636 14,108
Loans Payable 63,400 34,854
--------- ---------
68,036 48,962
--------- ---------
SHAREHOLDERS' EQUITY
Share Capital Authorized:
100,000,000 common share,
par value $0.001 per share 7,435 7,435
issued and outstanding:
22,305,000 common shares 39,315 39,315
Additional paid in capital (109,978) (90,905)
Deficit (63,228) (44,155)
--------- ---------
$ 4,807 $ 4,807
========= =========
Current
Cash -- --
Software Developmental Cost $ 4,807 $ 4,807
--------- ---------
Total Assets $ 4,807 $ 4,807
========= =========
LIABILITIES
Current
Accounts Payable 4,636 14,108
Loans Payable 63,400 34,854
--------- ---------
68,036 48,962
--------- ---------
SHAREHOLDERS' EQUITY
Share Capital Authorized:
100,000,000 common share,
par value $0.001 per share
issued and outstanding:
22,305,000 common shares 7,435 7,435
Additional paid in capital 39,315 39,315
Deficit (109,978) (90,905)
(63,228) (44,155)
--------- ---------
$ 4,807 $ 4,807
========= =========
See notes to these financial statements.
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Superior Networks, Inc.
Statement of Operations and Deficit
As At August 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
Three Months Ended Nine Months Ended
Aug 31,2002 Aug 31,2002
------------------ -----------------
EXPENSES
Professional Fees $ 16,656 $ 50,777
Office and Sundy 2,518 4,293
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Net Loss For The Period $ 19,074 $ 55,070
Deficit, Beginning of Period 90,905 54,908
----------- -----------
Deficit, End of Period 109,979 109,979
----------- -----------
Net Loss Per Common Share $ 0.01 $ 0.01
----------- -----------
Weight Average Number of
Common Shares Outstanding 22,305,000 22,305,000
----------- -----------
See notes to these financial statements.
3
Superior Networks, Inc.
Statement of Cash Flows
As At August 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
Three Months Ended
August 31, 2002
-------------------
Cash Flows From Operating Activities
Net Loss for the Period $(19,074)
Adjustments to Reconcile Net Loss
To Net Cash By Operating Activities
Accounts Payable 9,473
Loans Payable 28,547
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Cash Flows From Financing Activity --
Common Stock Issued --
Cash Flow From Investing Activity
Software Development Cost --
Increase ( Decrease) In Cash
Cash, Beginning of Period $ --
Cash, End of the Period $ --
See notes to these financial statements.
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SUPERIOR NETWORKS, INC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
1. BASIS OF PRESENTATION
The unaudited financial statements as of August 31, 2002 included herein have
been prepared without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with United
States generally accepted principles have been condensed or omitted pursuant to
such rules and regulations. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. It is suggested that these financial statements
be read in conjunction with the November 30, 2001 audited financial statements
and notes thereto.
2. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the state of Nevada, U.S.A. on May 24,
2000.
b) Development Stage Activities
The Company had intended to offer specialized training programs over
the internet to reach a demographically focused learning audience. The web-based
training model was intended to offer a cost-effective and convenient alternative
to traditional learning environments. Initially the website was to provide a
comprehensive driver training program to seniors interested in acquiring
discounts from insurance companies and in improving their driving ability.
The Company has recently announced that it is intending to enter into
an agreement to acquire an interest in a French-based discount airline
operation.
3. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a precise
determination of many assets and liabilities is dependent upon future events,
the preparation of financial statements for a period necessarily involves the
use of estimates, which have been made using careful judgment. The financial
statements have, in management's opinion, been properly prepared within
reasonable limits of materiality and within the framework of the significant
accounting policies summarized below:
a) Development Stage Company
The Company is a development stage company as defined in the Statements
of Financial Accounting Standards No. 7. The Company is devoting substantially
all of its present efforts to establish a new business and none of its planned
principal operations have commenced. All losses accumulated since inception have
been considered as part of the Company's development stage activities.
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SUPERIOR NETWORKS, INC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
b) Use of Estimates
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 the reported amounts of revenues and expenses for the reporting
period. Actual results could differ from these estimates.
c) Website Development Costs
Software development costs represent capitalized costs of design,
configuration, coding, installation and testing of the Company's website up to
its initial implementation. Upon implementation, the asset will be amortized to
expense over its estimated useful life of three years using the straight-line
method. Ongoing website post-implementation costs of operation, including
training and application maintenance, will be charged to expense as incurred.
d) Income Taxes
The Company has adopted Statement of Financial Accounting Standards No.
109 - "Accounting for Income Taxes" (SFAS No. 109). This standard requires the
use of an asset and liability approach for financial accounting and reporting on
income taxes. If it is more likely than not that some portion or all if a
deferred tax asset will not be realized, a valuation allowance is recognized.
e) Stock Based Compensation
The Company measures compensation cost for stock based compensation
using the intrinsic value method of accounting as prescribed by A.P.B. Opinion
No. 25 - "Accounting for Stock Issued to Employees". The Company has adopted
those provisions of Statement of Financial Accounting Standards No. 123
"Accounting for Stock Based Compensation", which require disclosure of the
pro-forma effect on net earnings and earnings per share as if compensation cost
had been recognized based upon the estimated fair value at the date of grant for
options awarded.
f) Financial Instruments
The Company's financial instruments consist of cash, accounts payable
and loans payable. Unless otherwise noted, it is management's opinion that this
Company is not exposed to significant interest or credit risks arising from
these financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise noted.
g) Net Loss Per Common Share
The loss per share is calculated using the weighted average number of
common shares outstanding during the year. Fully diluted loss per share is not
presented, as the impact of the exercise of options is anti-dilutive.
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SUPERIOR NETWORKS, INC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
h) Revenue Recognition
The Company intends to recognize revenue from product sales, and fee
and commission arrangements at the time the sales occur or the fees and
commissions are earned.
4. SHARE CAPITAL
During the period, the Company increased its issued and outstanding share
capital by way of a three for one split of the Company's common stock. The stock
split was effected by the completion of a stock dividend to each of the
Company's shareholders of two common shares for every one common share held.
Item 2. Management's Discussion and Analysis or Plan of Operation. (a) Plan of
Operations
Item 2. Management's Discussion and Analysis or Plan of Operation.
- -----------------------------------------------------------------
(a) Plan of Operations
The Company is a development stage company. At this time, we have insufficient
funds to commence development of our initial product. We will require additional
financing in order to implement our business plan. As at August 31, 2002 we had
no cash to maintain operations. In order to complete our objectives over the
next 12 months, we require additional funding. The amount of additional
financing we will require to sustain our business operations 12 months from now
will depend on the level of revenues we will be generating at that time. The
Company does not anticipate receiving any revenues in the near future. It is
impossible to give a meaningful forecast at this time as to the amounts of
additional financing that will be required. We do not currently have any
arrangements for financing and we can provide no assurance to investors that we
will be able to find such financing if required.
The Company is in the process of changing its business strategy. In this regard,
the Company has recently announced that it seeks to acquire a forty-nine (49%)
interest in AlitudePlus SAS, a French company owning airline assets and
operating as "L'Air". AltitudePlus SAS is owned by AeroPlus, SAS, also a French
company. The Company intends to acquire an interest in AltitudePlus by issuing
common stock from treasury. The Company intends to acquire an interest
AltitudePlus and to operate a discount passenger air carrier in France with
trans-atlantic destinations.
The Company has not earned any revenues from its website for
Superioronlinetraining.com. The site was focused on a training program
specifically designed to cater to senior drivers' needs and features a section
on aging and driving, a driving course and a quiz on the driving course. The
Company will no longer attempt to generate revenues from the website
advertising.
We have not earned any revenues from the date of inception through the interim
period ending August 31, 2002. We do not anticipate earning revenues until such
time as we have our initial product developed and available to the public on the
Internet.
We incurred an accumulated deficit of $109,978 from the date of inception
through August 31, 2002. Failure to raise the necessary capital in the immediate
future will, at a minimum, prevent us from fully developing our initial product
and, in the worst case, cause our business to fail.
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Even though the Company does not at the present time have any understandings or
agreements with any persons or entities to provide such funding, shareholders
having an interest in seeing that the Company remains a viable business entity
have been willing to provide funds to the Company in the past either through
purchasing additional stock or by loaning money to the Company. However, there
can be no assurances to that effect, as the Company has no revenues and the
Company's need for capital may change dramatically if it acquires an interest in
a business opportunity during that period. It should also be noted that the
Company is now obligated to satisfy the costs associated with filing the
required reports under the Securities and Exchange Act of 1934, as amended. It
appears at the present time that these costs will also have to be met through
the sale of stock or by borrowing additional funds. The Company's current
operating plan is to (i) handle the administrative and reporting requirements of
a public company; (ii) continue development of its website and course offerings;
and (iii) conclude the acquisition of airline assets in France, as described
above.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
Our actual results and actual plan of operations may differ materially from what
is stated above. From time to time, the Company will make written and oral
forward-looking statements about matters that involve risk and uncertainties
that could cause actual results to differ materially from projected results.
Important factors that could cause actual results to differ materially include,
among others:
- general domestic economic and political conditions;
- risks associated with the airline industry, should the acquisition
of the French airline assets be succesful
- changes in laws and government regulations, including without
limitation regulations of the Securities and Exchange Commission;
- availability and timing of receipt of necessary outside capital; and
- other risk factors described from time to time in the Company's
filings with the Securities and Exchange Commission.
Many of these factors are beyond the Company's ability to control and predict.
Investors are cautioned not to place undue reliance on forward-looking
statements. The Company disclaims any intent or obligation to update its
forward-looking statements, whether as a result of receiving new information,
the occurrence of future events or otherwise.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
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Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
The Company filed a current report on Form 8-K on October 15, 2002. The report
was filed in connection with the change of auditors of the Company. Also, the
Company has reported that, as of the date of this interim report, it is in final
negotiations to acquire a forty-nine (49%) interest in French airline assets
known as "L'Air." In connection with the acquisition of such assets, the Company
will change its name to "L.Air Holding Inc."
Also, as disclosed on Form 8-K filed on September 9, 2002, Robert Rosner has
resigned as the sole director and officer of the Company. Mr. Alexander Goldman
has acquired the shares of the Company owned by Robert Rosner, being 15,000,000
common shares in the capital of the Company. Mr. Goldman has also been named the
sole director and officer of the Company, effective September 5, 2002. Item 6.
Exhibits and Reports on Form 8-K.
Exhibit 99: Risk Factors.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SUPERIOR NETWORKS, INC.
(Registrant)
Date October 18, 2002 /s/ Alex Goldman
-------------------------------------
Alex Goldman, President, CEO, CFO
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CERTIFICATION OF PERIODIC REPORT
I, Alexander Goldman, CEO and CFO of Superior Networks Inc. (the "Company")
certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
Section 1350, that:
1. The Quarterly Report on Form 10Q-SB of the Company for the quarterly
period ended August 31, 2002 (the "Report) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities and Exchange
Act of 1934, as amended, (15 U.S.C. 78m or 78o(d); and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Dated: October 18, 2002 /s/ Alexander Goldman
---------------------------------
Alexander Goldman
I, Alexander Goldman, CEO/CFO of Superior Networks Inc. (the Company), certify
that pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, that:
(1) I have reviewed the report on Form 10-QSB for the quarter ended August 31,
2002 of the Company;
(2) Based on my knowledge, this quarterly 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 quarterly report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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
quarterly report.
Dated: October 18, 2002 /s/ Alexander Goldman
--------------------------------
Alexander Goldman
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