SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-83418-LA
CYBERIA HOLDINGS, INC.
(Exact name of Small Business Issuer as Specified in its
Charter)
Delaware 93-1138967
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification
Organization) Number)
1531 14th Street
Santa Monica, California 90404
(Address of Principal Executive Offices)
(310) 260-3163
(Issuer's Telephone Number, Including Area Code)
Check whether the Issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
Common, $.0001 par value per share: 30,000,000
outstanding as of August 1, 2002
PART I - FINANCIAL INFORMATION
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
Index to Financial Information
Period Ended June 30, 2002
Item Page Herein
Item 1 - Financial Statements:
Consolidated Balance Sheet 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated
Financial Statements 6
Item 2 - Management's Discussion and Analysis 7
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30, 2002
ASSETS
Current Assets
Cash $ 20,866
Accounts receivable, less allowance
for doubtful accounts of $84,600 435,648
Work in process 132,551
Prepaid expenses 27,110
Due from affiliates 20
Revenue in Excess of Billings 4,412
Total Current Assets 620,607
Non-Current Assets
Property, plant and equipment (net) 98,082
Other assets 21,379
Total Non-Current Assets 119,461
Total Assets $ 740,068
LIABILITIES & STOCKHOLDERS' DEFICIT
Current Liabilities
Book overdraft $ 104,246
Accounts payable and accrued expenses 89,343
Accrued payroll and payroll taxes 57,828
Notes and loans payable 41,905
Deferred income 260,801
Due to affiliate 781,722
Due to minority shareholders 49,954
Capital lease payable - current 31,808
Total Current Liabilities 1,417,607
Long Term Liabilities
Capital lease payable - long term 1,500
Due to others - long term 149,800
Total Long Term Liabilities 151,300
Stockholders' Deficit
Common stock 3,000
Additional paid in capital 9,269
Accumulated deficit (841,108)
Total Stockholders' Deficit (828,839)
Total Liabilities
& Stockholders' Deficit $ 740,068
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2002 2001 2002 2001
Sales $ 458,722 $ 569,934 $ 817,542 $ 1,180,364
Cost of sales 254,521 291,130 421,516 911,455
General and
administrative
expenses 321,838 325,007 657,330 451,644
Total expenses 576,359 616,137 1,078,846 1,363,099
Loss from operations (117,637) (46,203) (261,304) (182,735)
Other income (expense)
Interest income 129 249 261 19,204
Other income 285 0 285 0
Interest expense (13,111) (8,994) (22,793) (37,467)
Total other expense (12,697) (8,745) (22,247) (18,263)
Net loss $(130,334) $(54,948) $(283,551) $(200,998)
Basic and diluted loss
per share $ (.004) $ (.002) $ (.009) $ (.007)
Weighted average
common
Shares
outstanding 30,000,000 30,000,000 30,000,000 30,000,000
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
2002 2001
Operating Activities:
Net loss $ (283,551) $ (200,998)
Adjustments to
reconcile net loss
to net cash used in
operating activities:
Depreciation and
amortization 39,940 46,167
(Increase) decrease in:
Accounts receivable (322,930) (263,247)
Work in process (129,700) (94,937)
Prepaid and other
current assets (20,964) (26,505)
Due from officer - 26,101
Other assets 7,378 (6,243)
Increase (decrease) in:
Accounts payable and
accrued expenses (86,873) 47,658
Due to affiliates 119,103 75,161
Due to others 46,591 -
Accrued payroll 39,951 (27,049)
Income tax payable - (15,751)
Deferred income 307,463 342,965
Net cash used in
Operating activities (283,592) (96,678)
Investing Activities:
Purchase of equipment (7,997) (1,519)
Net cash used in
Investing activities (7,997) (1,519)
Financing Activities:
Book overdraft 66,136 45,831
Due to affiliates 175,000 -
Due to others 100,000 -
Capital lease payments (30,318) (31,625)
Notes and loan payable 1,637 (100,000)
Net cash provided by (used in)
Financing activities 312,455 (85,794)
Net increase (decrease)
in cash 20,866 (183,991)
Cash, beginning of period - 205,596
Cash, end of period $ 20,866 $ 21,605
Cash paid for interest $ 8,056 $ 42,808
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(UNAUDITED)
1. Presentation of Interim Information
The accompanying unaudited consolidated financial statements have
been prepared in conformity with generally accepted accounting
principles for interim financial information and with Regulation
S-B. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
normal, recurring adjustments considered necessary for a fair
presentation have been included. These consolidated financial
statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2001.
The results of operations for the three and six months ended June
30, 2002 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2002.
2. Financial Statements
The consolidated financial statements include the accounts of the
Company and its majority-owned subsidiary, Media Revolution. All
significant intercompany balances, transactions and stockholdings
have been eliminated.
3. Overview of Business
The Company designs Internet Web sites, computer games, and
software and sells its services to customers in the United States.
Item 2. Management's Discussion and Analysis
The following discussion should be read in conjunction with the
Financial Information and Notes thereto included in this report and
is qualified in its entirety by the foregoing.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2002 vs.
JUNE 30, 2001
Net sales for the three month period ended June 30, 2002 were
$459,000 as compared to $570,000 for the three month period ended
June 30, 2001, a decrease of $111,000 or 19%. Sales in the current
period were composed of a greater number of smaller scale projects
as compared to the same period last year. Two large scale projects
recognized revenue in the current quarter, one in the research
phase and the other in the final phase. These phases generate less
revenue than the build and design phases, which is the reason less
revenue was recognized in the current period as compared to the
same period last year.
Cost of sales was $255,000 for the three month period ended June
30, 2002 as compared to $291,000 for the three month period ended
June 30, 2001, a decrease of $36,000 or 12%. The cost of sales has
a close relation to the recognition of sales. Since the net sales
figure was deflated for the quarter, the cost of sales was also
deflated. The gross margin for the quarter is 45%, which is a
normal margin.
General and administrative expenses were $322,000 for the three
month period ended June 30, 2002 compared to $325,000 for the three
month period ended June 30, 2001, a decrease of $3,000 or 1%.
Non-direct payroll and consulting costs remained relatively
constant in the period as compared to the same period last year.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2002 vs.
JUNE 30, 2001
Net sales for the six month period ended June 30, 2002 were
$818,000 as compared to $1,180,000 for the six month period ended
June 30, 2001, a decrease of $362,000 or 31%. The decrease is
attributable to an industry-wide slowdown which led our customers
to delay the commencement of new projects. As a result, revenue
recognized in the first quarter was pushed into the second quarter
of this year, depressing sales in total for the year to date.
Cost of sales was $422,000 for the six month period ended June 30,
2002 as compared to $911,000 for the six month period ended June
30, 2001, a decrease of $489,000 or 54%. The cost of sales has a
close relation to the recognition of sales. Since the net sales
figure was deflated year to date, the cost of sales was also
deflated. The gross margin for the year to date is 48%, which is a
normal margin.
General and administrative expenses were $657,000 for the six month
period ended June 30, 2002 compared to $452,000 for the six month
period ended June 30, 2001, an increase of $205,000 or 45%. The
increase in expenses is due to less direct labor and overhead from
a relatively fixed labor and overhead pool to allocate to cost of
sales. This increase was attributable to the reduction in cost of
sales recognized in the first quarter. When cost of sales and
general and administrative expenses are considered in the
aggregate, expenses have decreased year to year.
Liquidity and Capital Resources
At June 30, 2002, the Company had a working capital deficiency of
$797,000. The ratio of current assets to current liabilities was
approximately .44 to 1 at June 30, 2002. At June 30, 2002, the
Company had a stockholders' deficiency of $829,000. To date, the
Company has funded its activities principally from cash flows
generated from operations. The Company has had to supplement its
operational cash flow with short term financing from related
parties.
Forward-Looking Statements
This report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs
and assumptions made by the Company's management as well as
information currently available to the management. When used in
this document, the words "anticipate", "believe", "estimate", and
"expect" and similar expressions, are intended to identify
forward-looking statements. Such statements reflect the current
views of the Company with respect to future events and are subject
to certain risks, uncertainties and assumptions. Should one or
more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described herein as anticipated, believed,
estimated or expected. The Company does not intend to update these
forward-looking statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes 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.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
99.1 Certification pursuant to U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K.
Listed below are reports on Form 8-K filed during the
fiscal quarter ended June 30, 2002.
Form 8-K (dated May 17, 2002). Items 4 and 7. Changes in
Registrant's Certifying Accountant.
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.
CYBERIA HOLDINGS, INC.
(Registrant)
Dated: September 13, 2002 By : /s/ Jay Rifkin
Jay Rifkin, President
Dated: September 13, 2002 By : /s/ Jay Rifkin
Jay Rifkin, Principal Financial Officer
CERTIFICATIONS
I, Jay Rifkin, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Cyberia
Holdings, Inc.;
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; and
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.
Date: September 13, 2002 /s/ Jay Rifkin
Jay Rifkin
President and Principal
Executive Officer
I, Jay Rifkin, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Cyberia
Holdings, Inc.;
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; and
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.
Date: September 13, 2002 /s/ Jay Rifkin
Jay Rifkin
Principal Financial Officer
EXPLANATORY NOTE REGARDING CERTIFICATIONS: Representations 4, 5 and
6 of the Certifications as set forth in this Form 10-QSB have been
omitted, consistent with the Transition Provisions of SEC
Exchange Act Release No. 34-46427, because this Quarterly Report on
Form 10-QSB covers a period ending before the Effective Date of
Rules 13a-14 and 15d-14.
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Cyberia Holdings, Inc.
(the "Company") on Form 10-QSB for the period ended June 30, 2002,
as filed with the Securities and Exchange Commission on the date
hereof (the "Report"), the undersigned certifies, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, to the best of the undersigned's
knowledge, that:
(1) The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company.
Date: September 13, 2002 /s/ Jay Rifkin
Jay Rifkin
Jay Rifkin,
President and
Principal Executive Officer
Date: September 13, 2002 /s/ Jay Rifkin
Jay Rifkin
Principal Financial Officer