Sport Broadcasting, Inc.
Balance Sheet Exhibit 99.2
As at March 31, 2001
(Unaudited)
March 31, 2001
ASSETS
Cash 1
Investment 897,657
-------------------
TOTAL ASSETS 897,658
===================
LIABILITIES
Accounts payable and accrued liabilities -
-------------------
TOTAL LIABILITIES -
SHAREHOLDER'S EQUITY
Capital Stock 1
Contributed surplus 5,053,200
Deficit (4,155,543)
-------------------
897,658
-------------------
TOTAL LIABILITIES AND
SHAREHOLDER'S EQUITY 897,658
===================
Sport Broadcasting, Inc.
Statement of Operations and Deficit
For the period from January 1, 2001 to March 31, 2001
(Unaudited)
Loss in equity
accounted investment (429,898)
----------------
Net loss (429,898)
Deficit, Beginning of Period (3,725,645)
----------------
Deficit, End of Period (4,155,543)
================
Sport Broadcasting, Inc.
Statement of Cash Flows
For the period from January 1, 2001 to March 31, 2001
(Unaudited)
Cash flows from operating activities:
Net loss (429,898)
Loss from equity investment 429,898
-----------------
-
-----------------
Cash flows from investing activities:
Investment in The Racing Network (530,700)
-----------------
(530,700)
-----------------
Cash flows from financing activities:
Capital contributions 530,700
Issuance of capital stock -
-----------------
530,700
-----------------
Change in cash -
Cash, Beginning of period 1
-----------------
Cash, End of period 1
=================
Sport Broadcasting, Inc.
Notes to Financial Statements
March 31, 2001
(Unaudited)
1. Description of business and significant accounting policies
Sport Broadcasting, Inc. (the "Company") is a Delaware Corporation formed in
1998 to acquire an interest in The Racing Network, LLC ("The Racing Network"), a
limited liability company formed under the Delaware Limited Liability Company
Act. On November 30, 1998, the Company entered into an agreement to acquire a
17.5% membership interest in The Racing Network. The Racing Network was
incorporated to acquire, develop, own and operate a network for delivery of
televised sporting events, primarily horse racing, by video signal to subscriber
homes and offices throughout North America, using satellite technology.
Investment
The Company accounts for its investment in The Racing Network over which it has
significant influence, on the equity basis of accounting, whereby the investment
is initially recorded at cost, adjusted to recognize the Company's share of
earnings or losses of the investee company and reduced by any dividends
received.
2. Investment
The Company holds an 18.3% interest in The Racing Network.
The Racing Network has incurred substantial losses since inception and such
losses are expected to continue through 2001. In addition, the revenues have not
been sufficient to cover the expenses. These factors raise substantial doubt
about The Racing Network's ability to continue as a going concern. Management is
working on a reformulated business plan and is analyzing the operating structure
in efforts to expand and grow the revenue base and reduce operating expenses.
The above financial information does not reflect any adjustments that might be
necessary if The Racing Network is unable to continue as a going concern.
3. Capital Stock
(a) Common stock
2001
Authorized $
Unlimited number of common shares, par value of $0.01 per share
Issued
100 shares 1
============
(b) Contributed Surplus
During the period ended March 31, 2001, the Company received capital
contributions of $530,700 which were utilized to fund investment acquisitions.
4. Income Taxes
The Company has approximately $4.0 million of losses available to reduce future
income taxes. No benefit from these loss carryforwards have been reflected in
these financial statements.
5. Subsequent Event
On July 30, 2001, The Racing Network LLC suspended its broadcasting operations.