FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT
OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 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 333-61610
DATE OF REPORT: FEBRUARY 13, 2003
WIZBANG TECHNOLOGIES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 912061053
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
SUITE 679, 185 - 911 YATES STREET
VICTORIA, BRITISH COLUMBIA V8V 4Y9, CANADA
(250) 519-0553
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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
The number of outstanding shares of the issuer's common stock, $0.0001 par
value, as of December 31, 2002 was 10,100,000.
TABLE OF CONTENTS
PART I
Item 1. Financial Statements .1
Item 2. Management Discussion And Analysis of Financial Condition and
Results of Operations 8
Item 3. Controls And Procedures 12
PART II
Item 5. Changes in Securities and Use of Proceeds 13
Item 6 Exhibits and Reports on Form 8-K 14
Signatures 14
Certification Of Chief Executive Officer And Principal Financial
Officer Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002 15
Index To Exhibits 17
[This Space Has Been Intentionally Left Blank]
PART I
ITEM 1. FINANCIAL STATEMENTS
Unaudited Balance Sheet At December 31, 2002 And Audited Balance Sheet
at December 31, 2002 . 1
Unaudited Statement Of Operations For The Nine Months Ended December 31,
2002 And 2001, For The Three Months Ended December 31, 2002 And 2001, And
For The Period September 22, 2000 (Date Of Inception) To December 31, 2002 2
Unaudited Statement Of Cash Flows For The Nine Months Ended December 31,
2002 And 2002 And For The Period September 22, 2000 (Date Of Inception) To
December 31, 2002 3
Notes To Unaudited Financial Statements 4
[This Space Has Been Intentionally Left Blank]
Wizbang Technologies, Inc.
(A Development Stage Company)
Balance Sheets
(expressed in U.S. dollars)
December 31, March 31,
2002 2002
$ $
(unaudited) (audited)
ASSETS
Current Assets
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,976 36,148
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 750 750
- -------------------------------------------------------------------------------------------------
Total Current Assets. . . . . . . . . . . . . . . . . . . . . . . . . 15,726 36,898
- -------------------------------------------------------------------------------------------------
License (Note 3)
Cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,000 36,000
Accumulated amortization. . . . . . . . . . . . . . . . . . . . . . . (24,500) (9,244)
- -------------------------------------------------------------------------------------------------
License - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,500 26,756
- -------------------------------------------------------------------------------------------------
Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,226 63,654
=================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 573 -
Accrued liabilities (Note 3). . . . . . . . . . . . . . . . . . . . . 2,583 1,376
Advances from related party (Note 4(d)) . . . . . . . . . . . . . . . 3,750 -
- -------------------------------------------------------------------------------------------------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . 6,906 1,376
- -------------------------------------------------------------------------------------------------
Notes Payable (Note 3). . . . . . . . . . . . . . . . . . . . . . . . 20,974 10,114
- -------------------------------------------------------------------------------------------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 27,880 11,490
- -------------------------------------------------------------------------------------------------
Stockholders' Equity
Common Stock: 100,000,000 common shares authorized with a
par value of $0.0001; 10,100,000 issued and outstanding respectively. 1,010 1,010
Additional Paid-in Capital. . . . . . . . . . . . . . . . . . . . . . 74,990 74,990
Donated Capital (Note 4(a)) . . . . . . . . . . . . . . . . . . . . . 26,250 18,750
- -------------------------------------------------------------------------------------------------
102,250 94,750
- -------------------------------------------------------------------------------------------------
Preferred Stock: 20,000,000 preferred shares authorized with a
par value of $.0001; none issued. . . . . . . . . . . . . . . . . . . - -
Deficit Accumulated During the Development Stage. . . . . . . . . . . (72,904) (42,586)
- -------------------------------------------------------------------------------------------------
Total Stockholders' Equity. . . . . . . . . . . . . . . . . . . . . . 29,346 52,164
- -------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity. . . . . . . . . . . . . . 57,226 63,654
=================================================================================================
Contingent Liability (Note 1)
The accompanying notes are an integral part of these financial statements
1
Wizbang Technologies, Inc.
(A Development Stage Company
Statement of Operations
(expressed in U.S. dollars)
(unaudited)
Accumulated from
September 22, 2000 Three Months Nine Months
(Date of Inception) Ended Ended
to December 31, December 31, December 31,
2002 2002 2001 2002 2001
$ $ $ $ $
Revenue. . . . . . . . . . . . . . . 105,789 70,389 - 82,889 22,900
Cost of Goods Sold (Note 4(c)) . . . 89,000 63,350 - 71,700 17,300
- ------------------------------------------------------------------------------------------------------------------
Gross Margin . . . . . . . . . . . . 16,789 7,039 - 11,189 5,600
- ------------------------------------------------------------------------------------------------------------------
Expenses
Amortization of license. . . . . . . 24,501 8,257 2,622 15,257 4,622
Bank charges and interest. . . . . . 2,073 505 29 1,404 165
Consulting (Note 4). . . . . . . . . 33,785 8,644 3,000 14,644 9,000
Filing fees. . . . . . . . . . . . . 6,056 1,664 636 2,797 2,786
Professional fees. . . . . . . . . . 17,064 750 574 5,155 3,444
Rent (Note 4). . . . . . . . . . . . 6,750 750 750 2,250 2,250
Less interest income . . . . . . . . (536) - (108) - (458)
- ------------------------------------------------------------------------------------------------------------------
89,693 20,570 7,503 41,507 21,809
- ------------------------------------------------------------------------------------------------------------------
Net Loss for the Period. . . . . . . (72,904) (13,531) (7,503) (30,318) (16,209)
==================================================================================================================
Net Loss Per Share - Basic . . . . . - - - -
========================================================================================================
Weighted Average Shares Outstanding. 10,100,00 10,100,000 10,100,000 10,100,000
========================================================================================================
The accompanying notes are an integral part of these financial statements
2
Wizbang Technologies, Inc.
(A Development Stage Company
Statement of Cash Flows
(expressed in U.S. dollars)
(unaudited)
Nine Months
Ended
December 31,
2002 2001
$ $
Cash Flows To Operating Activities
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . (30,318) (16,209)
Adjustments to reconcile net loss to cash
Amortization. . . . . . . . . . . . . . . . . . . . . . . . . . 15,257 4,622
Donated consulting services . . . . . . . . . . . . . . . . . . 6,000 9,000
Donated rent. . . . . . . . . . . . . . . . . . . . . . . . . . 1,500 2,250
Changes in non-cash working capital items
(Increase) in prepaid expenses. . . . . . . . . . . . . . . . . - (750)
Increase (decrease) in accounts payable and accrued liabilities 1,779 (323)
- -----------------------------------------------------------------------------------------
Net Cash Used In Operating Activities . . . . . . . . . . . . . (5,782) (1,410)
- -----------------------------------------------------------------------------------------
Cash Flows To Financing Activities
Advances from related party . . . . . . . . . . . . . . . . . . 3,750 -
Repayment of notes payable. . . . . . . . . . . . . . . . . . . (19,140) (10,303)
- -----------------------------------------------------------------------------------------
Net Cash Used In Financing Activities . . . . . . . . . . . . . (15,390) (10,303)
- -----------------------------------------------------------------------------------------
Cash Flows To Investing Activities. . . . . . . . . . . . . . . - -
- -----------------------------------------------------------------------------------------
Decrease in Cash. . . . . . . . . . . . . . . . . . . . . . . . (21,172) (11,713)
Cash - Beginning of Period. . . . . . . . . . . . . . . . . . . 36,148 53,474
- -----------------------------------------------------------------------------------------
Cash - End of Period. . . . . . . . . . . . . . . . . . . . . . 14,976 41,761
- -----------------------------------------------------------------------------------------
Non-Cash Financing Activities
A license was purchased by issuing a promissory note. . . . . . 30,000 20,000
=========================================================================================
Supplemental Disclosures
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . - -
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . - -
=========================================================================================
The accompanying notes are an integral part of these financial statements
3
Wizbang Technologies Inc.
(A Development Stage Company)
Notes To Financial Statements
(Expressed in US Dollars)
(Unaudited)
_____________________________________________________________________
1. Development Stage Company
The Company was incorporated in the state of Washington on September 22, 2000.
On September 22, 2000 the Company entered into a licensing agreement with Reach
Technologies, Inc. ("Reach"), a Canadian Corporation. The agreement allows the
Company to sell a Digital Data Recorder product line in the north central United
States.
The Company's principal business plan is to seek immediate earnings by
exploiting the license agreement with Reach. The Company has started marketing
the Digital Data Recorder product line.
Planned principal activities have begun but significant revenues have not been
realized. The Company will continue to be in the development stage until
significant revenues begin. In a development stage company, management devotes
most of its activities in developing a market for its products. The ability of
the Company to emerge from the development stage with respect to any planned
principal business activity is dependent upon its successful efforts to raise
additional equity financing and/or attain profitable operations. There is no
guarantee that the Company will be able to raise any equity financing or sell
any of its products at a profit. There is substantial doubt regarding the
Company's ability to continue as a going concern.
The Company has enough cash resources to meet ongoing operating expenses in the
short-term but will need to generate positive cash flow from operations in the
long-term and/or raise additional capital.
2. Summary of Significant Accounting Principles
a) Year End
The Company's fiscal year end is March 31.
b) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents.
c) License
The cost to acquire a license was capitalized. The cost is being amortized on a
straight-line basis over the license term of four years. Additional costs for
amendments to the original license agreement are being amortized over the
remaining life of the license.
The carrying value of the License is evaluated in each reporting period to
determine if there were events or circumstances, which would indicate a possible
inability to recover the carrying amount. Such evaluation is based on various
analyses including assessing the Company's ability to bring the commercial
applications to market, related profitability projections and undiscounted cash
flows relating to each application which necessarily involves significant
management judgment. Where an impairment loss has been determined the carrying
amount is written-down to fair market value. Fair market value is determined as
the amount at which the license could be sold in a current transaction between
willing parties.
d) Revenue
Revenue from sales of the Digital Data Recorders will be recognized when goods
have been shipped and collectibility is reasonably certain.
4
Wizbang Technologies Inc.
(A Development Stage Company)
Notes To Financial Statements
(Expressed in US Dollars)
(Unaudited)
_____________________________________________________________________
2. Summary of Significant Accounting Principles (continued)
e) Basic Earnings (Loss) Per Share
Basic earnings (loss) per share have been calculated in conformity with
Financial Accounting Standards Board Statement No. 128 "Earnings per Share". The
Company has a simple capital structure without potential common shares. Basic
earnings (loss) per share is calculated on the weighted average number of common
shares outstanding each year.
f) Use of Estimates
The preparation of financial statements in conformity with U.S. 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 during the
reporting period. Actual results could differ from those estimates.
g) Interim Financial Statements
These interim unaudited financial statements have been prepared on the same
basis as the annual financial statements and in the opinion of management,
reflect all adjustments, which include only normal recurring adjustments,
necessary to present fairly the Company's financial position, results of
operations and cash flows for the periods shown. The results of operations for
such periods are not necessarily indicative of the results expected for a full
year or for any future period.
h) Recent Accounting Pronouncements
On June 29, 2001, SFAS No. 141, "Business Combinations," was approved by the
Financial Accounting Standards Board ("FASB"). SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Goodwill and certain intangible assets will remain on the
balance sheet and not be amortized. On an annual basis, and when there is reason
to suspect that their values have been diminished or impaired, these assets must
be tested for impairment, and write-downs may be necessary. The Company
implemented SFAS No. 141 on July 1, 2001 and its impact is not expected to be
material on its financial position or results of operations.
On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets," was
approved by FASB. SFAS No. 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. SFAS No. 142 is effective
for fiscal years beginning after December 15, 2001. Amortization of goodwill,
including goodwill recorded in past business combinations, will cease upon
adoption of this statement. The Company adopted SFAS No. 142 on April 1, 2002
and its impact is not expected to have a material effect on its financial
position or results of operations.
In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligation." SFAS No. 143 is effective for fiscal years beginning after June 15,
2002, and will require companies to record a liability for asset retirement
obligations in the period in which they are incurred, which typically could be
upon completion or shortly thereafter. The FASB decided to limit the scope to
legal obligations and the liability will be recorded at fair value. The effect
of adoption of this standard on the Company's results of operations and
financial positions is being evaluated.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 is effective for fiscal years
beginning after December 15, 2001. It provides a single accounting model for
long-lived assets to be disposed of and replaces SFAS No. 121 "Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of."
The Company adopted SFAS No. 144 on April 1, 2002. The effect of adoption of
this standard on the Company's results of operations and financial position is
not expected to be material.
5
Wizbang Technologies Inc.
(A Development Stage Company)
Notes To Financial Statements
(Expressed in US Dollars)
(Unaudited)
_____________________________________________________________________
2. Summary of Significant Accounting Principles (continued)
h) Recent Accounting Pronouncements
In June, 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities". The provisions of this Statement are effective for
exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. This Statement addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)". This Statement requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. The Company will adopt SFAS No. 146
on January 1, 2003. The effect of adoption of this standard on the Company's
results of operations and financial position is being evaluated.
FASB has also issued SFAS No. 145 and 147 but they will not have any
relationship to the operations of the Company therefore a description of each
and their respective impact on the Company's operations have not been disclosed.
3. License
The Company acquired the right to market and sell a Digital Data Recorder
product line (the "License") in the states of North Dakota, South Dakota,
Nebraska, Kansas, Montana, Wyoming, and Colorado. The licensed product consists
of 0 to 40 Megabit per second Bit Error Rate Testers that are configured for
laboratory and onsite use. Models consist of laboratory, rack mount and portable
versions. The licensor maintains the right to set the minimum price of the
licensed products. The license was acquired on September 22, 2000 and has a
four-year term. The license was purchased by the Company for $16,000 cash from
Reach, which is one-third owned by the President of the Company and two-thirds
owned by arms-length parties. Reach manufactures all of the products that the
Company sells. Under the terms of the License agreement, the Company purchases
products from Reach and resells them.
On October 31, 2001 the Company agreed to pay $20,000 in the form of a note
payable, due October 31, 2003, to amend the License agreement to a worldwide
exclusive license, except in the territories of Washington DC, Virginia, West
Virginia, Maryland, Pennsylvania, New York, Connecticut, Massachusetts, New
Hampshire, Maine, Ohio, Kentucky and Tennessee where the license will be
non-exclusive. The Company has repaid the note payable in full.
On June 10, 2002 the Company agreed to pay $30,000 in the form of a note
payable, due June 30, 2004, to amend the License agreement to include a
worldwide exclusive license for data recorders in the 41 to 160 mega bit per
second range. Interest accrues on the unpaid principal amount of $20,974 at a
rate of 7% per annum and matures June 30, 2004 and is due on demand in the event
of termination for cause, which includes breach of the agreement; the bankruptcy
or insolvency of Wizbang Technologies Inc.; or the conviction of Wizbang
Technologies Inc., its officers or directors, of any crime involving moral
turpitude. As at December 31, 2002, included in accrued liabilities is an
interest accrual of $1,747.
The amortization of the license for the remainder of the license agreement is as
follows:
$
Three months ended March 31, 2003 5,929
2004 23,714
2005 11,857
- -------------------------------------------
41,500
===========================================
6
Wizbang Technologies Inc.
(A Development Stage Company)
Notes To Financial Statements
(Expressed in US Dollars)
(Unaudited)
_____________________________________________________________________
4. Related Party Transactions/Balances
a) A Company controlled by the President of the Company (2001: the President
of the Company) donated services valued at $6,000 (2001 - $9,000) and rent
valued at $1,500 (2001 - $2,250). These amounts were charged to operations and
classified as "donated capital" in stockholders' equity.
b) Consulting fees of $644 (2001 - Nil) were paid to the President of the
Company.
c) Purchases of $71,700 (2001 - $17,300) were made from Reach, a Company
which is one-third owned by the President of the Company.
d) The balance due to a company controlled by the President of the Company
for consulting fees of $3,000 and rent reimbursement of $750 is non-interest
bearing, unsecured and due on demand. These amounts were charged to operations.
e) Mike Frankenberger Wizbang Technologies Inc.'s president and controlling
shareholder is also a one third shareholder in Reach Technologies Inc. The two
other shareholders of Reach Technologies Inc. are not related to Mr.
Frankenberger. Reach Technologies Inc. manufactures all of the products that
Wizbang Technologies Inc. sells. Under the terms of the license Wizbang
Technologies Inc. acquires the products from Reach Technologies Inc. and resells
them. The license agreement was negotiated at arms length.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This quarterly report on Form 10-QSB contains forward-looking statements, which
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements involve risks
and uncertainties that could cause actual results to differ materially from the
forward-looking statements. You should not place undue reliance on
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expects", "plans",
"anticipates", "believes", "estimated", "predicts", "potential", or "continue"
or the negative of such terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties, and
other factors that may cause Wizbang Technologies Inc.'s actual results, levels
of activity, performance, or achievements to be materially different from any
future results, levels of activity, performance, or achievements expressed or
implied by such forward-looking statements. These factors include, among other
things, those discussed in this quarterly report on Form 10-QSB and in Wizbang
Technologies Inc.'s other filings with the SEC. Although Wizbang Technologies
Inc. believes that the expectations reflected in the forward-looking statements
are reasonable, forward-looking statements are inherently uncertain, and Wizbang
Technologies Inc. cannot guarantee future results, levels of activity,
performance, or achievements. Wizbang Technologies Inc. is under no duty to
update any of the forward-looking statements in this quarterly report on Form
10-QSB to conform forward-looking statements to actual results. All
forward-looking statements should be considered in light of these risks and
uncertainties.
Wizbang Technologies Inc. was incorporated under the laws of the State of
Washington on September 22, 2000. Wizbang Technologies Inc. principal business,
at present, is the marketing of its licensed product line consisting of
high-tech instruments that are used to record information transferred from
distant sources like aircraft and satellites. Simply put the recorders are high
speed tape recorders that are capable of recording information relayed by
several types of satellites and aircraft. Some of the data that can be recorded
include fuel consumption, engine rotation per minute, time, pictures recorded by
cameras, load stresses recorded by sensors and the status of various equipment
on the craft such as batteries or radar. The recorder operates basically the
same as a VCR with all the same play, fast-forward, rewind, record, scheduled
operation, and other similar functions. The product line is unique in that it
can record information from satellites at speeds required by those satellites.
The licensed product line consists of recorders capable of recording at speeds
up to 160 Megabits per second. The recorders are configured for both laboratory
and onsite use. Models consist of laboratory, rack mount and portable versions.
At December 31, 2002, Wizbang Technologies Inc. had $15,726 in current assets
and $6,906 in current liabilities. Wizbang Technologies Inc. intends to pay the
current liabilities out of cash on hand. Cash deceased by $21,172 during the
period for a balance of $14,976 at quarter-end.
8
Wizbang Technologies Inc. paid $18,723 of notes payable resulting in the $20,974
owing at period-end. Notes payable originally increased during the period by
$30,000. This note increase arose when Wizbang Technologies Inc. agreed to pay
$30,000 in the form of a note payable to amend its license agreement with Reach
Technologies Inc. to include data recorders in the 41 to 160 mega bit per second
speed range. This amendment of the license resulted in an increase in license
cost to $66,000. After recording amortization of $15,257 during the period, the
net license value is $41,500. Wizbang Technologies Inc. increased the scope of
its product offering in the expectation of generating future sales from those
new products. Sales of this new product line are included in revenue of the
period covered by this Form 10-QSB
Revenues were $82,889 for the period compared with $22,900 for the same period
last year. Revenues represent sales to two different customers. Two customers
accounted for all sales revenue and each represented more than 10% of revenue.
Those customers were the Government of China, were the product is being used in
a civilian ground station and the National Aeronautics and Space Administration
(NASA). These two customers represented approximately 85% and 15% of sales
respectively and 90% and 10% of cost of goods sold respectively. Total cost of
goods sold was $71,700 for the period compared with $17,300 for the same period
last year. Gross margin was 13.5% compared with 24.5% for the same period last
year. The decrease in gross margin % is due to a lower gross margin achieved on
the sale of the new licensed product line. Wizbang Technologies Inc.'s future
plans include continuing to market the licensed product line. The market for
the product includes aircraft and spacecraft manufacturers, both private and
government, involved in both military and nonmilitary applications and it is
anticipated that these will be the focus of selling efforts. Wizbang
Technologies Inc. will begin marketing the product to new target companies as
they are identified.
Total expenses increased $19,698, over the comparable period in the previous
year, to $41,507. This net increase was due mostly to:
1. an increase in amortization expense of $10,635, resulting from the
increased license cost discussed above,
2. an increase in bank charges and interest of $1,239 due to the increase in
notes payable,
3. an increase in consulting expenses due to costs associated with the
companies Form 211 filing with the National Association of Stock Dealers and
amendments to its prior periodic reports, and
4. a increase in professional fees of $1,711, associated with the an
increase in legal fees with respect to Wizbang Technologies Inc.'s form 211
filing with the National Association of Stock Dealers.
Included in total expenses is $6,000 in consulting fees and $1,500 in rent,
which was donated by the President of Wizbang Technologies Inc. and therefore
did not require cash. Also included in total expenses are filing fees to $2,797
which are greater than budgeted due to unexpected electronic filing fees
incurred with respect to Wizbang Technologies Inc.'s amends to its periodic and
current reports.
9
Net loss for the period was $30,318 compared with $16,209 for the same period
last year. Although expenditures with respect to filing amended periodic
reports and seeking a stock exchange listing are not expected to occur in the
future and sales are expected to increase, Wizbang Technologies Inc. does expect
to incur losses over the next several years. The reason for this expectation of
continued losses is because it is expected that in general, and specifically
travel and wage, expenses are expected to increase with sales. In the long term
it is expected that any increase in sales will outpace increases in expenses.
Wizbang Technologies Inc. does expect the $14,976 in cash on hand to satisfy its
cash requirements over the next 12 months. Wizbang Technologies Inc. hopes
generate sufficient cash flow from sales to support long term continued
operations. If sales are insufficient in the long term, then Wizbang
Technologies Inc. may need additional capital to carry out its business plan.
In the event that Wizbang Technologies Inc. requires more capital, no
commitments to provide additional funds have been made by management or other
shareholders. Accordingly, there can be no assurance that any additional funds
will be available on terms acceptable to Wizbang Technologies Inc. or at all.
Wizbang Technologies Inc.'s auditors have expressed that there is substantial
doubt regarding Wizbang Technologies Inc.'s ability to continue as a going
concern. Wizbang Technologies Inc. has not generated significant revenues since
inception and has only just beginning conducting operations. The ability of
Wizbang Technologies Inc. to achieve success with respect to its planned
principal business activity is dependent upon its successful efforts to attain
profitable operations. Wizbang Technologies Inc. may not be able to sell any of
its products at a profit. There is therefore substantial doubt regarding Wizbang
Technologies Inc.'s ability to continue as a going concern.
Other than the following, Wizbang Technologies Inc. knows of no trends, events,
or uncertainties that have or are reasonably likely to have a material impact on
its short and long term liquidity:
Wizbang Technologies Inc.'s license with Reach Technologies Inc. expires on
September 30, 2004. The license is renewable by mutual agreement between
Wizbang Technologies Inc. and Reach Technologies Inc. for an additional
three-year periods. Wizbang Technologies Inc. has not yet begun discussions
with Reach Technologies Inc. with respect to the license renewal.
Other than the license renewal discussed above Wizbang Technologies Inc. does
not have material commitments for capital expenditures. If Wizbang Technologies
Inc. is successful in renewing its license agreement it intends to fund any
required capital expenditure though future sales revenues and/or debt or equity
financing.
Other than the license renewal discussed above Wizbang Technologies Inc. knows
of no trends, events, or uncertainties that have had or are reasonably expected
to have a material impact on its net sales or revenues or income for continuing
operations.
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Wizbang Technologies Inc. expects no significant changes in its number of
employees.
The following is disclosure regarding recent accounting pronouncements and their
effect or potential effect on Wizbang Technologies Inc.'s financial statements.
On June 29, 2001, SFAS No. 141, "Business Combinations," was approved by the
Financial Accounting Standards Board. SFAS No. 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001. Goodwill and certain intangible assets will remain on the balance
sheet and not be amortized. On an annual basis, and when there is reason to
suspect that their values have been diminished or impaired, these assets must be
tested for impairment, and write-downs may be necessary. Wizbang Technologies
Inc. implemented SFAS No. 141 on July 1, 2001 and its impact is not expected to
be material on its financial position or results of operations.
On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets," was
approved by Financial Accounting Standards Board. SFAS No. 142 changes the
accounting for goodwill from an amortization method to an impairment-only
approach. Amortization of goodwill, including goodwill recorded in past business
combinations, will cease upon adoption of this statement. Wizbang Technologies
Inc. is required to implement SFAS No. 142 on April 1, 2002 and its impact, if
any, is not expected to be material on its financial position or results of
operations as Wizbang Technologies Inc.'s license is a finite license with a
term of four years being the amortization period.
In June 2001, the Financial Accounting Standards Board issued SFAS No. 143,
"Accounting for Asset Retirement Obligation." SFAS No. 143 is effective for
fiscal years beginning after June 15, 2002, and will require companies to record
a liability for asset retirement obligations in the period in which they are
incurred, which typically could be upon completion or shortly thereafter. The
Financial Accounting Standards Board decided to limit the scope to legal
obligations and the liability will be recorded at fair value. The effect of
adoption of this standard on Wizbang Technologies Inc.'s results of operations
and financial positions is being evaluated.
In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144
is effective for fiscal years beginning after December 15, 2001. It provides a
single accounting model for long-lived assets to be disposed of and replaces
SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to Be Disposed Of." Wizbang Technologies Inc. adopted SFAS No. 144 on
April 1, 2002. The effect of adoption of this standard on Wizbang Technologies
Inc.'s results of operations and financial position is not expected to be
material on its financial position or results of operations.
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In June, 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities". The provisions of this Statement are effective for
exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. This Statement addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)". This Statement requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. The Company will adopt SFAS No. 146
on January 1, 2003. The effect of adoption of this standard on the Company's
results of operations and financial position is not expected to be material on
its financial position or results of operations.
FASB has also issued SFAS No. 145 and 147 but they will not have any
relationship to the operations of the Company therefore a description of each
and their respective impact on the Company's operations have not been disclosed.
ITEM 3: CONTROLS AND PROCEDURES
(A) Evaluation Of Controls And Procedures
Wizbang Technologies Inc.'s principal executive officer and principal financial
officer, Mike Frankenberger, has concluded, based on his evaluation as of a date
within 90 days prior to the filing date of this report, that Wizbang
Technologies Inc.'s disclosure controls and procedures are effective to ensure
that information required to be disclosed by Wizbang Technologies Inc. in the
reports filed or submitted by it under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, and
include controls and procedures designed to ensure that information required to
be disclosed by Wizbang Technologies Inc. in such reports is accumulated and
communicated to Wizbang Technologies Inc.'s management, including the principal
executive officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure.
(B) Changes In Internal Controls
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
such evaluation including any corrective actions with regard to significant
deficiencies and material weaknesses.
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PART II
ITEM 5. CHANGES IN SECURITIES AND USE OF PROCEEDS
a) Recent Sales Of Unregistered Securities
i. On September 22, 2000, Wizbang Technologies Inc. issued a total of
8,500,000 shares of common stock to Mike Frankenberger in exchange for $16,000
in cash. The issuance of the common stock was exempt from registration under
Regulation S. Mike Frankenberger was not a resident or citizen of the U.S. at
the time it received the offer to purchase and at the closing of the purchase of
the stock, and did not acquire the stock for the account or benefit of any U.S.
person. Mike Frankenberger agreed to resell such securities only in accordance
with the provisions of Regulation S, pursuant to registration, or pursuant to an
available exemption from registration. The stock contains a legend to the
effect that transfer is prohibited except in accordance with the provisions of
Regulation S, pursuant to registration, or pursuant to an available exemption
from registration. Wizbang Technologies Inc. will refuse to register any
transfer of the Stock not made in accordance with the provisions of Regulation
S, pursuant to registration, or pursuant to an available exemption from
registration. The issuance of the shares was also exempt from registration under
Rule 506 of Regulation D, and sections 3(b) and 4(2) of the Securities Act of
1933, as amended, due to Mr. Frankenberger's status as the founder and initial
management of Wizbang Technologies Inc. and his status as an accredited
investor.
ii. On March 3, 2001 Wizbang Technologies Inc. issued a total of
1,600,000 shares of common stock to four foreign corporations in exchange for
$60,000 in cash. The issuance of the common stock was exempt from registration
under Regulation S. Each entity was a foreign corporation at the time it
received the offer to purchase and at the closing of the purchase of the stock,
and did not acquire the stock for the account or benefit of any U.S. person.
Each corporation agreed to resell such securities only in accordance with the
provisions of Regulation S, pursuant to registration, or pursuant to an
available exemption from registration. The stock contains a legend to the
effect that transfer is prohibited except in accordance with the provisions of
Regulation S, pursuant to registration, or pursuant to an available exemption
from registration. Wizbang Technologies Inc. will refuse to register any
transfer of the Stock not made in accordance with the provisions of Regulation
S, pursuant to registration, or pursuant to an available exemption from
registration.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibits: Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to Exhibits beginning on page 17 of this Form 10-QSB, which
is incorporated herein by reference.
(B) REPORTS ON FORM 8-K.
On June 24, 2002, Wizbang Technologies Inc filed a Form 8-K with respect to
"Acquisition or Disposition of Assets" as discussed in Item 2 "Capital
Expenditures" of this form 10-QSB.
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.
Wizbang Technologies Inc.
Date: February 13, 2003
/s/ Mike Frankenberger
- ------------------------
Mike Frankenberger
President, Chief Executive Officer Chief Financial Officer and Director
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
- ---------------------- ---------------------------------- ----------------
/s/ Mike Frankenberger President, Chief Executive Officer February 13, 2003
Chief Financial Officer
and Director
/s/ Mike Frankenberger Controller and February 13, 2003
Principal Accounting Officer
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CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Mike Frankenberger, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Wizbang
Technologies 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;
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;
4. I as sole certifying officer am responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant is made known to me by others within this
entity, particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. I as sole certifying officer have disclosed, based on my most recent
evaluation, to the registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
15
6. I as sole certifying officer have indicated in this quarterly report
whether there were significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: February 13, 2003
/s/ Mike Frankenberger
Mike Frankenberger
President, Chief Executive Officer and Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -------------------------------------------------------------------------
99.1 Certification Of Chief Executive Officer And Principal Financial Officer
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of
The Sarbanes-Oxley Act of 2002
- ----------- -------------------------------------------------------------------------
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