UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period ended: June 30, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-49972
Sports Information & Publishing Corp.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-1579760
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1869 W. Littleton Boulevard, Littleton, Colorado 80120
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(Address of principal executive offices)
(303) 738-8994
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 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 No X
----- -----
As of September 24, 2003, 5,020,000 shares of common stock were outstanding.
Transitional Small Business Disclosure Format: Yes No X
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SPORTS INFORMATION & PUBLISHING CORP.
Index
Page
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Part I - FINANCIAL INFORMATION
Item 1. Balance Sheet (unaudited) at June 30, 2003 1
Statements of Operations (unaudited) for the
three and nine months ended June 30, 2003 and 2002 2
Statements of Cash Flows (unaudited) for the
nine months ended June 30, 2003 and 2002 3
Notes to unaudited Financial Statements 4
Item 2. Management's Discussion and Analysis or
Plan of Operation 6
Part II - OTHER INFORMATION
Item 5. Other information 9
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURES 10
CERTIFICATIONS 11
i
SPORTS INFORMATION & PUBLISHING CORP.
(A Development Stage Company)
Condensed Balance Sheet
(Unaudited)
June 30, 2003
Assets
Cash...............................................................$ 175
Web site development costs, net (Note 3)........................... --
----------
$ 175
==========
Liabilities and Shareholders' Deficit
Accounts payable and accrued liabilities...........................$ 9,558
Indebtedness to related party (Note 2)............................. 1,600
----------
Total liabilities................................ 11,158
----------
Shareholders' deficit:
Preferred stock................................................ --
Common stock................................................... 5,020
Additional paid-in capital..................................... 157,150
Deficit accumulated during development stage................... (173,153)
----------
Total shareholders' deficit...................... (10,983)
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$ 175
==========
See accompanying notes to condensed financial statements
1
SPORTS INFORMATION & PUBLISHING CORP.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
March 1,
2001
Three Months Ended Nine Months Ended (Inception)
June 30, June 30, Through
--------------------------- ------------------------ June 30,
2003 2002 2003 2002 2003
------------ ------------- ----------- ----------- -----------
Revenue...................................................$ -- $ -- $ 422 $ 225 $ 647
------------ ------------- ----------- ----------- -----------
Expenses:
Cost of sales......................................... -- -- 2,000 2,000 4,390
Stock-based compensation:
Organization costs and services.................... -- -- -- -- 4,020
Salaries and payroll taxes............................ -- 12,974 -- 29,483 38,626
Professional fees..................................... 756 3,051 6,544 21,414 60,829
Web site wire service, hosting and maintenance........ 165 -- 1,265 2,000 20,643
Rent.................................................. -- -- -- 2,500 3,000
Contributed rent (Note 2)............................. 1,500 1,500 4,500 2,000 11,000
Contributed services (Note 2)......................... 300 -- 900 -- 900
Amortization.......................................... -- 2,083 2,083 6,250 11,458
Interest expense (Note 2)............................. -- -- -- -- 146
Loss on web site impairment (Note 3).................. -- -- 13,542 -- 13,542
Other................................................. 139 471 745 1,698 5,246
----------- ------------- ----------- ------------ -----------
Total expenses......................... 2,860 20,079 31,579 67,345 173,800
----------- ------------- ----------- ------------ -----------
Loss before income taxes............... (2,860) (20,079) (31,157) (67,120) (173,153)
Income tax provision (Note 4)............................. -- -- -- -- --
----------- ------------- ----------- ----------- -----------
Net loss...............................$ (2,860) $ (20,079) $ (31,157) $ (67,120)$ (173,153)
=========== ============= =========== ============ ===========
Basic and diluted loss per share..........................$ (0.00) $ (0.00) $ (0.01) $ (0.01)
=========== ============= =========== ============
Basic and diluted weighted average
common shares outstanding............................. 5,020,000 5,020,000 5,020,000 5,020,000
=========== ============= =========== ============
See accompanying notes to condensed financial statements
2
SPORTS INFORMATION & PUBLISHING CORP.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
March 1,
2001
Nine Months Ended (Inception)
June 30, Through
--------------------------- June 30,
2003 2002 2003
------------- ------------ --------------
Net cash used in
operating activities................... (3,654) (55,664) (122,675)
------------- ------------ --------------
Cash flows from investing activities:
Payment for web site development costs...................... -- -- (25,000)
------------- ------------ --------------
Net cash used in
investing activities................... -- -- (25,000)
------------- ------------ --------------
Cash flows from financing activities:
Proceeds from promissory note issued to
officer (Note 2)......................................... -- -- 5,000
Repayment of promissory note issued to
officer (Note 2)......................................... -- -- (5,000)
Working capital contributed by an affiliate (Note 2)........ 1,250 -- 1,250
Proceeds from loans by an affiliate (Note 2)................ 1,600 -- 1,600
Proceeds from the sale of common stock...................... -- -- 150,000
Payments for offering costs................................. -- -- (5,000)
------------- ------------ --------------
Net cash provided by
financing activities.................. 2,850 -- 147,850
------------- ------------ --------------
Net change in cash..................... (804) (55,664) 175
Cash, beginning of period....................................... 979 60,525 --
------------- ------------ --------------
Cash, end of period.............................................$ 175 $ 4,861 $ 175
============= ============ ==============
Supplemental disclosure of cash flow information:
Income taxes................................................$ -- $ -- $ --
============= ============ ==============
Interest....................................................$ -- $ -- $ 146
============= ============ ==============
See accompanying notes to condensed financial statements
3
SPORTS INFORMATION & PUBLISHING CORP.
(A Development Stage Company)
Notes to Unaudited Condensed Financial Statements
(1) Basis of Presentation
The financial statements presented herein have been prepared by the Company in
accordance with the rules for Form 10-QSB and the accounting policies in its
Form SB-2, as amended, as filed with the Securities and Exchange Commission,
and should be read in conjunction with the notes thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim periods presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
The Company is in the development stage in accordance with Statements of
Financial Accounting Standards (SFAS) No. 7 "Accounting and Reporting by
Development Stage Enterprises". As of June 30, 2003, the Company has devoted
substantially all of its efforts to financial planning, raising capital and
developing markets.
Financial data presented herein are unaudited.
(2) Related Party Transactions
An officer contributed office space to the Company for the periods from March 1,
2001 (inception) through August 31, 2001 and from March 1, 2002 through June 30,
2003. The office space was valued at $500 per month based on the market rate in
the local area and is included in the accompanying financial statements as rent
expense with a corresponding credit to additional paid-in capital.
An officer contributed administrative services to the Company totaling $900 for
the nine months ended June 30, 2003. The time and effort was recorded in the
accompanying financial statements based on the prevailing rates for such
services, which totaled $100 per month based on the level of services performed.
The services are reported as contributed services with a corresponding credit to
additional paid-in capital.
During the nine months ended June 30, 2003, an affiliate contributed working
capital of $1,250 to the Company. The contribution was recorded as an increase
to additional paid-in capital.
During the nine months ended June 30, 2003, an affiliate loaned the Company
$1,600 for working capital. The loans are non-interest bearing and are due on
demand. The loans are included in the accompanying unaudited, condensed
financial statements as Indebtedness to Related Party.
On March 9, 2001, an officer loaned the Company $5,000 in exchange for a
promissory note that carried a five percent interest rate. On September 28,
2001, the Company repaid the note and related accrued interest totaling $146.
On March 1, 2001, the Board of Directors approved the issuance of 4,020,000
shares of the Company's $.001 par value restricted common stock to three
directors of the Company in exchange for costs and services related to the
organization of the Company and the development of its business plan. On the
transaction date, the Company's common stock had no reliable market value. The
value of the transaction could not be objectively measured as the services were
rendered by related parties. The shares were valued by the Board of Directors at
a nominal value ($.001 per share) as the stock had no market value. Stock-based
compensation expense of $4,020 was recognized in the accompanying financial
statements for the period ended September 30, 2001.
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SPORTS INFORMATION & PUBLISHING CORP.
(A Development Stage Company)
Notes to Unaudited Condensed Financial Statements
(3) Web Site Development Costs
The Company capitalizes internal and external costs incurred to develop its web
site during the application development stage in accordance with Statement of
Position 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use". Capitalized web-site development costs are amortized
over an estimated life of three years commencing on the date the software is
ready for its intended use. The Company commenced amortizing its web-site
development costs on August 15, 2001. Amortization expense totaled $2,083,
$6,250, and $11,458 for the nine months ended June 30, 2003 and 2002, and from
March 1, 2001 (inception) through June 30, 2003, respectively.
Following is a schedule of significant costs (capitalized and expensed) related
to the web site's development and operation:
March 1,
2001
Three Months Ended Nine Months Ended (Inception)
June 30, June 30, Through
------------------------ ----------------------- June 30,
Description 2003 2002 2003 2002 2003
- --------------------------------- ------------ ----------- ----------- ----------- -------------
Capitalized:
Web site development $ - $ - $ - $ - $ 25,000
============ =========== =========== =========== =============
Expenses:
Cost of sales,
web site hosting - - 2,000 2,000 4,390
Web site maintenance 165 - 1,265 - 13,643
Web site wire service - - - 2,000 7,000
------------ ----------- ----------- ----------- -------------
Total web site expenses $ 165 $ - $ 3,265 $ 4,000 $ 25,033
============ =========== =========== =========== =============
Due to an economic downturn in the Internet industry, the Company evaluated the
recoverability of the web site in accordance with SFAS 144. The web site has
generated minimal revenues in the past; therefore the recorded value of the web
site exceeded its estimated fair value based estimated future cash flows.
Accordingly, at December 31, 2002, the Company wrote-off the remaining net book
value of the web site, resulting in a non-cash asset impairment loss of $13,542.
(4) Income Taxes
The Company records its income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". The Company incurred net operating losses during
all periods presented resulting in a deferred tax asset, which was fully allowed
for; therefore, the net benefit and expense resulted in $-0- income taxes.
5
Item 2. Management's Discussion and Analysis or Plan of Operation.
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Introduction
The following discussion and analysis covers the financial condition of
Sports Information & Publishing Corp. ("we" or the "Company") at June 30, 2003,
changes in our financial condition since fiscal year end September 30, 2002 and
a comparison of our results of operations for the three and nine months ended
June 30, 2003 to the same periods of the prior fiscal year. This information
should be read in conjunction with the other financial information, including
financial statements and notes, included in the Company's Form SB-2 registration
statement, as amended, as filed with the United States Securities and Exchange
Commission ("SEC").
Our business is the operation of a web-based sports information publishing
service. We publish a weekly electronic football information service that covers
college and professional games and related information. Basic information is
provided to our subscribers at no cost and serves as an inducement to subscribe
for our premium service; we charge a fee for more detailed information about
selected games. To date, our revenue has been insignificant and we are
considered to be in the development stage under relevant accounting principles.
In an effort to provide increased liquidity to our shareholders, and obtain
access to additional capital, we registered our common stock with the SEC. Our
registration statement on Form SB-2, together with the registration or our
common stock under the 1934 Act, was declared effective on August 12, 2003.
Consequently, we will now file reports with the SEC on a regular basis.
Results of Operation
For the three and nine months ended June 30, 2003, we reported a net loss
of $2,860 and $31,157, respectively. This compares to a loss of $20,079 for the
three months ended June 30, 2002 and $67,120 for the nine months then ended. The
net loss per share for both three and nine-month periods equated to (nil) and
$.01, respectively. Our revenue was negligible for both nine-month periods and
we had no revenue during either three-month period.
Our revenue is dependent on sale of our premium information services to
subscribers. Our business plan contemplated marketing our service through e-mail
contact to a database of potential subscribers. Due primarily to our limited
working capital, we have been unable to engage in any form of traditional
marketing or advertising. Accordingly, our revenue has been insignificant to
date. We are unable to predict with any degree of certainty when this situation
might change. However, unless we obtain additional capital, we expect to
continue the status quo.
Our loss for the three and nine months ended June 30, 2003 was reduced
substantially from comparable periods of the prior fiscal year. The loss for the
three months ended June 30, 2003 represents an 85% decrease from the loss for
the prior three-month period, while the nine month loss was reduced 54%.
Significant reductions in our expenses include salaries and payroll taxes,
6
professional fees and amortization of web-site development costs. Currently, our
sole employee serves without compensation, which has allowed us to reduce our
compensation expense accordingly. Professional fees have been reduced
commensurate with completion of our registration with the SEC. Amortization was
reduced following our right off of remaining web-site development costs.
Offsetting the foregoing reductions were increases in contributed rent and
services. Both of these items are non-cash expenses, as our rent and certain
administrative services are provided by affiliates of our president at no cost
to the Company. We also realized a loss on impairment of our web-site in the
amount of $13,542 during the nine months ended June 30, 2003.
August of each year brings the beginning of our football publication and
opportunities to generate revenue. We publish our football related information
from approximately late August to January, commensurate with the football season
in the United States.
Our current plans to improve operations include expanding our database of
subscribers by acquiring additional names from a third party. However, there is
no assurance that these efforts will be successful. If we are unable to obtain
additional capital, we may be forced to reduce or cease operations. See,
- -Liquidity and Capital Resources, below.
Liquidity and Capital Resources
Our liquidity and working capital position remained unsatisfactory at June
30, 2003. At that date, we reported negative working capital and shareholders'
equity. Our working capital position continued to deteriorate from fiscal year
end 2002, totaling a deficit of $10,983 at June 30, 2003. That represents a
decrease of $8,882 since year-end. Our operations did not provide any cash flow
to pay our liabilities, and we have not received any capital from outside
sources since year end. We expect this situation to continue until operations
improve or we locate additional sources of financing.
We are not currently a candidate for debt financing, due to our extremely
limited operations, lack of cash flow and assets. Accordingly, our ability to
continue as a going concert depends on our ability to obtain equity financing.
Historically, we relied on a single private placement of our common stock and
temporary financing from our officers for cash flow. We hope our status as a
SEC-registered entity will facilitate additional equity financing. However, we
have no commitments for such financing, and none is assured in the future.
Our limited cash at fiscal year end was reduced even more during the nine
months ended June 30, 2003. Our operating activities used $3,654 of cash.
Financing, in the form of capital contributed and loans by an affiliate,
provided $2,850 during the last nine months to partially offset this reduction.
However, we have numerous accounts payable in arrears and no cash with which to
pay them.
We will continue efforts to locate additional capital. We intend to rely on
contributions or advances from our President to bridge our cash requirements for
7
the remainder of the current fiscal year and through the end of the current
football season. Failing that, we may investigate an acquisition of additional
assets or operations to supplement our existing operations.
Forward-Looking Statements
This Form 10-QSB contains or incorporates by reference "forward-looking
statements," as that term is used in federal securities laws, about our
financial condition, results of operations and business. These statements
include, among others:
- statements concerning the benefits that we expect will result from our
business activities and certain transactions that we contemplate or have
completed, such as increased revenues, decreased expenses and avoided expenses
and expenditures; and
- statements of our expectations, beliefs, future plans and strategies,
anticipated developments and other matters that are not historical facts.
These statements may be made expressly in this document or may be
incorporated by reference to other documents that we will file with the SEC. You
can find many of these statements by looking for words such as "believes,"
"expects," "anticipates," "estimates" or similar expressions used in this report
or incorporated by reference in this report.
These forward-looking statements are subject to numerous assumptions, risks
and uncertainties that may cause our actual results to be materially different
from any future results expressed or implied by us in those statements. Because
the statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied. We caution you not to put undue
reliance on these statements, which speak only as of the date of this report.
Further, the information contained in this document or incorporated herein by
reference is a statement of our present intention and is based on present facts
and assumptions, and may change at any time and without notice, based on changes
in such facts or assumptions.
Risk Factors Impacting Forward-Looking Statements
The important factors that could prevent us from achieving our stated goals
and objectives include, but are not limited to, those set forth in our other
reports filed with the SEC and the following:
o The extent and duration of the current economic downturn,
especially in the Colorado market;
o Competition from our sports information services and new
technologies to attract potential customers;
o Our ability to raise additional capital, as it may be affected by
current conditions in the stock market and competition in our
industry for risk capital;
o Our costs and the pricing of our services;
8
o Our ability to identify, finance and integrate acquisitions; and
o Volatility of our stock price.
We undertake no responsibility or obligation to update publicly these
forward-looking statements, but may do so in the future in written or oral
statements. Investors should take note of any future statements made by or on
our behalf.
PART II--OTHER INFORMATION
Item 5. Other Information
On August 12, 2003, our Registration Statement on Form SB-2, as well as our
Registration Statement on Form 8-A, was declared effective by the SEC. We intend
to apply for quotation of our common stock on the OTC Bulletin Board in the near
future. However, there is no assurance that such efforts will be successful.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: The following exhibits are filed with this report:
99.1 Certificate of Chief Executive Officer Pursuant
to Section 906 of the Sarbanes-Oxley Act.
99.2 Certificate of Chief Financial Officer Pursuant
to Section 906 of the Sarbanes-Oxley Act.
(b) Reports on Form 8-K.
None.
(The Remainder of This Page Was Intentionally Left Blank)
9
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
as amended, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SPORTS INFORMATION & PUBLISHING CORP.
Date: September 26, 2003 By: /s/ Michael D. Tanner
----------------------------------------
Michael D. Tanner, Authorized Signatory,
President and Chief Executive Officer
10
CERTIFICATION
Pursuant to the requirements of Rule 13a-14 of the Securities Exchange Act
of 1934, as amended, Michael D. Tanner, provides the following certification.
I, Michael D. Tanner, President and Chief Executive Officer of Sports
Information & Publishing Corp. ("Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB 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
Company as of, and for, the periods presented in this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Company and have:
a. Designed such disclosure controls and procedures to ensure
that material information relating to the Company is made known to me
by others, particularly during the period in which this quarterly
report is being prepared;
b. Evaluated the effectiveness of the Company'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 have disclosed, based on my most recent evaluation, to the Company's
auditors and the audit committee of our 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 Company's ability
to record, process, summarize and report financial data and have
identified for the Company'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 Company's
internal controls; and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: September 26, 2003 /s/ Michael D. Tanner
---------------------- -------------------------------
Michael D. Tanner, President
and Chief Executive Officer
11
CERTIFICATION
Pursuant to the requirements of Rule 13a-14 of the Securities Exchange Act
of 1934, as amended, Mary Beth Doubet provides the following certification.
I, Mary Beth Doubet, Secretary and Treasurer of Sports Information &
Publishing Corp. ("Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB 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
Company as of, and for, the periods presented in this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
Company and have:
a. Designed such disclosure controls and procedures to ensure
that material information relating to the Company is made known to me
by others, particularly during the period in which this quarterly
report is being prepared;
b. Evaluated the effectiveness of the Company'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 have disclosed, based on my most recent evaluation, to the Company's
auditors and the audit committee of our 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 Company's ability
to record, process, summarize and report financial data and have
identified for the Company'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 Company's
internal controls; and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: September 26, 2003 /s/ Mary Beth Doubet
---------------------- -----------------------------------------
Mary Beth Doubet, Secretary and Treasurer
11