UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2002
Commission file number 000-27987
Cavalcade of Sports Media, Inc
(Exact name of small business issuer as specified in its charter)
Nevada 33-0766069
(State or other jurisdiction of incorporation
or organization) (IRS Employer
Identification No.)
12268 Via Latina Del Mar, CA 92914
(Address of principal executive offices)
(858) 481-2207
(Issuer's telephone number)
Check whether the registrant (1) has filed all reports required to be
filed by Sections 13 or 15(d) of the Securities Exchange Act during
the past 12 months (or for such shorter period as 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 ___
Indicate the number of shares outstanding of each of the issuer's
class of common stock. The Registrant had 18,249,294 shares of its
common stock outstanding as of November 11, 2002 (Note use latest
practicable date).
CAVALCADE OF SPORTS MEDIA, INC.
(A Development Stage Company)
Quarterly Report on Form 10-QSB for the
Quarterly Period Ending September 30, 2002
TABLE OF CONTENTS
Part I: FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
CAVALCADE OF SPORTS MEDIA, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30 December 31
2002 2001
ASSETS
Current Assets:
Cash and Equivalents $ 77 $ 15,459
Other Receivable 30,000 30,000
Total Current Assets 30,077 45,459
Property and Equipment
Office Furniture, net of depreciation 1,095 1,350
Other Assets
Film Library, at cost 522,577 522,577
Goodwill, net of amortization - 294,282
Other Investment 62,500 -
586,172 816,859
616,249 863,668
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses 635,944 318,419
Other Accrued Liabilities 380,000 380,000
Note Payable 1,015,665 1,084,415
Advances from Officers 202,849 193,799
Other Advances 70,000 45,000
Total Current Liabilities 2,304,458 2,021,633
Commitment and Contingencies - -
Deficiency in Stockholders' Equity:
Preferred Stock, Par Value, $0.001 per Share;
10,000,000 Shares Authorized; None Issued
at September 30, 2002 and December 31, 2001 - -
Common Stock, Par Value, $0.001 Per Share,
100,000,000 Shares Authorized, 17,552,754
shares and 11,430,972 shares issued
at September 30, 2002 and December 31, 2001,
respectively 17,553 11,431
Additional Paid-In Capital 4,159,942 1,595,973
Accumulated Deficit (5,865,705) (2,765,370)
(1,688,210) (1,157,966)
616,249 863,668
See accompanying notes to the unaudited condensed consolidated
financial information
CAVALCADE OF SPORTS MEDIA, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF LOSSES
(Unaudited)
For the Three Months For the Nine Months For The Period
Ended Ended July 29, 1997
September 30 September 30 (Date of
2002 2001 2002 2001 Inception to
Sept 30 2002
Revenues $ - $ - $ - $ - $ -
Costs and Expenses:
Selling, General and
Administrative 1,511,728 74,651 2,634,182 692,007 4,629,035
Interest Expense 58,333 36,870 171,616 82,517 476,573
Depreciation & Amortization 85 24,608 24,778 73,824 221,303
Total Operating Costs 1,570,146 136,129 2,830,576 848,348 5,326,911
Other Income:
Miscellaneous Income - - - - 4,766
Interest Income - - - - 130
- - - - 4,896
Loss from continuing operations,
before income taxes and discontinued
operations (1,570,146) (136,129) (2,830,576) (848,348) (5,322,015)
Loss from Discontinued Operations - - - - (352,905)
Income (Loss) on disposal of
discontinued operations - - - - 78,974
Net Loss (1,570,146) (136,129) (2,830,576) (848,348) (5,595,946)
Cumulative effect of accounting
change - - (269,759) - (269,759)
Net loss applicable to
common shares (1,570,146) (136,129) (3,100,335) (848,348) (5,865,705)
Income (Loss) per Common Share
(basic and assuming dilution) (0.10) (0.01) (0.24) (0.08) (0.53)
Continuing Operations (0.10) (0.01) (0.24) (0.08) (0.48)
Discontinued Operations - - - - (0.05)
Weighted Average Common Shares
Outstanding 16,031,820 11,337,029 13,182,035 11,207,239 11,021,891
See accompanying notes to the unaudited condensed consolidated
financial information
CAVALCADE OF SPORTS MEDIA, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended For the Period
Sept 30 July 29, 1997
2002 2001 (Date of
Inception) to
Sept 30 2002
Increase (Decrease) in Cash
and Equivalents
Cash Flows from Operating
Activities:
Net Loss for the Period $(3,100,335) $ (848,348) $ (5,591,774)
Loss from Discontinued Operations - - (352,905)
Income on Disposal of
Business Segment - - 78,974
Adjustments to Reconcile
Net (Loss) to Net Cash
Provided By Operating Activities:
Cumulative Effect of
Accounting Change 269,759 - 269,759
Depreciation and Amortization 24,778 73,825 221,303
Organization and
Acquisition Costs Expensed - - 11,553
Common Stock Issued in
Connection with Services Rendered 2,362,591 531,060 3,333,429
Common Stock Issued in
Exchange for Debt - - 233,498
Preferred Stock Issued in
Exchange for Services - - 855
Conversion of Preferred Stock - - (855)
Write-off of acquired asset - - 5,000
Expenses Paid by Principal
Shareholder - 4,500 26,925
Expenses Paid by Shareholders in Exchange
for Stock - - 25,000
(Increase) Decrease in:
Other Receivables - (25,000) (30,000)
Increase (Decrease) in:
Accounts Payable and
Accrued Liabilities 317,525 (8,500) 406,364
Net Cash Provided by (Used
in) Operating Activities (125,682) (272,463) (1,362,874)
Cash Flows from Investing Activities:
Capital Expenditures, Net
of Disposals (5,000) (131,515) (154,563)
Net Cash Used in Investing Activities (5,000) (131,515) (154,563)
Cash Flows from Financing Activities:
Proceeds from Sale of
Common Stock, Net of Costs 50,000 - 129,000
Proceeds from Loans 31,250 366,100 1,115,665
Other Advances 25,000 - 70,000
Advances from Officer 9,050 - 202,849
Net Cash Provided by (Used
in) Financing Activities 115,300 366,100 1,517,514
Net (Decrease) Increase in
Cash and Equivalents (15,382) (37,878) 77
Cash and Equivalents at
Beginning of the Period 15,459 59,840 -
Cash and Equivalents at End
of the Period 77 21,962 77
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash paid during the period for interest - - -
Cash paid during the period for taxes - - -
Common stock issued in exchange
for services 3,100,335 531,060 3,333,429
Common stock issued in exchange
for debts - - 223,498
Common stock issued for investment 62,500 - 62,500
Conversion of preferred stock - - (855)
Preferred stock issued in
exchange for services - - 855
Contribution of shares to
treasury by principal shareholder - - (2,821)
Acquisition:
Assets required - - 379,704
Goodwill - - 490,467
Accumulated deficit - - -
Liabilities assumed - - (588,027)
Common stock issued - - (282,144)
Net cash paid for acquisition - - -
Liabilities disposed of in
disposition of business, net - - 79,374
Net cash received in disposition
of business - - -
See accompanying notes to the unaudited condensed consolidated
financial information
CAVALCADE OF SPORTS MEDIA, INC.
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
SEPTEMBER 30, 2002
(UNAUDITED)
NOTE A - SUMMARY OF ACCOUNTING POLICIES
General
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the instructions to
Form 10-QSB, and therefore, do not include all the information
necessary for a fair presentation of financial position, results of
operations and cash flows in conformity with generally accepted
accounting principles.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine-month period ended
September 30, 2002 are not necessarily indicative of the results that
may be expected for the year ended December 31, 2002. The unaudited
condensed consolidated financial statements should be read in
conjunction with the consolidated December 31, 2001 financial
statements and footnotes thereto included in the Company's SEC Form
10-KSB.
Business and Basis of Presentation
Cavalcade of Sports Media, Inc. (the "Company") is in the development
stage and its efforts have been principally devoted to developing a
sports entertainment business, which will provide 24 hours per day
broadcasting from a library of nostalgic sports films and footage to
paid subscribers. The consolidated financial statements include the
accounts of Cavalcade of Sports Media, Inc. and its wholly-owned
subsidiaries, Cavalcade of Sports Network, Inc. Significant
intercompany transactions have been eliminated in consolidation.
Reclassification
Certain reclassifications have been made to conform to prior periods'
data to the current presentation. These reclassifications had no
effect on reported losses.
NOTE B - GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF STATEMENT 142
In July 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 141 "Business
Combinations" (SFAS No. 141) and Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets" (SFAS No.
142). SFAS No. 141 addresses financial accounting and reporting for
business combinations. This statement requires the purchase method of
accounting to be used for all business combinations, and prohibits the
pooling-of-interests method of accounting. This statement is effective
for all business combinations initiated after June 30, 2001 and
supercedes APB Opinion No. 16, "Business Combinations" as well as
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 38, "Accounting for Preacquisition Contingencies of
Purchased Enterprises."
SFAS No. 142 addresses how intangible assets that are acquired
individually or with a group of other assets should be accounted for
in financial statements upon their acquisition. This statement
requires goodwill amortization to cease and for goodwill to be
periodically reviewed for impairment for fiscal years beginning after
December 31, 2001. SFAS No. 142 supercedes APB Opinion No. 17,
"Intangible Assets." The Company adopted the provisions of this
standard for its second quarter of fiscal 2002.
Upon adoption of SFAS 142 in the second quarter of 2002, the Company
recorded a one-time, non-cash charge of approximately $269,759 to
reduce the carrying value of its goodwill. Such charge is non-
operational in nature and is reflected as a cumulative effect of an
accounting change in the accompanying consolidated statement of
operations. In calculating the impairment charge, the fair value of
the impaired reporting unit was estimated at the fair value of assets
underlying the business, thereby eliminating the goodwill element
entirely.
The following table presents the impact of SFAS 142 on net income
(loss) and net income (loss) per share had SFAS 142 been in effect for
the quarter and first nine months ended September 30, 2002 and 2001:
For the Three Months Ended For the Nine Months Ended
September 30 September 30
2002 2001 2002 2001
Net Loss $ (1,570,146) $ (136,129) $ (2,830,576) $ (848,348)
Adjustments:
Amortization of
Goodwill - 24,523 - 73,569
Impairment of
goodwill - - 269,759 -
Adjusted net (loss) (1,570,146) (111,606) (3,100,335) (774,779)
Shares used to
compute basic and
diluted net loss per
common share 16,031,820 11,220,902 13,182,035 11,140,902
Adjusted basic and
diluted net loss per
share (0.10) (0.01) (0.24) (0.07)
Reported basic and
diluted net loss per
common share (0.10) (0.01) (0.24) (0.08)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
As previously reported this corporation is in a development stage and
has not yet conducted any business so as to become an income
producing entity. The Company intends to continue utilizing capital
raised from the sale of Capital Notes and or equity. Our annual
report (10-KSB) dated April 16, 2002 includes a detailed Plan of
Operations for this year. That annual report can be accessed on
EDGAR.
The following discussion contains forward-looking statements that are
subject to significant risks and uncertainties about us, our current
and planned products, our current and proposed marketing and sales,
and our projected results of operations. There are several important
factors that could cause actual results to differ materially from
historical results and percentages and results anticipated by the
forward-looking statements. The Company has sought to identify the
most significant risks to its business, but cannot predict whether or
to what extent any of such risks may be realized nor can there be any
assurance that the Company has identified all possible risks that
might arise. Investors should carefully consider all of such risks
before making an investment decision with respect to the Company's
stock. The following discussion and analysis should be read in
conjunction with the financial statements of the Company and notes
thereto. This discussion should not be construed to imply that the
results discussed herein will necessarily continue into the future,
or that any conclusion reached herein will necessarily be indicative
of actual operating results in the future. Such discussion
represents only the best present assessment from our Management.
Overview
Results of Operations
The Company is in the development stage and is seeking to acquire and
market retired sporting footage and events, which have been
transferred to digital or Beta- SP format, for delivery to viewers
via satellite and cable transmission. The risks specifically
discussed are not the only factors that could affect future
performance and results. In addition the discussion in this
quarterly report concerning our business our operations and us
contain forward-looking statements. Such forward-looking statements
are necessarily speculative and there are certain risks and
uncertainties that could cause actual events or results to differ
materially from those referred to in such forward-looking statements.
We do not have a policy of updating or revising forward- looking
statements and thus it should not be assumed that silence by our
Management over time means that actual events or results are
occurring as estimated in the forward-looking statements herein.
As a development stage company, we have yet to earn revenues from
operations. We may experience fluctuations in operating results in
future periods due to a variety of factors including, but not limited
to, viewer acceptance of our sports channel and its nostalgic
content, our ability to acquire and deliver high quality products,
our ability to obtain additional financing in a timely manner and on
terms favorable to us, our ability to successfully attract viewers
and maintain viewer satisfaction, our promotions, branding and sales
programs, the amount and timing of operating costs and capital
expenditures relating to the expansion of our business, operations
and infrastructure and the implementation of marketing programs, key
agreements, and strategic alliances, the number of products offered
by us, the number of cancellations we experience, and general
economic conditions specific to the transferring of previously
televised material onto Beta- SP, the broadcasting of nostalgic
content, and the entertainment industry.
As a result of limited capital resources and no revenues from
operations from its inception, the Company has relied on the issuance
of equity securities to non-employees in exchange for services. The
Company's management enters into equity compensation agreements with
non-employees if it is in the best interest of the Company under
terms and conditions consistent with the requirements of Financial
Accounting Standards No. 123, "Accounting for Stock Based
Compensation." In order conserve its limited operating capital
resources, the Company anticipates continuing to compensate non-
employees for services during the next twelve months. This policy
may have a material effect on the Company's results of operations
during the next twelve months.
Revenues
We have generated no operating revenues from our inception. We
believe we will begin earning revenues from operations during the
first quarter of fiscal year 2003 as the Company transitions from a
development stage company to an active growth and acquisition stage company.
Costs and Expenses
From our inception through September 30, 2002, we have not generated
any revenues. We have incurred losses of $ 5,865,705 during this
period. Losses incurred during the third quarter of 2002 were $
1,570,146 compared with losses of $136,129 during the second quarter
of 2001. Losses incurred during the nine months ended September 30,
2002 were $ 3,100,335 compared with losses of $848,348 during the
same period of 2001. These losses stem from expenses associated
principally with equity-based compensation to employees and
consultants, product development costs and professional service fees.
In addition, the Company incurred a one-time non-cash charge of
$269,759 reducing the carrying value of its goodwill. Such a charge
is non-operational in nature and is reflected as a cumulative effect
of an accounting change in the accompanying consolidated statement of
losses. In calculating the impairment charge, the fair value of the
impaired reporting unit was estimated at the fair value of assets
underlying the business, thereby eliminating the goodwill element entirely.
Liquidity and Capital Resources
As of September 30, 2002, we had a working capital deficit of
$2,274,381 as a result of our operating losses since our inception.
From its inception, the Company has generated a cash flow deficit of
$1,362,874 from operating activities. We met our cash requirements
during this period through the private placement of $129,000 of
common stock, $1,185,665 from the issuance of capital and other notes
(net of repayments), and $202,849 from advances from the Company's
President (net of repayments).
While we have raised capital to meet our working capital and
financing needs in the past, additional financing is required in
order to meet our current and projected cash flow deficits from
operations and development and to acquire desirable film library
assets. We are actively engaged in negotiations with interested
investors and anticipate making a private equity placement at an
appropriate valuation and on terms acceptable to the existing
shareholders. We are also discussing possible joint venture
arrangements to share or finance costs, and pre selling advertising
and or sponsorships to raise working capital. We plan to raise
sufficient capital to fund operations for the next 12 months and to
finance the timely acquisition and digitization of additional vintage
sports film footage. We currently have no commitments for financing.
There is no guarantee that we will be successful in raising the funds required.
Acquisitions
During the quarter ended September 30, 2002 the Company acquired of
the assets of Cineports.com, Inc. ("Cineports") and Changebridge
Entertainment LLC ("Chainbridge") , two companies that the Company
believes will enhance its multi-dimensional approach to developing
and distributing programming and strengthen its management team and
advisory board. Cineports is an inactive company with no significant
assets, liabilities or operations and is seeking to develop and
acquire distribution agreements with several foreign film libraries
to sell films to homeowners, on a pay-per-view basis, via broadband.
Currently, Cineports has distribution agreements with substantial
European film libraries. Changebridge is an inactive company with no
significant assets, liabilities or operations and is seeking to
develop a business to provide video concepts and presentations to
market goods and services enhancing corporate client opportunities,
while also creating and producing television programming.
Cineports.com, Inc. was acquired by means of a merger of
Cineports.com, Inc. with and into a wholly owned subsidiary of
Cavalcade of Sports Media, Inc. The merger was closed on July 10,
2002, effective. July 1, 2002. The acquisition signals Cavalcade's
further development as a diversified programming and entertainment
company. Cineports is engaged in the acquisition of
In connection with the acquisition of Cineports.com, Inc., the
Company issued:
- For the 1,135,519 shares of Cineports' Series A Preferred Stock,
Cavalcade issued, 567,780 shares of its Common Stock, or two (2)
share of Cavalcade's Common Stock for each four (4) shares of the
Series A.
- For the 80,000 shares of Cineports' Series B Preferred Stock,
Cavalcade issued 100,000 shares of its Common Stock, or one and a
quarter (1.25) shares of Cavalcade's Common Stock for each one (1)
share of the Series B.
- For the 10,304,556 shares of Cineports' Common Stock, Cavalcade
issued (i) 4,121,822 shares of Cavalcade's Common Stock and (ii)
has agreed to issue 6,182,734 Warrants, each giving the holder the
right to purchase a share of Cavalcade's Common Stock, within a two
year period after issuance, at an exercise price of $1.20; or four-
tenths of a share of Cavalcade's stock and six-tenths of a warrant
for each share of Cineports' Common Stock.
The acquisition of ChangeBridge Television, Inc. (formerly
Changebridge Entertainment Television LLC) was automatically
effective at and as of 12:01 a.m. on July 1, 2002. The Company has
agreed to issue 100,000 shares of newly designated shares of
preferred stock in connection with the acquisition. To effectuate the
acquisition, all of the assets of a single-owner limited liability
company (disregarded entity) were contributed to a newly organized
Nevada corporation, "Changebridge Television, Inc.". The Company
then acquired that corporation as a wholly owned subsidiary.
These acquisitions were done primarily to strengthen the Company's
management team and advisory board with experienced and committed
executives who provide strong ties to key industry participants.
These acquisitions will be accounted for as required by the purchase
method accounting. Accordingly, no asset value has been assigned to
balance sheet intangibles, and the cost of the acquisition has been
expensed as consulting expense. No incremental cash funding
requirements are anticipated as a result of these acquisitions.
We believe that our existing and planned capital resources will be
sufficient to fund our current level of operating activities, capital
expenditures and other obligations through the next 12 months.
However, if during that period or thereafter, we are not successful
in generating sufficient liquidity from operations or in raising
sufficient capital resources, on terms acceptable to us, this could
have a material adverse effect on our business, results of operations
liquidity and financial condition.
The Company's independent certified public accountants have stated in
their report included in the Company's December 31, 2001 Form 10-KSB,
that the Company has incurred operating losses in the last two years,
and that the Company is dependent upon management's ability to
develop profitable operations. These factors among others may raise
substantial doubt about the Company's ability to continue as a going concern.
Product Research and Development
We do not anticipate performing research and development for any
products during the next twelve months.
Acquisition of Plant and Equipment and Other Assets (Film Library)
We do not anticipate the acquisition of any material property, plant
or equipment during the next 12 months, other than computer equipment
and peripherals used in our day-to-day operations. We believe we
have sufficient resources available to meet these acquisition needs.
However, negotiations are presently in progress to acquire
approximately 7,000 hours of additional vintage sports film footage.
The Company intends to aggregate more than 10,000 hour of vintage
sports programming by purchase or license. This film library and
footage will be necessary to support our mission to provide around
the clock broadcasting. Costs associated with program acquisition
and digitizing this footage are capitalized and this film library
becomes the primary programming asset of the Company. The Company
intends to acquire these film libraries on an opportune basis, as
they become available, and to negotiate acceptable financing
arrangements, which may be limited by its ability to raise sufficient
capital resources.
The Company presently has approximately 3,000 hours of program
content and believes that 4,300 hours would be sufficient for two
years of broadcast programming. Therefore, if the Company is not
successful in obtaining the full inventory of 10,000 hours during the
next twelve months, its ability to deliver near term program content
will not be impaired. Should sufficient financial resources become
available, it is the intention of the Company to acquire the full
target of 10,000 hours of quality vintage sports hours as soon as
possible. Once digitized, this film library has an unlimited shelf
life and adds measurable economic value to the Company's net assets.
In addition, it positions the Company to provide significant well-
timed entry barriers to competitors that may chose to enter the
nostalgia sports market.
Number of Employees
From our inception through the period ended September 30, 2002, we
have relied on the services of outside consultants for services and
had no employees. In order for us to attract and retain quality
personnel, we anticipate we will have to offer competitive salaries
to future employees. We anticipate that it may become desirable to
add full and or part time employees to discharge certain critical
functions during the next 12 months. Future executive staff
positions to be added include a CFO, EVP of Operations, CIO and a
Senior Sales and Marketing executive. Candidates have been
identified for these positions, but The Company presently has no
obligation to enter into Employment Agreements with these candidates.
This projected increase in personnel is dependent upon our ability to
generate revenues and obtain sources of financing. There is no
guarantee that we will be successful in raising the funds required or
generating revenues sufficient to fund the projected increase in the
number of employees.
The Company also plans to use the advice of its Advisory Board on an
as needed basis. As we continue to expand, we will incur additional
cost for personnel.
Trends, Risks and Uncertainties
We have sought to identify what we believe to be the most significant
risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that
we have identified all possible risks that might arise. Investors
should carefully consider all of such risk factors before making an
investment decision with respect to our Common Stock.
Cautionary Factors that May Affect Future Results
Our annual report (10-KSB) dated April 16, 2002 includes a detailed
list of cautionary factors that may affect future results.
Management believes that there have been no material changes to those
factors listed, however other factors besides those listed could
adversely affect us. That annual report can be accessed on EDGAR.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
(a) Not Applicable.
(b) Not Applicable.
(c) During the fiscal quarter ended September 30, 2002 the Registrant
issued the following securities without registration under the
Securities Act of 1933:
Common Stock
On July 17, 2002 the Registrant issued 1,500 shares of its Common
Stock to a consultant for financial consulting services. This
issuance was considered exempt under Section 4(2) of the Securities Act.
On July 26, 2002 the Registrant issued 4,789,582 shares of its Common
Stock to the shareholders of Cineports.com, Inc. in the merger of
Cineports.com, Inc. into Cineports, Inc., a wholly owned subsidiary
of the Registrant. This issuance was considered exempt under Section
4(2) of the Securities Act.
On July 31, 2002 the Registrant issued 20,000 shares of its Common
Stock to a foreign law firm in payment for legal services. This
issuance was considered exempt under Section 4(2) of the Securities Act.
On August 13, 2002 the Registrant issued 14,000 shares of its Common
Stock to Michael Carroll, a director, in payment of his agreement to
serve as a director (12,000 shares) and for two months of services
($2,000). This issuance was considered exempt under Section 4(2) of
the Securities Act.
Also on August 13, 2002 the Registrant issued 50,000 shares of its
Common Stock to a financial public relations and financial consultant
as a fee for services. This issuance was considered exempt under
Section 4(2) of the Securities Act of 1933.
On September 3, 2002 the Registrant issued 150,000 shares of its
Common Stock to another financial public relations and financial
consultant as a fee for services. This issuance was considered
exempt under Section 4(2) of the Securities Act.
On September 19, 2002 the Registrant issued 150,000 shares of its
Common Stock to a financial public relations and financial consultant
as a fee for services. This issuance was considered exempt under
Section 4(2) of the Securities Act.
Common Stock Purchase Warrants
On July 26, 2002 the Registrant agreed to issue 6,182,733 Common
Stock Purchase Warrants, each giving the holder the right to purchase
a share of Cavalcade's Common Stock, within a two year period after
issuance, at an exercise price of One Dollar and Twenty Cents ($1.20)
to the former shareholders of Cineports.com, Inc .in the merger of
Cineports.com, Inc. into Cineports, Inc., a wholly-owned subsidiary
of the Registrant.
(d) Not applicable.
Item 3. Defaults Upon Senior Securities.
The defaults on the Capital Notes, previously reported, have not been
cured and such defaults continue. However, a number of holders of
the Capital Notes requested that their notes be amended to permit
them to convert to Common Stock and the Board of Directors so amended
their notes. Such notes were in the process of conversion as of the
date of this filing.
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.
Exhibit No. Description
99.1 Certification of Ed Litwak Pursuant to Section 906 of Sarbanes-Oxley
Act of 2002 (filed herewith)
99.2 Certification of James Chamberlain Pursuant to Section 906 of
Sarbanes-Oxley Act of 2002 (filed herewith)
(b) Reports on Form 8-K.
During the fiscal quarter ended September 30, 2002 the Registrant
filed a report on Form 8-K. On July 29, 2002 the Registrant filed a
report for the Closing of the Changebridge Entertainment Television
LLC. Acquisition and the Cineports.com, Inc. merger.
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Cavalcade of Sports Media, Inc.
Date November 20, 2002 Edward Litwak, President