UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 2001.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) for the transition period from ________ to
________.
Commission file number: 0-11734
SATTEL GLOBAL NETWORKS, INC.
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-1385900
(State of Incorporation) (I.R.S. Employer Identification No.)
1004 Depot Hill Rd., 1E
Broomfield, CO 80020
(Address of Principal Executive Offices)
(303) 404-9904
(Registrant's Telephone Number, Including Area Code)
Check whether the issuer: (1)filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No[ ]
The number of shares outstanding of Registrant's common stock ($0.01 par
value) as of the quarter ended March 31, 2001, was 30,410,017.
TABLE OF CONTENTS
Page
PART I
ITEM 1. FINANCIAL STATEMENTS............................................. 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS............................. 8
PART II
ITEM 1. LEGAL PROCEEDINGS................................................ 9
ITEM 2. CHANGES IN SECURITIES............................................ 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.................................. 10
ITEM 4. SUBMISSION TO A VOTE OF SECURITY HOLDERS......................... 10
ITEM 5. OTHER............................................................ 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................. 10
SIGNATURES....................................................... 10
2
PART I
ITEM 1. FINANCIAL STATEMENTS
Unless otherwise indicated, the term "Company" refers to Sattel Global
Networks, Inc. and its subsidiaries and predecessors. The accompanying
consolidated unaudited condensed financial statements have been prepared by
management in accordance with the instructions in Form 10-QSB and, therefore,
so not include all information and footnotes required by generally accepted
accounting principals and should, therefore, be read in conjunction with
Company's Annual Report to Shareholders on Form 10-KSB for the fiscal year
ended December 31, 2000. These statements do include all the normal recurring
adjustments which the Company believes is necessary and affords a fair
presentation. The interim results are not necessarily indicative of the
results for the full year ending December 31, 2001.
3
Sattel Global Networks, Inc.
(formerly Osteo Systems, Inc., Jewelnique Designs, Inc.
and Blue Mountain Capital, Inc.)
(A Development Stage Company)
BALANCE SHEET
As of March 31, 2001
ASSETS $ 0
=========
LIABILITIES
Due to related party $ 2,021
---------
CAPITAL DEFICIT
Preferred stock, par value $0.01, 10,000,000
shares authorized, none issued and outstanding
Common stock, par value $0.001, 100,000,000
shares authorized, 30,410,017 shares issued
and outstanding $ 30,410
Additional paid-in capital 22,885
Deficit accumulated during the development stage (55,316)
---------
Total Capital Deficit ( 2,021)
---------
TOTAL LIABILITIES AND CAPITAL DEFICIT $ 0
=========
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Sattel Global Networks, Inc.
(formerly Osteo Systems, Inc., Jewelnique Designs, Inc.
and Blue Mountain Capital, Inc.)
(A Development Stage Company)
STATEMENTS OF EXPENSES
For the Three Months Ended March 31, 2001 and 2000
and the Period from March 6, 1997 (Inception) to March 31, 2001
3 Mos. End 3 Mos. End Inception
March 31, March 31, Through
2001 2000 2001
---------- ---------- ----------
General and administrative expenses $ 21 $ 25 $ 55,316
---------- ---------- ----------
Net loss $ (21) $ (25) $ (55,316)
========== ========== ==========
Net loss per common share $ ( 0) $ ( 0)
Weighted average common shares
outstanding 30,410,017 410,017
5
Sattel Global Networks, Inc.
(formerly Osteo Systems, Inc., Jewelnique Designs, Inc.
and Blue Mountain Capital, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2001 and 2000
and the Period from March 6, 1997 (Inception) to March 31, 2001
3 Mos. End 3 Mos. End Inception
March 31, March 31, Through
2001 2000 2001
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net deficit accumulated during
the development stage $ ( 21) $ (25) $ (55,316)
Adjustments to reconcile net deficit
to cash used by operating activities:
Stock issued for services 32,320
Writedown of organization costs 25 500
Changes in:
Accounts payable (2,000)
---------- ---------- ----------
NET CASH USED BY OPERATING ACTIVITIES (2,021) 0 (22,496)
NET CASH USED BY INVESTING ACTIVITIES
Organization costs ( 500)
---------- ---------- ----------
NET CASH FROM FINANCING ACTIVITIES
Proceeds from stock issuances 20,975
Advances from related party 2,021 2,021
---------- ---------- ----------
NET CASH USED BY FINANCING ACTIVITIES 2,021 22,926
---------- ---------- ----------
NET INCREASE IN CASH $ 0 $ 0 $ 0
========== ========== ==========
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NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Sattel Global
Networks, Inc. have been prepared in accordance with generally accepted
accounting principles and the rules of the Securities and Exchange Commission
("SEC"), and should be read in conjunction with the audited financial
statements and notes thereto contained in the Company's Annual Report filed
with the SEC on Form 10-KSB. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation
of financial position and the results of operations for the interim periods
presented have been reflected herein. The results of operations for interim
are not necessarily indicative of the results to be expected for the full
year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited financial statements for the period
from March 6, 1997 (Inception) through December 31, 2000, as reported in the
10-KSB, have been omitted.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis should be read in conjunction with
the Company financial statements and notes thereto included elsewhere in this
Form 10-QSB. Except for the historical information contained herein, the
discussion in this Form 10-QSB contains certain forward looking statements
that involve risks and uncertainties, such as statements of the Company plans,
objectives, expectations and intentions. The cautionary statements made in
this Form 10-QSB should be read as being applicable to all related forward
statements wherever they appear in this Form 10-QSB. The Company actual
results could differ materially from those discussed here.
Other than what has been disclosed herein and in the year end report for
year 2000, filed on April 17, 2001, the Company is not aware of any immediate
circumstances or trends which would have a negative impact upon future sales
or earnings. There have been no material fluctuations in the standard
seasonal variations of the Company business. The accompanying financial
statements include all adjustments, which in the opinion of management are
necessary in order to make the financial statements not misleading.
The Company
- -----------
The Company is presently inactive and does not maintain a formal office.
The Company receives mail at the office of its secretary, Richard M. Muller,
at 1004 Depot Hill Rd., Ste. 1E, Broomfield, Colorado 80020. The Company has
30,410,017 shares issued and outstanding among 47 shareholders.
Business of Issuer
- ------------------
Sattel Global Networks, Inc. (hereinafter referred to as the "Company" or
"Corporation"), was incorporated under the laws of the State of Colorado on
March 6, 1997, as Blue Mountain Capital, Inc. The name was changed to
Jewelnique Designs, Inc. on June 20, 1997.
On June 17, 1998, the name was changed to Osteo Systems, Inc. ("OSYS").
The Company intended to develop and commercialize several biotech technologies
related to bone healing for medical, dental and surgical applications. The
Company was not able to complete its business objectives.
On September 11, 2000, a Reorganization Agreement (the "Agreement") was
executed by and among the Company, Freva Investment Trust, a common law
business trust resident in California ("FTI"), Vancouver Telephone Company
and/or assigns ("VTC"), which owns 100% of Sattel Global Networks, a private
Delaware corporation which manufactures satellite systems for public switched
telephone and data systems targeting primarily rural areas in "third world
countries", and certain shareholders of the Company who represented
approximately 57% of the outstanding shares of the Company's common stock. At
the closing of the transactions contemplated by the Agreement, the current
stockholders of the Company would have owned less than 1.5% of the outstanding
shares of the Company's common stock and the Company would have owned 100% of
the existing business of Sattel, and all of the beneficial interests of FTI.
On October 12, 2000, the Company's Board of Directors enacted a 1 to 15
reverse stock split and, restated and amended their Articles of Incorporation
changing its name from Osteo Systems, Inc. to Sattel Global Networks, Inc.
On October 16, 2000, the Company signed a definitive Reorganization
Agreement, which was predicated upon several and various events and conditions
which needed to take place. Those events and conditions were set forth in the
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Plan of Reorganization and several ancillary agreements. If those events came
to pass and the conditions were met, the Company's operations were to
consolidate with Sattel Global Networks, Inc., a private Delaware corporation.
On December 19, 2000, the Company rescinded its October 16, 2000
agreement and entered into a new Acquisition Agreement with certain
shareholders of the Company, who were owners of, or otherwise represented, at
least fifty-one percent (51%) of the Company's issued and outstanding common
stock, and Vancouver Telephone Company Limited which owns of 100% of the
issued and outstanding shares of Sattel Global Networks, Inc., the private
Delaware Corporation and Sattel Guatemala, a private Guatemalan company.
There were conditions precedent upon the Closing of this Acquisition
Agreement, the primary being that the Company was to raise a minimum of
$4,000,000 by February 20, 2001. If the Company did not raise the $4,000,000
by February 20, 2001, the agreement would be rescinded. The Company did not
raise the monies as required per the Acquisition Agreement and it was mutually
agreed to rescind the agreement.
Since its recent attempts to procure merger and acquisition opportunities
have proved unfruitful, the Company intends to continue to review
opportunities to pursue various options including viable merger/acquisition
opportunities should they present themselves.
Capital Resources and Liquidity
- -------------------------------
During the quarter ended March 31, 2001, the Company did not issue any
unregistered shares nor register any shares.
Results of Operations
- ---------------------
For the three month ended March 31, 2001, the Company sustained a loss of
$21.00 or $0.00 per share (basic and diluted) on revenue of $0.00. The loss
in the first quarter of 2001 can be contributed to the fact the Company had no
revenue producing operations. For the comparable period of 2000, the Company
sustained a loss of $25.00, or $0.00 per share on revenue of $0.00.
PART II
ITEM 1. LEGAL PROCEEDINGS
On February 22, 2001, Seville Consulting Group, Inc., a major shareholder in
the Company, as Plaintiffs, filed a lawsuit against Erwin Liem, President's
Corporate Group, E-Commerce, Inc., Jack Augsback & Company, Inc. and Madcon
Company (collectively referred to as "Defendants") (Seville Consulting Group,
Inc. vs. The President's Group, et al., CV01-01744-WMB, the Central District
of California, seeking rescission of a September 11, 2000 agreement through
which the Defendants obtained 4,400,000+ shares of Sattel Global Network
common stock (both restricted and free-trading) in exchange for Defendants'
promise to raise $4,000,000 in capital or financing for Sattel Global
Networks, Inc. The lawsuit alleges that Defendants failed to raise such
capital or financing and that the September 11, 2000 agreement requires
Defendants to return the shares they received due to Defendants' failure to
perform as promised.
The complaint seeks injunctive relief which would require the Defendants to
return to Seville Consulting all of the Sattel Global Network shares which
Defendants obtained as a result of the September 11, 2000 agreement, and seeks
consequential, special and punitive damages of more than $500,000.00 against
9
Defendants based upon claims of fraud, negligent misrepresentation, and claim
and delivery. Seville Consulting also seeks a legal declaration from the
Court that Defendants have no right, title or interest in the shares
transferred to Defendants under the September 11, 2000 and an order cancelling
the share certificates issued to Defendants.
The suit is progressing against these defendants and in addition, new
management is contemplating initiating new and additional charges, including
fraud and fraud in the inducement, against a couple of the former immediate
officers and directors of the Corporation.
ITEM 2. CHANGES IN SECURITIES
During the quarter ended March 31, 2001, there were no changes in securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
During the quarter ended March 31, 2001, there were no defaults upon senior
securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the quarter ended March 31, 2001, there were no matters submitted to a
vote of the Company's shareholders.
ITEM 5. OTHER
During the quarter ended March 31, 2001, there were no material events to
report that have not been previously disclosed herein. (Please see, Part II,
Item 1. "Legal Proceedings".)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
During the quarter ended March 31, 2001, there were no reports on form 8-K.
10
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized this 17th day of May, 2001.
SATTEL GLOBAL NETWORKS, INC.
/s/ Daniel Motsinger
- --------------------
Daniel Motsinger, President
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.
/s/ Daniel Motsinger
- --------------------
Daniel Motsinger,
President, Treasurer & Director 5/17/2001
/s/Richard Muller
- -----------------
Richard Muller, Secretary & Director 5/17/2001
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