SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q SB/A-2
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the quarterly period ended June 30, 2001 or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the transition period from to
Commission file number 333-64420
SCIENTIO, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 11-3581664
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
P.O. Box 940007, Belle Harbor, New York 11694
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(Address of Principal Executive Office) (Zip Code)
(718) 318-0994
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(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding twelve
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 ninety days.
Yes / / No / X /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
2,015,000
10QSB-1
Part 1. Financial Information
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Scientio, Inc. ("The Registrant") was incorporated in the State of
Delaware on December 11, 2000. It is engaged in the development,
marketing and support of software components that can be used to
analyze data (data mining) flowing the XML (extensible markup
language) protocol between computers over the internet or
intranets. The Registrant has not yet generated any sales to date.
The Registrant has completed development and is offering for sale
its first datamining software product, the XML Miner package
version 1.0. The package contains three components, XML Miner, XML
Rule and Strucfind. Also being worked on is an XML Rule package
which will contain two components, XML Rule and a Rule Editor. The
targeted customers are software developers.
While the XML Miner Package has been installed and running on the
Registrant's web site, offering online demonstrations of its
performance in two distinct application areas, it has not yet sold
any units of XML Miner or the XML Miner Package nor has the
Registrant's technology been installed to date by any business and
no assurance can be given that its technology will work in an
operational setting. To date, the Registrant has not entered into
any joint venture or general consultancy agreements nor licensed
any of its technology to software development companies.
On December 8, 2000, Modern Technology Corp ('Modern') entered into
an agreement with Andrew Edmonds, President and Anneke Edmonds,
principal shareholder, to form Scientio. Modern agreed to purchase
403,000 shares of Scientio, representing 20% of the outstanding
shares, for an investment of $188,500 and an additional investment
of up to $50,000 to cover the costs of registering those shares and
distributing them to shareholders of Modern.
A registration statement for the 403,000 shares owned by Modern
Technology Corp was filed with the Securities and Exchange
Commission. On September 24, 2001, the registration statement was
declared effective. During the first week of October 2001, the
403,000 shares were distributed to Modern's shareholders.
The Registrant is in the development stage, not yet generating any
revenues. Over the next twelve months, the Registrant does not
anticipate the purchase of any significant amount of plant or
equipment and does not anticipate any significant changes in the
number of company employees (presently there are 3 employees).
During the three months ended June 30, 2001, the Registrant had a
net loss of $42,096. During the period from inception (December
11, 2000) to June 30, 2001, the Registrant generated a net loss of
$91,276. For the three months ended June 30, 2001, the
Registrant's expenses consisted of general and administrative items
amounting to $12,682, Officer's salary to the Registrant's
president amounting to $29,016, professional fees, mainly legal and
accounting, amounting to $289 and depreciation of $340. The
Registrant generated interest income of $231 for the three months
ended June 30, 2001.
For the period from inception (December 11, 2000) to June 30, 2001,
the Registrant's expenses consisted of general and administrative
expenses of $21,499, officer's salary of $59,203 (paid to the
Registrant's president), professional fees (primarily legal and
accounting expenses) of $10,392 and depreciation of $588. $406 of
interest income was generated for this period.
As of June 30, 2001, the Registrant had total assets of $128,945,
consisting of $103,594 of cash and cash equivalents, fixed assets
of $5,328 and Deferred Registration Costs of $20,023. Total
liabilities amounted to $49 with shareholders' equity of $128,896.
The Registrant received its initial funding from Modern, one of its
principal shareholders. As of June 30, 2001, Modern invested
$188,500. Management believes these funds will be sufficient to
cover working capital needs through March 31, 2002. The Registrant
will need to raise an additional $50,000-$100,000 over the next 12
months. There are presently no commitments for any additional
financing.
The only officer entitled to compensation is Andrew Edmonds, the
President of the Company. Dr. Edmonds devotes his full time to
the business of the Registrant. Pursuant to the shareholder's
agreement of December 8, 2000 (signed with Modern Technology Corp),
Dr. Edmonds is to be paid a minimum salary of $90,000 on or before
December 8, 2001. Dr. Edmonds has agreed to transfer to the
Company all improvements of the Registrant's products and any new
software products he develops for a three year period ending
December 8, 2003. In the event this salary is not paid to Dr.
Edmonds, he will be free of the three year restriction provided all
shares issued to Mrs. Edmonds (owner of 1,591,850 shares of the
Registrant, representing a 79% ownership interest) are returned to
the treasury of the Registrant.
The Registrant is paying rent monthly of about $1,700 to Anneke
Edmonds, treasurer and director, for use of two rooms (about 300
square feet) in Mrs. Edmond's home under an oral agreement on a
month by month basis. Included in the rental are monthly payments
for telephone, utilities and use of equipment, computers and
software owned by Andrew and Anneke Edmonds. Management believes
the amount paid is equivalent to or less than current market rental
rates. Anneke Edmonds, treasurer and chief financial
officer/director, and Arthur Seidenfeld, secretary and director,
both are non paid officers/directors.
Item 3. Defaults upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Materially Important Events. None.
Item 6. Exhibits and Reports on Form 8-K. None.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934,
the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SCIENTIO, INC.
By: Andrew Edmonds
President and Chief Executive Officer
November 19, 2001
SCIENTIO, INC.
FINANCIAL STATEMENTS
JUNE 30, 2001
I N D E X
Page
BALANCE SHEET - ASSETS 1
BALANCE SHEET - LIABILITIES AND EQUITY 2
STATEMENT OF OPERATIONS 3
STATEMENT OF CASH FLOWS 4
NOTES TO THE FINANCIAL STATEMENTS 5 - 8
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(Unaudited)
A S S E T S
June 30, 2001
CURRENT ASSETS
Cash and Cash Equivalents $103,594
--------
TOTAL CURRENT ASSETS 103,594
--------
FIXED ASSETS, At Cost
Equipment 4,324
Software 1,579
--------
5,903
Less: Accumulated Depreciation (575)
--------
FIXED ASSETS, net 5,328
--------
OTHER ASSETS
Deferred Registration Costs 20,023
--------
TOTAL ASSETS $128,945
========
See accompanying summary of accounting policies and notes to financial
statements.
Page 1 of 8
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
(Unaudited)
L I A B I L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y
June 30, 2001
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 49
--------
TOTAL CURRENT LIABILITIES 49
--------
COMMITMENTS & CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock - 30,000,000 Shares
Authorized, 2,015,000 Issued &
Outstanding Shares at $.001 Par Value 2,015
Paid In Capital 218,157
(Deficit) Accumulated during the
Development Stage (91,276)
--------
TOTAL SHAREHOLDERS' EQUITY 128,896
--------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $128,945
========
See accompanying summary of accounting policies and notes to financial
statements.
Page 2 of 8
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(Unaudited)
For the Cumulative
Period Amounts from
April 1, December 11,
2001, to 2000
June 30, (Inception)to
2001 June 30, 2001
Interest Income $ 231 $ 406
General and Administrative
Expenses (12,682) (21,499)
Officer Salary (29,016) (59,203)
Professional Fees (289) (10,392)
Depreciation (340) (588)
--------- ---------
INCOME (LOSS) BEFORE INCOME TAXES (42,096) (91,276)
Income Tax Expense (Benefit) -0- -0-
--------- ---------
NET INCOME (LOSS) (42,096) $ (91,276)
========= =========
Basic and Diluted Earnings (Loss)
Per Share $ (.02) $ (.05)
========= =========
Weighted Average Number of Shares
of Common Stock Outstanding 2,015,000 2,015,000
========= =========
See accompanying summary of accounting policies and notes to financial
statements.
Page 3 of 8
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Unaudited)
For the Cumulative
Period Amounts from
April 1, December 11,
2001 to 2000
June 30, (Inception)to
2001 June 30, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $(42,096) $ (91,276)
Adjustments to Reconcile Net Income (Loss)
to Net Cash
Provided by (Used In) Operating Activities:
Depreciation 340 588
Stock Issued for Services -0- 9,471
Change in Assets and Liabilities:
Decrease (Increase) in Deposits 157 -0-
Increase (Decrease) in Accounts Payable -0- 49
Net Cash Provided by (Used In) ---------- ---------
Operating Activities (41,599) (81,168)
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment (185) (4,362)
Net Cash Provided By (Used In) ---------- ---------
Investing Activities (185) (4,362)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Common Stock Issuance -0- 100,000
(Increase) in Deferred Registration Costs (20,023) (20,023)
Payment received on subscription
receivable 109,109 109,109
Net Cash Provided By (Used In) ---------- ---------
Financing Activities 89,086 189,086
---------- ---------
Effect of Exchange Rate Changes on Cash 44 38
Net Increase (Decrease)in Cash and
Cash Equivalents 47,346 103,594
Cash and Cash Equivalents at Beginning
of Period 56,248 -0-
---------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 103,594 $ 103,594
========== =========
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest Expense $ -0- $ -0-
Income Tax $ -0- $ -0-
Non Cash Investing and Financing Transactions:
Stock Issued for Services $ -0- $ 9,471
Stock Issued for Software $ -0- $ 1,592
See accompanying summary of accounting policies and notes to financial
statements.
Page 4 of 8
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD DECEMBER 11, 2000 (INCEPTION) TO JUNE 30, 2001
(Unaudited)
NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS
Scientio, Inc. (Scientio) is a Delaware corporation. Scientio is in
the development stage and has not generated any revenue. Scientio's
offices are located in the United Kingdom and the United States.
Scientio's principal purpose was to acquire the ownership and
commercialization rights to a line of software products developed by
Andy Edmonds and owned by Anneke Edmonds and designated 'the family
of XML products' defined as XML Miner, XML Rule and Strucfind. These
products mine XML code to find relationships and predict values using
fuzzy-logic rules, then apply them to web sites, applications, or
anywhere that a COM control or Java bean can be used.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Currency Translation
The Company's functional currency is the British pounds sterling in
which revenue and expenses are generated. For reporting purposes, the
reporting currency is the US Dollar. The translating functional
currency statement into the reporting currency was performed in
accordance with Statements of Financial Accounting Standards (SFAS)
52 and General Accepted Accounting Principles (GAAP).
Cash and Cash Equivalents
Cash equivalents consist of highly liquid, short-term investments
with original maturities of 90 days or less.
Property and Equipment, At Cost
Depreciation is calculated using the straight line method over the
asset's estimated useful life, which is 5 years for equipment and 3
years for software.
Revenue Recognition Policy
The company recognizes sales, for both financial statement purposes
and for tax purposes, when the products are shipped to customers.
Page 5 of 8
SCIENTO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD DECEMBER 11, 2000 (INCEPTION) TO JUNE 30, 2001
(Unaudited)
(Continued)
Estimates in Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of 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.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes." SFAS 109 has as its basic objective the recognition of
current and deferred income tax assets and liabilities based upon all
events that have been recognized in the financial statements as
measured by the provisions of the enacted tax laws.
Valuation allowances are established when necessary to reduce
deferred tax assets to the estimated amount to be realized. Income
tax expense represents the tax payable for the current period and the
change during the period in the deferred tax assets and liabilities.
NOTE 3: DEFERRED REGISTRATION COSTS
For the period December 11, 2000 (inception) through June 30, 2001,
the Company has incurred deferred registration costs of $20,023
relating to expenses incurred in connection with the Proposed
Distribution (see Note 9). Upon consummation of this Proposed
Distribution, the deferred registration costs will be charged to
equity. Should the Proposed Distribution prove to be unsuccessful,
these deferred costs, as well as additional expenses to be incurred,
will be charged to operations.
NOTE 4: OFFICER SALARY AND PROFESSIONAL FEES
The company has an agreement with its president to complete and
maintain the company's product. In this agreement, the company agrees
to pay the officer at least $90,000 per annum. The officer has
received $30,187 and $29,016 for the period December 11, 2000
(inception) to March 31, 2001 and for the period April 1, 2001 to
June 30, 2001, respectively.
Page 6 of 8
SCIENTO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD DECEMBER 11, 2000 (INCEPTION) TO JUNE 30, 2001
(Unaudited)
(Continued)
NOTE 5: STOCK BASED COMPENSATION
The person who performed services in relation to the formation of the
corporation received 20,150 common shares approximating the fair
market value of $9,471. This amount was charged to professional fees
during the period ended March 31, 2001. This stock based
compensation plan is accounted for in accordance with SFAS No. 123.
NOTE 6: TRANSFERS OF NONMONETARY ASSETS BY SHAREHOLDERS
According to the Securities and Exchange Commission's Staff
Accounting Bulleting 48, when the company acquires assets from
shareholders in exchange for stock just prior to its first public
offering, the assets should generally be recorded at cost to the
shareholder. On December 15, 2000, the company acquired software from
a shareholder and recorded the software at a cost of $1,592 (the cost
to the shareholder).
NOTE 7: INCOME TAXES
Income taxes are accrued at the statutory U.S. and state income tax
rates.
Income tax expense is as follows:
6/30/01 3/31/01
Current tax expense (benefit):
Income tax at statutory rates $ -0- $ -0-
Deferred tax expense (benefit):
Operating Loss Carryforward (12,203) (7,081)
------- --------
(12,203) (7,081)
Valuation allowance (12,203) (7,081)
------- --------
Total Tax Expense (Benefit) $ -0- $ -0-
======= ========
Deferred tax assets:
NOL $19,284 $ 7,081
Valuation allowance (19,284) (7,081)
------- --------
Net deferred tax assets $ -0- $ -0-
======= ========
The Company has net operating loss (NOL) carryforwards for income tax
purposes of approximately $91,000. This loss is allowed to be offset
against future income until the year 2021 when the NOL's will expire.
Page 7 of 8
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD DECEMBER 11, 2000 (INCEPTION) TO JUNE 30, 2001
(Unaudited)
(Continued)
The loss has been fully reserved for in the valuation allowance
account due to the startup of operations and the uncertainty of the
company to achieve profitability in the future.
NOTE 8: INTERIM FINANCIAL REPORTING
The unaudited financial statements of the Company for the period
April 1, 2001 through June 30, 2001 and December 11, 2000 (inception)
through June 30, 2001 have been prepared by management from the
books and records of the Company, and reflect, in the opinion of
management, all adjustments necessary for a fair presentation of
the financial position and operations of the Company as of the
period indicated herein, and are of a normal recurring nature.
NOTE 9: PROPOSED DISTRIBUTION
On December 8, 2000, Modern Technology Corp. ('Modern') entered into
an agreement with Andrew Edmonds, President and Anneke Edmonds,
principal shareholder, to form Scientio. Modern agreed to purchase
403,000 shares of Scientio, representing 20% of the outstanding
shares, for an investment of $188,500 and an additional investment of
up to $50,000 to cover the costs of registering those shares and
distributing them to shareholders of Modern.
A registration statement for the 403,000 shares owned by Modern
Technology Corp was filed with the Securities and Exchange
Commission. On September 24, 2001, the registration statement was
declared effective. During the first week of October 2001, the
403,000 shares were distributed to Modern's shareholders.
NOTE 10: RELATED PARTY TRANSACTIONS
The Company is paying rent monthly of about $1,700 to Anneke
Edmonds, treasurer and director, for use of two rooms (about 300
square feet) in Mrs. Edmond's home under an oral agreement on a
month to month basis. Included in the rental are monthly payments
for telephone, utilities and use of equipment, computers and
software owned by Andrew and Anneke Edmonds.
Page 8 of 8