SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q SB
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities Act
of 1934
For the quarterly period ended December 31, 2002 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.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-3581664
------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
P.O. Box 940007, Belle Harbor, New York 11694
------------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
(718) 318-0994
------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
------------------------------------------------------
(Registrant's Former Address)
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 / X / No / /
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. 661,900
10Q-1
SCIENTIO, INC.
FINANCIAL STATEMENTS
(A DEVELOPMENT STAGE ENTERPRISE)
DECEMBER 31, 2002
I N D E X
Page
BALANCE SHEET - ASSETS, LIABILITIES AND
SHAREHOLDERS' EQUITY 1
STATEMENT OF OPERATIONS 2
STATEMENT OF CASH FLOWS 3
NOTES TO THE FINANCIAL STATEMENTS 4 - 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
A S S E T S
December 31, September 30,
2002 2002
------------ -------------
(Unaudited)
CURRENT ASSETS
Miscellaneous Receivable $ 2,000 $ 2,000
-------- --------
TOTAL CURRENT ASSETS 2,000 2,000
-------- --------
TOTAL ASSETS $ 2,000 $ 2,000
-------- --------
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
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 15,750 $ 6,694
Accounts Payable, Related Parties 26,700 22,765
-------- --------
TOTAL CURRENT LIABILITIES 42,450 29,459
-------- --------
SHAREHOLDERS' EQUITY
Common Stock - 30,000,000 Shares
Authorized, 661,900 Issued &
Outstanding Shares at $.001
Par Value 662 662
Additional Paid In Capital 311,934 311,934
(Deficit) Accumulated during the
Development Stage (353,046) (340,055)
-------- --------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (40,450) (27,459)
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 2,000 $ 2,000
======== ========
See accompanying summary of accounting policies and notes to financial
statements.
Page 1 of 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(UNAUDITED)
Cumulative
Amounts from
December 11,
For the Three Months Ended 2000
December 31, December 31, (Inception) to
2002 2001 Dec. 31, 2002
------------ ------------ --------------
REVENUES
Software Licensing $ -0- $ -0- $ 2,700
Interest Income -0- -0- 531
----------- ----------- -----------
-0- -0- 3,231
----------- ----------- -----------
EXPENSES
General and Administrative
Expenses 9,500 18,089 150,446
Equity in Loss of Affiliate -0- -0- 5,124
Officer Salary -0- 39,750 169,334
Professional Fees 2,555 4,112 28,242
Depreciation -0- 397 2,195
----------- ----------- -----------
12,055 62,348 355,341
----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES (12,055) (62,348) (352,110)
Income Tax Expense (Benefit) 936 -0- 936
----------- ----------- -----------
NET INCOME (LOSS) $ (12,991) $ (62,348) $ (353,046)
=========== =========== ===========
Basic and Diluted Earnings
(Loss) Per Share $ (.02) $ (.03) $ (.21)
=========== =========== ===========
Weighted Average Number of
Shares of Common Stock
Outstanding - Basic and
Diluted 661,900 2,015,000 1,662,116
=========== =========== ===========
See accompanying summary of accounting policies and notes to financial
statements.
Page 2 of 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(UNAUDITED)
Cumulative
Amounts from
For the Three Months Ended Dec. 11, 2000
December 31, December 31, (Inception) to
2002 2001 Dec. 3l, 2002
--------------- ------------ --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (12,991) $ (62,348) $(353,046)
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by (Used In) Operating Activities:
Depreciation -0- 397 2,195
Stock Issued for Services -0- -0- 26,971
Equity in Loss of Affiliate -0- -0- 5,124
Change in Assets and Liabilities:
Decrease (Increase) in Miscellaneous
Receivable -0- -0- (2,000)
Increase (Decrease) in Accounts Payable
and Accrued Expenses 9,056 1,107 15,750
Increase (Decrease) in Accounts Payable,
Related Party 3,935 -0- 26,700
Increase (Decrease) in Loan Payable -0- 9,482 -0-
--------- --------- ---------
Net Cash Provided by (Used In)
Operating Activities -0- (51,362) (278,306)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment -0- (183) (6,777)
--------- --------- ---------
Net Cash Provided By (Used In)
Investing Activities -0- (183) (6,777)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Common Stock Issuance -0- -0- 326,265
(Increase) in Deferred Registration Costs -0- -0- (40,690)
--------- --------- ---------
Net Cash Provided By (Used In)
Financing Activities -0- -0- 285,575
--------- --------- ---------
Effect of Exchange Rate Changes on Cash -0- 46 (492)
--------- --------- ---------
Net Increase (Decrease) in Cash and
Cash Equivalents -0- (51,499) -0-
Cash and Cash Equivalents at Beginning of Period -0- 59,439 -0-
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -0- $ 7,940 $ -0-
========= ========= =========
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period For:
Interest Expense $ -0- $ -0- $ -0-
Income Tax $ 936 $ -0- $ -0-
Non Cash Investing and Financing Transactions:
Stock Issued for Services $ -0- $ -0- $ 26,971
Stock Issued for Software $ -0- $ -0- $ 1,592
Treasury Stock Received in Exchange
for Non-Monetary Assets $ -0- $ -0- $ (1,542)
Investment Received for Transfer
of Tangible and Intangible Assets $ -0- $ -0- $ 5,124
See accompanying summary of accounting policies and notes to financial
statements.
Page 3 of 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS
Scientio, Inc. (Scientio) is a Delaware corporation. Scientio is
in the development stage. 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 Andrew 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.
On June 3, 2002, the software products were removed from Scientio
Inc. and Scientio's principal purpose changed to acquire and
merge with an operating company.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Currency Translation
The Company's functional currency was the British pounds sterling
in which revenue and expenses were generated. For reporting
purposes, the reporting currency is the U.S. Dollar. The
translating functional currency statement into the reporting
currency was performed in accordance with Statements of Financial
Accounting Standards (SFAS) 52 and U.S. Generally Accepted
Accounting Principles (GAAP). Since June 3, 2002, the Company's
functional currency has changed to U.S. dollar.
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.
Estimates in Financial Statements
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to
Page 4 of 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
(CONTINUED)
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 September
30, 2001, the Company has incurred deferred registration costs of
$40,690 relating to expenses incurred in connection with the
Stock Distribution (see Note 10). As of December 31, 2001, the
deferred registration costs were charged to equity upon
consummation of this Stock Distribution.
NOTE 4: INVESTMENT IN EQUITY SECURITIES (At Equity)
Investments in Non Marketable Equity Securities consist of the
following:
Dec. 31, Sept. 30,
2002 2002
--------- ---------
Investment in 27% of total
shares in Scientio BVI $ -0- $ -0-
------- -------
$ -0- $ -0-
======= =======
Since Scientio Inc. owns 27% of Scientio BVI, the investment is
accounted for under the equity method. There were no
intercompany transactions between Scientio Inc. and Scientio BVI.
The following unaudited information is provided for Scientio BVI
Page 5 of 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
(CONTINUED)
for the period June 3, 2002 (inception) through September 30,
2002, (the most recent information available):
Total assets $ 607
Total liabilities $ 37,783
(Loss) for the period June 3, 2002
(inception) through Sept. 30, 2002 $(37,207)
The allocated loss is limited to the amount of investment, which
is $5,124. This loss is recognized as Equity in Loss of
Affiliate in the Statement of Operations.
NOTE 5: OFFICER SALARY AND PROFESSIONAL FEES
The Company had an agreement with its former president, Andrew
Edmonds to complete and maintain the Company's product. In this
agreement, the Company agreed to pay the officer at least $90,000
per annum. Mr. Edmonds has received $169,334 for the period
December 11, 2000 (inception) to June 30, 2002. The agreement
with Mr. Edmonds was terminated on May 29, 2002 with Mr. Edmond's
resignation as president and his becoming secretary of the
Company.
NOTE 6: STOCK BASED COMPENSATION
The parties 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 September 30, 2001.
During January 2002, the Company entered an agreement with a
consulting firm to perform corporate finance and other financial
service matters. The Company issued 50,000 restricted shares of
common stock for this service at the fair market value of
$17,500. This amount was charged to investor relations expense
during the period ended March 31, 2002. This stock based
compensation plan is accounted for in accordance with SFAS No.
123.
NOTE 7: 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). On June 3, 2002, the shareholder
returned 1,541,850 shares in exchange for the software and fixed
assets of Scientio Inc. See additional information in Related
Party Transactions Note.
Page 6 of 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
(CONTINUED)
NOTE 8: INCOME TAXES
Income taxes are accrued at the statutory U.S. and state income
tax rates.
Income tax expense is as follows:
Cumulative
For the Amount From
Three Dec. 11, 2000
Months Ended (inception) to
Dec. 31, 2002 Dec. 31, 2002
------------- --------------
Current tax expense (benefit):
Income tax at statutory rates $ -0- $ -0-
Deferred tax expense (benefit):
Operating Loss Carryforward (1,949) (101,070)
----------- -----------
(1,949) (101,070)
Valuation allowance 1,949 101,070
----------- -----------
Total Tax Expense (Benefit) $ -0- $ -0-
=========== ===========
As of As of
Dec. 31, 2002 Sept. 30, 2002
------------- --------------
Deferred tax assets:
NOL $ 101,070 $ 99,121
Valuation allowance (101,070) (99,121)
----------- -----------
Net deferred tax assets $ -0- $ -0-
=========== ===========
The Company has net operating loss (NOL) carryforwards for income
tax purposes of approximately $353,000. $13,000 is allowed to be
offset against future income until the year 2024 when the NOL's
will expire. $206,000 and $134,000 will expire in the year 2023
and 2022, respectively.
The loss has been fully reserved for in the valuation allowance
account due to the startup of operations, the large losses, and
the uncertainty of the Company to achieve profitability in the
future.
NOTE 9: OPERATIONS AND LIQUIDITY
The Company has incurred substantial losses in 2001 and 2002.
Until such time that the Company's products and services can be
successfully marketed, the Company will continue to need to
fulfill working capital requirements through the sale of stock
and the issuance of debt.
Page 7 of 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
(CONTINUED)
The ability of the Company to continue in existence is dependent
on its having sufficient financial resources to bring products
and services to market for marketplace acceptance. As a result
of its significant losses, negative cash flows from operations,
and accumulated deficits for the period ending December 31, 2002,
there is doubt about the Company's ability to continue as a going
concern.
Management believes that it will be able to meet its projected
expenditures for a period of at least twelve months from December
31, 2002 through borrowings from affiliates. Its principal plan
of operations will be to merge or be acquired by a private
entity. However any projections of future cash needs and cash
flows are subject to substantial uncertainty. There can be no
assurance that sufficient funds will be available in amounts or
on terms acceptable to the Company.
NOTE 10: STOCK 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 11: RELATED PARTY TRANSACTIONS
The Company paid 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. Andrew Edmonds was the
President of Scientio Inc. before June, 2002. Anneke Edmonds is
the wife of Andrew Edmonds. The rental payment ended in May 2002,
and the Company has no obligation to pay the rent in the future.
On January 28, 2002, 100,000 shares were issued to Modern
Technology Corp. for $70,000. On May 1, 2002, 17,250 shares were
issued to Modern Technology Corp. for $12,075.
Page 8 of 9
SCIENTIO, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
(UNAUDITED)
(CONTINUED)
In June 2002, Anneke Edmonds, who owned 1,591,850 shares,
returned 1,541,850 shares. Scientio BVI was formed and 27% of
the shares were given to Scientio Inc. in return for the transfer
of all intangible and tangible assets to Scientio BVI. The
title of Scientio Inc.'s presidency was transferred from Andrew
Edmonds to Arthur Seidenfeld and Anneke Edmonds had no position
in Scientio Inc. as of September 30, 2002. Anneke Edmonds is a
major shareholder and a director of Scientio BVI. Andrew Edmonds
is an officer of Scientio Inc. as of September 30, 2002.
Page 9 of 9
PART I. FINANCIAL INFORMATION
---------------------
Item 1. 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 has been engaged in the development,
marketing and support of software components that can be used to analyze
data (data mining) flowing from the XML (extensible markup language)
protocol between computers over the internet and the intranets. The
Registrant has not generated any licensing revenues until the quarter
ended June 30, 2002 when its first licensing contract was concluded.
The Registrant has created five software components along with
associated help files, example code and demonstration software. They are
XML Miner, XML Rule, XR Batch, Strucfind and the Metarule editor. These
components can be used to read data in the XML format, data mine it and
use the results of the analysis to make predictions on new data. The above
components are packaged into two different packages directed at different
developer needs. Each package is named after the major component. The XML
Rule package contains XML Rule, XR Batch and the Metarule editor. The
targeted customers for these products 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 licensed its first unit of XML
Miner and XML Rule during the quarter ended June 30, 2002. To date, the
Registrant has not yet entered into any joint venture or general
consultancy agreement nor licensed any of its technology to software
development companies, although the Registrant had been in discussions
with a European software provider with the goal of reaching a joint
marketing agreement.
Management had focused its business plan into three areas: to pursue
large companies who sell software products for which the Registrant's
technology would be a vital or useful addition, to generate complete
products that exploit its technology directed at a larger market than just
software developers and consulting projects utilizing the Registrant's
technology.
On December 8, 2000, Modern Technology Corp. ("Modern") entered into
an agreement with Andrew Edmonds, former president of the Registrant and
Anneke Edmonds, former 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 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 has been in the development stage, generating its
first revenues $2,700 during the quarter ended June 30, 2002 from the
licensing of company software. During the next twelve months, the
Registrant does not anticipate the purchase of any significant amount of
plant or equipment. There are presently two employees, the Registrant's
president/treasurer and secretary, neither of which are currently drawing
any salary.
A form 8-K was filed on May 29, 2002 discussing the following actions
taken by the Board of Directors of the Registrant on that date:
Due to the inability of the Registrant to raise additional funds for
operations and to generate a material amount of licensing revenues to
date, the Registrant transferred all assets and the software business of
the Registrant to a British Virgin Island incorporated private company
entitled Scientio Incorporated ("Scientio BVI"). The private company was
set up by Andrew Edmonds, former president and currently secretary of the
Registrant. The Registrant owns a 27% ownership interest in Scientio BVI
with Andrew and Anneke Edmonds holding a 73% ownership interest in
Scientio BVI. Andrew Edmonds will put all improvements and new products
related to the Registrant's software business into Scientio BVI and Andrew
Edmonds will not compete with Scientio BVI for the next three years as it
relates to the Registrant's software products and business.
As a result of the former board of directors, Anneke Edmonds, former
treasurer and director of the Registrant has resigned and returned
1,541,850 shares of the Registrant, maintaining a 50,000 share ownership
position. Arthur Seidenfeld, formerly secretary and a director of the
Registrant became the Registrant's president, treasurer and director of
the Registrant. Andrew Edmonds, formerly president and a director of the
Registrant, became secretary and director of the Registrant. Gerald
Kaufman has been appointed a director of the Registrant. All three current
directors will resign upon remerge of the Registrant with a private
company.
The Registrant acknowledges debt to Andrew Edmonds for salaries, rent
and other expenses due through December 31, 2002 of $18,985. As of
December 31, 2002, other liabilities consist of $715 due to Modern for
expenses of the Registrant paid by Modern. Arthur Seidenfeld, president of
the Registrant is also president and director of Modern and Gerald Kaufman
is a director of Modern. As of December 31, 2002, there are also
liabilities due to Gerald Kaufman of $7000 for legal services provided the
Registrant. Greenberg & Company LLC the Registrant's accountant is owed
$15,750 as of December 31, 2002. These liabilities will be repaid once the
Registrant is merged with a private company.
As a result, the number of outstanding shares of $.001 par value
common stock declined from 2,203,750 to 661,900 shares. Anneke Edmonds
ownership position in the Registrant has been reduced from 72.2% to 7.55%.
Arthur Seidenfeld, president and director of the Registrant, currently
owns 29.5% of the outstanding shares of the Registrant and Modern (a
reporting company of which Arthur Seidenfeld is president and a director
and Gerald Kaufman is a director) currently owns 17.7% of the outstanding
shares of the Registrant.
The board of directors has concluded that the Registrant would
enhance shareholder value by separation of the software business of the
Registrant into a private company, Scientio BVI, allowing it to attempt to
raise capital from private sources and allowing the Registrant to offer
itself as a reporting, trading public company for merger with a private
company. To date, the Registrant is actively pursuing such a merger and no
assurance can be given that such a merger of the Registrant with a private
company will take place at any time in the future.
During the three months ended December 31, 2002, the Registrant had a
net loss of $12,991 as compared with a net loss of $62,348 for the three
months ended December 31, 2001. For the three months ended December 31,
2002, the Registrant's expenses consisted of general and administrative
expenses of $9,500 and professional fees (legal and accounting expenses)
of $2,555. For the three months ended December 31, 2001, general and
administrative expenses amounted to $18,089, officer's salary (former
president of the Registrant) was $39,750, professional fees amounted to
$4,112 and depreciation amounted to $397.
For the period from inception (December 11, 2000) to December 31,
2002, the Registrant's expenses consisted of general and administrative
expenses of $150,446, officer's salary to the Registrant's former
president of $169,334, professional fees (primarily legal and accounting
expenses) of $28,242, and depreciation of $2,195. $531 of interest income
and $2,700 of software licensing revenues was generated for this period.
As of December 31, 2002, the Registrant had total assets of $2,000
consisting of a receivable due from a former marketing consultant of the
Registrant. Total liabilities amounted to $42,450, consisting of accounts
payable due to related parties $26,700 ($18,985 to Andrew Edmonds, $7,000
to Gerald Kaufman and $715 to Modern Technology Corp) and $15,750 due to
the Registrant's accountants- Greenberg & Company LLC.
The Registrant is actively seeking candidates for either acquisition
or merger. No assurance can be given that such acquisition or merger will
occur in the near future.
From inception to June 1, 2002, the Registrant's former president,
Andrew Edmonds was the only officer entitled to compensation, pursuant to
the shareholder's agreement of December 8, 2000 (signed by Modern). The
shareholder's agreement was terminated on May 20, 2002 with no further
salaries beyond amounts due through May 29, 2002 due to Andrew Edmonds.
The Registrant had also been paying rent monthly of about $1,700 to Anneke
Edmonds, former 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 were monthly payments for telephone,
utilities and use of equipment, computers and software owned by Andrew and
Anneke Edmonds. This rent agreement was terminated on May 29, 2002 as part
of the shareholders agreement with Anneke Edmonds. There are also expenses
related to an ISP contract signed by Andrew Edmonds which ran through
September 30, 2002. Included in the accounts payable of $18,985 due to
Andrew Edmonds are some rent payments due through May 29, 2002. The
Registrant is presently using the offices of Modern for which it does not
pay any rent.
During the six months ended June 30, 2002, Modern purchased 117,250
restricted shares of the Registrant for $82,075 ($.70 per share) and
Arthur Seidenfeld, the Registrant's president, treasurer and director
purchased 21,500 restricted shares of the Registrant for $15,000
(approximately $.70 per share).
The Registrant concluded an agreement with Vfinance Investments Inc.
("Vfinance") whereby Vfinance performed consulting services related to
corporate finance and other financial service matters. During the quarter
ended March 31, 2002, the Registrant paid $10,000 and issued 50,000
restricted shares of common stock to Vfinance for these services.
Item 4. Controls and Procedures.
The President, who is also treasurer, chief executive and chief
financial officer of the Registrant, has concluded based on his evaluation
as of a date within 90 days prior to the date of the filing of this
Report, that the Registrant's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the
Registrant in the reports filed or submitted by it under the Securities
Act of 1934, as amended, is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange
Commission's rules and forms, and include controls and procedures designed
to ensure that information required to be disclosed by the Registrant in
such reports is accumulated and communicated to the Registrant's
management, including the president, as appropriate to allow timely
decisions regarding required disclosure.
There was no significant changes in the Company's internal controls
or in other factors that could significantly effect these controls
subsequent to the date of such evaluation.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities. None.
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 for the quarter.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By: Arthur Seidenfeld
President
Dated: January,6, 2003
CERTIFICATIONS
I, Arthur J. Seidenfeld certify that:
1. I have reviewed this quarterly report on Form 10-Q of Scientio, Inc.
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant, as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rule 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function);
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls: and
b) any fraud whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The registrant's other certifying officers and 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 our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: January 6, 2003
/s/ Arthur J. Seidenfeld
------------------------
Arthur J. Seidenfeld
President, Treasurer and Chief Executive Officer
CERTIFICATIONS
I, Arthur J. Seidenfeld certify that:
1. I have reviewed the quarterly report on Form 10-Q of Scientio, Inc.
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant, as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rule 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function);
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls: and
b) any fraud whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The registrant's other certifying officers and 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 our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: January 6, 2003
/s/ Arthur J. Seidenfeld
------------------------
Arthur J. Seidenfeld
President, Treasurer and Chief Financial Officer