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
June 30, 2005
or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-28955
SYNDICATION NET.COM, INC.
(Exact name of registrant as specified in its charter)
Delaware 57-2218873
---------- -----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1250 24th Street, NW
Suite 300
Washington, D.C. 20037
(Address of principal executive offices (zip code))
(202) 467-2788
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the last 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 |_|
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
At August 15, 2005, there were 15,551,577 shares of common stock, $0.0001 par
value per share, issued and outstanding.
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SYNDICATION NET.COM, INC. AND SUBSIDIARY
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 2005 and December 31, 2004
SYNDICATION NET. COM, INC. AND SUBSIDIARY
(A Development Stage Company)
Balance Sheets
ASSETS
June 30, December 31,
2005 2004
------------ ------------
(Unaudited)
CURRENT ASSETS
Cash $ 178,909 $ 14,041
------------ ------------
Total Current Assets 178,909 14,041
------------ ------------
OTHER CURRENT ASSETS
N/R - Related Party
TSMT 48,831 0
Allowance for bad debts
TSMT (48,831) 0
------------ ------------
Total Other Current Assets 0 0
------------ ------------
OTHER ASSETS
Deferred acquisition costs 8,038 7,000
------------ ------------
Total Other Assets 8,038 7,000
------------ ------------
TOTAL ASSETS $ 186,947 $ 21,041
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
2
SYNDICATION NET. COM, INC. AND SUBSIDIARY
(A Development Stage Company)
Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
June 30, December 31,
2005 2004
------------ ------------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 353,949 $ 324,524
Accounts payable - related party 0 2,000
Note payable - related party 361,830 361,830
Interest payable - related party 61,990 40,160
Note payable 596,761 140,511
Interest payable 76,330 37,907
Convertible debenture 190,000 200,000
Interest payable - convertible debenture 11,042 6,029
Accrued directors fees 53,884 44,000
------------ ------------
Total Current Liabilities 1,705,786 1,156,964
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 20,000,000 shares authorized of
$0.0001 par value, no shares issued and outstanding -- --
Common stock: 100,000,000 shares authorized of $0.0001
par value, 15,551,577 and 15,365,088 shares issued and
outstanding respectively 1,553 1,536
Additional paid-in capital 3,588,362 3,558,379
Deferred fees (107,500) (190,000)
Deficit accumulated prior to the development stage (2,231,519) (2,231,519)
Deficit accumulated during the development stage (2,769,735) (2,274,319)
------------ ------------
Total Stockholders' Equity (Deficit) (1,518,839) (1,135,923)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 186,947 $ 21,041
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
3
SYNDICATION NET. COM, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
From inception
of the
Development
For the Three Months Ended For the Six Months Ended stage on
June 30, June 30, January 1, 2004
----------------------------------- -------------------------------------- through
2005 2004 2005 2004 June 30, 2005
----------------- ---------------- ------------------ ------------------ -----------------
CONSULTING REVENUE $ -- $ -- $ -- $ -- $ --
----------------- ---------------- ------------------ ------------------ -----------------
OPERATING EXPENSES
General and administrative 62,555 43,006 186,726 163,054 506,820
Bad debt expense 11,895 48,831 -- 327,017
Consulting 13,115 540,500 140,615 540,500 1,421,615
----------------- ---------------- ------------------ ------------------ -----------------
Total Operating Expenses 87,565 583,506 376,172 703,554 2,255,452
----------------- ---------------- ------------------ ------------------ -----------------
OPERATING LOSS (87,565) (583,506) (376,172) (703,554) (2,255,452)
----------------- ---------------- ------------------ ------------------ -----------------
OTHER INCOME (EXPENSES)
Interest income - 4,287 - 4,425 -
Gain (Loss) on investment ( 20,000) - ( 70,000) -- (346,431)
Interest expense ( 26,070) (26,720) ( 49,244) (32,481) (167,852)
----------------- ---------------- ------------------ ------------------ -----------------
Total Other Income (Expenses) ( 46,070) (22,433) (119,244) (28,056) (514,283)
----------------- ---------------- ------------------ ------------------ -----------------
INCOME (LOSS) BEFORE INCOME TAXES
AND DISCONTINUED
OPERATIONS (133,635) (605,939) (495,416) (731,610) (2,769,735)
----------------- ---------------- ------------------ ------------------ -----------------
INCOME TAX EXPENSE -- -- -- -- --
----------------- ---------------- ------------------ ------------------ -----------------
INCOME (LOSS) BEFORE
DISCONTINUED OPERATIONS (133,635) (605,939) (495,416) (731,610)
(2,769,735) ----------------- ---------------- ------------------ ------------------
- -----------------
Income from discontinued
operations -- -- -- -- --
----------------- ---------------- ------------------ ------------------ -----------------
Total income from
discontinued operations -- -- -- -- --
----------------- ---------------- ------------------ ------------------ -----------------
NET INCOME (LOSS) $ (133,635) $ (605,939) $ (495,416) $ (731,610) $ (2,769,735)
================= ================ ------------------ ================== =================
BASIC INCOME (LOSS) PER SHARE
Income (Loss) before discontinued
operations $ (0.01) $ (0.05) $ (0.03) $ (0.06)
Income from discontinued
operations 0.00 0.00 0.00 0.00
----------------- ---------------- ------------------ ------------------
Total Income (Loss) Per Share $ (0.01) $ (0.05) $ (0.03) $ (0.06)
================= ================ ================== ==================
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 15,384,077 13,184,264 15,374,635 12,688,192
================= ================ ================== ==================
The accompanying notes are an integral part of these consolidated financial
statements.
4
SYNDICATION NET. COM, INC. AND SUBSIDIARY
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From Inception
of the
Development
For the Six Months Ended Stage on
June 30, January 1, 2004
-------------------------------------- Through
2005 2004 June 30, 2005
------------------ ------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income/(Loss) $ (495,416) $ (731,610) $ (2,769,735)
Adjustments to reconcile net loss to net cash
provided (used) in operating activities:
Common stock issued for services - 437,500 1,182,750
Amortization of deferred fees 82,500 153,000 488,500
Bad debt expense 48,831 - 327,018
Loss on investment value 70,000 - 346,431
Changes in operating assets and liabilities:
(Increase) in interest receivable - related party - (2,391) -
Increase (decrease) in accounts payable 29,425 11,179 47,941
Increase in accounts payable - related party (2,000) 500 (1,000)
Increase in interest payable - related party 21,828 - 29,026
Increase in accrued expenses 43,435 25,459 82,076
Increase in accrued expenses - related party 9,884 (4,848) 41,884
------------------ ------------------ -----------------
Net Cash Provided (Used) in Operating
Activities (191,513) (111,211) (225,109)
------------------- ----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) in notes receivable - related (48,831) - (327,018)
Increase in investments - related (70,000) (52,500) (346,431)
Increase in deferred acquisition costs (1,038) - (8,038)
----------------- ------------------- -----------------
Net Cash Used in Investing Activities (119,869) (52,500) (681,487)
------------------ ------------------ ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock issued for cash - 50,000 50,000
Increase in notes payable 500,000 190,500 707,500
Payments on notes payable (23,750) (20,000) (120,729)
Increase in convertible debenture - 50,000 200,000
Increase in notes payable - related party - 9,500 272,990
Payments in notes payable - related party - (13,600) (24,260)
Increase in notes receivable - related party - (95,000) -
------------------ ------------------- -----------------
Net Cash Provided by Financing Activities 476,250 171,400 1,085,491
------------------ ------------------ -----------------
NET INCREASE IN CASH 164,868 7,689 178,895
CASH, BEGINNING OF PERIOD 14,041 14 14
------------------ ------------------ -----------------
CASH, END OF PERIOD $ 178,909 $ 7,703 $ 178,909
================== ================== =================
The accompanying notes are an integral part of these consolidated financial
statements.
5
SYNDICATION NET. COM, INC. AND SUBSIDIARY
(A Development Stage Company)
Statements of Cash Flows (Continued)
(Unaudited)
From Inception
of the
Development
For the Six Months Ended Stage on
June 30, January 1, 2004
--------------------------- Through
2005 2004 June 30, 2005
------------ ------------ ------------
SUPPLEMENTAL CASH FLOW INFORMATION
Cash Payments For:
Income taxes $ -- $ -- $ --
Interest $ -- $ 11,370 $ 11,370
Non-Cash Financing Activities
Common stock issued for deferred fees $ -- $ 264,000 $ 304,000
Common stock issued for converting N/P $ 20,000 $ -- $ 20,000
Common stock issued for converting Deb $ 10,000 $ -- $ 10,000
Common stock issued for services $ -- $ 437,500 $ 1,182,750
The accompanying notes are an integral part of these consolidated financial
statements.
6
SYNDICATION NET. COM, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2005 and December 31, 2004
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally
accepted in the United States of America have been or omitted in
accordance with such rules and regulations. The information
furnished in the interim financial statements include normal
recurring adjustments and reflects all adjustments, which, in the
opinion of management, are necessary for a fair presentation of
such financial statements. Although management believes the
disclosures and information presented are adequate to make the
information not misleading, it is suggested that these interim
financial statements be read in conjunction with the Company's
most recent audited financial statements and notes thereto
included in its December 31, 2004 Annual Report on Form 10-KSB.
Operating results for the three months ended June 30, 2005 are not
necessarily indicative of the results that may be expected for the
year ending December 31, 2005.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared using
accounting principals generally accepted in the United States of
America applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal
course of business. However, the Company does not have cash or
other material assets, nor does it have an established source of
revenues to cover its operating costs and to allow it to continue
as a going concern. The financial statements do not reflect any
adjustments that might result from the outcome of this
uncertainty. It is management's intent to seek growth by way of a
merger or acquisition. It is the belief that over the next 12
months that Company will acquire at least one or more of
acquisition candidates. The acquisition process should provide
capital, revenue and incomes as a result. There is no assurance
that the Company will be successful in its acquisition efforts or
in raising the needed capital.
NOTE 3 - SIGNIFICANT EVENTS
Investment
During the quarter ended June 30, 2005, the Company increased its
investment in Tri State Metro Territories, LLC (TSMT) by $20,000,
which equals an increase in the ownership of TSMT by approximately
1%, up from 11.21% to 12.21%. Also, the Company loaned an
additional $11,895 to TSMT. A major shareholder of the Company is
also the managing member of TSMT. The Company has written down
this receivable in full and has written down fully the value of
the above investment to $0.
New Age Systems Inc (NAS Inc)
During the quarter ended June 30, 2005, the Company continued
negotiations to acquire New Age Systems Inc (NAS Inc).
7
SYNDICATION NET. COM, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2005 and December 31, 2004
NOTE 3 - SIGNIFICANT EVENTS (Continued)
Note Payable
In addition to the borrowing during the quarter ended March 31,
2005, of $250,000 from Cornell Capital at an interest rate of 12%,
which along with interest thereon, is due in full in November
2005; the Company borrowed during the quarter ended June 30, 2005
an amount of $250,000 from Cornell Capital at an interest rate of
12%. The entire amount of principle and interest are due in full
in January, 2006.
Conversion of Debenture and Note Payable
During the quarter ended June 30, 2005, the Company converted part
of Convertible Debenture and part of Note Payable to Cornell
Capital at the prevailing market rates as below:
Date of Conversion No of Shares $ amount Type of Loan
06/09/2005 41,667 $ 10,000 Debenture
06/20/2005 59,788 $ 10,000 Note Payable
06/27/2005 85,034 $ 10,000 Note Payable
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD-LOOKING STATEMENTS
The information in this registration statement contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. This Act provides a "safe harbor" for forward-looking statements to
encourage companies to provide prospective information about themselves so long
as they identify these statements as forward looking and provide meaningful
cautionary statements identifying important factors that could cause actual
results to differ from the projected results. All statements other than
statements of historical fact made in this registration statement are forward
looking. In particular, the statements herein regarding industry prospects and
future results of operations or financial position are forward-looking
statements. Forward-looking statements reflect management's current expectations
and are inherently uncertain. Our actual results may differ significantly from
management's expectations.
The following discussion and analysis should be read in conjunction with our
financial statements and summary of selected financial data, included herewith.
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 of our management.
GENERAL
We are a consulting company formed to acquire controlling interests in or to
participate in the creation of, and to provide financial, management and
technical support to, development stage businesses. Our strategy is to integrate
affiliated companies into a network and to actively develop the business
strategies, operations and management teams of the affiliated entities.
It is the intent of our board of directors to develop and exploit all business
opportunities to increase efficiencies between companies with which we may
invest in or consult. In addition, we may acquire companies to be held as wholly
owned subsidiaries.
We had one wholly owned subsidiary, Kemper Pressure Treated Forest Products,
Inc. Kemper was engaged in the retail brokerage business of preservative treated
lumber such as utility poles, bridge pilings, timber and guardrail posts. Kemper
had one customer and as a result of limited revenue we elected to wind down
Kemper's operations during the fourth quarter of 2003. We have changed our focus
and growth efforts towards our consulting business and/or the acquisition of an
operating development company.
On November 10, 2003, we entered into a Letter of Intent with Tri State
Metro-Territories, LLC (Tri-State) to acquire substantially all of the assets of
Tri-State. Brian Sorrentino, a major shareholder, director and an executive
officer of our company, is also a 10% shareholder and managing member in Tri
State. Additionally, Robert Green serves as a member of the Board of Director of
Tri-State and is a member of Tri-State and a shareholder of our company. Mark
Solomon, who serves as a member of our Board of Directors and is a shareholder
of our company also is a member of Tri-State. Dale Hill, is a shareholder of our
company and is also a member of Tri-State. Tri State is in the business of
selling franchised hair coloring salon units under the name of "HCX the
haircolorxperts". HCX, the parent franchisor, has currently sold 31 territories
in 24 states representing 2,738 franchises committed to open over the next 7 to
10 years. The assets being negotiated by us include the exclusive rights to
develop the franchise chain of "HCX Tri-State Metro Territories LLC" in the
District of Columbia and Maryland area as well as the interest in the prototype
HCX Salons located in Columbia Maryland and Washington, DC. The Company has
loaned Tri-State $178,000 in connection with Tri-State's opening of its
prototype salon in Washington, DC. We believe that through the acquisition of
the development rights from Tri-State, we have an opportunity to sell between
seventy-five and one hundred HCX units over an estimated seven to ten years.
On March 18, 2004, we entered into privately negotiated exchange agreements to
exchange 355,000 restricted shares of its common stock for 8% of membership
interests of Tri-State. In addition, from September 2004 through June 2005 we
entered purchase agreements whereby the Company purchased 12.21% of membership
interests of Tri-State. Although it is our intent to acquire all the assets of
Tri-State, the specific terms and the evaluations of the potential transaction
have not yet been finalized and the pending audited financial statements of
Tri-State are a requirement for completion of that transaction. The transaction
is also subject to customary closing conditions, including but not limited to
the receipt of all definitive documents, valuations, consents, and approvals.
There can be no assurance as to whether or when the transaction will close.
On September 14, 2004, the Company entered into a letter of intent with the
shareholders of New Age Systems, Inc. ("New Age") in which the Company agreed to
acquire 100% of New Age's outstanding securities from New Age's shareholders.
The closing of this sale is subject to the entering of a final definitive
agreement and the performance of customary due diligence. New Age is a
full-service information technology provider to government and business,
providing services and related products. New Age provides services in the
following areas:
o Software Engineering,
o Records Management and Workflow,
o Network Design and Support,
9
o Program Management,
o Geographic/Geospatial Information System solutions, and
o Integrated Association Management Systems.
THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THREE MONTHS ENDED MARCH 31, 2004
For the three months ended June 30, 2005 and June 30, 2004 we did not
have any revenue. The lack of revenue is primarily attributed to the decreasing
of consulting activity.
The operating expenses for the three months ended June 30, 2005
decreased by $495,941 to $87,565 for the three months ended June 30, 2005 from
$583,506 for the three months ended June 30, 2004. Our operating expenses
consist of general and administrative expenses and consulting fees. The reason
for the decrease relates to a decrease in the issuance of shares for consulting
services.
The net loss for the three months ended June 30, 2005 was $133,635
compared to net loss of $605,939 for the three months ended June 30, 2004. The
primary reasons for the decrease in net loss was decreases in expenses.
Liquidity and Capital Resources
Total current liabilities at June 30, 2005 were $1,705,786.
We have historically incurred losses. For the three months ended June
30, 2005, we had a operating loss of $87,565. On June 15, 2004, we entered into
a Standby Equity Distribution Agreement with Cornell Capital Partners, L.P.
Pursuant to the Standby Equity Distribution Agreement, we may, at our
discretion, periodically sell to Cornell Capital Partners shares of common stock
for a total purchase price of up to $10,000,000. For each share of common stock
purchased under the Standby Equity Distribution Agreement, Cornell Capital
Partners will pay 98% of the lowest volume weighted average price of the common
stock during the five consecutive trading days immediately following the notice
date. In addition, Cornell Capital Partners will retain 5% of each advance under
the Standby Equity Distribution Agreement. For example, assuming that the 98% of
lowest volume weighted average price of our common stock during the five
consecutive trading days immediately following a notice date is $.245, if we
request an advance in the amount of $200,000, Cornell Capital will be entitled
to the following:
o $10,000, which represents the 5% commitment fee; and
o 816,327 shares of our common stock, which is calculated by dividing
$200,000 by $.245.
Cornell Capital Partners is restricted from owing in excess of 9.9% of
our outstanding common stock. In the event that Cornell Capital Partners is
unable to sell shares of common stock that it acquires under the Standby Equity
Distribution Agreement and its ownership equals 9.9% of the our outstanding,
then we will not be able to draw down money under the Standby Distribution
Agreement. Cornell Capital Partners is a private limited partnership whose
business operations are conducted through its general partner, Yorkville
Advisors, LLC. In addition, we engaged Newbridge Securities Corporation, a
registered broker-dealer, to advise us in connection with the Standby Equity
Distribution Agreement. For its services, Newbridge Securities Corporation
received 40,000 shares of our common stock.
On June 15, 2004, we entered into a Securities Purchase Agreement
whereby we issued $200,000 in convertible debentures to Cornell Capital
Partners, L.P. of which $50,000 was received by us on June 15, 2004 and $150,000
was received by us on July 9, 2004. The debentures bear interest at 5%, mature
three years from the date of issuance, and are convertible into our common
stock, at the holder's option, at the lower of: (i) $.42; or (ii) eighty percent
(80%) of the lowest volume weighted average price of the common stock for the
five (5) trading days immediately preceding the conversion date. The issuance of
the convertible debenture has resulted in the creation of a liability. However,
we believe, although we cannot provide guarantees, that the convertible
debenture will be converted by Cornell Capital into shares of our common stock
thereby not impacting our cash position. In the event that Cornell Capital does
not convert the debenture to shares, then we will be required to repay the
principal and interest on the debenture, which will have a negative impact on
our liquidity.
In addition to the borrowing during the quarter ended March 31, 2005,
of $250,000 from Cornell Capital at an interest rate of 12%, which along with
interest thereon, is due in full in November 2005; the Company borrowed during
the quarter ended June 30, 2005 an amount of $250,000 from Cornell Capital at an
interest rate of 12%. The entire amount of principle and interest are due in
full in January, 2006.
Our future revenues and profits, if any, will depend upon various
factors, including the following:
o whether we will be able to effectively evaluate the overall quality
and industry expertise of potential acquisition candidates;
o whether we will have the funds to provide seed capital and mezzanine
financing to brick-and-mortar, e-commerce and Internet-related
companies; and
o whether we can develop and implement business models that will
enable growth companies to develop.
We may not be able to effect any acquisitions of or investments in
development stage companies if we are unable to secure sufficient funds to
finance our proposed acquisitions costs. We expect that our current cash and
cash equivalents will allow us to continue our current operation for six months.
If we are unable to generate additional revenues or secure financings, we may be
forced to cease or curtail operations.
10
We intend for our management team to identify companies that are
positioned to succeed and to assist those companies with financial, managerial
and technical support. Over the next 12 months, we intend to increase revenue
and gross profit margin by focusing and expanding its consulting services and
seeking acquisition candidates. It is management's belief that potential
acquisition targets can be better identified and assessed for risk if we first
become involved with these candidates on a consulting capacity. Our strategy is
to integrate affiliated companies into a network and to actively develop the
business strategies, operations and management teams of the affiliated entities.
We have recently decided to engage in the acquisition phase of our business
plan. To that end, we expanded our relationship with HCX Tri-State Metro
Territories and on November 7, 2003 executed a Letter of Intent pursuant to
which we will acquire substantially all of the assets of Tri State. Tri State is
in the business of selling franchised hair coloring salon units under the name
of "HCX the haircolorxperts". In addition, we have entered into a letter of
intent to acquire New Age Systems, Inc. New Age is a full-service information
technology provider to government and business, providing services and related
products. The closing of both of these acquisitions is subject to the entering
of final definitive agreements and the performance of customary due diligence.
During the quarter ended June 30, 2005, the Company borrowed $250,000
from Cornell Capital at an interest rate of 12%. The entire amount of principle
and interest are due in full in January 2006.
We do not foresee any significant changes in the number of our
employees over the next twelve months except in the event we finalize our
acquisition of the assets of Tri-State and/or New Age or complete any other
acquisitions which would require us to hire additional employees related to that
business.
We have not paid dividends on our common stock, and intend to reinvest
our earnings to support our working capital and expansion requirements. We
intend to continue to utilize our earnings in the development and expansion of
the business and do not expect to pay cash dividends in the foreseeable future.
It is the belief of management that as we move toward an active trading status
the ability to raise capital by stock issuance to effect our business plan is
enhanced.
We do not expect to sell any manufacturing facilities or significant
equipment over the next twelve months except within the demands of potential
acquisitions that we may pursue.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on us.
ITEM 3. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we conducted an
evaluation, under the supervision and with the participation of our chief
executive officer and chief financial officer of our disclosure controls and
procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange
Act). Based upon this evaluation, our chief executive officer and chief
financial officer concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Commission's
rules and forms. There was no change in our internal controls or in other
factors that could affect these controls during our last fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
11
PART 2 - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Other than the information stated below, we are not a party to any
material litigation and management has no knowledge of any threatened or pending
litigation against it.
On January 6, 2005, the Circuit Court of Madison County, Mississippi,
granted summary judgment in favor of all defendants in the action styled "Barry
Pope, Individually and as a Shareholder of Worldwide Forest Products, Inc., v
..Brian Sorrentino, et.al.", including defendant Syndicationnet.com. The Court
also granted a motion of certain Defendants, including Syndicationnet, asking
that Mr. Pope be ordered to pay the defendants attorney fees and expenses
incurred as a result of a continuance of a trial set on September 22, 2004, with
the Court finding that the actions of Plainfiff Pope caused the continuance.
This matter was commenced on November 26, 2001, Barry Pope, individually and as
a shareholder of Worldwide Forest Products, Inc. commenced an action against
Brian Sorrentino, Dale Hill, Worldwide Forest Products, Inc., Kemper Pressure
Treated Forest Products, Inc., Life2k.com, Inc., Algonquin Acquisition Corp.,
Generation Acquisition Corp., SyndicationNet.com, Inc., Castle Securities
Corporation and John Does 1-5, in the Circuit Court of Madison County,
Mississippi.
ITEM 2. ISSUANCE OF UNREGISTERED SECURITIES AND USE OF PROCEEDS
We have not issued securities for the period ended June 30, 2005 except for the
following:
In addition to the borrowing during the quarter ended March 31, 2005, of
$250,000 from Cornell Capital at an interest rate of 12%, which along with
interest thereon, is due in full in November 2005; the Company borrowed during
the quarter ended June 30, 2005 an amount of $250,000 from Cornell Capital at an
interest rate of 12%. The entire amount of principle and interest are due in
full in January 2006.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
During the quarter ended June 30, 2005, the Company increased its investment in
Tri State Metro Territories, LLC (TSMT) by $20,000, which equals an increase in
the ownership of TSMT by approximately 1%, up from 11.21% to 12.21%.
Additionally, Robert Green, a former director of the Company, serves as a member
of the Board of Director of Tri-State and is a member of Tri-State and a
shareholder of our company.
In addition to the borrowing during the quarter ended March 31, 2005, of
$250,000 from Cornell Capital at an interest rate of 12%, which along with
interest thereon, is due in full in November 2005; the Company borrowed during
the quarter ended June 30, 2005 an amount of $250,000 from Cornell Capital at an
interest rate of 12%. The entire amount of principle and interest are due in
full in January 2006.
ITEM 6. EXHIBITS
31.1 Certification by the Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31.2 Certification by the Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32.1 Certification by the Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
32.2 Certification by the Chief Financial Officer Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SYNDICATIONNET.COM, INC.
By: /s/Brian Sorrentino
---------------------------------
Brian Sorrentino
CEO and Principal Executive Officer
Dated: August 16, 2005
By: /s/Mrutyunjaya S. Chittavajhula.
---------------------------------
Mrutyunjaya S. Chittavajhula.
CFO and Principal Accounting Officer
Dated: August 16, 2005