-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TQd6l+F66+0AKCnEASkSJsmjgiAelurTd2uuyqs74teG4RySIeMIklGKLqrUe43+ lmlXDaOaIK27HLQv5Tz8BA== 0001013453-01-000008.txt : 20010224 0001013453-01-000008.hdr.sgml : 20010224 ACCESSION NUMBER: 0001013453-01-000008 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20010221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SBI COMMUNICATIONS INC CENTRAL INDEX KEY: 0001013453 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 581700840 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-28416 FILM NUMBER: 1551079 BUSINESS ADDRESS: STREET 1: 26030 AVENUE HALL STUDIO 5 CITY: VALENCIA STATE: CA ZIP: 91355 BUSINESS PHONE: 8185506148 MAIL ADDRESS: STREET 1: 26030 AVENUE HALL STUDIO 5 CITY: VALENCIA STATE: CA ZIP: 91355 10QSB/A 1 0001.txt SBI COMMUNICATIONS, INC. - 10QSB/A Securities and Exchange Commission Washington, D.C., 20549 FORM 10-QSB/A (Mark one) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal quarter ended September 30, 2000 Commission file Number 0-28416 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ============================================================================== SBI Communications, Inc. (Name of small business issuer specified in its charter) ============================================================================== Delaware 58-1700840 -------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 1239 South Glendale Avenue, Glendale California 91205 ----------------------------------------------------- (Address of Principal executive offices) (Zip code) (818) 550-6181 -------------- Issuer's telephone number
============================================================================== Securities registered pursuant to 12(b) of the Act: None Securities to be registered pursuant to Section 12(g) of the Act: Common Stock and Preferred Stock Common Stock $0.001 Par Value - Preferred Stock $5.00 Par Value --------------------------------------------------------------- (Title of Class) 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 Exchange Act of 1934 during the preceding 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 [ ] As of September 30, 2000 the Registrant had 12,323,878 shares of its $0.001 par value Common Stock Outstanding. =============================================================================== October 23, 2000 ===============================================================================
Table Of Contents SBI COMMUNICATIONS, INC. ------------------------ FORM 10-QSB ----------- INDEX ----- Page PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements 3 Consolidated Balance Sheets as of December 31, 1999 and and September 30, 2000 Consolidated Statements of Operations 4 for the three and Nine months ended September 30, 1999 and 2000 Consolidated Statement of Changes 4 in Shareholders' Equity for the nine months ended September 30, 2000 Consolidated Statements of Cash Flows 5 for the nine months ended September 30, 1999 and 2000 Notes to Consolidated Financial State- 6 ments Item 2. Management's Discussion and Analysis 7 of Financial Condition and Results of Operations Condition Part II. OTHER INFORMATION Item 1. Legal Proceedings 8 Item 2. Changes in Securities 9 Item 3. Defaults Upon Senior Securities 9 Item 4. Submission of Matters to a Vote 9 of Security Holders Item 5. Other Information 9 Item 6. Exhibits and Reports on Form 8-K 9 Signatures 10
2 PART I. FINANCIAL INFORMATION - ----------------------------- INDEPENDENT ACCOUNTANTS' REPORT ------------------------------- We have reviewed the accompanying consolidated balance sheet, statement of operations, stockholders'equity and cash flows of SBI Communications, Inc., and subsidiaries as of September 30, 2000, and for the three-months and nine-months period then ended. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the American Institure of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally acce[ted auditing standards, the objective of which is the expression of an opinion reguarding the financial statements taken as a whole. Accordingly, we do not express such as opinion. As indicated in Note 7, the stockholders' equity has been restated. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be conformity with generally accepted accounting principles. /s/ Jay J. Shapiro, CPA P.C. - ---------------------------- JAY J. SHAPIRO, C.P.A. A professional corporation December 21, 2000, except for Note 7 as to which the date is February 9, 2001. Encino, California Financial Statements - -------------------- SBI COMMUNICATIONS, INC. AND SUBSIDIARY --------------------------------------- CONSOLIDATED BALANCE SHEETS ---------------------------
(Unaudited) (Audited) Sept. 30, Dec. 31, 2000 1999 ---- ---- ASSETS ------ Current assets: Cash $ 22,542 $ -0- Inventory 20,500 -------- -------- 44,541 -0- Property and equipment, at real sale value: $ 4,015,000 $ 3,940,000 Other assets: Fixed Assets: 20,500 -0- ------------ ------------ $ 4,080,041 $ 3,940,000 LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Note payable to trust managed by a shareholder $ 150,000 $ 150,000 Mortgage note payable 1,050,000 1,050,000 Equipment note payable current portion 131,181 131,181 Accrued wages due to principal shareholder (Note 2) 550,000 550,000 Advances due to principal shareholder 460,253 95,136 Accrued interest payable 299,000 199,000 Accounts Payable 76,000 58,000 ---------- ---------- Total liabilities $2,716,434 $2,233,317 ----------- ----------- Stockholders' equity: Preferred stock, par value $5.00; 10,000,000 shares authorized; 1,543,000 and 1,653,000 shares issued and outstanding at Sepetember 30, 2000 and December 31, 1999, respectively; $7,715,000 $8,265,000 Common stock, par value $.001; 40,000,000 shares authorized; 12,323,878 shares issued and outstanding at September 30, 2000 and 9,693,878 as of December 31, 1999 6,161 4,846 Paid in capital 4,175,039 3,477,609 Accumulated deficit ( 10,532,593) (10,040,767) ------------- ------------ 1,363,607 1,706,121 ------------- ------------ $ 4,080,041 $ 3,940,000
See accompanying notes to consolidated financial statements. 3 SBI COMMUNICATIONS, INC. AND SUBSIDIARY --------------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------- FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------------- (UNAUDITED) ----------- Nine Months Ended Sept. 30, Three Months Ended Sept. 30, --------------------------- --------------------------
2000 1999 2000 1999 ---- ---- ---- ---- Revenues: Revenues $ -0- $ -0- $ -0- $ -0- Expenses: General and administrative 289,335 98,000 112,188 33,500 Website Development 102,491 -0- 38,000 -0- Interest and finance expenses 100,000 120,000 35,000 40,000 ---------- -------- --------- -------- 491,826 218,000 185,188 73,000 ---------- -------- --------- -------- Net loss ($ 491,826) ($ 218,000) (185,188) ($ 73,000) =========== ========== ========= ========== Net loss per share $ (0.04) $ (0.02) $ (0.01) $ (0.00) =========== ========== ========= =========
SBI COMMUNICATIONS, INC. AND SUBSIDIARY --------------------------------------- CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY RESTATED ----------------------------------------------
Balance December 31, 1999 Additional Common Preferred Paid-in Accumulated Shares Amount Shares Amount Capital Deficit ------ ------ ------ ------ ------- ------- 9,693,878 $4,846 1,653,000 8,265,000 $3,477,604 ($10,040,767) Net loss for 9 months ended Sept. 30, 2000: (405,576) Shares Issued for services: 950,000 $ 475 $ 85,775 $ (86,250) Shares Issued for Cash: 400,000 200 44,800 45,000 180,000 475 17,410 17,410 - --------- -------- -------- --------- ----------- ------------- conversion of prefered stock 1,100,000 560 (110,000) (550,000) 549,450 - --------- -------- -------- --------- ---------- ------------- 12,323,878 $ 6,161 1,543,000 $7,715,000 $4,175,039 ($10,532,593)
See accompanying notes to consolidated financial statements. 4 SBI COMMUNICATIONS, INC. AND SUBSIDIARY --------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- FOR THE NINE MONTHS ENDED SEPTEMBER 30, --------------------------------- (UNAUDITED) -----------
2000 1999 ------ ------ Cash flows from operating activities: Net (loss) ($ 491,826) ($218,000) Adjustments to reconcile net loss to cash provided (used) by operating activities: Stock issued for services: $141,565 -0- Increase in accounts payable: 120,000 218,000 Inventory 20,500 --------- ----------- Cash (used) by operating activities: ($209,761) $ -0- Cash flows from investing activities: Renovation Costs ( 75,000) -0- Purchase of fixed assets: ( 20,000) -0- ---------- --------- Cash flow (used) by finanicing activities ( 95,000) -0- Loans from shareholders/affiliates: 282,302 -0- Sale of common stock 45,000 -0- ---------- --------- Cash flows provided by financing activities: $ 327,302 -0- Net increase in cash $ 22,541 -0- Cash at beginning of period: -0- -0- ----------- --------- Cash at end of period: $ 22,541 $ -0- ============ =========== Supplemental information: Income taxes paid: $ -0- $ - Interest paid $ -0- $ 24,311 ============ =========== Items not requiring use of cash: Conersion of preferred stock 550,000 -0- ============= ===========
See accompanying notes to consolidated financial statements. 5 SBI COMMUNICATIONS, INC. AND SUBSIDIARY --------------------------------------- NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------------- SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 ----------------------------------- Note 1 - Selected disclosures The accompanying unaudited consolidated financial statements, which are for interim periods, do not included all disclosures provided in the annual consolidated audited financial statements. These unaudited consolidated financial statements should be read in conjunction with the consolidated audited financial statements and the footnotes thereto contained in the Form 10-KSB for the year ended December 31, 1999 of SBI Communications, Inc. (the "Company"), as filed with the Securities and Exchange Commission. The September 30, 2000 financial statememt was derived from the unaudited consolidated financial statements, but does not include all disclosures required by generally accepted accounting principles. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary for a fair presentation of the financial statements. The results of operations and cash flow for the three and nine months ended September 30, 2000 and 1999 are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reporting amount of assets and liabilities and disclosure of contingent 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. In August 2000 the Company split its common stock 2 for 1. All financial data in these statements reflects the post-split basis. Note 2 - Related party transactions The Company accrued salaries payable to the Company's principal shareholder totaling $97,500 for the nine months ended September 30, 1999 and no accrued salaries for 2000, respectively. All amounts owed to the shareholder are payable on demand. Note 3 - Net loss per share The Company's net loss per share was calculated using 12,323,878 weighted average shares outstanding for ended September 30, 2000 and 11,140,878 for September 30, 1999 on a post split basis. Although convertible preferred stock is a common stock equivalent, with a conversion rate of each specific series of preferred share to common, preferred stock conversion has not been included in the calculation of earnings per share in that to do so would be antidilutive. 6 Note 4 - Mortgage The company borrowed $1,050,000.00 to pay State of Alabama, on behalf of Cranberry-Magnetite/Broadway Gas Company, the previous owner's tax liability. NOTE 5 - Property and equipment Property and equinment consists of the following at Setpember 30, 2000 Land $ 832,500 Building $3,182,500 ----------- $4,015,000 =========== NOTE 6 - Subsequent Events In Octoer 2000, the Company entered into an agreement to issue 75,710,000 shares of common stock to acquire 100% ownership Valencia Entertainment International LLC ("VEI"). This transaction will be treated as a reverse acquisition merger for accounting purposes. If the transaction would have taken pace as of January 1, 2000, the Company's proforma consolidated net assets would be $10,221,168, the shares outstanding 88,034,843 net income for nine months ended September 30, 2000 of 861,495 and net income per share of $0.00. NOTE 7 - Restatement of Financial Statements The balance sheet and statement of stockholders' equity as of September 30, 2000 and for the nine month then ended have been restated to reflect a reversal of preferred stock cancellation. Originally in 1998, 1,500,000 shares of preferred stock with a par value of $5.00 per share was issued in connection with he purchase of the Company's building and land in Piedmont, Alabama. The perferred shares were cancelled due to non-performance under the sales contract. It now has been determinded that this cancellation should not be recorded unless or until the preferred stock certificates are surrendered to the Company. The reversal is necessary for the financial statement to be in conformity with General Accepted Accounting principles. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Plan of Operation: - ------------------ During he next 12 months, SBI plans to continue to market and host its auction for automobiles and antique and collectible merchandisc using its 80,000 square foot facility located in Piedmont, Alabama. For the next 12 months, the auction will require an additional $50,000 in capital inprovement and approximately $150,000 for marketing and advertising. In addition, SBI is deliquent in its mortgage note payable in the amount of $1,050,000. plus accrued interest of $200,000, which the private party lender has agreed to extend until december 31, 2001. Since the inplementation of the auction business plan, SBI has not generated significant revenues, thus in order for SBI to satisfy its cash requirment for the nest 12 months, it will have to borrow or raise additional funds. Currently, management is in the process of looking into refinancing the existing mortgage loan and for operating cash flow for the next 12 months. In the event SBI is unable to obtain favorable financing, VEI has agreed to provide any necessary financing for the next 12 fmonths. For the next 12 months, SBI does not plan to purchase or sell any significant property or equipment and does not expect any significant changes in the number of employees. September 30, 2000 and 1999 - --------------------------- SBI generated revenues of $0.00 during its third quarter ended September 30, 2000, as compared to $0.00 in the comparable period of the prior year. SBI wxpects to generat revenuye from its on-site auction in the Piedmont facility and through the use of its website beginning in 2001. General an administratives cost of SBI totaled $150,000 during the third quarter of 2000 versus $33,000 in the comparable 1999 quarter which represents a 433% increase. Most of the current period's cost were comprised of the development of the SBI's website, which are not fixed expense. The balance is primarily comparised of professional cost. The nine months ended september 30, 2000 reflects $294,000 increase ofer the 1999 period due to website development cost and professional fees. Interest and financing cost totaled $35,000 during the third quarter of 2000 as copared to $40,000 in the comparable 1999 period and for the nine months ended Setpember seotember 30, 2000, such costs were $100,000 versus $120,000 for 1999. SBI did not record any tax expense during the current quarter or comparable year-ago period due to tax loss carry forwards. SBI's tax loss carry forward balance at the end fo fiscal 1999 was in excess of $9 milion. Net loss for the nine months of 2000 was $492,826. The loss was primarily due to the development of SBI's website and the renvoation of the auction facilty in Piedmont and professional fees. The sale of the property located in Pidedmont, Alabama for net proceeds of $3,040,000. pending as of June 30, 2000 was subsequently cancelled because the purchaser was unable to obtain financeing under favorable terms. SBI has decided to develop the property as a venue for auto and autique and collectible merchandise auction. SBI spent $75,000. for renovation of this property in Setember 2000. 7 PART II--OTHER INFORMATION - -------------------------- ITEM 1. LEGAL PROCEEDINGS NONE ITEM 2. CHANGES IN SECURITIES In February the Company issued 400,000 shares of common stock for the repayment of $40,000.00 for a loan to the Company. In January the Company issued 200,000 shares of common stock to a individual for cash of $5,000 and services of $7,500. In June 2000, the Company issued for 400,000 shares consulting services rendered. In August 2000 the Company issued 130,000 shares for goods and services rendered. All 1,130,000 shares issued are valued at $0.25 per share. In addition, 400,000 shares were issued for $45,000 in cash. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS A preliminary proxy statement on schedule 14C proxy filing. Terms of proxy is as follows which has been approved by a majority of the companys shareholders. An informational statement will be provided to all current shareholders of the company. A. Acquisition of Valencia Intertainment International. B. Company will change its name to Val Com, Inc. C. Change the capital structure of the company from 40,000,000 common shares to 100,000,000 shares. D. Elect four directors to the board of directors. ITEM 5. OTHER INFORMATION CHANGE IN MANAGEMENT. - ----------------------- NONE IMPACT OF THE YEAR 2000 - ----------------------- The year 2000 risk is the result of computers being written using two digits rather than four digits to define the applicable year. Computer programs that have sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. As a result, computer systems and/or software used by many companies and government agencies may need to be upgraded to comply with year 2000 requirements or risk systems or miscalculations causing disruptions of normal business activities. STATE OF READINESS - ------------------ Based on as internal assessment, SBI did not incur any problem with its software programs, both those development internally and purchased from material outside vendors. SBI will continue to require its vendors of material hardware and software to provide assurances of their year 2000 compliance. RISKS - ----- SBI is not currently aware of any significant year 2000 compliance problems relating to the broadcast, Internet or other software systems that would have a material and adverse effect on business, results of operations and financial condition. EXHIBITS AND REPORTS ON FORM 8-K - -------------------------------- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS: EXHIBITS DESCRIPTION 11 Statement re: computation of per share earnings 27 Financial data schedule (B) REPORTS ON FORM 8-K: July 20, 24, & 28 2000 8 SIGNATURES ---------- In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SBI Communications, Inc. Date: October 23, 2000 By: /s/Ron Foster ------------------------------------- Ron Foster, Chairman of the Board and Chief Executive Officer (principal executive officer) EX-11 2 0002.txt COMPUTATION OF PER SHARE EARNINGS EXHIBIT 11 SBI COMMUNICATIONS, INC. ------------------------ COMPUTATION OF EARNINGS PER COMMON SHARE ---------------------------------------- FOR THE NINE MONTHS ENDED ------------------------ SEPTEMBER 30, 2000 AND 1999 ----------------------
Nine Months Nine Months Ended Ended Sept. 30, 2000 Sept. 30, 1999 -------------- -------------- Shares outstanding: 5,570,439 Weighted average shares outstanding 12,323,878 11,140,878 Net loss ($ 491,826) ($ 218,000) Preferred Dividend -- -- -------------- -------------- Total ( 491,826) (218,000) Net loss per share $ (0.04) $ (0.02) -------------- --------------
EX-27 3 0003.txt FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 Exhibit 27 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF SBI COMMUNICATIONS, INC. FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000 IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-2000 SEPT-30-2000 22,541 0 0 0 20,500 4,015,000 4,015,000 0 4,080,041 2,551,181 1,200,000 0 215,000 6,885 1,528,860 4,080,041 0 0 102,491 289,335 0 0 100,000 0 0 0 0 0 0 (491,826) (0.04) 0
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