-----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, WowXqIck+RGfrT1sliZCWk9rO85I1aykA07OicaCFQx4rJTrPnekUsv7DntLSfrD xDXqWPgaCSZZU69enEAcLw== 0001169232-03-005194.txt : 20030814 0001169232-03-005194.hdr.sgml : 20030814 20030814105609 ACCESSION NUMBER: 0001169232-03-005194 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SITI-SITES COM INC CENTRAL INDEX KEY: 0000812551 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 751940923 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15596 FILM NUMBER: 03844129 BUSINESS ADDRESS: STREET 1: 594 BROADWAY STREET 2: SUITE 1001 CITY: NEW YORK STATE: NY ZIP: 10012 BUSINESS PHONE: 2129650013 MAIL ADDRESS: STREET 1: P O BOX 1006 CITY: NEW YORK STATE: NY ZIP: 10268-1800 FORMER COMPANY: FORMER CONFORMED NAME: SPECTRUM INFORMATION TECHNOLOGIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SPECTRUM CELLULAR CORP DATE OF NAME CHANGE: 19890925 FORMER COMPANY: FORMER CONFORMED NAME: SPECTRUM CELLULAR COMMUNICATIONS CORP DATE OF NAME CHANGE: 19870715 10-Q 1 d56644_10-q.txt QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2003 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 0-15596 SITI-SITES.COM, INC. (Exact name of registrant as specified in its charter) Delaware 75-1940923 (State of incorporation) (I.R.S. Employer Identification No.) 47 Beech Road, Englewood, New Jersey 07631 (Address of principal executive offices) (Zip Code) 111 Lake Avenue, Suite #7, Tuckahoe, New York 10707 (Address of Chief Financial Officer) (Zip Code) (212) 925-1181 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 |_| 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 |X| NO |_| As of August 11, 2003, the registrant had outstanding 23,418,178 shares of its Common Stock, par value $.001 per share. The following documents are incorporated herein by reference: (1) Annual Report to security holders on Form 10-K for the year ended March 31, 2003 (the "Form 10-K for 2003"); (2) Annual Report to security holders on Form 10-K for the year ended March 31, 2002 (the "Form 10-K for 2002"); (3) Annual Report to security holders on Form 10-K for the year ended March 31, 2001 (the "Form 10-K for 2001"); (4) Annual Report to security holders on Form 10-K for the year ended March 31, 2000 (the "Form 10-K for 2000"); (5) Quarterly Report to security holders on Form 10-Q for the quarter ended June 30, 2002 ("June 30, 2002 10-Q") SITI-SITES.COM, INC. FORM 10-Q JUNE 30, 2003 PART I. FINANCIAL INFORMATION Page No. -------- Item 1. Financial Information Statement of Net Assets in Liquidation at June 30, 2003 (Unaudited) and March 31, 2003..................................................... 1 Statement of Changes in Net Assets (Liabilities) in Liquidation (Unaudited) for the Three Months Ended June 30, 2003 and June 30, 2002.......................................................... 2 Notes to Condensed Financial Statements (Unaudited).................... 3 Item 2. Management's Discussion and Analysis of Financial Condition and Status of Liquidation.............................................. 6 Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 8 Item 4. Controls and Procedures........................................ 8 PART II. OTHER INFORMATION............................................ 8 Item 1. Legal Proceedings ............................................. 8 Item 5. Other Information ............................................. 8 Item 6. Exhibits and Reports on Form 8-K............................... 9 PART I. FINANCIAL INFORMATION SITI-Sites.com, Inc. Statement of Net Assets in Liquidation (Amounts in thousands) June 30, 2003 (Unaudited) March 31, 2003 - -------------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 28 $ 36 Receivables and other assets -- 5 ------ ------ Total current assets 28 41 ------ ------ Total assets $ 28 $ 41 ------ ------ Liabilities Current Liabilities Accounts payable and accrued liabilities $ 11 $ 13 ------ ------ Total current liabilities 11 13 ------ ------ Total liabilities 11 13 ------ ------ Commitments and contingencies -- -- ------ ------ Net Assets in Liquidation $ 17 $ 28 ====== ====== See accompanying notes to consolidated financial statements. 1 SITI-Sites.com, Inc. Statement of Changes in Net Assets (Liabilities) in Liquidation June 30, June 30, 2003 2002 (Unaudited) (Unaudited) ----------- ----------- Three months ended (Amounts in thousands) Net assets in liquidation beginning of period $ 28 $ 11 Additions to net assets in liquidation: Contribution of management's services and rent 38 46 Reductions to net assets in liquidation: Operating expenses and accrual of estimated costs (49) (62) ------ ------ Net assets (liabilities) in liquidation at end of period $ 17 $ (5) ====== ======
See accompanying notes to consolidated financial statements 2 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) MANAGEMENT'S PLAN FOR LIQUIDATION Siti-Sites.com, Inc., a Delaware corporation (referred to as "SITI" or the "Company") previously operated as an Internet media company with three websites for the marketing of news and services. The Company's websites related entirely to the music industry. SITI incurred losses continuously since its inception in 1999. Following conclusion of the second fiscal quarter ended September 30, 2001, management who were its primary investors (investing approximately $4.1 million 1998-2002), intended to continue operations by investing approximately $600,000 in further equity capital in the Company. But on November 13, 2001 they determined that such limited funding would not accomplish a meaningful result for the investors or the Company and terminated discussions of such financing plan. The Company commenced procedures to prepare to liquidate its assets effective January 1, 2002. Liquidation. The Company's only substantial liability, consisting of the remaining nine months on its lease for office premises at 594 Broadway in New York City, was amicably settled, and terminated as of December 31, 2001. Concurrently office furniture and unnecessary computers were sold, and all employees were terminated in November, 2001. A team of two software consultants were paid in December, 2001 and January, 2002, to complete the Company's Artist Promotion System. Attempts were to be made to license portions thereof, working with a marketing consultant. However, complications in completing the software resulted in management terminating these consulting relationships, with a view to restarting them, if possible, when specific marketing or sale opportunities present themselves. The Company shut down all of its websites effective February 1, 2002. Certain former employees and directors purchased excess furniture and equipment from the Company for a total of approximately $19,000. The balance of the furniture was sold to an unrelated third party for approximately $5,000. Financing. The Company required a small financing to complete its employee terminations, asset liquidation and provide for ongoing corporate expenses. Major investors in the Company provided $110,000 in equity funds, purchasing 4,400,000 shares of common stock at $.025 per share, in a private offering as of December 7, 2001 in varying amounts parallel to their respective option holdings. Each purchasing investor was further required to surrender all of his outstanding options to purchase common stock of the Company, acquired in making each previous investment. These consisted of options for a total of 4,400,000 shares, previously exercisable at prices ranging from $.15 to $2.50 per share, and expiring between 2003 and 2006. All of such options are now cancelled and terminated, reducing all outstanding stock options by over 90%. This surrender and cancellation was intended to make future merger, sale or other business possibilities for the Company easier to achieve. The Company has options, previously held by employees in 1998 (before current major investors purchased control), which still remain outstanding, for the purchase of 415,577 shares, exercisable at prices ranging from $.35 to $2.15 per share, expiring between 2004 and 2006. There were 20,118,178 shares of common stock outstanding as of June 30, 2002 as a result of the financing described above. The Company's stock was trading at $.03 per share with nominal volume, during the seven-day offer/closing period in December, 2001. The shares sold to major investors were not registered under the Securities Act of 1933, were purchased for investment and are not readily marketable, which factors generally result in discounts in purchase value. There was also substantial business risk to the purchasers because the Company has no continuing operations and was being liquidated. The Company has been seeking merger or sale possibilities with operating businesses who perceive value in a merger with the Company as a publicly traded corporate shell with approximately 5,400 shareholders. Other Financing. The Company Chairman/CEO Lawrence M. Powers and another investor, in order to finance ongoing corporate expenses, purchased an additional 1,800,000 shares of common stock of the Company (1,200,000 and 3 600,000 shares, respectively) as of July 26, 2002, at $.025 per share. (This was the same price paid by six shareholder investors in December, 2001, to finance ongoing corporate expenses at that time.) The Company's stock was trading at $.05 per share during the week ending July 26, 2002 with nominal volume. The shares recently sold to these two existing investors were not registered under the Securities Act of 1933, were purchased for investment requiring "legended" certificates and are not readily marketable because of such legending and the nominal trading volume in SITI stock, which factors generally result in substantial discounts in purchase value. There are also several other business risks to the purchasers, because the Company has no ongoing operations, is in liquidation, and is seeking merger or sale possibilities with operating businesses, to make use of the Company's publicly traded status with approximately 5,400 shareholders. But current depressed stock market conditions for "going public" increase the difficulties in arranging any such transactions. The Company Chairman/CEO Lawrence M. Powers, in order to finance ongoing corporate expenses, purchased an additional 1,500,000 shares of common stock of the Company as of October 23, 2002, at $.02 per share. The Company's stock was trading at $.02 per share for most of the three weeks preceding October 23, 2002 with nominal volume. The shares recently sold to Mr. Powers were not registered under the Securities Act of 1933, were purchased for investment requiring "legended" certificates and are not readily marketable because of such legending and the nominal trading volume in SITI stock, which factors generally result in substantial discounts in purchase value. The several other business risks to the purchaser described above are continuing. As a result of this stock purchase transaction completed October 28, 2002, the Company's outstanding common stock increased as of such date from 21,918,178 shares to 23,418,178 shares. As a result of the liquidation and reasons discussed below, the Company's management has determined that it is an inactive entity (See "Form 10-K for 2003, Item 1. Business - Inactive Entity"). The Company meets all of the criteria as set forth below except as noted: (a) Gross receipts from all sources for the fiscal year ended March 31, 2003 are not in excess of $100,000; (b) The registrant has not purchased or sold any of its own stock, granted options therefore, or levied assessments upon outstanding stock; (1) (c) Expenditures for all purposes for the fiscal year ended March 31, 2003 are not in excess of $100,000; (2) (d) No material change in the business has occurred during the fiscal year, including any bankruptcy, reorganization, readjustment or succession or any material acquisition or disposition of plants, mines, mining equipment, mine rights or leases; and (e) No exchange upon which the shares are listed, or governmental authority having jurisdiction, requires the furnishing to it or the publication of audited financial statements. (1) During the last fiscal year, the Company had no source of funding to cover its expenses which were almost entirely audit and stock transfer expenses, and Chairman/CEO Powers, who may be deemed to beneficially own approximately 48% of the Company's outstanding stock, and another investor provided funding to the Company. All of the shares issued are legended and neither investor, has any intention of selling the stock publicly in the foreseeable future. (See "Form 10-K for 2003, Item 1. Business - Inactive Entity") (2) Operating expenses of approximately $260,000 include approximately $185,000 of contributed services and rent. The Company recorded such $185,000 as a contribution of capital because there was no cash outlay for such expenses. (b) CHANGE TO LIQUIDATION BASIS OF ACCOUNTING During the quarter ended December 31, 2001, the Company decided to liquidate its operations and adopted the liquidation basis of accounting effective January 1, 2002. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts, which estimates will be periodically reviewed and adjusted. Since the Company is in liquidation without continuing operations, the need to 4 present quarterly Statements of Operations and Comprehensive Loss as well as a Statement of Cash Flows, is eliminated. However, the prior year's financial statements for the comparable quarter are presented, since the Company did not adopt this method of accounting until January 1, 2002. The valuation of assets at their net realizable value and liabilities at their anticipated settlement amounts necessarily requires many estimates and assumptions. In addition, there are substantial risks and uncertainties associated with carrying out the liquidation of the Corporation's existing operations. The valuations presented in the accompanying Statement of Net Assets in Liquidation represent estimates, based on present facts and circumstances, of the net realizable values of assets and costs associated with carrying out the dissolution and liquidation plan based on the assumptions set forth below. The actual values and costs are expected to differ from the amounts shown herein and could be greater or lesser than the amounts recorded. Accordingly, it is not possible to predict the aggregate amount that will ultimately be distributable to shareholders and no assurance can be given that the amount to be received in liquidation will equal or exceed the net assets in liquidation per share in the accompanying Statement of Net assets in Liquidation or the price or prices at which the Common Stock has generally traded or is expected to trade in the future. The cautionary statements regarding estimates of net assets in liquidation set forth in the Forward-Looking Statements portion of this report are incorporated herein by reference. (c) RECENT HISTORY For a full discussion of the Company's recent history refer to Form 10-K for 2003, Form 10-K for 2002 and Form 10-K for 2001, incorporated herein by reference. (d) USE OF ESTIMATES In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. (e) CASH AND CASH EQUIVALENTS Cash and cash equivalents include the Company's cash balances and short-term investments that mature in 90 days or less from the original date of maturity. Cash and cash equivalents are carried at cost plus accrued interest, which approximates market. 2. LITIGATION As of the date of this report the Company knows of no pending or threatened legal actions against the Company that would have a material impact on the operations or financial condition of the Company. In December, 2002 the Company was sued for $3,750 in Civil Court, New York City by MetTel, a former supplier of Internet access service. The suit was brought one year after the Company terminated the service in November, 2001, returned the "router" connecting the system and paid all outstanding bills into December, 2001. Although the outcome of any legal proceedings cannot be predicted with certainty, based on current knowledge of the applicable law and facts taking into consideration the opinion of the Company's general counsel that the allegations lack merit and substance, and that the Company should prevail in this litigation, management believes that this lawsuit should not have a material adverse effect on the net assets in liquidation. As of June 30, 2003, the claimant has not pursued its claim by docketing it in Court or replying to the Company's counterclaim. Defaults by EZCD.com as to its investment representations, and its content and technology sharing agreement with the Company could result in litigation or other legal complications, and attendant costs and efforts by the Company's management to resolve such matters. EZCD.com filed for bankruptcy liquidation in August, 2000 and the Company is making creditor claims in such proceeding which have been partially accepted by the trustee therein, and will result in a nominal distribution. There is little likelihood of any material recovery. 5 From time to time in previous years, the Company had been a party to other legal actions and proceedings incidental to its business. As of the date of this report, however, the Company knows of no other pending or threatened legal actions that could have a material impact on the net assets in liquidation. 3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities were comprised of the following: June 30, March 31, 2003 2003 ---------------------- (Amounts in thousands) Accrued professional fees $ 11 $ 11 Accounts payable and accrued Expenses -- 2 ------ ------ $ 11 $ 13 ====== ====== ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND STATUS OF LIQUIDATION THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, INCLUDING, BUT NOT LIMITED TO STATEMENTS RELATED TO BUSINESS OBJECTIVES AND STRATEGY OF THE COMPANY. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY'S INDUSTRY, MANAGEMENT'S BELIEFS AND CERTAIN ASSUMPTIONS MADE BY THE COMPANY'S MANAGEMENT. WORDS SUCH AS "ANTICIPATES," "EXPECTS," "INTENDS," "PLANS," "BELIEVES," "SEEKS," "ESTIMATES," VARIATIONS OF SUCH WORDS AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT; THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED, FORECASTED, OR CONTEMPLATED BY ANY SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY INCLUDE, AMONG OTHERS, THOSE RISK FACTORS SET FORTH IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 2003. GIVEN THESE UNCERTAINTIES, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON ANY SUCH FORWARD-LOOKING STATEMENTS. UNLESS REQUIRED BY LAW, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. HOWEVER, READERS SHOULD CAREFULLY REVIEW THE RISK FACTORS SET FORTH IN OTHER REPORTS OR DOCUMENTS THE COMPANY FILES FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION, PARTICULARLY THE ANNUAL REPORTS ON FORM 10-K, OTHER QUARTERLY REPORTS ON FORM 10-Q AND ANY CURRENT REPORTS ON FORM 8-K. Overview SITI has been seeking merger or sale possibilities with operating businesses who perceive value in a merger with the Company as a publicly traded corporate shell. The Company was an Internet media company with three websites for the marketing of news and services. The Company's websites related entirely to the music industry. The Company intended to develop these websites further by entering into strategic partnerships and affiliations. As part of this strategy, in June, 1999 the Company acquired Tropia, which promoted and marketed the music of selected independent artists on its website www.Tropia.com. The Company next acquired three music-related websites, HungryBands.com (an e-commerce website and business promoting and selling music by independent artists), NewMediaMusic.com (an e-news/magazine business), and NewYorkExpo.com (a music and Internet conference business), all in January, 2000. As of December 31, 2001, the Company discontinued the operations of its New Media Music and HungryBands divisions because they were not viable businesses. As of March 31, 2001, the Company discontinued the operations of the New York Expo as a result of increased losses associated with the production of the Expo. In addition, during fiscal 2000, the Company made and wrote-off a $500,000 investment in a music CD custom compilation and promotion company, Volatile Media, Inc., which 6 did business as EZCD.com, now in bankruptcy liquidation. Such investment was written off at March 31, 2000 because of uncertainties in EZCD's financing plans and ability to continue operations. SITI's history under former management and control persons goes back to 1984 when it was incorporated in Delaware. As a result of a change of control of the Company in December, 1998, the Company's senior management and Board of Directors were replaced. The current senior management and Board of Directors changed the strategic direction of the Company from being a developer of patented communication technologies to that of an Internet media company. All prior business operations of the Company were discontinued. The Company changed its corporate name to SITI-Sites.com, Inc. from Spectrum Information Technologies, Inc. after its Annual Meeting of Stockholders on December 14, 1999, and its former stock symbol "SITI" is now "SITN.EOB". In view of the Company's determination to seek other business opportunities to create shareholder value, the following information should not be relied upon as an indication of future performance. All of the Company's operations prior to January 1, 2002 are discontinued operations and the Company adopted the liquidation basis of accounting, effective January 1, 2002. (See Status of Liquidation). LIQUIDITY AND CAPITAL RESOURCES The Company's primary objective is to conserve its cash while it is seeking merger or sale possibilities. As of June 30, 2003 the Company had net assets of $17,000. As of June 30, 2003, the Company's total assets were $28,000, represented entirely by cash. During the three months ended June 30, 2003, the Company paid approximately $49,000 in operating expenses consisting primarily of its stock transfer agent fees and salary to one employee of approximately $6,000 and $3,000, respectively, as well as management's contribution of their services of approximately $31,000. As of June 30, 2003, the Company's liabilities were $11,000 consisting primarily of its obligations for professional fees associated with its fiscal 2003 year end agreed upon procedures. Management, primarily the Chairman/CEO, continues to work without any cash compensation. Management further continues to use personal offices to continue its plan. As a result, of this contribution, the Company charged-off approximately $38,000 to compensation and rent. LIQUIDATION BASIS OF ACCOUNTING The condensed consolidated financial statements for the three months ended June 30, 2002 were prepared on the liquidation basis of accounting. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their estimated settlement amounts, which estimates will be periodically reviewed and adjusted. Since the Company is in liquidation without continuing operations, the need to present quarterly Statements of Operations and Comprehensive Loss as well as a Statement of Cash Flows is eliminated. The valuation of assets at their net realizable value and liabilities at their anticipated settlement amounts necessarily requires many estimates and assumptions. In addition, there are substantial risks and uncertainties associated with carrying out the liquidation of the Corporation's existing operations. The valuations presented in the accompanying Statement of Net Assets in Liquidation represent estimates, based on present facts and circumstances, of the net realizable values of assets and costs associated with carrying out the dissolution and liquidation plan based on the assumptions set forth below. The actual values and costs are expected to differ from the amounts shown herein and could be greater or lesser than the amounts recorded. Accordingly, it is not possible to predict the aggregate amount that will ultimately be distributable to shareholders and no assurance can be given that the amount to be received in liquidation will equal or exceed the net assets in liquidation per share in the accompanying Statement of Net assets in Liquidation or the price or prices at which the Common Stock has generally traded or is expected to trade in the future. The cautionary statements regarding estimates of net assets in liquidation set forth in the Forward-Looking Statements portion of this report are incorporated herein by reference. RISK FACTORS See the Company's Annual Report on Form 10-K , "Item 1 - Risk Factors That May Affect the Company's Business, Future Operating Results and Financial Condition." and "Status of Liquidation" set forth herein. 7 STATUS OF LIQUIDATION SITI continues to seek merger or sale possibilities with operating businesses who perceive value in a merger with the Company as a publicly traded corporate shell. There can be no assurance these of any merger or sale occurring or such transaction will be viable for the Company. There are also several other business risks to the purchasers, because the Company has no ongoing operations, is in liquidation, and is seeking merger or sale possibilities with operating businesses, to make use of the Company's publicly traded status with approximately 5,400 shareholders. But current depressed stock market conditions for "going public" increase the difficulties in arranging any such transactions. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's market risk disclosures set forth in its fiscal 2003 Annual Report filed on Form 10-K have not changed significantly. ITEM 4. CONTROLS AND PROCEDURES (a) The Company's principal executive officer and its principal financial officer, based on their evaluation of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a -14 (c)) as of a date within 90 days prior to the filing of this Quarterly Report on Form 10-Q, have concluded that the Company's disclosure controls and procedures are adequate and effective for the purposes set forth in the definition in Exchange Act rules. (b) There were no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal controls subsequent to the date of their evaluation. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS As of the date of this report the Company knows of no pending or threatened legal actions against the Company that would have a material impact on the operations or financial condition of the Company. In December, 2002 the Company was sued for $3,750 in Civil Court, New York City by MetTel, a former supplier of Internet access service. The suit was brought one year after the Company terminated the service in November, 2001, returned the "router" connecting the system and paid all outstanding bills into December, 2001. Although the outcome of any legal proceedings cannot be predicted with certainty, based on current knowledge of the applicable law and facts taking into consideration the opinion of the Company's general counsel that the allegations lack merit and substance, and that the Company should prevail in this litigation, management believes that this lawsuit should not have a material adverse effect on the net assets in liquidation. As of June 30, 2003, the claimant has not pursued its claim by docketing it in Court or replying to the Company's counterclaim. Defaults by EZCD.com as to its investment representations, and its content and technology sharing agreement with the Company could result in litigation or other legal complications, and attendant costs and efforts by the Company's management to resolve such matters. EZCD.com filed for bankruptcy liquidation in August, 2000 and the Company is making creditor claims in such proceeding which have been partially accepted by the trustee therein, and will result in a nominal distribution. There is little likelihood of any material recovery. From time to time in previous years, the Company had been a party to other legal actions and proceedings incidental to its business. As of the date of this report, however, the Company knows of no other pending or threatened legal actions that could have a material impact on the net assets in liquidation. 8 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K A. Exhibits Exhibit 31 Certification Pursuant To Section 302 of The Sarbanes-Oxley Act of 2002 Exhibit 32 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 202 B. Reports on Form 8-K On July 15,2003, the Company filed Form 8-K announcing at "Item 4. Change in the Registrant's Certifying Accountant", the Company's termination of McGladrey & Pullen, LLP as its auditors as a result of the Company's inactive status. 9 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, thereto duly authorized. Dated: August 13, 2003 SITI-SITES.COM, INC. By /s/ Lawrence M. Powers --------------------------------------- Lawrence M. Powers Chief Executive Officer and Chairman of the Board of Directors By /s/ Toni Ann Tantillo --------------------------------------- Toni Ann Tantillo Chief Financial Officer, Vice President, Secretary and Treasurer 10 EX-31.1 3 d56644_ex31-1.txt CERTIFICATIONS EXHIBIT 31.1 CERTIFICATION Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Lawrence M. Powers, certify that: 1) I have reviewed this quarterly report on Form 10-Q of SITI-Sites.com, Inc. (the "Registrant") 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 Rules 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 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 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 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: August 13, 2003 By /s/ Lawrence M. Powers ------------------------------------- Lawrence M. Powers Chief Executive Officer and Chairman of the Board of Directors EX-31.2 4 d56644_ex31-2.txt CERTIFICATIONS EXHIBIT 31.2 CERTIFICATION Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Toni Ann Tantillo, certify that: 1) I have reviewed this quarterly report on Form 10-Q of SITI-Sites.com, Inc. (the "Registrant") 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 Rules 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 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 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: August 13, 2003 By /s/ Toni Ann Tantillo --------------------------------------- Toni Ann Tantillo Chief Financial Officer, Vice President, Secretary and Treasurer EX-32 5 d56644_ex32.txt CERTIFICATIONS EXHIBIT 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of SITI-Sites.com, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), We, Lawrence M. Powers, Chief Executive Officer and Toni Ann Tantillo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Lawrence M. Powers ----------------------- Lawrence M. Powers Chief Executive Officer /s/ Toni Ann Tantillo ----------------------- Toni Ann Tantillo Chief Financial Officer August 13, 2003 -----END PRIVACY-ENHANCED MESSAGE-----