Securities and Exchange Commission
Washington, D.C., 20549
FORM 10-QSB
(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, 1999
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 Identification Nunber)
incorporation or organization)
Post Office Box 729 - 103 Firetower Road - Leesburg, Georgia 31763
(Address of Principal executive offices) (Zip code)
(912)759-9176
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, 1998 the Registrant had 5,570,430 shares of its $0.001 par
value Common Stock Outstanding.
=============================================================================
November 15, 1999
=============================================================================
<PAGE>
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, 1998 and
and September 30, 1999
Consolidated Statements of Operations 4
for the nine months ended
September 30, 1998 and 1999
Consolidated Statement of Changes 4
in Shareholders' Equity for the nine
months ended September 30, 1999
Consolidated Statements of Cash Flows 5
for the nine months ended September 30,
1998 and 1999.
Notes to Consolidated Financial State- 6
meats
Item 2. Management's Discussion and Analysis 8
of Financial Condition and Results
of Operations Condition
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote 12
of Security Holders
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
<PAGE> 2
PART I. FINANCIAL INFORMATION
Financial Statements
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
Sept. 30, Dec. 31,
1999 1998
ASSETS
Current assets:
<S> <C> <C>
Cash $ 485 $ 485
Accounts receivable, - -
Note receivable from affiliates 3,600 3,600
Inventories 79,444 79,444
83,529 83,529
Property and equipment, net of accumulated
depreciation 7,458,345 7,458,345
Other assets:
Deferred loan costs 5,071 5,071
Deposits 63,065 63,065
____________________________________________________________________________
$7,610,010 $7,610,557
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to trust managed by a
shareholder 150,000 $ 150,000
Mortgage note payable-current portion
(Note 5) 1,050,000 1,050,000
Capitalized leases-current portion 17,284 17,284
Accrued wages due to principal shareholder
(Note 2) 355,000 355,000
Advances due to principal shareholder 12,698 12,698
Account payable and accrued expenses 169,071 169,071
1,754,053 1,754,053
Capitalized leases, long-term portion 61,459 61,459
Other notes payable 52,438 52,438
Total liabilities 1,867,950 1,867,950
Stockholders' equity:
Preferred stock, par value $5.00;
10,000,000 shares authorized;
1,653,000 and 1,653,000 shares
issued and outstanding at
September 30, 1999 and December 31,
1998, respectively 8,265,000 8,265,000
Common stock, par value $.001; 40,000,000
shares authorized;
5,570,439 shares issued and outstanding
at Sept. 30, 1999 and 5,570,439 as of
December 31, 1998 5,570 5,570
Paid in capital 3,667,118 3,66,118
Accumulated deficit ( 6,195,628) ( 6,195,628)
5,742,060 5,742,060
____________________________________________________________________________
$7,610,010 $ 7,610,010
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
STATEMENTS OF LOSS
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
<TABLE>
<CAPTION>
1999 1998 1999 1998
Revenues:
<S> <C> <C> <C> <C>
Bingo hall rent - $ - - -
Kitchen and gift shop revenues - - - -
Other income - - 593 593
- 593 593
Expenses:
Cost of sales - kitchen
and gift shop - - - -
Administrative salaries and
related expenses 35,000 35,000 73,133 73,133
Facility cost 12,260 12,260 22,971 22,971
Other general and
administrative 31,212 31,212 65,098 65,098
Production costs - - - -
Depreciation and
amortization 8,019 8,019 88,539 88,539
Interest and finance
expenses 24,311 24,311 31,061 31,061
___________________________________________________________________________
110,802 110,802 ($ 280,802) ($280,802)
___________________________________________________________________________
Net loss ($110,802) (110,802) ($ 280,209) ($280,209)
Net loss per share $__0.02) ($ 0.02 ($ 0.05) ($ 0.05)
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
1999 1998
Revenues:
<S> <C> <C>
Bingo hall rent $ - $ -
Kitchen and gift shop revenues - -
Other income 593 593
_________________________________________________________________________
593 593
Expenses:
Cost of sales - kitchen and
Gift shop - -
Administrative salaries and
related expenses 73,133 73,133
Facility costs 22,971 22,971
Other general and administrative 65,098 65,098
Production costs - -
Depreciation and amortization 88,539 88,539
Interest and finance expenses 31,061 31,061
________________________________________________________________________
280,802 280,802
Net loss ($ 280,209) ($ 280,209)
Net loss per share ($ 0.05) ($ 0.05)
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net (loss) ($ 280,209) ($ 280,209)
Adjustments to reconcile net loss to cash
provided (used) by operating activities:
Depreciation and amortization 72,500 72,500
Amortization of deferred loan costs 16,038 16,309
Charge offs of long-term receivables - -
Change in accounts receivable, trade 768 768
Change in inventories 6,621 6,621
Change in prepaid expenses - -
Change in accounts payable and 83,629 83,629
__________ _________
Cash (used) by operating activities( 100,653) (100,653)
Cash flows from investing activities:
Proceeds from repayment of notes receivable
from affiliate 5,499 5,499
Purchase of real estate ( 748,622) ( 748,622)
Cash (used) by investing activities ( 743,123) ( 743,123)
Cash flows from financing activities:
Loans from shareholders/affiliates 12,698 12,698
Proceeds From Mortgaged (see note 5) $1,050,000 $1,050,000
Mortgage loan repayments ( 239,701) (239,701)
Capital lease repayments ( 964) ( 964)
Cash flows provided by financing
activities $822,033 $822,033
Net increase (decrease) in cash ( 21,743) ( 21,743)
Cash at beginning of period 22,228 22,228
Cash at end of period $ 485 $ 485
Supplemental information:
Income taxes paid - $ -
Interest paid 28,311 $ 28,311
Items not requiring use of cash:
Preferred stock converted ($0.00) ($200,000)
Issuance of common stock $0.00 200.000
Paid in capital $ - $ -
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
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 financial statements. These unaudited consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the footnotes thereto contained in the Form 10-KSB for the year
ended December 31, 1998 of SBI Communications, Inc. (the "Company"), as filed
with the Securities and Exchange Commission. The December 31, 1998 balance
sheet 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 six months ended September 30,
1999 and 1998 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 discl
osure 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.
Note 2 - Related party transactions
The Company accrued salaries payable to the Company's principal
shareholder totaling $97,500. for the three quarters ended September 30, 1999
and 1998, 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 5,570,439 and
5,570,439 weighted average shares outstanding for each of the quarters ended
June 30, 1999 and December 31, 1998, respectively. Although convertible
preferred stock is a common stock equivalent, with a conversion rate of
approximately 10 shares of common stock (based upon an approximate market
price for common stock of $0.50) for each share of preferred stock, preferred
stock conversion has not been included in the calculation of earnings per
share in that to do so would be antidilutive.
<PAGE> 6
Note 4 - Preferred stock activity
In July, 1996, 5,000 shares of preferred stock with a par value of
$25,000 were to be issued to cover $20,000 in closing costs relating to the
mortgage note receivable. The Company inadvertently issued 25,000 shares
rather than 5,000 shares, and both parties agreed that the related certificate
would be returned and reissued. In that the certificate had not been returned
as of December 31, 1996, the full 25,000 shares were treated as outstanding at
that time, with a related reduction in paid in capital. In the first quarter
of 1997, the certificate was returned, and a new certificate for 5,000 shares
was issued. The stockholders' equity section of the balance sheet as of March
31, 1997, has been adjusted to reflect the reduced number of preferred shares
outstanding, with a corresponding adjustment to paid in capital.
Note 5 - Mortgage
The company borrowed $1,050,000.00 to pay the State of Alabama, on behalf of
Cranberry-Magnetite, the previous owner tax liability of $748,422.00 and to
pay the second mortgage to National Mortgage of $263,275. The company is also
securing a loan to refinance the property, renovate and expand the company
business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SBI Communications, Inc. (the "Company"), was originally organized in
the State of Utah on September 23, 1983, under the corporate name of Alpine
Survival Products, Inc. Its name was subsequently changed to Justin Land and
Development, Inc. during October, 1984, and then to Supermin, Inc. on November
20, 1985. On September 29, 1986, Satellite Bingo, Inc. was the surviving
corporate entity in a statutory merger with Supermin, Inc., a Utah
corporation. In connection with the above merger, the former shareholders of
Satellite Bingo, Inc. acquired control of the merged entity and changed the
corporate name to Satellite Bingo, Inc. Through shareholder approval dated
March 10, 1988, the name was changed to its current name of SBI
Communications, Inc. On January 1, 1993, the Company executed a plan of
merger that effectively changed the Company's state of domicile from Utah to
Delaware. Although the Company is currently a Delaware corporation, on
January 31, 1998, the stockholders and Board of Directors approved a plan to
change the Company's corporate domicile to the State of Nevada. Management
anticipates executing the plan during 1999.
The Company plans to lease or operate bingo halls and to provide
interactive satellite delivered bingo games, game shows and other similar
telecommunication gaming products or services to television viewers throughout
the United States. The Company has also developed a system that can be
integrated into all standard communications channels including the World Wide
Web for interactive play throughout the World. Our Web site or the company's
URLs are http://www.sBid.net, http://www.sbicom.com, http://www.abingo.com,
http://www.Wnet1.com, http://www.bingo2k.com,
http://www.sbicommunications.com, http://www.globalot.com or
http://www.frontierpalace.com. Currently, the Company's is developing its web
site and has a sales for the Alabama property.
Piedmont Jaycees did not perform as represented, and management did
not develop business. Gross revenues were 50% of their projections which did
not fulfill agreement in their premises lease: Jaycees salaries exceeded
budgets; operations schedule was not full time. Therefore, their lease was
allowed to not be renewed at the first of 1998.
At the same time, local political influences developed negative local
law changes as a reaction to the Piedmont Jaycees operation and a Bingo
Commission being implemented to oversee all bingo operation in Calhoun
County. Local ordinances are being adopted to limit all charity bingo
operations to the amount of employees and establish a requirement of net
proceeds being donated for charitable purposes, with no revenues to the
employees of the charity .
<PAGE> 7
In reaction to the above political/legal trends, management of it's
wholly owned subsidiary (SBI Communications, Inc. of Alabama) has a signed
purchase agreement with Mobile Home Factory Outlet Center, Inc. of Panama
City, Florida to purchase the Piedmont property for $7,300,000.00. The sale
of this property should be closed with-in the next thirty days. Management is
working in the Boca Raton/Fort Lauderdale, Florida area and believes that
the local charity Bingo market is more hospitable in Southeast Florida,
rather than northeast Alabama. The company plans to open a facilities in the
Southeast Florida and Maryland area to lease to local charities to conduct
bingo games.
Mobile Home Factory Outlet Center, Inc. plans to have an Mobile Home
Manufacturing Plant and Sales outlet at the Piedmont location. Plans are to
employ approximately 250 to 300 employees. SBI has enter into a purchase
agreement to purchase an additional eighteen (18) acres of land directly
adjoining it's property in order to make available a total of thirty-five
acres to Mobile Home Factory Outlet Center. The total purchase with the
additional land is $7,300,000.00.
Internet Web Site
The company established a secure web site allowing individuals to become
members in "A Shopping Club" with membership fees of $19.95 per month. The
shopping club will provide a variety of products, services, bingo game
sweepstakes related events and items, travel and consumer goods; the
opportunity is primarily a shopping club. No charge is made to participate
in the bingo games. Games will be available for play 24 hours a day seven
days a week and new games played every 12 minute. Winners will collect their
winning of the on-going Globalot Bingo Sweepstake games either by crediting
their account or being delivered to the member at their option. Payments for
membership will be made by credit card, bank check, debit/ATM cards and by
lec billing or "900" telephone number. The company's URLs are
http://www.abingo.com - http://www.sBid.net - http:/www.sbicom.com
- - http://www.Wnet1.com, http//www.bingo2k.com, http://www.globalot.com -
http://www.sbicommunications.com - http://www.frontierpalace.com. The web site
is hosted by the company and fulfillment will be provided by Regency
Communications, Inc. The company will also provide its services to other
companies desiring access to the Internet. The company will generate
additional revenues by offering web page/site design/development, advertising,
fulfilment and its web services to others. This would include equipment and
tee access to the Internet.
At the same time, local political influences developed negative local
law changes as a reaction to the Piedmont Jaycees operation. Local ordinances
are being adopted to limit all charity bingo operations and the amount of
employees and establish a requirement of near gross proceeds being donated for
charitable purposes regardless of reasonable and necessary operation expenses
with no revenues to the employees of the charity. At this time it is not
feasible to lease the facility for the operation of bingo.
In reaction to the above political/legal trends, management has
negotiated the sales of the property to a Panama City, Florida group, for the
operation of a mobile home plant and sales outlet.
<PAGE> 8
The Company believes that the $7 billion dollar North America
charitable bingo industry is fragmented and inefficient, yet potentially
profitable. The Company's strategy, therefore, is to consolidate a portion of
the industry to build a national chain of bingo centers in lucrative markets.
The Company believes that its industry experience, economies of scale and
financial resources will provide a competitive advantage over competing bingo
operations, which should enable the Company to effectively execute its
long-term growth plan. The Company currently has no bingo center. The
Company intends to continue its expansion through acquisitions and
developments in other selected markets throughout the United States.
Management's goal is to open other bingo centers by end of 1999.
RESULTS OF OPERATION
NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1998.
The Company generated revenues of $ 593 during its second fiscal quarter end
September 30, 1999, as compared to $593 in the comparable period of the prior
fiscal year, which represents no change. The Company expects quarterly
revenues to continue to increase upon the successful operation of the
Company's Web site, new leases of the company property in Piedmont and broadcas
ting of it's interactive programming.
Direct operating costs of the Company's Piedmont facility totaled $110,802
during the third quarter of 1999 versus $110,802 in the comparable 1998
quarter, which represents no change. Approximately 35% of the current
period's direct operating costs were comprised of depreciation and
amortization, which are relatively fixed expenses. The balance is primarily
comprised of legal, wages and management fee costs.
General & Administrative (G&A) expenses totaled $35,000 during the third
quarter of 1999 as compared to $35,000 in the year ago period. This expense
decrease of $0.00 was mainly due to no operations and renovation during the
first and second quarter of 1999.
The Company did not record any tax expense during the current quarter or
comparable year-ago period due to tax loss carry forwards. The Company's tax
loss carryforward balance at the end of fiscal 1998 was in excess of $6
million and, as such, the Company does not expect to incur any federal income
tax liability until this carryforward is depleted by operational profits.
Net loss for the third fiscal quarter of 1999 was $110,209, which equated to
loss per share of ($0.02) Net loss for the comparable quarter of 1998 was
$110,802 which equated to loss per share of ($0.02). Virtually all of the
loss was due to no operations in second quarter of 1999. Management believes
that the Company's direct operating costs and G&A expenses are relatively low
for this quarter. As such, management will continue to seek expansion
opportunities that offer incremental operating revenues which, in turn,
favorably leverage the Company's net income performance.
All of the Company's revenue in the past has come from operations of the bingo
hall or interest income on cash therefrom. The following table summarizes
revenue categories in the Company's statement of income (rounded to the
nearest whole dollar).
<PAGE> 9
<TABLE>
<CAPTION>
Amount of Total Revenue
Nine Months Ended September 30, 1999 1998
Revenues:
<S> <C> <C>
Bingo hall rent/administrative fees .00 .00
Kitchen and gift shop revenues .00 .00
Other Income 593 593
Total Revenue $593 $593
</TABLE>
In general, the Company experienced insignificant revenues in 1994 as it
attempted to expand and develop its operations. At the end of 1994 the
Registrant acquired a bingo hall, which it now leases to charities who sponsor
bingo games. The Company also provides management services to assist the
charities in the operations of the bingo games, for which the Company charges
a fee. In late 1996, the Company was also requested to take over operations
of the kitchen and gift shop portions of the facility. Except for the
operation of the bingo hall, there are no other significant revenue sources of
the Company at this time. In 1995, the Company charged a flat $75,000 per
month in rent, plus management fees as deemed appropriate. In February, 1996,
the lease with the current charity was amended to reflect a minimum payment
of $25,000 per month, with adjustments up to $75,000 per month if the charity
generates sufficient annual cash flow to afford to pay the increased rent.
Although the charity generated cash flow that would allow greater rent,
management allow such excess to be applied toward unpaid rents and did not
increase the rent charge for 1997.
Management collected no rent payments and had no revenue for nine months ended
September 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1999, the Company had cash and cash equivalents of $485.00, a
decrease of $0.00 from the end of fiscal 1998. The decrease was mainly due
to renovation of the property and not being able to operate the facility. The
Company does expect to make further investments in its Piedmont, Alabama
facility in order to meet customer demands and renovate as required by the
sell for the facility.
The Company intends to finance future acquisitions primarily through the use
of stock and, to a lesser extent, cash and notes.
The Company paid a tax liability owed to the State of Alabama that the
previous owners did not pay. This debt is due the Company and the company
plans to recover these funds by all legal means available to the company.
Current liabilities totaled $1,867,950 at the end of the quarter, but less
than 10% of this total represented trade payables. Approximately 60% of total
liabilities are comprised of a note payable to the Haulmark Company for a loan
the company received in order to pay the previous owners tax liability.
Approximately 20% of long-term note payable on which the Company is currently
making payments. The Company has no other long-term debt. The Company had
total assets of over $7.6 million and total liabilities of $1.9 million at the
end of the third quarter, with shareholder equity of $5.8 million. The
Company believes that its current capital resources, together with expected
positive operational cash flows and note collections, will support operational
requirements for the next year.
<PAGE> 10
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
.On April the 28th 1995 the State of Alabama place a tax lien on the previous
owner, Cranberry-Magnetite/Broadway Gas Corporation for admission taxes, in
the amount of $750,000.00 plus 12% interest. The company received a warranty
deed from Cranberry Magnetite. After a legal action by Cranberry Magnetite
with the State of Alabama failed in 1998 the company paid this tax liability
on behalf of Cranberry Magnetite/Broadway Gas Corporation. The company will
take any and all legal action to recover these funds.
In April of 1995 two of the employees of the company's subsidiaries (SBI
Communications, Inc. of Alabama) were named as defendants in a legal action in
Alabama. This action alleges that the defendant's bingo game, which was
operate by the charity; 1) comprise a illegal lottery, which violates the
state constitution; 2) further comprise that the equipment (a computer) was an
illegal gaming device. After appeals to Circuit and State Supreme court
failed, the defendants were incarcerated and later place on 24 months
probation which will end November 14th 1999. This was a misdemeanor and a
first offence for both defendants.
The Company believes that this action was completely without merit and did
defend vigorously.
ITEM 2. CHANGES IN SECURITIES
In July, 1996, 5,000 shares of preferred stock with a par value of $25,000
were to be issued to cover $20,000 in closing costs relating to the mortgage
note receivable. The Company inadvertently issued 25,000 shares rather than
5,000 shares, and both parties agreed that the related certificate would be
returned and reissued. In the first quarter of 1997, the certificate was
returned, and a new certificate for 5,000 shares was issued. In January 1998
the Company issued 25,000 shares of its common stock to cover the cost of
software programing relating to PandaAmerica. The Company also converted
40,000 shares of preferred shares to 200,000 shares of the company common
stock.
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
NO CHANGE IN MANAGEMENT.
<PAGE> 11
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 believes that its software programs, both
those development internally and purchased from material outside vendors, are
year 2000 compliant or will be by December 31st 1999.
SBI began assessing its state of year 2000 readiness during September 1998.
This included reviewing the year 2000 compliance of the following:
* SBI internally developed proprietary software incorporated in the
SBI broadcast bingo and Internet programs;
* Third-party software vendors;
SBI will continue to require its vendors of material hardware and
software to provide assurances of their year 2000 compliance.
COSTS
To date, SBI has incurred approximately $30,000.00 of costs in identifying and
evaluating year 2000 compliance issues. Most of SBI expenses have related to.
And expected to continue ro relate to the operating costs associated with time
spent by employees in the evaluation year 2000 compliance matters. At this
time, SBI does not possess the information necessary to estimate the potential
costs of future revision to software relating to the SBI programs should
revision by required of the replacement of third-party software, hardware of
services, if any, that are determined to not be year 2000 compliant. Although
SBI believes that its software programs, both development internally and
purchased from outside vendors are either already year 2000 compliant or will
be by December 31st, 1999,. Failure to identify non year 2000 compliant
software could have a material and adverse effect on SBI's business, results
of operations and financial condition.
RISKS
SBI is not currently aware of any significant year 2000 compliance problems
relating to the broadcast or 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: None
<PAGE> 12
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: November 15, 1999 By: /s/Ronald Foster
-------------------------------------
Ronald Foster Chairman of the
Board and Chief Executive Officer
(principal executive officer)
<PAGE> 13
EXHIBIT 11
SBI COMMUNICATIONS, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE NINE MONTHS ENDED
SEPTEMBER 30 , 1998 AND 1999
Nine Months Nine Months
Ended Ended
Sept. 30, 1998 Sept. 30, 1999
-------------- --------------
Shares outstanding: 5,570,439 5,570,439
Weighted average shares outstanding 5,570,439 5,570,439
Net loss $ (280,209) $ (280,209)
Preferred Dividend -- --
-------------- --------------
Total (280,209) (280,209)
Net loss per share $ (0.05) $ (0.05)
<PAGE> 14
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE>
<LEGEND>
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, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEPT-30-1999
<CASH> 485
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 79,444
<CURRENT-ASSETS> 83,529
<PP & E> 7,458,345
<DEPRECIATION> 88,538
<TOTAL-ASSETS> 7,610,010
<CURRENT-LIABILITIES> 817,950
<BONDS> 1,050,000
0
8,265,000
<COMMON> 5,570
<OTHER-SE> 5,742,060
<TOTAL-LIABILITY-AND-EQUITY> 7,610,010
<SALES> 0
<TOTAL-REVENUES> 593
<CGS> 0
*<TOTAL-COSTS> 182,168
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,061
<INCOME-PRETAX> (280,209)
<INCOME-TAX> 0
<INCOME-CONTINUING> (280,209)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (280,630)
<EPS-BASIC> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
