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 March 31, 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 (I.R.S. Employer
incorporation or organization) Identification Number)
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 May 14, 1999 the Registrant had 5,570,439 shares of its $0.001 par
value Common Stock Outstanding.
=============================================================================
May 14, 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 March 31, 1999
Consolidated Statements of Operations 4
for the three months ended
March 31, 1998 and 1999
Consolidated Statement of Changes 4
in Shareholders' Equity for the three
months ended March 31, 1999
Consolidated Statements of Cash Flows 5
for the three months ended March 31,
1998 and 1999
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 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote 11
of Security Holders
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 11
2
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Financial Statements
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
March 31, Dec. 31,
1999 1998
------------ ------------
ASSETS
------
<S> <C> <C>
Current assets:
Cash $ 485 $ 485
Accounts receivable, -0- -0-
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 $ 7,610,010
============ =============
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 1,693,000 shares issued
and outstanding at June 30, 1998 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 March 31, 1999 and 5,345,439 as of December 31,
1998 5,570 5,570
Paid in capital 3,667,118 3,667,118
Accumulated deficit (6,195,628) (6,195,628)
------------ ------------
5,742,060 5,742,060
------------ ------------
$ 7,610,010 $ 7,610,010
============ =============
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
<CAPTION>
1999 1998
----------- ------------
<S> <C> <C>
Revenues:
Bingo hall rent $ - $ -0-
Kitchen and gift shop revenues - -0-
Other income - 172
------------ ------------
- 172
----------- ------------
Expenses:
Cost of sales - kitchen and gift shop - -0-
Administrative salaries and related expenses 30,000 38,570
Facility costs 22,971 10,864
Other general and administrative 30,000 32,876
Production costs - -0-
Depreciation and amortization 88,539 72,500
Interest and finance expenses 14,769 14,769
----------- ------------
186,279 169,579
----------- ------------
Net loss ($ 186,279) ($ 169,579)
=========== ============
Net loss per share ($ 0.03) ($ 0.03)
=========== ============
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED)
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) ($ 186,279) ($169,579)
Adjustments to reconcile net loss to cash
provided (used) by operating activities:
Depreciation and amortization 88,539 72,500
Amortization of deferred loan costs 16,038 16,309
Charge offs of long-term receivables - 8,178
Change in accounts receivable, trade -0- -0-
Change in inventories 6,621 -
Change in prepaid expenses ( 12,172)
Change in accounts payable and accrued expenses 83,629 126,226
-------------- --------------
Cash (used) by operating activities 8,548 41,462
-------------- --------------
Cash flows from investing activities:
Proceeds from repayment of notes receivable
from affiliate 5,499 -
Purchase of real estate ( 748,622) ( 17,618)
-------------- --------------
Cash (used) by investing activities ( 743,123) ( 17,618)
-------------- --------------
Cash flows from financing activities:
Loans from shareholders/affiliates 12,698 34,054
Proceeds From Mortgaged (see note 5) $ 1,050,000 -
Mortgage loan repayments ( 239,701) -
Capital lease repayments ( 964) ( 3,327)
-------------- --------------
Cash flows provided by financing activities $822,033 30,727
-------------- --------------
Net increase (decrease) in cash ( 21,743) ( 21,743)
Cash at beginning of period -0- 22,228
-------------- --------------
Cash at end of period $ -0- $ 485
============== ==============
Supplemental information:
Income taxes paid $ - $ -
============== ==============
Interest paid $ 28,311 $ 32,102
============== ==============
Items not requiring use of cash:
Preferred stock converted ($ - 0- ) ($200,000)
Issuance of common stock -0- 200,000
-------------- --------------
Paid in capital $ - -
============== ==============
See accompanying notes to consolidated financial statements.
</TABLE>
5
<PAGE>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
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 Three months
ended March 31, 1999 and 1998 are not necessarily indicative of the results
to be expected for the full year. There were no activity in the third
quarter.
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.
Note 2 - Related party transactions
The Company accrued salaries payable to the Company's principal shareholder
totaling $30,000 for the quarter ended March 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 quarter
ended March 31, 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.
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.
6
<PAGE>
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. The above Note of $1,050,000.00 Is due and
payable.
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.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.
7
<PAGE>
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 Regency Communications, Inc. of Dallas,
Texas to purchase the Piedmont property for $7,100,000.00. 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.
Regency plans are to have an inbound telemarketing, fulfilment center and
backbone to the Internet at the Piedmont location. Regency plans to contract
with SBI to set all phases of operation in place. Plans are to employ
approximately 250 to 300 employees.
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.com - http:/www.sbicom.com -
http://www.globalot.com - http://www.sbicommunications.com -
http://www.forntierpalace.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 Dallas, Texas group, for the operation of a
telecommunication company for "800" inbound.
The Company believes that the $5 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 only one bingo center
located in Piedmont, Alabama. The Company intends to continue its expansion
8
<PAGE>
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
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS
ENDED MARCH 31, 1998.
The Company generated revenues of $-0- during its first fiscal quarter
ended March 31, 1998, as compared to $-0- in the comparable period of the
prior fiscal year, which represents a decrease. The revenue decrease was
due to renovation of facility in Piedmont. The Company expects quarterly
revenues to increase when the new leases are in place. Also, upon the
successful operation of the Company's Web site and broadcasting of it's
interactive programming.
Direct operating costs of the Company's bingo center totaled $186,279
during the first quarter of 1999 versus $169,579 in the comparable 1998
quarter, which represents a 9% increase. Approximately 60% 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 $30,000 during the first
quarter of 1999 as compared to $32,876 in the year ago period, an decrease
of 9%. This expense decrease of $2,876 was mainly due to the delectation
of certain key management personnel since the first 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 first fiscal quarter of 1999 was $186,279 which equated
to loss per share of ($.03) Net loss for the comparable quarter of 1998
was $169,407 which equated to loss per share of ($0.03). Virtually all
losses was due to termination of the Jaycees lease and renovation of
property in Piedmont, Alabama which was not open in the first quarter of
1998. Management believes that the Company's direct operating costs and
G&A expenses are relatively fixed. 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 comes from operation 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).
Amount of Total Revenue
Three Months Ended March 31, 1999 1998
--------- ---------
Revenues:
Bingo hall rent/administrative fees -0- $ -0-
Kitchen and gift shop revenues -0- -0-
Other Income -0-
---------
Total Revenue $ -0- $-0-
========= =========
9
<PAGE>
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, 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 1996. However, the company did received $61,033
additional rents in 1997.
Management collected no rent payments for three months ended March 31,
1998. Management has collect no revenues for first quarter 1999 from the
Piedmont facility. Management believes that due to competition and geographic
factors, change in the local regulations, which states that charity member
and employees cannot be paid, the local charity will not be able to operate
and pay its obligations under the lease agreement and therefore in January
of 1998 the lease with the Piedmont Jaycees was terminated.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, the Company had cash and cash equivalents of $ 0.00 a
decrease of $83,812 from the end of fiscal 1998. The decrease was due to
renovation of the facility and will not be able to rent the facility until
August of 1999. The Company does expect to make further investments in its
Piedmont, Alabama facility in order to meet strong customer demands and
requirement of under the new leases.
The Company expects its cash position to begin to increase assuming
leases are place and the Company's Internet website is operational. There
can be no assurance of the foregoing. The Company intends to finance future
acquisitions primarily through the use of stock and, to a lesser extent, cash
and notes.
Accounts receivables totaled $ -0- at March 31, 1999. The Company had no
revenues as of March 31, 1999.
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 which currently is due
and payable. The Company has no other long-term debt. The Company had total
assets of over $7.6 million and total liabilities of $1,867,950.00 at the end
of the first 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.
10
<PAGE>
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 for admission taxes, in the amount of
$750,000.00. The company did receive a warranty deed from Cranberry
Magnetite. After a legal action by Cranberry Magnetite failed in 1998 the
company paid this tax liability on behalf of Cranberry Magnetite. The
company will take legal action to recover these funds.
In April of 1995 one of the employees of the company's subsidiaries (SBI
Communications, Inc. of Alabama) was named as a defendant 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.
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
CHANGE IN MANAGEMENT.
SBI is unaware of any contract or other arrangement of which may at a
subsequent date result in a change in control of SBI
11
<PAGE>
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
12
<PAGE>
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,
hereunto duly authorized.
SBI Communications, Inc.
Date: July 14, 1998 By: /s/Ronald Foster
-------------------------------------
Ronald Foster Chairman of the
Board and Chief Executive Officer
(principal executive officer)
13
EXHIBIT 11
SBI COMMUNICATIONS, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE THREE MONTHS ENDED
MARCH 31, 1998 AND 1999
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1999
-------------- --------------
Shares outstanding: 5,570,439 5,570,439
Weighted average shares outstanding 5,570,439 5,570,439
Net loss $ (169,407) $ (186,279)
Preferred Dividend -- --
-------------- --------------
Total (169,407) (186,279)
Net loss per share $ (0.03) $ (0.03)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SBI COMMUNICATIONS, INC. FOR THE QUARTERLY
PERIOD ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 79,444
<CURRENT-ASSETS> 83,529
<PP&E> 7,458,345
<DEPRECIATION> 88,539
<TOTAL-ASSETS> 7,610,010
<CURRENT-LIABILITIES> 1,867,950
<BONDS> 1,050,000
0
8,265,000
<COMMON> 5,570
<OTHER-SE> 5,852,862
<TOTAL-LIABILITY-AND-EQUITY> 7,610,010
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 118,069
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 131,061
<INCOME-PRETAX> (186,279)
<INCOME-TAX> 0
<INCOME-CONTINUING> (186,279)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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</TABLE>
