UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 0R 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 0R 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
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Commission file number 91-1921581
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RADIOTOWER.COM, INC.
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(Name of Small Business Issuer in its charter)
Incorporated in the State of Nevada 91-1921581
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
322 - 425 Carrall Street, Vancouver, British Columbia V6B 6E3
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (604) 605-1357
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the last 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES [ X ] NO [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
CLASS OUTSTANDING AS AT September 30, 2000
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Common Stock - $0.001 par value 23,250,000
Transitional Small Business Disclosure Format (Check one): YES [ ] NO [ X ]
<PAGE>
PAGE 2 of 9
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Balance Sheet
September 30, 2000
(unaudited)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 873
Other assets:
Domain asset, net 44,427
Property, plant & equipment,
net of depreciation 3,467
------------------
$ 48,767
==================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $ 40,095
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Other liabilities:
Loans payable - stockholders 183,835
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Stockholders' (deficit):
Preferred stock, $0.01 par value,
1,000,000 shares authorized, none
issued or outstanding -
Common stock, $0.001 par value,
50,000,000 shares authorized,
23,250,000 shares issued and
outstanding 23,250
Additional paid in capital 129,868
Deficit accumulated during the
development stage (328,281)
------------------
(175,163)
------------------
$ 48,767
==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Page 3 of 9
RadioTower.com Inc.
fka Magnum Ventures Inc.
(A Development Stage Company)
Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
For the Period
May 5, 1998
Three Months Ended Nine Months Ended (inception) to
September September September September September
30, 2000 30, 1999 30, 2000 30, 1999 30, 2000
---------------- -------------- ---------------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
Revenue $ 460 $ 299 $ 3,413 $ 299 $ 4,261
Costs and expenses:
Selling, general and
administrative 51,872 73,660 134,061 107,760 303,697
Depreciation and
Amortization 3,862 6,879 10,362 7,583 22,007
Loss on investment in
mineral property - - - - 5,000
---------------- -------------- ---------------- ------------- ------------------
Total operating
expenses 55,734 80,539 144,423 115,343 330,704
---------------- -------------- ---------------- ------------- ------------------
Operating (loss) (55,274) (80,240) (141,010) (115,044) (326,443)
Other income (expense)
Interest expense - (182) - (182) (327)
Foreign currency transaction
gain (loss) 102 (194) (164) (194) (431)
Other expense - - - - (1,347)
---------------- -------------- ---------------- ------------- ------------------
102 (376) (164) (376) (2,105)
---------------- -------------- ---------------- ------------- ------------------
Net (loss) $ (55,172) $ (80,616) $ (141,174) $ (115,420) $ (328,548)
================ ============== ================ ============= ==================
Per share information:
Weighted average number of
common shares outstanding -
basic and diluted 23,250,000 18,750,000 22,277,473 12,940,257 15,145,730
================ ============== ================ ============= ==================
Net (loss) per common share -
basic and diluted $ (0.00) $ (0.00) $ (0.01) $ (0.01) $ (0.02)
================ ============== ================ ============= ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Page 4 of 9
RadioTower.com
fka Magnum Ventures Inc.
(A Development Stage Company)
Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
For the Period
Nine Months Nine Months May 5, 1998
ended ended (inception) to
September September September
30, 2000 30, 1999 30, 2000
----------------- ----------------- ----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net cash flow from operating activities $ (119,749) $ (58,590) $ (250,189)
Cash flows from investing activities:
Purchase of fixed assets - - (4,079)
Organization costs - - (812)
Investment in mineral claims - - (5,000)
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Net cash (used in) investing activities - - (9,891)
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Cash flows from financing activities:
Proceeds from loans payable - shareholders 135,544 35,370 200,519
Payments for loans payable - shareholders (16,684) - (16,684)
Proceeds from related party advances - - 15,000
Proceeds from stock sales, net of issuance costs - 25,000 43,118
Proceeds from stock subscriptions - - 19,000
----------------- ----------------- ----------------
Net cash provided by financing activities 118,860 60,370 260,953
----------------- ----------------- ----------------
Increase (decrease) in cash (889) 1,780 873
Beginning cash 1,762 5,789 -
----------------- ----------------- ----------------
Ending cash $ 873 $ 7,569 $ 873
================= ================= ================
Supplemental cash flow information:
Cash paid for interest $ - $ - $ (327)
Noncash transactions:
Issuance of stock for repayment of advances $ - $ - $ (15,000)
Issuance of stock for purchase of goodwill $ - $ (65,500) $ (65,000)
Issuance of stock subscriptions in repayment of
accrued wages $ - $ - $ (11,000)
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
Page 5 of 9
RadioTower.com, Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
Note 1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. They do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, considered necessary for a fair presentation, have been
included in the accompanying unaudited financial statements. Operating results
for the periods presented are not necessarily indicative of the results that may
be expected for the full year. For further information, refer to the financial
statements and notes thereto, included in the Company's Form 10-KSB for the year
ended December 31, 1999.
Note 2. NET LOSS PER SHARE
The net loss per share amounts are based on the weighted average number of
common shares outstanding for the period. Potential common shares and the
computation of diluted earnings per share are not considered, as their effect
would be anti-dilutive.
Note 3. STOCKHOLDERS' EQUITY
In 1999, stock subscriptions for 1,900,000 shares of common stock were issued
for cash of $19,000.
Also in 1999, stock subscriptions for 1,100,000 shares of common stock were
issued in exchange for payment of accrued wages of $11,000.
The common stock for the stock subscriptions mentioned above was issued in
February, 2000 pursuant to section 4(2) and Regulation S of the Securities Act
of 1933.
In 2000, the Company approved a 3:2 stock split of its common shares effective
for shareholders of record as of June 20, 2000.
Note 4. SUBSEQUENT EVENTS
In October 2000, the Company announced the resignation of its President,
Secretary, and Treasurer, who was replaced on an interim basis by the Chairman
of the Board of Directors. The Company is in active discussions with several
industry professionals to fill the role of President.
<PAGE>
Page 6 of 9
ITEM 2. PLAN OF OPERATION.
This discussion contains forward-looking statements regarding plans and
objectives of RadioTower for future operations, including statements concerning
the development of website technology and strategies for proposed generation of
revenue to drive traffic to RadioTower's website. Such statements are subject to
risks and uncertainties, including future economic, competitive and market
conditions, the cost of any future governmental regulation of RadioTower's
activities and RadioTower's need to raise additional funds to satisfy
anticipated cash needs over the next twelve (12) months, as discussed below.
Although RadioTower believes that the assumptions underlying the forward-looking
statements are reasonable, such assumptions could prove inaccurate. These
forward-looking statements refer only to the date of this report, and this
discussion should be read in conjunction with the financial statements and other
financial information contained in this report.
RadioTower did not generate any revenues from its business operations during its
1998 fiscal year. RadioTower is in the early stages of operation and just
beginning to generate business revenues. Since June 30, 1999, RadioTower has
generated revenues from the sale of onsite advertising.
RadioTower's twelve-month plan of operation is to (i) improve the quality and
quantity of content on its website in order to provide a unique online directory
connecting listeners to stations worldwide, (ii) increase site traffic, and
(iii) develop more revenue-generating programs. RadioTower plans to improve its
site by developing a more dynamic interface and making the site easier to
navigate and more graphically exciting. RadioTower plans to utilize new
technologies and software such as Flash with Vector graphics to improve the
quality of the website. RadioTower's strategy is to enhance the product design
while increasing brand awareness and loyalty among its listeners.
(A) CONTENT
It is management's intent to continue to add as many stations as possible to
RadioTower's directory and to continue to add more contextual and specific
information to RadioTower's website. As technology improves, management plans to
provide more customized features and a much more interactive interface so that
the website will have a user-friendly design and a quick download time and will
have cross-reference capabilities. It is intended that the site will provide
users with more information on their searches such as better station
descriptions, and will highlight special events, concerts and regularly
scheduled features. Management intends to improve RadioTower's website so that
it will also provide a multiple of dynamic ways for visitors to interact in the
site. These developments are currently in progress and will be released on an
ongoing basis.
RadioTower plans to continue to hire employees as the need arises and finances
allow. Positions will include web programmers, graphic artists, web masters,
multimedia designers, web writers, marketing representatives, sales
representatives and administrators.
(B) SITE TRAFFIC
In order to increase site traffic, RadioTower intends to launch an extensive
sales and marketing campaign to promote its website. The campaign will include
banner and audio advertising on the Internet, print ads in relevant print media
and spot ads on radio stations. RadioTower will participate in trade shows that
have an Internet, technology and/or radio focus.
(C) REVENUE
RadioTower will attempt to generate more revenue by (i) acquiring exclusive
rights to radio personalities and content and (ii) putting in place more
e-commerce affiliations. RadioTower will pursue exclusive arrangements with
radio stations to rebroadcast their content. RadioTower will endeavor to make
arrangements with various radio personalities and shows and recording artists to
broadcast their material on the RadioTower site. This will create exposure for
the content provider and a marketing opportunity for RadioTower to drive traffic
to the site.
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Page 7 of 9
RadioTower is in the early stages of operation and just beginning to generate
business revenues. Revenue generating programs include:
o Advertising - Burst Media and Music Vision LLC currently act
as agents to place ads on the RadioTower site; and
o AudioAds - beta site available for demonstration purposes,
full launch set for the fourth quarter of 2000, to provide a
turn-key solution for businesses to put audio on their
websites. The final stage of beta testing is currently under
way.
(D) SUMMARY
RadioTower cannot satisfy its cash requirements for the next 12 months without
having to raise additional funds. RadioTower's expected cash requirement for the
next 12 months is $180,000. As RadioTower's monthly user base grows, management
expects advertising and e-commerce revenues to grow significantly. RadioTower
also expects to raise any required additional funds by way of equity and/or debt
financing. However, RadioTower may not be able to raise the required funds from
such financings. In that case RadioTower will proceed by approaching current
shareholders for loans to cover operating costs.
RadioTower does not presently plan to purchase any plant or significant
equipment. RadioTower will continue with its research and development by
conducting continuous perceptual studies to monitor what listeners want from its
website and by continuing to explore various e-commerce models to ensure that
its website continues to meet the listeners' needs.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
RadioTower is not a party to any pending legal proceedings, and to the
best of RadioTower's knowledge, none of RadioTower's assets are the subject of
any pending legal proceedings.
ITEM 2. CHANGES IN SECURITIES.
During the third quarter of the fiscal year covered by this report,
RadioTower did not modify the instruments defining the rights of its
shareholders, no rights of any shareholders was limited or qualified by any
other class of securities, and RadioTower did not sell any unregistered equity
securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
During the third quarter of the fiscal year covered by this report, no
material default has occurred with respect to any indebtedness of RadioTower.
Also during this quarter, no arrearage in the payment of dividends has occurred.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the third quarter of the fiscal
year covered by this report.
ITEM 5. OTHER INFORMATION.
RadioTower elected not to renew its contract with Pronet Enterprises
Ltd. that came up for renewal on August 21, 2000. RadioTower gave 60-day notice
of this action in accordance with the Master Distributor Agreement between the
companies, dated August 21, 1997. RadioTower received no revenue from this
agreement.
On August 21, 2000, market maker William V. Frankel & Co. filed Form
211 with the NASD for a price quotation of RadioTower's common stock on the
Over-the-Counter Bulletin Board (the "OTC BB"). RadioTower's common stock
commenced trading on the OTC BB on August 25, 2000.
<PAGE>
Page 8 of 9
On September 6, 2000, RadioTower announced it signed a definitive
Distribution Partnership with NetBroadcaster.com to launch a co-branded Internet
radio directory website. RadioTower will retain 50% of revenue derived from this
partnership. While awaiting implementation of this website, NetBroadcaster.com
is providing a link to RadioTower.
On October 5, 2000, Alan Brown resigned from his positions as
President, Treasurer and Secretary of RadioTower, and was replaced on an interim
basis by Michael Levine, RadioTower's Chairman. The Company is currently in
discussions with several industry professionals to fill the role of President.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
All Exhibits required to be filed with this Form 10-QSB are
incorporated by reference to RadioTower's previously filed Form 10-SB, as
amended, and Form 10-KSB for the year ended December 31, 1999.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
Exhibit 2.1 Corporate Charter Filed
Exhibit 2.2 Articles of Incorporation Filed
Exhibit 2.3 Certificate of Amendment of Articles of Incorporation Filed
Exhibit 2.4 By-Laws Filed
Exhibit 3 Instruments defining the rights of security holders None
Exhibit 5 Voting Trust Agreement None
Exhibit 6.1 Purchase Agreement Filed
Exhibit 6.2 Licensing Agreement with Global Media Filed
Exhibit 6.3 Site Contract with Burst Media Filed
Exhibit 6.4 Interim Licensing Agreement with Destiny Media Technologies Inc. Filed
Exhibit 6.5 Master Distributor Agreement with Pronet Enterprises Ltd. Filed
Exhibit 6.6 Contract with Eline Technologies Inc. Filed
Exhibit 6.7 Copies of Promissory Notes given to insiders Filed
Exhibit 7 Material Foreign Patents None
Exhibit 12 Additional Exhibits None
Exhibit 27 Financial Data Schedule Filed
</TABLE>
(b) REPORTS ON FORM 8-K.
There were no reports on Form 8-K filed by the Company during the
quarter ended September 30, 2000.
<PAGE>
Page 9 of 9
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
RadioTower has caused this report to be signed on its behalf by the undersigned,
who are duly authorized.
RADIOTOWER.COM, INC.
By: /s/ MICHAEL LEVINE
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Name and Title: MICHAEL LEVINE - CHAIRMAN, PRESIDENT AND TREASURER
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Dated: November 14, 2000
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By: /s/ PAUL VALKAMA
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Name and Title: PAUL VALKAMA - DIRECTOR
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Dated: November 14, 2000
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