FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2000.
Commission file number: 000-28089
WARPRADIO.COM, INC.
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(Name of Small Business Issuer in its charter)
Nevada 87-0538158
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6535 South Dayton Street, Suite 3000
Greenwood Village, Colorado 80111
(Address of principal executive offices)
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(Zip Code)
(303) 799-9118
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(Issuer's telephone number, including area code)
Indicate by check mark whether the Issuer (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 periods 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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $.001 Par Value, 10,228,796 shares as of March 31, 2000.
<PAGE>
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
WARPRADIO.COM, INC. AND SUBSIDIARY
(A Development Stage Company)
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
ASSETS
------
Current Assets:
Cash and cash equivalents $ 157,575
Accounts Receivable - trade 1,292
Accrued interest receivable 314
Note receivable - stockholder 20,500
-----------
Total Current Assets 179,681
-----------
Property and Equipment, at cost:
Office equipment 211,116
Furniture 15,383
-----------
226,499
Less accumulated depreciation (13,084)
-----------
Net Property and Equipment 213,415
-----------
Other Assets:
Deposits 8,417
-----------
Total Other Assets 8,417
-----------
Total Assets $ 401,513
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable - trade $ 12,312
Accrued expenses:
Payroll taxes 32,748
-----------
Total Current Liabilities 45,060
-----------
Commitments and Contingencies --
Stockholders' Equity:
Preferred stock: $.001 par value, 7,000,000 shares
authorized, none issued or outstanding --
Common stock: $.001 par value, 50,000,000 shares
authorized, 10,228,796 shares issued and outstanding 10,229
Additional paid in capital 2,291,059
Deficit accumulated during the development stage (1,944,835)
-----------
Total Stockholders' Equity 356,453
-----------
Total Liabilities and Stockholders' Equity $ 401,513
===========
See notes to unaudited
condensed consolidated financial statements.
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<TABLE>
<CAPTION>
WARPRADIO.COM, INC. AND SUBSIDIARY
(A Development Stage Company)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
FOR THE PERIODS FROM MARCH 16, 1999 (INCEPTION) TO MARCH 31, 1999 AND 2000
Three Months Ended Inception to
March 31, March 31,
------------ ----------------------------
2000 1999 2000
---- ---- ----
<S> <C> <C> <C>
Revenue $ 1,292 $ -- $ 2,390
------------ ------------ ------------
Operating Expenses:
Stock compensation -- 3,202 739,742
Depreciation 7,000 -- 13,084
Selling, general and administrative 350,215 -- 1,187,788
------------ ------------ ------------
Total Operating Expenses 357,215 3,202 1,940,614
------------ ------------ ------------
Loss From Operations (355,923) (3,202) (1,938,224)
------------ ------------ ------------
Other Income (Expense):
Interest and other income 5,772 -- 8,748
Interest expense -- -- (15,359)
------------ ------------ ------------
Total Other Income (Expense) 5,772 -- (6,611)
------------ ------------ ------------
Net Income (Loss) $ (350,151) $ (3,202) $ (1,944,835)
============ ============ ============
Net Income (Loss) Per Basic and
Diluted Share of Common Stock $ (.03) $ -- $ (.22)
Weighted Average Number of Basic and
Diluted Common Shares Outstanding 10,228,796 7,319,500 8,677,068
See notes to unaudited
condensed consolidated financial statements.
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</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WARPRADIO.COM, INC. AND SUBSIDIARY
(A Development Stage Company)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
FOR THE PERIODS FROM MARCH 16, 1999 (INCEPTION) TO MARCH 31, 1999 AND 2000
Three Months Ended Inception to
March 31, March 31,
----------- --------------------------
2000 1999 2000
---- ---- ----
Cash Flows From Operating Activities:
<S> <C> <C> <C>
Net income (loss) $ (350,151) $ (3,202) $(1,944,835)
Adjustments to reconcile net income (loss) to net
cash (used) by operating activities:
Depreciation 7,000 -- 13,084
Common stock issued for services -- 3,202 739,742
Changes in assets and liabilities:
Accounts receivable (1,292) -- (1,292)
Accrued interest receivable (314) -- (314)
Accounts payable (9,457) -- 12,312
Accrued expenses 17,339 -- 48,044
----------- ----------- -----------
Net Cash (Used) By Operating Activities (336,875) -- (1,133,259)
----------- ----------- -----------
Cash Flows From Investing Activities:
Capital expenditures (144,414) -- (226,499)
Deposits (2,746) -- (8,417)
Loan to stockholder (20,500) -- (20,500)
----------- ----------- -----------
Net Cash (Used) By Investing Activities (167,660) -- (255,416)
----------- ----------- -----------
Cash Flows From Financing Activities:
Proceeds from borrowing -- -- 550,000
Issuance of common stock -- -- 1,000,000
Offering costs incurred -- -- (3,750)
----------- ----------- -----------
Net Cash Provided By Financing Activities -- -- 1,546,250
----------- ----------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents (504,535) -- 157,575
Cash and Cash Equivalents at Beginning of Period 662,110 -- --
----------- ----------- -----------
Cash and Cash Equivalents at End of Period $ 157,575 $ -- $ 157,575
=========== =========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ -- $ -- $ 63
Income taxes -- -- --
Supplemental Disclosure of Noncash Investing and
Financing Activities:
Conversion of convertible notes payable and accrued
interest into common stock $ -- $ -- $ 565,296
See notes to unaudited
condensed consolidated financial statements.
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</TABLE>
<PAGE>
WARPRADIO.COM, INC. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The accompanying financial information of the Company is prepared in accordance
with the rules prescribed for filing condensed interim financial statements and,
accordingly, does not include all disclosures that may be necessary for complete
financial statements prepared in accordance with generally accepted accounting
principles. The disclosures presented are sufficient, in management's opinion,
to make the interim information presented not misleading. All adjustments,
consisting of normal recurring adjustments, which are necessary so as to make
the interim information not misleading, have been made. Results of operations
for the three months ended March 31, 2000 are not necessarily indicative of
results of operations that may be expected for the year ending December 31,
2000. It is recommended that this financial information be read with the
complete financial statements included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1999 previously filed with the Securities
and Exchange Commission.
Per Share Information
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings Per Share," which specifies the method of computation,
presentation and disclosure for earnings per share. SFAS No. 128 requires the
presentation of two earnings per share amounts, basic and diluted.
Basic earnings per share is calculated using the average number of common shares
outstanding. Diluted earnings per share is computed on the basis of the average
number of common shares outstanding plus the dilutive effect of outstanding
stock options using the "treasury stock" method.
The basic and diluted earnings per share are the same because the Company did
not have any outstanding stock options during the periods presented.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- -----------------------------------------------------------------
Introduction
The following section contains forward-looking statements that involve
risks and uncertainties. Our results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors.
This discussion of the Company's financial condition and results of operations
for the period from January 1, 2000 to March 31, 2000 should be read in
conjunction with the Company's financial statements, and the notes related
thereto included elsewhere in this Report.
Results of Operations
The Company is a development stage company that commenced operations on
March 16, 1999. The Company's operations to date have been limited to organizing
the Company, raising operating capital, hiring employees and commencing
streaming services. As of March 31, 2000, the Company had an accumulated deficit
of $1,944,835 and a net worth of $356,453. Accordingly, the Company has a
limited operating history on which to base an evaluation of its business and
prospects. Moreover, there are no meaningful comparisons between the three
months ended March 31, 2000 and the period from March 16, 1999 (date of
inception) to March 31, 1999. Additionally, the limited operating history of the
Company makes the prediction of future operating results difficult or
impossible. The Company expects to continue to incur significant losses on a
quarterly and annual basis for the foreseeable future. For these and other
reasons, there can be no assurance that the Company will ever achieve
profitability or, if profitability is achieved, that it can be sustained.
The Company earned revenue of $1,292 and incurred an operating loss of
$355,923 for the three months ended March 31, 2000, comprised primarily of the
following:
Salaries of $195,290 paid to officers and employees.
Payroll taxes of $18,901.
Rent expense of $19,806.
The Company has rapidly and significantly expanded its operations and
anticipates that significant expansion of its operations will continue to be
required in order to address potential market opportunities. The Company
expanded from two employees in March 1999, to fifteen employees in March 2000,
and the Company expects to increase its personnel significantly in the near
future. The Company's recent growth has placed, and is expected to continue to
place, a significant strain on its managerial, operational and financial
resources and systems.
Liquidity and Capital Resources
The Company anticipates that in the near term it will incur significant
continuing losses due to ongoing substantial operating expenses offset by
negligible revenue. The Company currently barters an average of two minutes of
advertising inventory per day Monday through Sunday with each contracted radio
station that uses the Company's streaming services. The Company presently
expects future revenues to stem from sales of bartered advertising time.
Currently, the Company has commitments under non-cancelable operating
leases for office facilities requiring payments of $8,374 per month until
November 2000 and then of $8,507 until October 2002.
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<PAGE>
During the three months ended March 31, 2000 the Company purchased $144,414
of computer equipment and software.
The Company expects to incur significantly higher costs, particularly
marketing and advertising costs, product content and development costs, general
and administrative costs and additional technology and equipment purchase costs
in order to expand the Company's business. The Company expects to expend the
largest portion of existing capital on increasing the Company's technical staff,
adding key management level employees and purchasing additional technology and
equipment. In the event revenue is insufficient to meet our operating expenses,
the Company will seek additional funding through debt or equity offerings. The
Company currently has no commitments for any such funding and cannot assure it
will be able to obtain such funding if otherwise required to do so.
PART II. OTHER INFORMATION.
ITEM 1. Legal proceedings.
None.
ITEM 2. Changes in securities.
None.
ITEM 3. Defaults upon senior securities.
None.
ITEM 4. Submission of matters to a vote of security holders.
None.
ITEM 5. Other information.
None.
ITEM 6. Exhibits and reports on Form 8-K.
Reports on Form 8-K: During the three months covered by this report, the Company
filed no reports on form 8-K.
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<PAGE>
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.
Date: May 15, 2000 WarpRadio.com, Inc.
-------------------
(Registrant)
/s/ Denise Sutton
-----------------
Denise Sutton
Chief Executive Officer, Chief Financial
Officer (Principal Accounting Officer),
and Director
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 157,575
<SECURITIES> 0
<RECEIVABLES> 1,292
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 179,681
<PP&E> 226,499
<DEPRECIATION> 13,084
<TOTAL-ASSETS> 401,513
<CURRENT-LIABILITIES> 45,060
<BONDS> 0
0
0
<COMMON> 10,229
<OTHER-SE> 346,224
<TOTAL-LIABILITY-AND-EQUITY> 401,513
<SALES> 0
<TOTAL-REVENUES> 1,292
<CGS> 0
<TOTAL-COSTS> 357,215
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (350,151)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (350,151)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.03)
</TABLE>
