UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2002
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period ___________ to
Commission File Number 000-27621
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Studio Bromont Inc.
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(Exact name of small Business Issuer as specified in its charter)
Florida 95-4720231
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(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
2300 W. Sahara, Ave., Suite 500
Las Vegas, Nevada 89102
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: 514-891-9070
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Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) 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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ X ] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 13,703,416 Shares of Common Stock
outstanding as of September 30, 2002.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying un-audited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and, therefore, do not include
all information and footnotes necessary for a complete presentation of financial
position, results of operations, cash flows, and stockholders' deficit in
conformity with generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature. Operating results for the nine
months ended September 30, 2002 are not necessarily indicative of the results
that can be expected for the year ending December 31, 2002.
Studio Bromont, Inc.
(A Development Stage Company)
Financial Statements
September 30, 2002
Studio Bromont, Inc.
(A Development Stage Company)
Balance Sheet
September December
30, 2002 31, 2001
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(Unaudited)
Assets
Current Assets
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Subscriptions Receivable $ 1,333 $ 1,333
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Total Current Assets 1,333 1,333
Other Assets
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Capital Assets, Net 3,384 4,164
Technology Costs, Net 17,664 26,958
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Total Other Assets 21,048 31,122
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Total Assets $ 22,381 $ 32,455
============ ===========
Liabilities & Stockholders' Equity
Current Liabilities
-------------------
Accounts Payable and Accrued Liabilities $ 609,470 $ 562,617
Note Payable 99,422 99,422
Note Payable - Related Party 144,074 141,574
Accrued Interest 54,491 16,267
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Total Current Liabilities 907,457 819,880
Stockholders' Equity
--------------------
Common Stock, 50,000,000 Shares Authorized
at $0.001 Par Value; 13,703,416 & 9,668,224
Shares Issued & Outstanding 13,703 9,668
Additional Paid In Capital (Deficit) 1,393,149 991,665
Common Stock Subscribed 231,731 231,731
Deficit Accumulated in the Development Stage (1,523,659) (1,020,489)
Less: Treasury Stock (1,000,000) (1,000,000)
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Total Stockholders' Equity (885,076) (787,425)
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Total Liabilities & Stockholders' Equity $ 22,381 $ 32,455
============ ===========
See accompanying notes to financial statements.
2
Studio Bromont, Inc.
(A Development Stage Company)
Statement of Operations
(Unaudited)
Deficit
For the Three Months For the Nine Months Accumulated
Period Ended Period Ended During the
September September September September Development
30, 2002 30, 2001 30, 2002 30, 2001 Stage
--------------------------------------------------------------------------------------------------
Revenue $ - $ - $ - $ - $ -
------------------------------ ------------ ----------- ----------- ----------- -------------
Expenses
--------
General & Administrative 2,805 81,719 420,943 172,801 829,604
Depreciation & Amortization 3,358 5,517 10,074 12,393 24,812
Legal Fees 1,860 7,666 33,929 122,047 156,623
Salaries & Benefits - 95,330 - 161,170 306,488
Travel - 2,011 - 26,473 29,193
------------ ----------- ----------- ----------- -------------
Total Expenses 8,023 192,243 464,946 494,884 1,346,720
------------ ----------- ----------- ----------- -------------
Income (Loss)
From Operations (8,023) (192,243) (464,946) (494,884) (1,346,720)
Other Income (Expenses)
-----------------------
Interest Expense 33,470 (1,598) (38,224) (3,178) (49,362)
------------ ----------- ----------- ----------- -------------
Total Other Income
(Expenses) (33,470) (1,598) (38,224) (3,178) (49,362)
------------ ----------- ----------- ----------- -------------
Net Income (Loss) $ (41,491) $ (193,841) $ (503,170) $ (498,062) (1,396,082)
============ =========== =========== =========== =============
Loss Per Share (0.00) $ (0.02) (0.05) (0.05)
Weighted Average
Shares Outstanding 11,461,643 9,668,224 9,668,274 9,213,915
See accompanying notes to financial statements.
Continued
Studio Bromont, Inc.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
Deficit
Accumulated
For the Nine Months Ended During the
September September Development
30, 2002 30, 2001 Stage
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Cash Flows from Operating Activities
------------------------------------
Net Income (Loss) $ (41,493) $(498,062) $ (1,396,082)
Adjustment to Reconcile Net (Loss) to Net
Cash Provided by Operating Activities;
Stock Issued for Services - - 405,519
Increase in Due to Related Party - 23,756
Deficiency from Subsidiary - - (127,577)
Depreciation & Amortization 3,358 12,393 24,812
Increase (Decrease) in Accounts Payable
/Accrued Expenses 2,165 158,050 609,470
Increase (Decrease) in Interest Payable 33,470 - 54,491
(Increase) Decrease in Accounts Receivable - (887) -
(Increase) Decrease in Prepaid Expenses - (16,750) -
----------- ---------- -------------
Net Cash Provided (Used)
By Operating Activities (2,500) (321,500) (429,367)
Cash Flows from Investing Activities
------------------------------------
Payments for Technology Costs - (40,655) (40,655)
Payments for Computer Equipment - (5,205) (5,205)
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Net Cash Provided (Used) by
Investing Activities - (45,860) (45,860)
Continued
4
Studio Bromont, Inc.
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
Deficit
Accumulated
For the Nine Months Ended During the
September September Development
30, 2002 30, 2001 Stage
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Cash Flows from Financing Activities
-------------------------------------
Proceeds from Stock Subscriptions - 231,731 231,731
Proceeds from Notes Payable - 20,200 99,422
Proceeds from Related Party Notes 2,500 117,818 144,074
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Net Cash Provided (Used) by
Financing Activities 2,500 369,749 475,227
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Increase (Decrease) in Cash - 2,389 -
Cash at Beginning of Period - 1,068 -
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Cash at End of Period $ - $ 3,457 $ -
========== ========== ============
Disclosures from Operating Activities
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Interest $ - $ - $ -
Taxes - - -
Supplemental Non Cash Disclosure
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On June 12, 2002, the Company issued 4,035,192 shares of common stock for
services performed in behalf of the Company. The shares were issued at $0.10
per share pursuant to an S-8 Registration dated June 12, 2002. Accordingly,
$401,484 has been charged to additional paid-in capital.
During the nine months month period ended September 30, 2001, the Company issued
1,168,224 common shares in satisfaction of debt totaling $1,000,000 to its
subsidiary.
See accompanying notes to financial statements.
5
Studio Bromont, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2002
Financial Statement Preparation
The condensed financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading.
In the opinion of the Company, all adjustments, consisting of only normal
recurring adjustments, necessary to present fairly the financial position of the
Company as of September 30, 2002 and the results of its operations and changes
in its financial position from December 31, 2001 through September 30, 2002 have
been made. The results of its operations for such interim period is not
necessarily indicative of the results to be expected for the entire year.
Item 2. Management's Discussion and Analysis or Plan of Operations
Plan of Operations
Our principal asset is a license to use and commercialize the client software
known as "Gnotella" ("Gnotella"). However, in late 2001, further development
and promotion of Gnotella ceased. During the nine month period ended September
30, 2002, the Company sought new business opportunities.
In or around February, 2002, the Company entered into a plan of reorganization
with Studio Bromont Inc. If the plan had been consummated, the business
operations of the Studio Bromont Inc. would have become the business operations
of the Company. The plan of reorganization was never closed, and in or around
March, 2002, the plan expired according to its terms and was never consummated.
In contemplation of the transactions set forth in the plan, the Company changed
its name to Studio Bromont Inc. and that remains the name of the Company as of
the date of this filing.
For the next 12 months, the Company will continue to seek out business
opportunities in which it can engage and/or operating companies that it can
acquire. During the fiscal quarter ended September 30, 2002, the Company had a
verbal agreement to acquire through a reverse acquisition a holding company have
diverse business operations. However, these discussions did not continue and
have now terminated. Accordingly, the Company continues at the present time to
seek out business opportunities.
At September 30, 2002, the Company had no working capital to meet the cash
requirements of the Company. In addition, at that date the Company had current
liabilities totaling $907,457. We therefore believe the Company will need to
raise as much as $900,000 by selling common shares or by borrowing in order to
have sufficient capital to meet its needs for the next 12 months. The Company
attempted without success to raise sufficient capital to vigorously pursue its
business during 2001. Accordingly, there is significant doubt as to whether we
will be able to raise the $900,000. Therefore the day to day operations of the
Company are contingent upon our creditors allowing us to proceed without
immediate payment of our obligations and upon our ability to raise sufficient
monies to sustain minimal operations while we search for a business opportunity.
It is impossible to know at this point whether we will be successful in this
attempt.
It should also be noted that the Company is obligated to satisfy the costs
associated with filing the required reports under the Exchange Act of 1934. It
appears at the present time that these costs will also have to be met through
the continued sale of stock or by borrowing additional funds. The Company's
current operating plan is to (i) handle the administrative and reporting
requirements of a public company; and (ii) search for potential business,
products, technologies and companies for acquisition.
FORWARD LOOKING STATEMENTS
The information in this discussion contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements involve risks and uncertainties, including statements
regarding the Company's capital needs, business strategy and expectations. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking
3
statements by terminology such as "may", "will", "should", "expect", "plan",
"intend", "anticipate", "believe", "estimate", "predict", "potential" or
"continue", the negative of such terms or other comparable terminology. Actual
events or results may differ materially. In evaluating these statements, you
should consider various factors, including the risks outlined below, and, from
time to time, in other reports the Company files with the SEC. These factors may
cause the Company's actual results to differ materially from any forward-looking
statement. The Company disclaims any obligation to publicly update these
statements, or disclose any difference between its actual results and those
reflected in these statements. The information constitutes forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995.
ITEM 3. CONTROLS AND PROCEDURES.
As required by Rule 13a-14 under the Securities Exchange Act of 1934 (the
"Exchange Act"), we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures within the 90 days prior
to the filing date of this report. This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer, Mr. Rodger Brulotte. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective in timely alerting management to material
information relating to us which is required to be included in our periodic SEC
filings. There have been no significant changes in our internal controls or in
other factors that could significantly affect internal controls subsequent to
the date we carried out our evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed our reports filed
or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material legal proceedings and to our knowledge, no
such proceedings are threatened or contemplated.
Item 2. Changes in Securities
We did not complete any sales of our securities during the fiscal quarter ended
September 30, 2002.
Item 3. Defaults upon Senior Securities
4
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to our security holders for a vote during the fiscal
quarter ended September 30, 2002.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
EXHIBITS REQUIRED BY ITEM 601 OF FORM 8-K
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Exhibit Number Description of Exhibit
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99.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(1)
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(1) Filed as an Exhibit to this Quarterly Report on Form 10-QSB
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REPORTS ON FORM 8-K
We did not file any Current Reports on Form 8-K during the fiscal quarter ended
September 30, 2002.
5
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
STUDIO BROMONT INC.
Date: December 13, 2002
By: /s/ Rodger Brulotte
----------------------------------
Rodger Brulotte
President
Principal Executive Officer
Principal Accounting Officer
CERTIFICATIONS
I, Rodger Brulotte, certify that;
(1) I have reviewed this quarterly report on Form10-QSB of Studio Bromont Inc.;
(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
quarterly report;
(4) The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
(5) The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
(6) The Registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other facts that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 13, 2002 /s/ Rodger Brulotte
___________________________________
Rodger Brulotte
Chief Executive Officer
Chief Financial Officer