UNITED STATES 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 quarterly period ended June 30, 2003
or
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ________________
Commission file number 33-73004
HOSTING SITE NETWORK INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 13-4122844
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
32 Poplar Place
Fanwood, New Jersey 07023
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(Address of principal executive offices) (Zip Code)
(973) 652-6333
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(Registrant's telephone number, including area code)
Check 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, and (2) has been subject to such filing requirements for the past 90
days. Yes |X| No | |
As of August 11, 2003, there were 7,273,500 shares of the issuer's common
stock, par value $0.001, issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes | | No |X|
HOSTING SITE NETWORK INC.
JUNE 30, 2003 QUARTERLY REPORT ON FORM 10-QSB
TABLE OF CONTENTS
PAGE
Special Note Regarding Forward Looking Information...................3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.................................................4
Item 2. Plan of Operation...................................................10
Item 3. Controls and Procedures.............................................10
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds...........................11
Item 6. Exhibits and Reports on Form 8-K....................................11
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
To the extent that the information presented in this Quarterly Report on
Form 10-QSB for the quarter ended June 30, 2003 discusses financial projections,
information or expectations about our products or markets, or otherwise makes
statements about future events, such statements are forwardlooking. We are
making these forward-looking statements in reliance on the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Although we
believe that the expectations reflected in these forward-looking statements are
based on reasonable assumptions, there are a number of risks and uncertainties
that could cause actual results to differ materially from such forward-looking
statements. These risks and uncertainties are described, among other places in
this Quarterly Report, in "Plan of Operation".
In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or circumstances after the date of this Quarterly
Report. When considering such forwardlooking statements, you should keep in mind
the risks referenced above and the other cautionary statements in this Quarterly
Report.
3
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PAGE
Consolidated Balance Sheet as at June 30, 2003 ...............................5
Consolidated Statements of Operations for the three and nine months
ended June 30, 2003 and 2002 and for the period from May 31, 2000
(inception) to June 30, 2003..................................................6
Consolidated Statements of Cash Flows for the nine months ended
June 30, 2003 and 2002 and for the period from May 31, 2000
(inception ) to June 30, 2003.................................................7
Notes to Consolidated Financial Statements ...................................8
4
Hosting Site Network, Inc. and Subsidiary
(A Development Stage Company)
Consolidated Balance Sheet
June 30, 2003
Assets
Cash $ 414,601
Computers and equipment , net of
accumulated depreciation of $9,918 18,418
-----------
$ 433,019
===========
Liabilities and Shareholders' Equity
Accounts payable and accrued liabilities $ 3,847
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Shareholders' equity:
Preferred stock, $.0001 Par value, 5,000,000
shares authorized; none outstanding -
Common stock, $.001 par value; 100,000,000 shares
authorized; 7,273,500 shares issued and outstanding 7,273
Additional paid in capital 758,259
Deferred stock based compensation (61,505)
Accumulated Deficit (274,855)
-----------
Total Shareholders' equity: 429,172
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$ 433,019
===========
See Notes to Consolidated Financial Statements
5
Hosting Site Network, Inc. and Subsidiary
(A Development Stage Company)
Consolidated Statements of Operations
Period from
May 31, 2000
(inception)
Three Months Ended June 30, Nine Months Ended June 30, Through
2003 2002 2003 2002 June 30, 2003
----------- ----------- ----------- ----------- ---------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
General and administrative
expenses $ 26,544 $ 23,551 $ 105,248 $ 90,781 $ 285,180
Interest income 630 53 5,152 176 10,325
----------- ----------- ----------- ----------- ---------------
Net loss $ (25,914) $ (23,498) $ (100,096) $ (90,605) $ (274,855)
=========== =========== =========== =========== ===============
Basic loss per share $ * $ (0.01) $ (0.01) $ (0.02)
=========== =========== =========== ===========
Basic weighted average
shares outstanding 7,273,500 3,023,500 7,273,500 3,023,500
=========== =========== =========== ===========
* - Amount is less than $0.01
See Notes to Consolidated Financial Statements.
6
Hosting Site Network, Inc. and Subsidiary
(A Development Stage Company)
Consolidated Statements of Cash Flows
Period from
May 31, 2000
Nine Months Ended June 30, (inception)
-------------------------------- Through
2003 2002 June 30, 2003
------------- ---------- --------------
(Unaudited) (Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $ (100,096) $ (90,605) $ (274,855)
Adjustments to reconcile net loss
to cash used in operating activities:
Depreciation 4,251 4,250 9,918
Stock based compensation 30,882 30,612 88,495
Common stock issued for services - - 11,000
Changes in assets and liabilities:
Accounts payable and accrued liabilities (5,316) 17,282 4,490
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Cash used in operating activities (70,279) (38,461) (160,952)
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Cash flows from investing activities:
Advance of loan receivable - - (200,000)
Repayment of loan and interest receivable 203,333 - 200,000
Investment in computers and equipment - - (28,336)
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Cash provided by (used in) investing activities 203,333 - (28,336)
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Cash flows from financing activities:
Proceeds of private placement - - 603,889
Proceeds from note payable - - 25,000
Repayment of note payable - 25,000 (25,000)
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Cash provided by (used in) financing activities - 25,000 603,889
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Increase (decrease) in cash 133,054 (13,461) 414,601
Cash, beginning of period 281,547 35,045 -
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Cash, end of period $ 414,601 $ 21,584 $ 414,601
============= ========== ============
See Notes to Consolidated Financial Statements.
7
HOSTING SITE NETWORK, INC. AND SUBSIDIARY
(A Developmental Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003
NOTE 1 - NATURE OF BUSINESS
Hosting Site Network, Inc. (the "Company") (a developmental stage company) was
incorporated in the State of Delaware on May 31, 2000 and its wholly owned
subsidiary HSN, Inc. ("HSN") was incorporated in the State of New Jersey on
August 21, 2002. The Company and HSN are inactive and are searching for new
business opportunities.
NOTE 2 - BASIS OF PRESENTATION AND CONSOLIDATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
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 of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine months ended June 30, 2003 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 2003. For further information, refer to the financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the fiscal year ended September 30, 2002.
The consolidated financial statements include the accounts of Hosting Site
Network, Inc. and its wholly owned subsidiaries, CreativeSites.com, Inc. (for
the period from September 14, 2000 through April 30, 2001) and HSN, Inc. (for
the period from August 21, 2001 through March 31, 2003). All material
inter-company accounts and transactions have been eliminated in consolidation.
NOTE 3 - RECENT ACCOUNTING PRONOUCEMENTS
- In December 2002, the Financial Accounting Standards Board, "FASB" issued
Statement of Financial Accounting Standards, ("SFAS") No. 148, "Accounting
for Stock-Based Compensation -Transition and Disclosure - an amendment of
FASB Statement No. 123." SFAS No. 148 amends SFAS No. 123, "Accounting for
Stock-Based Compensation," to provide alternative methods of transition for
a voluntary change to the fair value based method of accounting for
stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting
for stock-based employee compensation and the effect of the method used on
reported results. The disclosure requirements apply to all companies for
fiscal years ending after December 15, 2002. The adoption of SFAS No. 148
is not expected to have a material impact on the Company's consolidated
financial statements.
- In April 2003, the FASB issued SFAS No. 149 ("SFAS 149"), "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities." This
statement amends SFAS 133 to provide clarification on the financial
accounting and reporting of derivative instruments and hedging activities
and requires contracts with similar characteristics to be accounted for on
a comparable basis. The Company is in the process of assessing the effect
of SFAS 149 and does not expect the adoption of the statement, which will
be effective for contracts entered into or modified after June 30, 2003, to
have a material effect on its financial position or results of operations.
8
- In May 2003, the FASB issued SFAS No. 150 ("SFAS 150"), "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity." SFAS 150 establishes standards on the classification and
measurement of financial instruments with characteristics of both
liabilities and equity. SFAS 150 will become effective for financial
instruments entered into or modified after May 31, 2003. The adoption of
SFAS 150 has not had a material effect on the Company's financial position
or results of operations.
Management does not believe that recently issued, but not yet effective
accounting pronouncements if currently adopted would have a material effect on
the accompanying financial statements.
9
ITEM 2. PLAN OF OPERATION
We were incorporated on May 31, 2000 to provide businesses with a variety
of Internet services including web hosting, web consulting and electronic mail
services. Given the current Internet business environment, we have not commenced
material business operations, have not had any operating revenues, and have
concluded that our business model is not presently valid. Although we may
determine to engage in our intended Internet operations at a later date, we have
decided to look at other ventures of merit for corporate participation as a
means of enhancing shareholder value. This may involve sales of our equity or
debt securities in merger or acquisition transactions.
We have minimal operating costs and expenses at the present time due to our
limited business activities. Accordingly, absent changed circumstances, we will
not be required to raise additional capital over the next twelve months,
although we may do so in connection with or in anticipation of possible
acquisition transactions. We do not currently engage in any product research and
development and have no plans to do so in the foreseeable future. We have no
present plans to purchase or sell any plant or significant equipment. We also
have no present plans to add employees although we may do so in the future if we
engage in any merger or acquisition transactions.
ITEM 3. CONTROLS AND PROCEDURES
Our principal executive officer and principal financial officer evaluated
the effectiveness of our disclosure controls and procedures as of a date within
90 days prior to the filing of this report. Based on this evaluation, our
principal executive officer and principal financial officer have concluded that
our controls and procedures are effective in providing reasonable assurance that
the information required to be disclosed in this report is accurate and complete
and has been recorded, processed, summarized and reported within the time period
required for the filing of this report. Subsequent to the date of this
evaluation, there have not been any significant changes in our internal controls
or, to our knowledge, in other factors that could significantly affect our
internal controls.
Consistent with Section 10A(i)(2) of the Securities Exchange Act of 1934,
as added by Section 202 of the Sarbanes-Oxley Act of 2002, we are responsible
for listing the non-audit services approved by our Board of Directors to be
performed by Rogoff & Company, P.C., our external auditor. Nonaudit services are
defined as services other than those provided in connection with an audit or a
review of our financial statements. Our Board of Directors currently has not
approved the engagement of Rogoff & Company, P.C. to perform any non-audit
services in 2003, except for income tax preparation.
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PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
No equity securities were sold by us during the period covered by this
Report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
99.1 Certificate of Chief Executive and Financial Officer.
(b) Reports on Form 8-K.
None.
11
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
HOSTING SITE NETWORK INC.
Dated: August 12, 2003 By: /s/ Scott Vicari
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Scott Vicari
President, Chief Executive and
Accounting Officer
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CERTIFICATIONS
I, Scott Vicari, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Hosting Site
Network, 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. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15) for the
registrant and have;
(a) Designed such disclosure controls and procedures to ensure that materia l
information relating to the registrant, including its consolidated subsidiaries,
is made known to me 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 and presented in this report my conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the period covered by the
Quarterly Report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. I have disclosed, based on my most recent evaluation of internal control
over financial reporting, 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 and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: August 12, 2003 /s/ Scott Vicari
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Scott Vicari
Principal Executive and Financial Officer
13