UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d)
Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2003
-OR-
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities And Exchange Act of 1934
for the transaction period from ___________ to _________
Commission File Number 333-70663
CONNECTIVCORP
(formerly known as Spinrocket.com, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 06-1529524
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
750 Lexington Avenue, 24th Floor, New York, New York 10022
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(Address of principal executive offices, Zip Code)
(212) 750-5858
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(Registrant's telephone number, including area code)
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 registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
The number of outstanding shares of the registrant's common stock, par value
$.001 as of October 31 2003 is 16,281,902.
CONNECTIVCORP AND SUBSIDIARIES
FORM 10-QSB
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page
----
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheet as of September 30, 2003...............................................3
Consolidated Statements of Operations for the nine months
ended September 30, 2003 and 2002...........................................................4
Consolidated Statements of Operations for the three months
ended September 30, 2003 and 2002..........................................................5
Consolidated Statements of Cash Flows for the nine months
ended September 30, 2003 and 2002..........................................................6
Notes To Consolidated Financial Statements .....................................................7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................11
Item 3. Controls and Procedures.....................................................................................14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings...........................................................................................14
Item 2. Changes in Securities and Use of Proceeds...................................................................14
Item 3. Defaults Upon Senior Securities.............................................................................14
Item 4. Submission of Matters to a Vote of Security Holders.........................................................14
Item 5. Other Information...........................................................................................15
Item 6. Exhibits and Reports on Form 8-K............................................................................15
Signatures............................................................................................15
Certifications........................................................................................16
2
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
ConnectivCorp
Consolidated Balance Sheet
(Unaudited)
September 30,
2003
-----------
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents ................................................. $ 48,586
Prepaid expenses .......................................................... 2,199
-----------
Total Assets ............................................................ $ 50,785
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses ..................................... $ 613,937
Loans payable ............................................................. 150,000
Loans payable - officers .................................................. 10,934
-----------
Total Current Liabilities ................................................ 744,871
-----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Preferred Stock, $.001 par value
10,000,000 shares authorized, Series D , none issued ..................... -
Common Stock, $.001 per value
40,000,000 shares authorized, 13,077,061 issued and outstanding ........... 13,077
Additional paid in capital ................................................ 19,796,628
Accumulated deficit ....................................................... (20,513,791)
-----------
(704,086)
Less: stock subscription receivable ....................................... (20,000)
-----------
Total Stockholders' Deficit ............................................. (724,086)
-----------
Total Liabilities and Stockholders' Deficit ............................. $ 50,785
===========
The accompanying notes are an integral part of these consolidated statements.
3
ConnectivCorp
Consolidated Statements of Operations
For the Nine Month ended September 30,
(Unaudited)
2003 2002
------------ -------------
Revenues ................................... $ - $ 3,500
General and administrative expenses ........ (569,259) (759,929)
------------ -------------
Operating loss ............................. (569,259) (756,429)
Interest income ............................ - 635
------------ -------------
Net loss ................................... $ (569,259) $ (755,794)
============ =============
Net loss per common share- basic and diluted $ (0.05) $ (0.09)
============ =============
Weighted average shares outstanding:
basic and diluted .......................... 11,578,886 8,366,710
============ =============
The accompanying notes are an integral part of these consolidated statements.
All share and per share amounts have been adjusted to reflect the 1 for 10
reverse stock split in March 2002.
4
ConnectivCorp
Consolidated Statements of Operations
For the Three Months Ended September 30,
(Unaudited)
2003 2002
----------- --------------
Revenues .................................... $ - $ -
General and administrative expenses ......... (172,300) (185,850)
---------- -------------
Operating loss .............................. (172,300) (185,850)
Interest income ............................. - 103
---------- -------------
Net loss .................................... $ (172,300) $ (185,747)
========== =============
Net loss per common share- basic and diluted $ (0.01) $ (0.02)
========== =============
Weighted average shares outstanding:
basic and diluted ........................... 12,571,626 10,618,487
========== =============
The accompanying notes are an integral part of these consolidated statements.
All share and per share amounts have been adjusted to reflect the 1 for 10
reverse stock split in March 2002.
5
CONNECTIVCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30,
(Unaudited)
2003 2002
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ...................................... $(569,259) $(755,794)
Adjustments to reconcile net loss
to net cash used in operating activities:
Stock-based compensation .................... - 153,872
Changes in assets and liabilities:
Prepaid expenses ........................... (2,199) (1,889)
Accounts payable and accrued expenses ...... 245,867 221,181
---------- ----------
Net cash used in operating activities ..... (325,591) (382,630)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock ........ 175,000 297,500
Proceeds from stock subscriptions receivable .. 20,000 -
Proceeds from loans payable ................... 150,000 -
Proceeds from loans payable - officers ........ 10,934 -
---------- ----------
Net cash provided by financing activities . 355,934 297,500
---------- ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS ........ 30,343 (85,130)
CASH AND CASH EQUIVALENTS, beginning of period . 18,243 89,861
---------- ----------
CASH AND CASH EQUIVALENTS, end of period ....... $ 48,586 $ 4,731
========== ==========
NON-CASH INVESTING AND FINANCING ACTIVITIES
Stock issued in satisfaction of accounts payable $ - $ 42,292
========== ==========
Stock issued in satisfaction of note payable ... $ 25,000 $ -
========== ==========
The accompanying notes are an integral part of these consolidated statements.
6
CONNECTIVCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2003
Note 1 - Basis of Presentation
As used in these financial statements, the term the "Company" refers to
ConnectivCorp and its consolidated subsidiaries.
The accompanying unaudited consolidated financial statements of the Company have
been prepared pursuant to the rules of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with U.S. generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Form 10-KSB for the year ended December 31 2002. In
the opinion of management, the accompanying consolidated financial statements
reflect all adjustments, which are of a normal recurring nature, necessary for a
fair presentation of the results for the periods presented.
The results of operations presented for the nine months and three months ended
September 30, 2003, are not necessarily indicative of the results to be expected
for the year ending December 31, 2003.
Recent Accounting Pronouncements
--------------------------------
In January 2003, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 46, "Consolidation of Variable Interest Entities - an
Interpretation of ARB No. 51" ("FIN 46"), which addresses consolidation of
variable interest entities. FIN 46 expands the criteria for consideration in
determining whether a variable interest entity should be consolidated by a
business entity, and requires existing unconsolidated variable interest entities
(which include, but are not limited to, Special Purpose Entities, or SPEs) to be
consolidated by their primary beneficiaries if the entities do not effectively
disperse risks among parties involved. This interpretation applies immediately
to variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date. It
applies in the first fiscal year or interim period beginning after September 15,
2003, to variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The adoption of FIN 46 is not
expected to have a material impact on the results of operations or financial
position of the Company.
In May 2003, the FASB issued Statement of Financial Accounting Standard "(SFAS")
No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities." SFAS No. 149 amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under SFAS No. 133. SFAS No. 149 is
effective for contracts entered into or modified after September 30, 2003 and
for hedging relationships designated after September 30, 2003. The Company does
not believe that the adoption of SFAS No. 149 will have a material impact on its
consolidated financial statements.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
establishes standards for how companies classify and measures certain financial
instruments with characteristics of both liabilities and equity. It requires
companies to classify a financial instrument that is within its scope as a
liability (or an asset in some circumstances). SFAS No. 150 is effective
beginning with the second quarter of fiscal 2004; the Company does not believe
the adoption of SFAS No. 150 will have a material impact on its consolidated
financial statements.
7
CONNECTIVCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2003
Note 2 - Net Loss Per Common Share
Basic net loss per common share ("Basic EPS") is computed by dividing net loss
by the weighted average number of common shares outstanding. Diluted net income
per common share ("Diluted EPS") is computed by dividing net income by the
weighted average number of common shares and dilutive common share equivalents
then outstanding.
Basic and Diluted EPS are the same for the three month and nine month periods
ended September 30, 2003 and 2002, as Diluted EPS does not include the impact of
stock options and warrants then outstanding, as the effect of their inclusion
would be antidilutive.
The following table summarizes the equivalent number of common shares assuming
the related options and warrants that were outstanding as of September 30, 2003
and 2002 had been converted. These were not included in the calculation of
diluted loss per share, as such shares are antidilutive:
2003 2002
------- -------
Stock options .......... - -
Warrants ............... 146,608 146,608
------- -------
Common Stock Equivalents 146,608 146,608
======= =======
Options to purchase 1,999 and 10,333 shares of common stock, and warrants to
purchase 3,000 and 5,000 shares of common stock for the nine months ended
September 30, 2003 and 2002, respectively, were not included in the above table
because the exercise price of those options and warrants were greater than the
average market price of the common shares. The options and warrants were still
outstanding at the end of the period.
Note 3 - Loans Payable - Officers
During the nine months ended September 30, 2003, officers of the Company
advanced $34,434. The loans bear interest at 6%. Of the advances, $8,500 was
repaid and $15,000 was offset against subscriptions receivable.
Note 4 - Stock subscriptions
During three months ended September 30, 2003, the Company received cash totaling
$175,000 in connection with subscriptions to purchase 1,750,000 shares of common
stock of the Company at $0.10 per share.
On July 21, 2003, a loan payable totaling $25,000 was converted into 250,000
shares of common stock of the Company at $0.10 per share.
8
CONNECTIVCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2003
Note 5 - Accounting for Stock Based Compensation
Effective January 1, 2003, the Company adopted the fair value recognition
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation"
prospectively to all employee awards granted, modified, or settled after January
1, 2003. Prior to 2003, the Company accounted for stock-based employee
compensation under the recognition and measurement provisions of APB Opinion No.
25, "Accounting for Stock Issued to Employees," and related Interpretations. No
stock-based employee compensation cost was reflected in 2003 and 2002 net
losses, as no awards were granted during the three and nine month periods ended
September 30, 2003 and 2002. The following table illustrates the effect on net
loss and loss per share as if the fair value based method had been applied to
all outstanding and unvested awards in each period.
Nine Months Ended Three Months Ended
September 30, September 30,
----------------------------- ------------------------
2003 2002 2003 2002
----------------------------- ------------------------
Net loss ................................................. As reported (569,259) (755,794) (172,300) (185,747)
Proforma (569,259) (750,695) (172,300) (185,747)
Basic and diluted net loss per common share:
Net loss per common share ................................ As reported (0.05) (0.09) (0.01) (0.02)
Proforma (0.05) (0.09) (0.01) (0.02)
Weighted Average Outstanding Shares ...................... 11,578,886 8,366,710 12,571,626 10,618,487
Note 6 - Related Party Transactions
The Company has engaged a shareholder to provide investor relation services. The
engagement provides for a monthly retainer of $5,000. As of September 30, 2003,
investor relations expense totaled approximately $75,000 which is included in
accrued expenses.
Note 7 - Commitments
Sublease
--------
Effective January 1, 2003, the Company renewed its sublease for office space
located at 750 Lexington Avenue, New York, New York. The lease term is for the
period from January 1, 2003 through December 31, 2003, with a monthly rent of
$2,500. The office space is being leased from an entity in which the father of
Robert Ellin, Chairman of the Company, is a partner.
Employment Agreements
---------------------
Effective March 18, 2003, the Company extended its employment contract with
Elliot Goldman for a term of one year, expiring on March 19, 2004 at an annual
salary of $10,800. Mr. Goldman serves as President, Chief Executive Officer and
as a Director of the Company.
9
CONNECTIVCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2003
Note - 7 Commitments (Continued)
Employment Agreements (Continued)
Effective March 18, 2003, the Company extended its employment contract with
Robert Ellin for a term of one year, expiring on March 19, 2004, at an annual
salary of $10,800. Mr. Ellin serves as Chairman of the Company.
Consulting Agreement
--------------------
The Company retained the services of Atlantis Equities, Inc. ("Atlantis"), a
private merchant banking and advisory firm that primarily assists emerging
growth companies, to act as its financial advisor pursuant to an Engagement
letter dated March 21, 2002 for a term of one year from March 18, 2002 to March
18, 2003. Robert Ellin, the current Chairman of the Company, is a principal in
Atlantis. The Company has agreed in principle to continue to use the services
provided by Atlantis. The Company has compensated Atlantis $126,500 through
September 2003, plus out-of-pocket expenses, and will continue at the rate of
$12,500 per month thereafter.
Note 8 - Subsequent Events
Stock Subscriptions
-------------------
During October 2003, the Company received $140,000 of stock subscriptions to
purchase 1,400,000 shares of common stock at $0.10 per share.
Letter of Intent
----------------
On October 14, 2003, the Company executed a letter of intent which sets forth
the preliminary terms and conditions of a proposed merger transaction between
the Company and Majesco Sales, Inc. ("Majesco"). As proposed, the shareholders
of Majesco would exchange their shares of capital stock in Majesco for capital
stock of the Company. At the closing of the merger as currently contemplated,
the shareholders of Majesco will own common and preferred stock representing
approximately 80% of the capital stock of ConnectivCorp on a fully-diluted
basis.
The closing of the transaction is subject to certain conditions, including
execution of a definitive merger agreement and the completion of due diligence.
There can be no assurance that the merger will be consummated or, if
consummated, that it will be consummated on the terms set forth in the letter of
intent, which is nonbinding with respect to the terms of the proposed
transaction and the obligation to close. The parties anticipate the closing
shall occur on or before January 10, 2004, or as soon thereafter as possible.
Agreement and Plan of Merger
----------------------------
On November 10, 2003, the Company entered into an "Agreement and Plan of Merger"
("Merger") with Majesco. The Merger is subject to certain conditions including
stockholder approval, completion of due diligence, and satisfaction of the
Company's indebtedness. The Company contemplates issuing 10,000,000 shares of
its common stock and 1,000,000 of its Series A Preferred Stock in exchange for
all of the outstanding common shares of Majesco. The series A Preferred Shares
shall be convertible into 71,000,000 shares of the Company's common stock. The
Merger shall terminate if it is not consummated on or before January 10, 2004.
Settlement of Liabilities
-------------------------
In connection with the Merger subsequent to the end of the quarter, the Company
has settled and is in the process of settling liabilities with certain of it
creditors for stock and cash and also sold shares to raise a portion of such
cash at $0.10 per share.
After giving effect to the settlement of such liabilities and the sale of such
shares, the Company will have approximately 21,000,000 shares outstanding before
giving effect to the Merger
10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's Financial Statements and the notes thereto appearing elsewhere in this
report. This report contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. The Company cautions that forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and that actual results
may differ materially from the statements that constitute forward-looking
statements as a result of various factors.
The Company was incorporated in Delaware on May 8, 1998 under the name "SMD
Group, Inc." In January 1999, the Company changed its name to "CDbeat.com, Inc."
On April 19, 2000, the Company's name was changed to "Spinrocket.com, Inc." On
September 11, 2000, the Company changed its name from Spinrocket.com, Inc. to
"ConnectivCorp" because this new name better described the Company's then
strategic direction. The Company's business model was to facilitate the online
connection between targeted, profiled consumers and marketers desiring to reach
those consumers. As its initial focus, the Company formed a new wholly-owned
subsidiary, ConnectivHealth, in order to facilitate its connectivity model in
the healthcare field. Currently, the Company is exploring various business
opportunities that may be available to it.
Uncertainty
-----------
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has a limited
operating history, and since its inception in 1998 has incurred substantial
losses. The Company's accumulated deficit as of September 30, 2003 is
approximately $20.5 million. To date, the Company has not generated any revenue
from its previously proposed business model, which contemplated selling
pharmaceutical and other healthcare companies access to the Company's aggregated
users. The Company incurred a net loss of approximately $569,000 and $756,000
for the nine months ended September 30, 2003 and 2002, respectively, while cash
and cash equivalents at September 30, 2003 totaled approximately $49,000. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. The Company's continued existence is dependent upon several
factors including the Company's ability to raise additional equity or locate a
merger or business partner.
Letter of Intent
----------------
On October 14, 2003, the Company executed a letter of intent which sets forth
the preliminary terms and conditions of a proposed merger transaction between
the Company and Majesco Sales, Inc. ("Majesco"). As proposed, the shareholders
of Majesco would exchange their shares of capital stock in Majesco for capital
stock of the Company. At the closing of the merger as currently contemplated,
the shareholders of Majesco will own common and preferred stock representing
approximately 80% of the capital stock of ConnectivCorp on a fully-diluted
basis.
The closing of the transaction is subject to certain conditions, including
execution of a definitive merger agreement and the completion of due diligence.
There can be no assurance that the merger will be consummated or, if
consummated, that it will be consummated on the terms set forth in the letter of
intent, which is nonbinding with respect to the terms of the proposed
transaction and the obligation to close. The parties anticipate the closing
shall occur on or before January 10, 2004, or as soon thereafter as possible.
Agreement and Plan of Merger
On November 10, 2003, the Company entered into an "Agreement and Plan of Merger"
("Merger") with Majesco. The Merger is subject to certain conditions including
stockholder approval, completion of due diligence, and satisfaction of the
Compan's indebtedness. The Company contemplates issuing 10,000,000 shares of
its common stock and 1,000,000 of its Series A Preferred Stock in exchange for
all of the outstanding common shared of Majesco. The Series A Preferred Shares
shall be convertible into 71,000,000 shares of the Company's common stock. The
Merger shall terminate if it is not consummated on or before January 10, 2004
Settlement of Liabilities
In connection with the Merger subsequent to the end of the quarter, the Company
has settled and is in process of settling liabilities with certain of its
creditors for stock and cash and also sold shares to raise a portion of such
cash at $0.10 per share.
After giving effect to the settlement of such liabilities and the sale of such
shares, the Company will have approximately 21,000,000 shares outstanding before
giving effect to the Merger.
The following discussion and analysis compares the results of the Company's
operations for the three and nine months ended September 30, 2003 and September
30, 2002.
11
Accounting Policies
The following accounting policies are important to an understanding of the
operating results and financial condition of the Company and should be
considered as an integral part of the financial review. For additional
accounting policies, see Note 1 to the consolidated financial statements,
"Significant Accounting Policies."
Estimates and Assumptions
-------------------------
In preparing the financial information, the Company used some estimates and
assumptions that may affect reported amounts and disclosures. Estimates are used
when accounting for depreciation, amortization, impairment of assets and asset
valuation allowances. We are also subject to risks and uncertainties that may
cause actual results to differ from estimated results, such as legislation,
regulation and the ability to obtain financing. Certain of these risks and
uncertainties are discussed elsewhere in Management's Discussion and Analysis.
Nine Months ended September 30, 2003
------------------------------------
The Company generated no revenues from operation during the nine months ended
September 30, 2003 and $3,500 during the nine months ended September 30, 2002.
For the nine months ended September 30, 2003 and 2002, the Company reported the
following:
Net loss .................................... $ (569,259) $ (755,794)
=============== ============
Net loss per common share- basic and diluted $ (0.05) $ (0.09)
=============== ============
For the nine months ended September 30, 2003, the Company reported a net loss of
$569,259. General and administrative expenses include expenses of approximately
$114,000 for professional fees, $103,000 for salary and related expenses,
$75,300 for investor relations, $127,500 for consulting, $22,500 for rent,
$6,600 for interest, $58,900 for travel and $57,000 for office expenses.
For the nine months ended September 30, 2002, the Company reported a net loss of
$755,794. General and administrative expenses include expenses of approximately
$77,000 for professional fees; $226,000 for salary and related expenses,
$176,000 for consultants, $34,000 of insurance, $22,500 for rent, $130,000 for
office expenses and $87,000 for compensation costs recognized in connection with
stock options.
Three Months ended September 30, 2003
-------------------------------------
The Company did not generate revenues from operations during the three months
ended September 30, 2003 and 2002.
For the three months ended September 30, 2003 and 2002, the Company reported the
following:
Net loss .................................... $ (172,300) $ (185,747)
============== ==============
Net loss per common share- basic and diluted $ (0.01) $ (0.02)
============== ==============
12
For the three months ended September 30, 2003, the Company reported a net loss
of $172,300. General and administrative expenses include expenses of
approximately $73,100 for professional fees, $12,200 for salary and related
expenses, $23,000 for investor relations, $26,000 for consulting, $7,500 for
rent, $2,500 for interest, $10,900 for travel and $17,100 for office expenses.
For the three months ended September 30, 2002, the Company reported a net loss
of $185,747. General and administrative expenses include expenses of which
approximately, $76,000 for salary and related expenses, $6,000 for legal and
professional, $7,500 for rent, $29,000 for office expenses and $67,000 for
consultants.
Liquidity and Capital Resources
-------------------------------
In the nine months ended September 30, 2003, $325,591 of cash was used in
operating activities. Funds were used to pay the Company's operating expenses.
$355,934 of cash was generated from financing activities. These included
proceeds for the issuance of common stock of $175,000, loan proceeds of $161,000
from an outside third party and officers of the Company, and $20,000 was
collected on the subscription receivable.
13
ITEM 3 - CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures. Our chief executive
officer and chief financial officer have reviewed and evaluated the
effectiveness of our disclosure controls and procedures (as defined in
Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934 (the
"Exchange Act")), as of a date within ninety days before the filing of
this quarterly report. Based on that evaluation, the chief executive
officer and chief financial officer have concluded that our current
disclosure controls and procedures are effective to ensure that
information required to be disclosed by us in reports that we file or
submit under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in the Commission's rules
and forms.
Changes in internal controls.
----------------------------
There have not been any significant changes in our internal controls or
in other factors that could significantly affect these controls
subsequent to the date of their evaluation. There were no significant
deficiencies or material weakness in the internal controls, and
therefore no corrective actions were taken.
PART II -- OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - CHANGES IN SECURITIES
The issuance of shares of Common Stock during the nine months ended
September 30, 2003 did not involve a public offering and was based on
Section 4(2) of the Securities Act of 1933, as amended.
During the nine months ended September 30, 2003, the Company raised
$175,000 through the issuance of 1,750,000 shares of the Company's
Common Stock at $0.10 per share.
The Company issued 250,000 shares of the Company's Common Stock at
$0.10 per share to satisfy a $25,000 loan payable.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
14
ITEM 5 - OTHER INFORMATION
Sublease
--------
Effective January 1, 2003, the Company renewed its sublease for office
space located at 750 Lexington Avenue, New York, New York. The lease
term is for the period from January 1, 2003 through December 31, 2003,
with a monthly rent of $2,500. The office space is being leased from an
entity in which the father of Robert Ellin, Chairman of the Company, is
a partner.
Employment Agreements
---------------------
Effective March 18, 2003, the Company extended its employment contract
with Elliot Goldman for a term of one year, expiring on March 19, 2004
at an annual salary of $10,800. Mr. Goldman serves as President, Chief
Executive Officer and as a Director of the Company.
Effective March 18, 2003, the Company extended its employment contract
with Robert Ellin for a term of one year, expiring on March 19, 2004,
at an annual salary of $10,800. Mr. Ellin serves as Chairman of the
Company.
Consulting Agreement
--------------------
The Company retained the services of Atlantis Equities, Inc.
("Atlantis"), a private merchant banking and advisory firm that
primarily assists emerging growth companies, to act as its financial
advisor pursuant to an Engagement letter dated March 21, 2002 for a
term of one year from March 18, 2002 to March 18, 2003. Robert Ellin,
the current Chairman of the Company, is a principal in Atlantis. The
Company has agreed in principle to continue to use the services
provided by Atlantis. The Company has compensated Atlantis $125,000
through August 2003, plus out-of-pocket expenses, and will continue at
the rate of $12,500 per month thereafter.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Not applicable
(b) Reports on Form 8-K
None
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
CONNECTIVCORP
Dated: November 11, 2003 By: /s/ Elliot Goldman
Elliot Goldman
President and Chief Executive Officer
15
Certification
I, Elliot Goldman, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
ConnectivCorp;
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 period presented in this
quarterly report;
4. The registrant's other certifying officer 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 we 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 conclusion
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the registrant's board of directors
(or persons performing the equivalent function):
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 officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors 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: November 11, 2003
/s/ Elliot Goldman
------------------
Elliot Goldman
President and Chief Operating Officer
16
Certification
I, Robert Ellin, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
ConnectivCorp;
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 period presented in this
quarterly report;
4. The registrant's other certifying officer 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 we 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 conclusion
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the registrant's board of directors
(or persons performing the equivalent function):
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 officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors 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: November 11, 2003
/s/ Robert Ellin
----------------
Robert Ellin
Chairman
17
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Elliot Goldman, President and Chief Executive Officer of ConnectivCorp
certify that:
1. I have reviewed the quarterly report on Form 10-QSB of
ConnectivCorp;
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.
Dated: November 11, 2003
/s/ Elliot Goldman
------------------
Elliot Goldman
President and Chief Operating Officer
18
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Ellin, Chairman of ConnectivCorp certify that:
1. I have reviewed the quarterly report on Form 10-QSB of
ConnectivCorp;
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.
Dated: November 11, 2003
/s/ Robert Ellin
----------------
Robert Ellin
Chairman
19