Attached files
| file | filename |
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| EXCEL - IDEA: XBRL DOCUMENT - Enveric Biosciences, Inc. | Financial_Report.xls |
| EX-31.2 - CERTIFICATION - Enveric Biosciences, Inc. | spzr_ex312.htm |
| EX-32.2 - CERTIFICATION - Enveric Biosciences, Inc. | spzr_ex322.htm |
| EX-31.1 - CERTIFICATION - Enveric Biosciences, Inc. | spzr_ex311.htm |
| EX-32.1 - CERTIFICATION - Enveric Biosciences, Inc. | spzr_ex321.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
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x
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended: September 30, 2012
OR
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Commission File Number: 000-26460
SPATIALIZER AUDIO LABORATORIES, INC.
(Exact name of Registrant as specified in its charter)
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Delaware
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95-4484725
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|
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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410 Park Avenue--15th Floor New York, New York 10022
(Address of principal corporate offices)
Telephone Number: (212) 231-8359
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (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 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 Noo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
(Do not check if a smaller reporting company)
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Smaller reporting company x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Yesx Noo
As of November 9, 2012, there were 12,142,000 shares of the Registrant’s Common Stock outstanding.
SPATIALIZER AUDIO LABORATORIES, INC.
Quarterly Report on Form 10-Q
For the Three Months Ended September 30, 2012
INDEX
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PART I. FINANCIAL INFORMATION
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|||||
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Item 1.
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Financial Statements
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3 | |||
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Condensed Balance Sheets as of September 30, 2012 and December 31, 2011 (Unaudited)
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3 | ||||
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Condensed Statements of Operations for the Three Months Ended September 30, 2012 and 2011 (Unaudited)
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4 | ||||
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Condensed Statements of Operations for the Nine Months Ended September 30, 2012 and 2011 (Unaudited)
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5 | ||||
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Condensed Statements of Cash Flows for the Nine Months ended September 30, 2012 and 2011 (Unaudited)
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6 | ||||
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Notes to Unaudited Financial Statements
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7-8 | ||||
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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9-11 | |||
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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12 | |||
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Item 4.
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Controls and Procedures
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12 | |||
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PART II. OTHER INFORMATION
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13 | ||||
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Signatures
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14 | ||||
| Exhibits | |||||
2
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
SPATIALIZER AUDIO LABORATORIES, INC.
CONDENSED BALANCE SHEETS
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September 30,
2012
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December 31,
2011
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|||||||
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(unaudited)
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||||||||
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ASSETS
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||||||||
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Current Assets:
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||||||||
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Cash and Cash Equivalents
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$
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2,149
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$
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18,231
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||||
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Other Current Assets
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4,219
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4,219
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||||||
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Total Current Assets
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6,368
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22,450
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||||||
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Total Assets
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$
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6,368
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$
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22,450
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||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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||||||||
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Current Liabilities:
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||||||||
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Accounts Payable and Accrued Liabilities
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9,806
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17,895
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||||||
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Loans from Shareholders
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5,000
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-
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||||||
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Total Current Liabilities
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14,806
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17,895
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||||||
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Commitments and Contingencies
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||||||||
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Stockholders’ Equity (Deficit):
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||||||||
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Preferred shares, $.01 par value, 1,000,000 shares authorized, none issued and outstanding
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||||||||
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Common shares, $.01 par value, 300,000,000 shares authorized, 12,142,000 shares issued and outstanding
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121,420
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121,420
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||||||
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Additional Paid-In Capital
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47,250,887
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47,250,887
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||||||
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Accumulated Deficit
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(47,380,745
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)
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(47,367,752
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)
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||||
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Total Stockholders’ Equity (Deficit)
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(8,438
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)
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4,555
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|||||
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Total Liabilities and Stockholders’ Equity (Deficit)
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$
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6,368
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$
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22,450
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||||
See notes to financial statements (following)
3
SPATIALIZER AUDIO LABORATORIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
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Three Months Ended
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||||||||
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September 30,
2012
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September 30,
2011
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|||||||
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O Operating Expenses :
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||||||||
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General and Administrative
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4,566
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3,687
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||||||
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Operating Loss
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(4,566
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)
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(3,687
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)
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||||
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InLoss Before Income Taxes
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(4,566
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)
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(3,687
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)
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||||
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InIncome Taxes
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(300
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)
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-
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|||||
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N Net Loss
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$
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(4,866
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)
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$
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(3,687
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)
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||
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B Basic and Diluted Loss Per Share
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$
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(0.00
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)
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$
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(0.00
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)
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||
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WWeighted Average Shares Outstanding
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12,142,000
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8,484,000
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||||||
See notes to financial statements (following).
4
SPATIALIZER AUDIO LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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Nine Months Ended
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||||||||
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September 30,
2012
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September 30,
2011
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|||||||
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O Operating Expenses :
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||||||||
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General and Administrative
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12,693
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18,403
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||||||
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Operating Loss
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(12,693
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)
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(18,403
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)
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||||
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InLoss Before Income Taxes
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(12,693
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)
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(18,403
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)
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||||
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InIncome Taxes
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(300
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)
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-
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|||||
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N Net Loss
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$
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(12,993
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)
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$
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(18,403
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)
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||
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B Basic and Diluted Earnings Per Share
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$
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(0.00
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)
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$
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(0.00
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)
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||
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WWeighted Average Shares Outstanding
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12,142,000
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7,161,333
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||||||
See notes to financial statements (following).
5
SPATIALIZER AUDIO LABORATORIES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
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Nine Months Ended
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||||||||
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September 30,
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||||||||
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2012
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2011
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|||||||
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Cash Flows from Operating Activities:
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||||||||
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Net Loss
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$
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(12,993
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)
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$
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(18,403
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)
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||
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Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||
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Net Change in Assets and Liabilities:
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||||||||
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Other Current Assets
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-
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(4,219
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)
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|||||
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Accounts Payable and Accrued Liabilities
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(8,089
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)
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(2,944
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)
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||||
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Net Cash Used In Operating Activities
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(21,082
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)
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(25,566
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)
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||||
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Cash Flows from Financing Activities:
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||||||||
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Issuance of Common Stock
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-
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20,000
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||||||
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Loans from Officers
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5,000
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24,598
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||||||
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Net Cash Provided by Financing Activities
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5,000
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44,598
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||||||
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Increase (Decrease) in Cash and Cash Equivalents
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(16,082
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)
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19,032
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|||||
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Cash and Cash Equivalents, Beginning of Period
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18,231
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1,126
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||||||
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Cash and Cash Equivalents, End of Period
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$
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2,149
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$
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20,158
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||||
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Supplemental Disclosure of Cash Flow Information:
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||||||||
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Cash paid during the period for:
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||||||||
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Interest
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$
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-
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$
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-
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||||
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Income Taxes
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300
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-
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||||||
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Supplemental disclosure of non-cash financing activity:
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||||||||
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Repayment of loans from shareholders through issuance of common stock
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64,598
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|||||||
See notes to financial statements (following).
6
SPATIALIZER AUDIO LABORATORIES, INC.
Notes to Unaudited Financial Statements
(1) Ability to Continue as a Going Concern
Spatializer was a developer, licensor and marketer of next generation technologies for the consumer electronics, personal computing, entertainment and cellular telephone markets. Our technology was incorporated into products offered by our licensees and customers on various economic and business terms. We were incorporated in the State of Delaware in February 1994 and are the successor company in a Plan of Arrangement pursuant to which the outstanding shares of Spatializer Audio Laboratories, Inc., a publicly held Yukon, Canada corporation, were exchanged for an equal number of shares of our common stock. Our corporate office is located at 410 Park Avenue--15th Floor, New York, New York 10022.
The foregoing interim financial information is unaudited and has been prepared from the books and records of the Company. The financial information reflects all adjustments necessary for a fair presentation of the financial condition, results of operations and cash flows of the Company in conformity with generally accepted accounting principles. All such adjustments were of a normal recurring nature for interim financial reporting. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. Accordingly, your attention is directed to footnote disclosures found in the December 31, 2011 Annual Report and particularly to Note 2 thereof, which includes a summary of significant accounting policies.
The foregoing financial information has been prepared assuming that the Company will continue as a going concern. The Company’s current circumstances, including significant operating losses, raise substantial doubt about the likelihood that the Company will continue as a going concern. The foregoing financial information does not include any adjustments that might result from the outcome of this uncertainty.
We are quoted on the OTCQB of the OTC Marketplace under the symbol “SPZR”.
(2) Significant Accounting Policies
Cash and Cash Equivalents — Cash equivalents consist of highly liquid investments with original maturities of three months or less.
Earnings Per Share — Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Since the Company generated net losses in each of the periods presented, outstanding stock options would have been anti-dilutive and were not considered in these calculations.
7
Income Taxes — Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Use of Estimates — Management of the Company has made estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.
Fair Value of Financial Instruments — The carrying values of the Company’s current assets and liabilities approximate fair value due to their short maturity or nature.
(3) Net Operating Loss Carryforwards
At September 30, 2012, we had net operating loss carry-forwards for Federal income tax purposes of approximately $9,500,000 which were available to offset future Federal taxable income, if any, through 2031. These net operating loss carry forwards are subject to an annual limitation of approximately $1,000,000. Utilization of these loss carryforwards is subject to further limitation as a result of change in ownership of the Company, as defined by Federal tax law.
(4) Subsequent Events
During October 2012, Jay Gottlieb, the Company’s President, loaned $3,000 to the Company on an interest-free basis to assist in funding its operating expenses. No other material subsequent events have occurred since September 30, 2012 that require recognition or disclosure in the financial statements.
8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, the audited financial statements and the notes thereto included in the Form 10-K and the unaudited interim financial statements and notes thereto included in this report. The Company plans to continue as a public entity and continues to seek merger, acquisition and business combination opportunities with other operating businesses or other appropriate financial transactions. Until such an acquisition or business combination is effectuated, the Company does not expect to have significant operations.
This report contains forward-looking statements, within the meaning of the Private Securities Reform Act of 1995, which are subject to a variety of risks and uncertainties. Our actual results, performance or achievements may differ significantly from the results, performance or achievements expressed or implied in such forward-looking statements.
Executive Overview
Revenues were $0 for the quarter ended September 30, 2012, compared to $0 for the quarter ended September 30, 2011.
Net loss was $4,866 for the quarter ended September, 2012 and $12,993 for the nine months then ended ($0.00 basic and diluted per share), compared to a net loss of $3,687 for the quarter ended September 30, 2011 and $18,403 for the nine months then ended.
At September 30, 2012, we had $2,149 in cash and cash equivalents as compared to $18,231 at December 31, 2011. The decrease in cash resulted primarily from payment of liabilities and operating expenses incurred from the costs of maintaining the corporate entity as a public entity. We had negative working capital of $(8,438) at September 30, 2012, as compared with working capital of $4,555 at December 31, 2011.
We ceased commercial operations in 2006.
Approach to MD&A
The purpose of MD&A is to provide our shareholders and other interested parties with information necessary to gain an understanding of our financial condition, changes in financial condition and results of operations. As such, we seek to satisfy three principal objectives:
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·
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To provide a narrative explanation of a company’s financial statements “in plain English” that enables the average investor to see the company through the eyes of management.
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·
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To enhance the overall financial disclosure and provide the context within which financial information should be analyzed; and
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·
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To provide information about the quality of, and potential variability of, a company’s earnings and cash flow, so that investors can ascertain the likelihood and relationship of past performance being indicative of future performance.
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9
We believe the best way to achieve this is to give the reader:
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·
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An understanding of our operating environment and its risks (see below and Item 1A of Part II of this Form 10-Q);
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|
·
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An outline of critical accounting policies;
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·
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A review of our corporate governance structure;
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·
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A review of the key components of the financial statements and our cash position and capital resources;
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·
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A review of the important trends in the financial statements and our cash flow; and
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·
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Disclosure on our internal controls and procedures.
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Operating Environment
The market for our stock may not remain liquid and the stock price may be subject to volatility.
Certain other risk factors are set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 on file with the Securities and Exchange Commission.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Our financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s current circumstances, including significant operating losses, raise substantial doubt about the likelihood that the Company will continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
10
Key Components of the Financial Statements and Important Trends
The Company’s financial statements, including the Balance Sheets, the Statements of Operations, and the Statements of Cash Flows, should be read in conjunction with the Notes thereto included elsewhere in this report. MD&A explains the key components of each of these financial statements, key trends and reasons for reporting period-to-period fluctuations.
The Balance Sheet provides a snapshot view of our financial condition at the end of our current fiscal period. A balance sheet helps management and our stockholders understand the financial strength and capabilities of our business. Balance sheets can help identify and analyze trends, particularly in the area of receivables and payables. A review of cash balances compared to the prior years and in relation to ongoing profit or loss can show the ability of the Company to withstand business variations. The difference between Current Assets and Current Liabilities is referred to as Working Capital and measures how much liquid assets a company has available to build its business. This is addressed further in MD&A under Liquidity and Capital Resources.
The Statement of Operations tells the reader whether the Company had a profit or loss. It shows key sources of revenue and major expense categories. It is important to note period-to-period comparisons of each line item of this statement, reasons for any fluctuation and how costs are managed in relation to the overall revenue trend of the business. These statements are prepared using accrual accounting under generally accepted accounting principles in the United States.
The Statement of Cash Flows explains the actual sources and uses of cash.
Results of Operations
Net Loss
Our net losses for the three and nine months ended September 30, 2012 were $4,866 and $12,993, compared to net losses of $3,687 and $18,403 in the comparable periods last year.
Operating Expenses
Operating expenses in the three and nine months ended September 30, 2012 were $4,566 and $12,693, compared to operating expenses of $3,687 and $18,403 in the comparable periods last year.
Liquidity and Capital Resources
At September 30, 2012, we had $2,149 in cash and cash equivalents as compared to $18,231 at December 31, 2011. The decrease in cash resulted primarily from the use of cash to sustain ongoing expenses. We had negative working capital of ($8,438) at September 30, 2012, as compared with working capital of $4,555 at December 31, 2011.
Based on current and projected operating levels, we believe that we can maintain our liquidity position at a consistent level, on a short-term basis. However, we do not believe our current cash reserves are sufficient for us to meet our operating obligations for more than 3-6 months without raising additional capital. There is no current source of future cash flow for the Company.
Net Operating Loss Carry forwards
At September 30, 2012, we had net operating loss carry-forwards for Federal income tax purposes of approximately $9,500,000 which were available to offset future Federal taxable income, if any, through 2031. These net operating loss carry forwards were subject to an annual limitation of approximately $1,000,000. Utilization of these loss carryforwards is subject to further limitation as a result of change in ownership of the Company, as defined by Federal tax law.
11
Not applicable.
The Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Office and Principal Financial Officer concluded that, as of September 30, 2012, these disclosure controls and procedures were effective to ensure that all information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Principal Executive Officer and Principal Financial Officer to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
There were no changes in the Company’s internal controls over financial reporting, known to the Principal Executive Officer and Principal Financial Officer that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be involved in various disputes and litigation matters arising in the normal course of business. We are not involved in any legal proceedings that are expected to have a material adverse effect on our financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties. Were an unfavorable ruling to occur, given the size of our Company, there exists the possibility of a material adverse impact on our results of operations of the period in which the ruling occurs. Our estimate of the potential impact on our financial position or overall results of operations for new legal proceedings could change in the future.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report, stockholders should carefully consider the factors discussed in Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2011, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no unregistered sales of equity securities or repurchases during the period covered by this report.
None
ITEM 4. MINE SAFETY DISCLOSURES
None
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31.1
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CEO-Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended
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31.2
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CFO-Certification Pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as Amended
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32.1
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CEO-Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
| 32.2 | CFO-Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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101.INS **
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XBRL Instance Document
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101.SCH **
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XBRL Taxonomy Extension Schema Document
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101.CAL **
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF **
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB **
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE **
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XBRL Taxonomy Extension Presentation Linkbase Document
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** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
13
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 thereunto duly authorized.
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SPATIALIZER AUDIO LABORATORIES, INC.
(Registrant)
|
|||
| Dated: November 9, 2012 |
/s/ Jay Gottlieb
|
||
|
Jay Gottlieb
|
|||
|
Chairman of the Board, President, Secretary,
Treasurer and Principal Executive Officer
|
|||
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/s/ GREGGORY SCHNEIDER
|
|||
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Greggory Schneider
|
|||
|
Director, Chief Financial and Principal Financial Officer
|
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14