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 Quarterly Period Ended March 31, 2002
-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
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
750 Lexington Avenue, 24th Floor, New York, New York 10022
------------------------------------------------------------------------------
(Address of principal executive offices, Zip Code)
(212) 750-5858
--------------------------------------------------------------------------------
(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 May 20, 2002 is 10,786,966.
Pursuant to Temporary Note 2T, this filing includes unreviewed financial
statements in lieu of reviewed financial statements, because the issuer changed
auditors from Arthur Andersen LLP as disclosed on Form 8K filed on April 15,
2002. The issuer's new accountants are in the process of conducting their audit
of the issuer's financial statements included in Form 10KSB filed on April 16,
2002. A review in respect of those financial statements will be obtained as
further discussed on page 2.
CONNECTIVCORP AND SUBSIDIARIES
FORM 10-QSB
THREE MONTHS ENDED MARCH 31, 2002
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
-----
Item 1. Financial Statements (unaudited and unreviewed)
Consolidated Balance Sheet 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes To Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Pursuant to Temporary Note 2T, this filing includes unreviewed financial
statements in lieu of reviewed financial statements, because the issuer changed
auditors from Arthur Andersen LLP as disclosed on Form 8K filed on April 15,
2002. The issuer's new accountants are in the process of conducting their audit
of the issuer's financial statements included in Form 10KSB filed on April 16,
2002. A review in respect of those financial statements will be obtained within
60 days, as required by temporary rules released by the Securities and Exchange
Commission on March 18, 2002.
2
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
CONNECTIVCORP
CONSOLIDATED BALANCE SHEET
(UNAUDITED AND UNREVIEWED)
March 31,
2002
--------------
ASSETS
--------
CURRENT ASSETS:
Cash and cash equivalents $ 42,104
Prepaid expenses 3,067
--------------
Total Assets $ 45,171
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 52,738
--------------
Total Current Liabilities 52,738
--------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock, $.001 par value
10,000,000 shares authorized, Series D, none issued -
Common Stock, $.001 per value
40,000,000 shares authorized, 8,261,966 issued and outstanding 8,262
Additional paid in capital 19,343,141
Accumulated deficit (19,358,970)
--------------
Total Stockholders' Equity (7,567)
--------------
Total Liabilities and Stockholders' Equity $ 45,171
==============
The accompanying notes are an integral part of these consolidated statements (unaudited and unreviewed).
3
CONNECTIVCORP
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED AND UNREVIEWED)
2002 2001
----------- ------------
Revenues $ 3,500 $ -
General and administrative expenses (290,658) (1,094,505)
----------- ------------
Operating loss (287,158) (1,094,505)
Interest income 153 20,165
----------- ------------
Net loss $ (287,005) $(1,074,340)
=========== ============
Net loss per common share- basic and diluted $ (0.07) $ (0.50)
=========== ============
Weighted average shares outstanding:
basic and diluted 4,252,350 2,153,216
=========== ============
The accompanying notes are an integral part of these consolidated statements
(unaudited and unreviewed).
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
(UNAUDITED AND UNREVIEWED)
2001 2001
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(287,005) $(1,074,340)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization - 250,675
Stock-based compensation 153,872 234,374
Changes in assets and liabilities:
Prepaid expenses (3,067) 24,266
Accounts payable and accrued expenses (6,557) (164,691)
----------- -----------
Net cash used in operating activities (142,757) (729,716)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 95,000 -
----------- -----------
Net cash provided by financing activities 95,000 -
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS (47,757) (729,716)
CASH AND CASH EQUIVALENTS, beginning of period 89,861 1,818,631
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 42,104 $ 1,088,915
=========== ===========
NON-CASH INVESTING AND FINANCING ACTIVITIES
Stock issued in satisfaction of accounts payable $ 42,292 $ -
=========== ===========
The accompanying notes are an integral part of these consolidated statements
(unaudited and unreviewed).
5
CONNECTIVCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED AND UNREVIEWED)
MARCH 31, 2002
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 and unreviewed 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. 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 three months ended March 31, 2002,
are not necessarily indicative of the results to be expected for the year ending
December 31, 2002.
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 months ended March 31, 2002 and
2001, 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 March 31, 2002 and
2001 had been converted. These were not included in the calculation of diluted
loss per share, as such shares are antidilutive:
2002 2001
------- -------
Stock options - 29,322
Warrants 146,608 146,608
------- -------
Common Stock Equivalents 146,608 175,930
======= =======
Options to purchase 10,333 and 479,613 shares of common stock, and warrants to
purchase 26,863 and 387,911 shares of common stock for the three months ended
March 31, 2002 and 2001, 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.
6
CONNECTIVCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED AND UNREVIEWED)
MARCH 31, 2002
Note 3 - Common Stock
During the quarter ended March 31, 2002, the Company raised $95,000 through the
issuance of 950,000 shares of the Company's Common Stock at $0.10 per share.
The Company issued 466,250 shares of Common Stock to suppliers, employees and
consultants in exchange for any outstanding options and warrants and a release
from any future claims against the Company. As a result of the issuance, the
Company recognized $7,971 of non-cash expenses.
On March 18, 2002, 1,205,000 shares of the Company's Common Stock was issued to
officers and directors and recognized $22,475 of compensation expense.
The Company issued 2,960,000 shares of Common Stock to consultants as
compensation for services rendered in connection with the letter of intent to
acquire Aqua Development Corp. and recognized consulting expense of $58,922.
Atlantis Equities, Inc. ("Atlantis") received 2 million shares of the 2,960,000
shares of Common Stock issued to consultants. Robert Ellin, Chairman of the
Company, is a principal of Atlantis. West End Capital Partners, LLC ("WECP")
received 760,000 shares of the 2,960,000 shares of Common Stock issued to
consultants. Jeffery Kuhr, a director of the Company, is a principal in WECP.
The Company issued 500,000 shares of Common Stock to satisfy $42,292 of accounts
payable outstanding at December 31, 2002.
On March 12, 2002, the Company effected a one-for-ten reverse split of its
common stock. All references in the accompanying consolidated financial
statements and notes thereto relating to common stock and additional paid-in
capital, stock options and warrants, per share and share data have been
retroactively adjusted to reflect the one-for-ten reverse stock split.
Note 4 - Letter of Intent
On March 21, 2002, the Company executed a letter of intent to acquire Aqua
Development Corp., a California corporation ("Aqua"). The Company intends to
acquire Aqua in exchange for 78% of the issued and outstanding common stock in
the Company, as defined. The acquisition is contingent upon numerous factors,
including the raising of additional financing by the parties. Immediately upon
the acquisition, the Company will authorize its name to be changed to "d/b/a
Aqua Development Corp."
Capital of $2 million shall be necessary in connection with the transaction
financing, of which $1 million shall be raised by Aqua and $1 million by the
Company. Through May 20, 2002, the Company has raised approximately $350,000 of
additional financing. At the signing of the Purchase Agreement, the Company
shall advance $250,000 to Aqua in the form of a secured bridge loan to be
evidenced by a note bearing interest at 12% per annum. In the event the
transaction closes, the $250,000 shall be credited to the Company as part of its
$1 million capital contribution discussed above. The Company shall be obligated
to make another $100,000 available to Aqua prior to closing on the same terms.
In the event the transaction is not consummated, the loan shall mature 90 days
after the closing date, as defined. The parties anticipate the closing shall
occur on or before the date that is 120 days after March 21, 2002.
7
CONNECTIVCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED AND UNREVIEWED)
MARCH 31, 2002
Note 5 - Commitments
Sublease
--------
On January 1, 2002, the Company entered into a sublease for office space located
at 750 Lexington Avenue, New York, New York. The lease term is for the period
from January 1, 2002 through December 31, 2002, 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
----------------------
The Company entered into an employment contract, on March 18, 2002 with Elliot
Goldman for an initial term of one year. Mr. Goldman serves as President, Chief
Executive Officer and as a Director of the Company at an annual salary of
$150,000. However, the compensation shall accrue and no more than $200 per week
shall be paid to Mr. Goldman until such time as the Company has received at
least $1 million in proceeds from new debt and/or equity investment subsequent
the date of the agreement.
The Company entered into an employment contract, on March 18, 2002 with Robert
Ellin for an initial term of one year. Mr. Ellin serves as Chairman of the
Company at an annual salary of $150,000. However, the compensation shall accrue
and no more than $200 per week shall be paid to Mr. Goldman until such time as
the Company has received at least $1 million in proceeds from new debt and/or
equity investment subsequent the date of the agreement.
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 and
ending on March 18, 2003. Robert Ellin, the current Chairman of the Company,
is a principal in Atlantis. In consideration for the services to be provided by
Atlantis, upon the consummation of the transactions contemplated by the letter
of intent, dated as of March 21, 2002, by and between the Company and Aqua
Development Corporation, the Company will issue shares of its common stock so
that Atlantis will own that number of shares which constitutes up to 4.0% of the
common stock then outstanding. In addition, Atlantis is to receive cash
compensation of $250,000.
8
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.
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 March 31, 2002 is approximately
$19.4 million. To date, the Company has not generated any significant revenue
from its 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 $287,000 and $1.1 million for the
three months ended March 31, 2002 and 2001, respectively, while cash and cash
equivalents at March 31, 2002 totaled approximately $42,000. 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 execute its business
strategy.
The Company has made a decision to restructure its operations. Management has
issued restricted common stock to satisfy existing trade payables and that the
Company is seeking appropriate merger or acquisition partners in the medical
information or other unrelated fields. Management has agreed to provide or
arrange for short term financing of $250,000 in connection with this effort and
has effected a one for ten reverse stock split of the Company's common stock as
of March 12, 2002.
The Company's ability to operate as a going concern is dependent on its ability
to execute its restructuring and/or raise additional equity. There can be no
level of assurance that the Company will be able to achieve or sustain any level
of profitability in the future. Future operating results will depend upon a
number of factors, including the ability to raise additional capital, the
execution of the Management's restructuring plans and prevailing economic
conditions. While the Company has reduced its operating expenses, no assurance
can be given that the Company can sustain these operating levels. Moreover, the
Company has not yet generated any meaningful revenues, and no assurance can be
given that it will do so in the future. There can be no assurance that the
Company will generate sufficient revenues to ever achieve profitability or
otherwise sustain its profitability in the future. While the Company is
exploring appropriate merger or acquisition partners in the medical information
or other unrelated fields, there can be no assurance that a transaction will be
consummated.
LETTER OF INTENT
On March 21, 2002, the Company executed a letter of intent to acquire Aqua
Development Corp., a California corporation ("Aqua"). The Company intends to
acquire Aqua in exchange for 78% of the issued and
9
outstanding common stock in the Company, as defined. The acquisition is
contingent upon numerous factors, including the raising of additional financing
by the parties. Immediately upon the acquisition, the Company will authorize its
name to be changed to "d/b/a Aqua Development Corp."
Capital of $2 million shall be necessary in connection with the transaction
financing, of which $1 million shall be raised by Aqua and $1 million by the
Company. Through May 20, 2002, the Company has raised approximately $350,000 of
additional financing. At the signing of the Purchase Agreement, the Company
shall advance $250,000 to Aqua in the form of a secured bridge loan to be
evidenced by a note bearing interest at 12% per annum. In the event the
transaction closes, the $250,000 shall be credited to the Company as part of its
$1 million capital contribution discussed above. The Company shall be obligated
to make another $100,000 available to Aqua prior to closing on the same terms.
In the event the transaction is not consummated, the loan shall mature 90 days
after the closing date, as defined. The parties anticipate the closing shall
occur on or before the date that is 120 days after March 21, 2002.
The following discussion and analysis compares the results of the Company's
continuing operations for the Three Months ended March 31, 2002 and March 31,
2001.
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.
THREE MONTHS ENDED MARCH 31, 2002
--------------------------------------
The Company generated $3,500 in revenues from operations during the three months
ended March 31, 2002.
For the three months ended March 31, 2002 and 2001, the Company reported the
following:
Net loss (287,005) (1,074,340)
============================== =============================
Net loss per common share- basic and diluted $ (0.07) $ (0.50)
============================== =============================
For the three months ended March 31,2002, the Company reported a net of
$287,005. General and administrative expenses include expenses of approximately
$8,300 for professional fees; $60,500 for salary and related expenses, $94,000
for consultants, $26,000 of insurance, $7,500 for rent and $64,000 for
compensation costs recognized in connection with stock options.
For the three months ended March 31, 2001, the Company reported a loss from
continuing operations of $1,074,340. General and administrative expenses
include expenses of which approximately $59,000 for professional fees; $120,000
for salary-related expenses, $274,000 for consultants, $250,000 for amortization
of acquired software, magazines and goodwill, and $234,000 for compensation
costs recognized in connection with stock options issued.
10
THREE MONTHS ENDED MARCH 31, 2001 (THE "2001 QUARTER")
--------------------------------------------------------------
The Company generated no revenues from continuing operation in the 2001 Quarter.
In the first quarter of 2001 and 2000, the Company reported the following:
2001 2000
------------------------- -------------------------
Loss from continuing operations $ (1,074,340) $ (786,706)
Loss from discontinued operations - (357,707)
------------------------- -------------------------
Net loss $ (1,074,340) $ (1,144,413)
========================= =========================
Basic and diluted loss per share:
Loss from continuing operations $ (0.50) $ (0.04)
Loss from discontinued operations - (0.02)
------------------------- -------------------------
Net loss (0.50) (0.06)
========================= =========================
For the three months ended March 31, 2001, the Company reported a loss from
continuing operations of $1,074,340. General and administrative expenses
include expenses of which approximately $59,000 for professional fees; $120,000
for salary-related expenses, $274,000 for consultants, $250,000 for amortization
of acquired software, magazines and goodwill, and $234,000 for compensation
costs recognized in connection with stock options issued.
Liquidity and Capital Resources
----------------------------------
In the three months ended March 31, 2002, $142,757 of cash was used in operating
activities. Funds were used to pay the Company's operating expenses as well
as to reduce accounts payable and accrued expenses by $26,557. $95,000 of
cash was generated through the issuance of 950,000 shares of common stock.
11
PART II -- OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None
ITEM 2 - CHANGES IN SECURITIES
The issuance of the shares of common stock during the quarter ended March 31,
2002, did not involve a public offering and was based on Section 4(2) of the
Securities Act of 1933, as amended.
During the quarter ended March 31, 2002, the Company raised $95,000 through the
issuance of 950,000 shares of the Company's Common Stock at $0.10 per share
to four existing shareholders and consultants.
The Company issued 466,250 shares of Common Stock to suppliers, employees and
consultants in exchange for any outstanding options and warrants and a release
from any future claims against the Company. As a result of the issuance, the
Company recognized $7,971 of non-cash expenses.
On March 18, 2002, 1,205,000 shares of the Company's Common Stock was issued to
officers and directors and recognized $22,475 of compensation expense.
The Company issued 2,960,000 shares of Common Stock to consultants as
compensation for services rendered in connection with the letter of intent to
acquire Aqua Development Corp. and recognized consulting expense of $58,922.
Atlantis Equities, Inc. ("Atlantis") received 2 million shares of the 2,960,000
shares of Common Stock issued to consultants. Robert Ellin, Chairman of the
Company, is a principal of Atlantis. West End Capital Partners, LLC ("WECP")
received 760,000 shares of the 2,960,000 shares of Common Stock issued to
consultants. Jeffery Kuhr, a director of the Company, is a principal in WECP.
The Company issued 500,000 shares of Common Stock to satisfy $42,292 of accounts
payable outstanding at December 31, 2002.
On March 12, 2002, the Company effected a one-for-ten reverse split of its
common stock. All references in the accompanying consolidated financial
statements and notes thereto relating to common stock and additional paid-in
capital, stock options and warrants, per share and share data have been
retroactively adjusted to reflect the one-for-ten reverse stock split.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
12
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5 - OTHER INFORMATION
Sublease
--------
On January 1, 2002, the Company entered into a sublease for office space located
at 750 Lexington Avenue, New York, New York. The lease term is for the period
from January 1, 2002 through December 31, 2002, 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
----------------------
The Company entered into an employment contract, on March 18, 2002 with Elliot
Goldman for an initial term of one year. Mr. Goldman serves as President, Chief
Executive Officer and as a Director of the Company at an annual salary of
$150,000. However, the compensation shall accrue and no more than $200 per week
shall be paid to Mr. Goldman until such time as the Company has received at
least $1 million in proceeds from new debt and/or equity investment subsequent
the date of the agreement.
The Company entered into an employment contract, on March 18, 2002 with Robert
Ellin for an initial term of one year. Mr. Ellin serves as Chairman of the
Company at an annual salary of $150,000. However, the compensation shall accrue
and no more than $200 per week shall be paid to Mr. Goldman until such time as
the Company has received at least $1 million in proceeds from new debt and/or
equity investment subsequent the date of the agreement.
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 and
ending on March 18, 2003. Robert Ellin, the current Chairman of the Company,
is a principal in Atlantis. In consideration for the services to be provided by
Atlantis, upon the consummation of the transactions contemplated by the letter
of intent, dated as of March 21, 2002, by and between the Company and Aqua
Development Corporation, the Company will issue shares of the common stock so
that Atlantis will own that number of shares which constitutes up to 4.0% of the
common stock then outstanding, and in addition, cash compensation of $250,000.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Not applicable
(b) Reports on Form 8-K
During the quarter ended March 31, 2002, the Company filed a Current
Report on Form 8K, dated April 15, 2002 that reporting a change in
accountants. Patrusky Mintz & Semel ("Patrusky") was engaged as the
Company's new independent accountants replacing Arthur Andersen LLP.
SIGNATURE
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: May 20, 2002 by: /s/ Elliot Goldman
--------------------
Elliot Goldman
President and Chief Executive Officer
13