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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended March 31, 2000
Commission File No. 0-27994
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
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(Exact name of small business issuer as specified in its charter)
FLORIDA 59-3203301
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
186 P.C.N.A. PARKWAY
LAKE HELEN, FL 32744
904-228-1000
-----------------------------
(Address and telephone number
of principal executive offices)
Indicate by check mark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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:
[X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding at March 31, 2000
- --------------------------- -----------------------------
Common Stock: no par value 4,228,033
Transitional Small Business Disclosure Format (check one): [ ] Yes [X] No
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<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
INDEX
Page
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets
as of March 31, 2000 (unaudited) and December 31, 1999 3
Consolidated Statements of Operations
for the three months ended March 31, 2000 and 1999 (unaudited) 4
Consolidated Statements of Cash Flows
for the three months ended March 31, 2000 and 1999 (unaudited) 5-6
Notes to unaudited consolidated interim financial statements 7-10
ITEM 2. Management's Discussion and Analysis of Interim Financial
Condition and Results of Operations 11-14
PART II - OTHER INFORMATION
ITEM 5. Other Information 15
ITEM 6. Exhibits and Reports on Form 8-K 15
Exhibit 27 - Financial data schedule
2
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
CONSOLIDATED BALANCE SHEETS
<TABLE><CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
----------- -----------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,221,276 $ 2,095,866
Accounts receivable, less allowance for doubtful
accounts of $129,865 at March 31, 2000
and $153,901 at December 31, 1999 230,994 246,952
Directories in progress 223,197 164,309
Other current assets 166,697 175,067
----------- -----------
Total current assets 4,842,164 2,682,194
Property and equipment, net 1,231,325 1,217,894
Investment in AroundCampus, Inc. 200,000 200,000
Other assets 301,349 213,676
----------- -----------
Total assets $ 6,574,838 $ 4,313,764
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 143,387 $ 247,827
Accrued expenses 637,240 169,999
Deferred revenue 589,295 492,574
Mortgage payable 53,333 53,333
----------- -----------
Total current liabilities 1,423,255 963,733
Notes payable 100,000 100,000
Mortgage payable after one year 573,334 586,667
----------- -----------
Total liabilities 2,096,589 1,650,400
Shareholders' equity:
Common shares, no par value:
15,000,000 shares authorized; 5,862,333 shares
issued at March 31, 2000; 4,925,020
shares issued at December 31, 1999 8,214,654 5,914,416
Paid-in capital for stock warrants 143,912 26,208
Accumulated deficit (2,720,260) (2,115,871)
Unearned compensation, net (1,355) (2,687)
Treasury stock; 1,634,300 shares, at cost (1,158,702) (1,158,702)
----------- -----------
Total shareholders' equity 4,478,249 2,663,364
----------- -----------
Total liabilities and shareholders' equity $ 6,574,838 $ 4,313,764
=========== ===========
</TABLE>
See accompanying notes.
3
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE><CAPTION>
THREE MONTHS ENDED
MARCH 31, MARCH 31,
2000 1999
----------- -----------
<S> <C> <C>
Net sales $ 1,169,367 $ 1,428,267
Costs and expenses:
Production 393,193 332,729
Marketing and selling 509,605 623,306
Depreciation 29,433 33,158
Amortization 15,343 6,180
General and administrative 854,834 415,179
----------- -----------
1,802,408 1,410,552
----------- -----------
Income (loss) from operations (633,031) 17,715
Interest income, net 28,652 10,601
----------- -----------
Net income (loss) $ (604,389) $ 28,316
=========== ===========
Net income (loss) per common share - basic $ (0.16) $ 0.01
=========== ===========
Net income (loss) per common share - diluted $ (0.16) $ 0.01
=========== ===========
Shares used in computing net income (loss) per share - basic 3,729,940 3,253,613
=========== ===========
Shares used in computing net income (loss) per share - diluted 3,729,940 3,435,114
=========== ===========
</TABLE>
See accompanying notes.
4
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE><CAPTION>
THREE MONTHS ENDED
MARCH 31, MARCH 31,
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $ (604,389) $ 28,316
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities:
Depreciation and amortization 44,776 39,338
Accretion of unearned compensation 1,332 915
Bad debt expense 30,302 101,791
Proceeds from the exercise of stock options 48,618 2,600
Exchange of common stock for services -- 6,299
Issuance of stock warrants in exchange for goods and services 16,704 --
Increase in accounts receivable (14,344) (23,728)
(Increase) decrease in directories in progress (58,888) 56,587
(Increase) decrease in other assets 5,346 6,536
Decrease in accounts payable (104,440) (65,068)
Decrease in income taxes payable -- (4,000)
Increase in accrued expenses 467,241 83,818
Increase (decrease) in deferred revenue 96,721 (169,960)
----------- -----------
Net cash (used in) provided by operating activities (71,021) 60,844
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (41,856) (5,080)
----------- -----------
Net cash provided by (used in) investing activities (41,856) (5,080)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of mortgage principal (13,333) (13,333)
Proceeds from the sale of common stock 2,251,620 --
Purchase of treasury stock -- (29,219)
----------- -----------
Net cash provided by (used in) financing activities 2,238,287 (39,952)
----------- -----------
Net increase in cash and cash equivalents 2,125,410 15,812
Cash and cash equivalents at beginning of period 2,095,866 2,331,633
----------- -----------
Cash and cash equivalents at end of period $ 4,221,276 $ 2,347,445
=========== ===========
</TABLE>
5
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
<TABLE><CAPTION>
THREE MONTHS ENDED
MARCH 31, MARCH 31,
SUPPLEMENTAL CASH FLOW INFORMATION 2000 1999
-----------------------
<S> <C> <C>
Interest paid $ 13,470 $ 12,898
======== ========
Exchange of advertising for supplies and equipment $ 11,871 $ 6,319
======== ========
Issuance of stock warrants in exchange for intangible property $101,000 --
======== ========
Reduction of accounts payable by issuance of common stock -- $ 33,950
======== ========
</TABLE>
See accompanying notes.
6
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of The Publishing
Company of North America, Inc. and subsidiaries (the "Company") have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include
all the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. It is
recommended that these financial statements be read in conjunction with the
Company's audited financial statements as of December 31, 1999. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included in the
accompanying unaudited consolidated financial statements. The results of
operations of any interim period are not necessarily indicative of the results
of operations for the fiscal year.
The Company operates in one reportable business segment, the publishing of
membership directories for bar associations and the selling of advertising in
those directories, with respect to the segment disclosure requirement of FAS
131, DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION.
2. Consolidation
The consolidated financial statements include the accounts of The Publishing
Company of North America, Inc., and its wholly-owned subsidiaries PCNA
Communications Corporation since its incorporation on October 14, 1998 and
Attorneys.com, Inc. (formerly Attorneys Online, Inc.) since its incorporation on
February 15, 1999 (collectively, the Company). Intercompany transactions have
been eliminated in consolidation.
3. Cash and Equivalents
The Company considers all highly-liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
4. Accounts Receivable
Accounts receivable are comprised primarily of amounts due from advertisers in
bar association directories and the online vendor directory. The Company's
allowance for doubtful accounts is estimated by management as a percentage of
sales. All amounts outstanding in excess of six months are written off.
5. Investment in AroundCampus, Inc.
The investment in AroundCampus, Inc. ("ACI") (formerly College Directory
Publishing Corporation) is accounted for on the cost basis as the Company does
not participate in ACI's management.
7
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. Intangible Assets and Amortization
Intangible assets, which are comprised of purchased software, Internet web site
addresses, and rights to use of a particular toll-free telephone number are
recorded at cost and included in other assets. The cost is amortized over an
estimated useful life of five years using the straight-line method.
7. Revenue Recognition
Revenues and related costs are recorded by the Company upon shipment of
directories. Upfront non-refundable payments received for Internet advertising
and costs are recognized upon the release of the advertisement on the website.
Costs accumulated under directories in progress are stated at estimated costs,
not in excess of estimated realizable value. Deferred revenue represents amounts
received from advertisers prior to shipment of the related directories.
Staff Accounting Bulletin No. 101 (SAB101), "Revenue Recognition", was issued in
December 1999. SAB 101 will require companies to recognize certain upfront
non-refundable fees over the life of the related contract. The Company is
required to adopt this new accounting principle through a cumulative charge to
the statement of operations, in accordance with Accounting Principles Board
Opinion (APB) No. 20, "Accounting Changes", no later than the second quarter of
fiscal 2000. The Company believes that the adoption of SAB 101 will have an
impact on its future operating results as it relates to the up-front
non-refundable payments received in connection with contracts. The historical
financial statements reflect revenues of approximately $389,000 through December
31, 1999 and $54,000 in first quarter 2000. Upon adoption of SAB 101, the
Company will be required to record these revenues over the life of the related
agreement, as defined.
8. Stock-based Compensation
The Company accounts for employee stock-based compensation under the provisions
of Accounting Principles Board (APB) Opinion No. 25, ACCOUNTING FOR STOCK ISSUED
TO EMPLOYEES. Accounting for the issuance of stock options under the provisions
of APB No. 25 typically does not result in compensation expense for the Company
as the exercise price of options are normally established at a price which
approximates the fair market value of the Company's common stock on the date of
grant.
9. Use of Estimates
The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.
8
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. Common Stock Outstanding at March 31, 2000
In February 2000, the Company sold a total of 790,513 shares of its common stock
to four investment funds in exchange for $2,000,000. As of March 31, 2000 the
shares had not been issued due to delays in receiving the transfer instructions.
The shares are shown as outstanding on the cover page of this report and on the
Company's balance sheet as of March 31, 2000. They also are included in the
calculation of the basic and diluted loss per share for the most recent period
(see Note 11. Earnings Per Share).
11. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per
share in accordance with SFAS Number 128, "Earnings Per Share":
<TABLE><CAPTION>
Three months ended March 31,
2000 1999
----------- -----------
<S> <C> <C>
Numerator:
Net income (loss) from continuing operations $ (604,389) $ 28,316
----------- -----------
Numerator for basic earnings per share -
income (loss) available to common shareholders $ (604,389) $ 28,316
Effect of dilutive securities -- --
----------- -----------
Numerator for diluted earnings per share -
income (loss) available to common
shareholders after assumed conversions $ (604,389) $ 28,316
Denominator:
Denominator for basic earnings per share -
weighted-average shares 3,729,940 3,253,613
Effect of dilutive securities - stock options -- 181,501
----------- -----------
Denominator for diluted earnings per share -
adjusted weighted-average shares and
assumed conversions 3,729,940 3,435,114
Basic earnings (loss) per share $ (0.16) $ 0.01
=========== ===========
Diluted earnings (loss) per share $ (0.16) $ 0.01
=========== ===========
</TABLE>
In computing diluted loss per share for 2000, 463,859 common share equivalents
were excluded from the diluted loss per share computation because their effect
would have been antidilutive.
9
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. Subsequent Events
In connection with the sale of its former subsidiary, College Directory
Publishing, Inc. in June 1998, the Company received an interest-bearing
promissory note in the amount of $100,000 due December 15, 2000. The note and
all unpaid accrued interest was paid to the Company in April 2000.
In April 2000, the Company agreed to issue 360,000 unregistered shares of its
common stock in exchange for the rights to use an intangible asset. The
acquisition will result in a future non-cash operating expense of approximately
$557,000 that will be amortized over five years, assuming the continued usage of
the asset.
10
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
The following table sets forth the Company's results of operations for the
quarters ended March 31, 2000 and 1999:
<TABLE><CAPTION>
Three months ended March 31, Change Change
2000 1999 in $ in %
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 1,169,367 100.0% $ 1,428,267 100.0% $(258,900) (18.1)%
Costs and expenses:
Production 393,193 33.6% 332,729 23.3% 60,464 18.2%
Marketing and selling 509,605 43.6% 623,306 43.6% (113,701) (18.2)%
Depreciation 29,433 2.5% 33,158 2.3% (3,725) (11.2)%
Amortization 15,343 1.3% 6,180 0.4% 9,163 148.3%
General and administrative 854,834 73.1% 415,179 29.1% 439,655 105.9%
---------------------------------------------------------------------------------------
1,802,408 154.1% 1,410,552 98.8% 391,856 27.8%
---------------------------------------------------------------------------------------
Income (loss) from operations (633,041) (54.1)% 17,715 1.2% (650,756)
Interest income, net 28,652 2.5% 10,601 0.7% 18,051
--------------------------------------------------------------------------
Net income (loss) $ (604,389) (51.7)% $ 28,316 2.0% $(632,705)
</TABLE>
In the first quarter of 2000, we published 20 directories that generated
an average of $56,000 per directory in revenues. In the same period in 1999 we
published 16 directories at an average of $89,000 per directory in revenues.
During 1998, we began to transition our agreements with bar associations to our
Directory Participation Program ("DPP") by which directories may be purchased by
either individual members or the association. Up until that time, nearly all
agreements were under our "free directory program" by which directories are
provided to all members of a professional association at no charge to either the
individual members or the association. Directory sales represented $113,000 of
our first quarter 2000 revenues and $72,000 of our first quarter 1999 revenues.
We published approximately one-half of our directories under the DPP in 1999,
40% in the first quarter 2000 and approximately 30% in the first quarter 1999.
The DPP reduces the number of directories that must be printed and distributed.
This acts as a disincentive to advertisers for whom distribution is a
significant issue in their buying decision. We believe that in the last half of
1999 and the first quarter of 2000, as some directories were published in their
second year under the DPP, the reduced distribution had a negative effect upon
advertising sales. This effect of the DPP can not be isolated and quantified
because of the numerous other variables that have an effect. However, we believe
that the DPP is a significant contributor to a trend in lower average revenues
per directory.
Historically, we have published a very low percentage of our directories
independent of a contract with a bar or medical association. We are expanding
our publication of these "independent" directories to approximately 20 in 2000.
Attorney and other information that we typically include in our directories is
legally available from a variety of sources. Since we are not bound to the terms
of a publishing contract, we have much greater flexibility in content, design,
and schedule. We believe these proprietary directories
11
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
RESULTS OF OPERATIONS (CONTINUED)
- ---------------------
will replace our less profitable association contracts while we maintain and
grow our more profitable association contracts. In publishing these independent
directories, we believe that we will be able to more effectively brand and
market our future Internet products.
In first quarter 2000 we recognized approximately $54,000 of Internet
advertising revenues; there were no Internet advertising revenues in first
quarter 1999. Currently, we are selling our Internet advertising in conjunction
with our print directory advertising. In the future, we intend to sell Internet
advertising independent of our print directory sales effort.
The decrease in average revenues per directory from year to year was the
most significant factor in the increase in production costs as a percentage of
revenues in 2000. Twelve of the 16 directories published in the first quarter of
1999 were published again in the first quarter of 2000. For these directories,
third-party production costs rose $6,000 while revenues decreased $350,000;
therefore, the decrease in revenues was much more significant than the increase
in costs. Also significant in the most recent quarter was that the eight new
directories published in first quarter 2000 had third-party production costs
that were $62,000 higher than the four directories they replaced from first
quarter 1999. This was primarily because the eight new directories averaged
nearly three times the number of directories printed and distributed than the
four directories they replaced.
General and administrative expenses more than doubled in the most recent
quarter from the same period a year earlier. Of the $440,000 increase, $403,000
was for professional services, of which $373,000 related to the contracting of a
leading management consulting firm, McKinsey and Company, to provide
comprehensive consulting services relating to the further development and launch
of Attorneys.com, our new legal portal to debut later this year. Approximately
one-half of this expense will be paid in cash and the other half in common stock
of the Company. We also incurred $25,000 of expense relating to financial public
relations consultants in the first quarter of 2000 that were not incurred in the
same period a year earlier.
In January 2000 we acquired the rights to an intangible asset in exchange
for the issuance of four-year warrants to purchase 100,000 shares of our common
stock at $2.188 per share. A non-cash operating expense of approximately
$101,000 is being amortized over five years, assuming continued use of the
asset. In April 2000 we acquired the rights to another intangible asset in
exchange for 360,000 unregistered shares of our common stock. The acquisition
will result in a future non-cash operating expense of approximately $557,000
that will be amortized over the next five years. We purchased these rights to
have the assets available for use as part of our future Internet strategy.
A significant amount of our expense in the most recent quarter was
directly related to the development of our Internet strategy. As described
above, $373,000 of
12
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
RESULTS OF OPERATIONS (CONTINUED)
- ---------------------
expense for professional services in the most recent quarter directly related to
the Internet strategy development. Amortization expense related to intangible
assets for the Internet business was approximately $11,000 in the most recent
quarter, compared to approximately $1,000 for first quarter 1999. Management
estimates that approximately $114,000 of executive management expense was
invested in the Internet strategy in first quarter 2000, compared to
approximately $23,000 in the same period in 1999. Accordingly, approximately
$498,000 of the current period's expense is related to our Internet strategy,
compared to $24,000 for the same period a year earlier. In addition to the
expenses related to our Internet strategy, a material part of our loss in the
most recent quarter also arose from our traditional print directory business
that was marginally profitable in first quarter 1999.
Our strategy, that began in late 1998, to develop an Internet business has
had and will continue to have a significant impact upon our operating results.
During the second quarter of 2000 we will incur more than $400,000 of expense
related to the management consulting services discussed above for Attorneys.com.
Our CEO has been largely dedicated to the Internet strategy and a majority of
the time of our other executive management has been invested there as well. We
do expect to see improvement in our print directory operations in the latter
half of 2000; however, the costs associated with the start-up of our Internet
business will significantly overshadow any possible revenues from the Internet
business in 2000.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's cash and equivalents increased $2,125,410 to $4,221,276 at
March 31, 2000 from $2,095,866 at December 31, 1999. Most of these funds are
invested in money market funds.
In January 2000, a member of our board of directors purchased 115,000
shares of our common stock at the then current market price of $2.188 per share
for a total of $251,620. In February 2000, we sold a total of 790,513 shares of
our common stock to four investment funds in exchange for $2,000,000. Both the
director and the investment funds acquired their common stock for investment,
and they did not receive any registration rights.
Our net loss of $604,000 in the most recent quarter did not affect our
cash balance commensurately due primarily to the increase of $467,000 in accrued
expenses during the period; however, nearly all of the increase in accrued
expenses is expected to be paid out during the next quarter.
Our existing cash balances are sufficient to meet our working capital
needs for more than the next 12 months. We can not estimate at this time how
much of our existing cash resources we will use in our new Internet business
strategy. We are pursuing discussions with various possible sources of
additional capital in connection with our plans to launch our new Internet
business later this year. We cannot assure you that any of these discussions
will lead to agreements or that we will be able to raise additional capital.
13
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
YEAR 2000 CONSIDERATIONS
- ------------------------
In prior periods, we discussed the nature and progress of our plans to
become Year 2000 ready. In late 1999, we completed our remediation and testing
of systems. As a result of those planning and implementation efforts, we
experienced no significant disruptions in mission critical information
technology and non-information technology systems and believe those systems
successfully responded to the Year 2000 date change, including the occurrence of
February 29th. We expensed less than $25,000 during 1999 in connection with
remediating our systems. We are not aware of any problems resulting from Year
2000 issues, either with our products, our internal systems, or the products and
services of third parties. We will continue to monitor our mission critical
computer applications and those of our suppliers and vendors throughout the year
2000 to ensure that any latent Year 2000 matters that may arise are addressed
promptly.
FORWARD-LOOKING STATEMENTS
- --------------------------
The statements made above relating to our expansion of our independent
directories, to these independent directories replacing our less profitable
association contracts while we maintain and grow our more profitable association
contracts, to our ability to more effectively brand and market our future
Internet products in our independent directories, to our new Internet sales
effort being independent of our print directory sales effort, to our expectation
to see improvement in our print directory operations in the latter half of 2000,
to our existing cash balances being sufficient to meet our working capital needs
for more than the next 12 months, to our plans to raise additional capital, and
to our plans to launch our new Internet business later this year are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
statements that express the "belief", "anticipation", "plans", "expectations"
and similar expressions are intended to identify forward-looking statements. The
results anticipated by these forward-looking statements may not occur. While the
Company believes that these statements are accurate, the Company's business is
dependent upon general economic conditions and various conditions specific to
its industry and future trend results cannot be predicted with certainty.
Important factors that may cause actual results to differ materially from the
forward-looking statements include the following: 1) our ability to achieve
acceptable sales volumes and gross margins in our new independent directories,
2) our ability to successfully gain recognition and usage of our new independent
directories, 3) our ability to create and maintain an effective and efficient
sales force for our new Internet products which is independent of our print
directory sales force, 4) the ability of our management to implement and expand
our Internet strategy without using all of our cash resources, 5) unexpected
downturns in our print directory business, including national and local economic
factors that will reduce advertising sales 6) our ability to successfully
implement our plans with the capital resources we already have on hand or are
able to additionally raise in the future, 7) whether the capital markets find
our current business or our plans for our new Internet business acceptable for
investment, 8) the intense competition we face both in our current and planned
business and in the market for raising additional capital, 9) our ability to
convince sources of capital that our management is able to carry out its new
business strategy, 10) our ability to successfully negotiate, contract and work
with other companies to provide site development, content or management, and 11)
our ability to successfully achieve the technical requirements of the site as
intended.
14
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
PART II - OTHER INFORMATION
ITEM 5. Other Information
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits
1. Exhibit 27 - Financial Data Schedule
b. No reports on Form 8-K were filed during the quarter
ended March 31, 2000.
15
<PAGE>
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
FORM 10-QSB - MARCH 31, 2000
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf on May 15, 2000 by the
undersigned, thereunto duly authorized.
THE PUBLISHING COMPANY OF NORTH AMERICA, INC.
/s/ Peter S. Balise
-----------------------------------
President (Chief Executive Officer)
/s/ James M. Koller
-----------------------------------
Chief Financial Officer (Principal
Financial and Accounting Officer)
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH
31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-31-2000
<PERIOD-END> MAR-31-2000
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0
0
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</TABLE>
