SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 15, 1999
UTG COMMUNICATIONS INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 333-08305 13-3895294
(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
incorporation or organization) Identification No.)
Limmattalstrasse 10
8954 Geroldswil, Switzerland
(Address of principal executive offices)
Registrant's telephone number, including area code: 011-41-1-749-3103
<PAGE>
ITEM 2. Acquisition or Disposition of Assets
For a description of the Registrant's acquisition of 51% of the outstanding
shares of common stock of Music Line AG, refer to Item 2 of the Registrant's
Current Report on Form 8-K, filed on November 30, 1999, which Item 2 is
incorporated in its entirely herein by this reference.
ITEM 7 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired:
CONSOLIDATED FINANCIAL STATEMENTS OF MUSICLINE AG AND SUBSIDIARIES
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 (AUDITED) AND
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
Page
----
INDEPENDENT AUDITORS' REPORT 3
CONSOLIDATED BALANCE SHEETS 4-5
CONSOLIDATED STATEMENTS OF OPERATIONS 6-7
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 8
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 9
CONSOLIDATED STATEMENTS OF CASH FLOWS 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11-17
(b) Pro Forma Financial Information:
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS FOR
THE SIX MONTHES ENDED SEPTEMBER 30, 1999 AND
FOR THE YEAR ENDED MARCH 31, 1999
Page
----
Pro Forma Consolidated Financial Data (Unaudited) 18
Pro Forma Consolidated Statement of Operations
for the Six months ended September 30, 1999 (Unaudited) 19-20
Notes to Pro Forma Consolidated Statement of Operations
for the Six months ended September 30, 1999 (Unaudited) 20
Pro Forma Consolidated Statement of Operations
for the Year ended March 31, 1999 (Unaudited) 21-22
Notes to Pro Forma Consolidated Statement of Operations
for the Year ended March 31, 1999 (Unaudited) 22
Pro Forma Consolidated Balance Sheet
as of September 30, 1999 (Unaudited) 23-24
Notes to Pro Forma Consolidated Balance Sheet
as of September 30, 1999 (Unaudited) 25
(c) Exhibits:
Number Description
- ------ -----------
10.37 Stock Purchase Agreement dated as of August 9, 1999 between the
Company and Ulrich Ernst (incorporated by reference to Exhibit 10.37
to the Company's quarterly report on Form 10-QSB for the quarter
ended June 30, 1999 and incorporated herein by reference.)
23.1 Consent of Merdinger Fruchter Rosen & Corso.
2
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
MUSICLINE AG:
We have audited the accompanying consolidated balance sheets of MUSICLINE AG AND
SUBSIDIARIES as of June 30, 1999 and 1998, and the related consolidated
statements of operations, stockholders' equity, comprehensive income and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Musicline AG and
Subsidiaries as of June 30, 1999 and 1998, and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
Certified Public Accountants
New York, New York
January 14, 2000
3
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, September 30,
----------------------- -----------------------
ASSETS 1999 1998 1999 1998
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
CURRENT ASSETS (unaudited) (unaudited)
Cash and cash equivalents $ 981 $ 2,190 $ 783 $ 1,078
Accounts receivable, net of allowance for
doubtful accounts of $101,353 and $16,444
at June 30, 1999 and 1998 and $187,878 and
$16,500 at September 30, 1999 and 1998 1,558,893 126,446 1,868,461 547,197
Inventory 824,513 -- 1,029,116 216,604
Due from related parties 71,558 1,576,737 134,072 890,663
Prepaid expenses 138,513 65,343 317,251 104,426
Prepaid license costs 401,828 90,193 629,134 331,987
---------- ---------- ---------- ----------
Total current assets 2,996,286 1,860,909 3,978,817 2,091,955
Property and equipment, net of accumulated
depreciation of $17,365 and $0 at June 30, 1999
and 1998 and $20,850 and $1,300 at
September 30, 1999 and 1998 35,498 -- 32,013 40,248
Goodwill, net of accumulated amortization of
$49,075 and $0 at June 30, 1999 and 1998 and
$61,351 and $0 at September 30, 1999 and 1998 687,043 -- 675,226 --
Product license, net of accumulated amortization
of $1,201,722 and $746,421 at
June 30, 1999 and 1998 and $1,299,000
and $0 at September 30, 1999 and 1998 596,677 97,097 569,015 425,567
Other assets 32,822 -- 37,721 31,004
---------- ---------- ---------- ----------
TOTAL ASSETS $4,348,326 $1,958,006 $5,292,792 2,588,774
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, September 30,
------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited) (unaudited)
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 1,913,790 $ 969,845 $ 2,821,902 $ 1,449,797
Due to related party 484,058 -- 685,671 --
Loans payable 1,763,941 905,342 1,665,544 868,462
Deferred revenue 72,239 -- -- 154,864
----------- ----------- ----------- -----------
Total liabilities 4,234,028 1,875,187 5,173,117 2,473,123
----------- ----------- ----------- -----------
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Common stock - $650 par value, authorized
100 shares; 100 shares issued and outstanding 65,000 65,000 65,000 65,000
Retained Earnings 45,268 17,532 93,027 42,553
Cumulative foreign currency translation
adjustment 4,030 287 (38,352) 8,098
----------- ----------- ----------- -----------
Total stockholders' equity 114,298 82,819 119,675 115,651
----------- ----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 4,348,326 $ 1,958,006 $ 5,292,792 $ 2,588,774
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended For the Three Months Ended
June 30, September 30,
----------------------- -----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
NET SALES $7,950,818 $1,435,897 $1,558,733 $1,909,970
COST OF SALES 5,886,909 418,367 777,964 1,592,193
---------- ---------- ---------- ----------
GROSS PROFIT 2,063,909 1,017,530 780,769 317,777
---------- ---------- ---------- ----------
SELLING AND TECHNICAL EXPENSES
Consulting fees -- -- 62,331 --
Sales salaries 200,000 -- 60,000 --
Other selling expenses 388,958 -- -- 60,000
---------- ---------- ---------- ----------
Total selling and technical expenses 588,958 -- 122,331 60,000
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS BEFORE
GENERAL AND ADMINISTRATIVE
EXPENSES 1,474,951 1,017,530 658,438 257,777
---------- ---------- ---------- ----------
GENERAL AND ADMINISTRATIVE EXPENSES
Management and consulting fees 201,051 -- 40,000 47,080
Salaries and employee benefits 127,572 -- 57,259 --
Bad debt expense 96,001 -- -- --
Depreciation and amortization 523,031 746,421 148,794 1,337
Professional fees 63,351 1,460 4,313 6,773
Travel expenses 85,761 -- 43,561 1,870
Rent expense 56,388 -- 20,246 9,754
Other operating expenses 216,940 10,635 262,159 166,193
---------- ---------- ---------- ----------
Total general and administrative expenses 1,370,095 758,516 576,332 233,007
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 104,856 259,014 82,106 24,770
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended For the Three Months Ended
June 30, September 30,
----------------------- -----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
OTHER INCOME (EXPENSES)
Interest income 47,428 32,114 3,705 --
Interest expense (102,784) (48,446) (38,695) (1,126)
Gain (loss) from foreign currency (36,378) 15,775 1,643 1,379
Other income (expenses) 19,600 (242,909) -- --
--------- --------- --------- ---------
Total other income (expenses) (72,134) (243,466) (33,347) 253
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 32,722 15,548 48,759 25,023
INCOME TAXES (4,986) -- (1,000) --
--------- --------- --------- ---------
NET INCOME $ 27,736 $ 15,548 $ 47,759 $ 25,023
========= ========= ========= =========
NET INCOME PER COMMON SHARE
Basic $ 277 $ 155 $ 478 $ 250
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
7
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
For the Year Ended For the Three Months Ended
June 30, September 30,
----------------------- -----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
COMPREHENSIVE INCOME
Net income $ 27,736 $ 15,548 $ 47,759 $ 25,023
Foreign currency translation adjustment 3,743 287 (42,382) 7,811
-------- -------- -------- --------
COMPREHENSIVE INCOME $ 31,479 $ 15,835 $ 5,377 $ 32,834
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
8
<PAGE>
MUSICLINE AG AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
Common Stock Foreign Total
-------------------- Retained Currency Stockholders'
Shares Amount Earnings Adjustment Equity (Deficiency)
-------- --------- --------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Balance at June 30, 1997, restated 100 $ 65,000 $ 1,984 $ -- $ 66,984
Net income for the year ended June 30, 1998 -- -- 15,548 -- 15,548
Cumulative foreign currency translation adjustment -- -- -- 287 287
-------- --------- --------- --------- ---------
Balance at June 30, 1998 100 65,000 17,532 287 82,819
Net income - for the year ended June 30, 1999 -- -- 27,736 -- 27,736
Cumulative foreign currency translation adjustment -- -- -- 3,743 3,743
-------- --------- --------- --------- ---------
Balance at June 30, 1999 100 65,000 45,268 4,030 114,298
Net income for the three months ended
September 30, 1999 (unaudited) -- -- 47,759 -- 47,759
Cumulative foreign currency translation adjustment (unaudited) -- -- -- (42,382) (42,382)
-------- --------- --------- --------- ---------
Balance at September 30, 1999 (unaudited) 100 $ 65,000 $ 93,027 $ (38,352) $ 119,675
======== ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
9
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Year Ended For the Three Months Ended
June 30, September 30,
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ---------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 27,736 $ 15,548 $ 47,759 25,023
Adjustments to reconcile net income to
net cash used by operating activities:
Depreciation and amortization 523,031 746,421 148,794 1,337
Bad debt expense 84,909 16,444 -- --
Changes in certain assets and liabilities:
(Increase) decrease in accounts receivable (1,517,356) 48,311 (396,093) (420,751)
(Increase) decrease in prepaid expenses (73,170) (110,924) (178,738) (39,083)
Increase in prepaid license costs (311,635) (44,013) (227,306) (241,794)
Increase in inventory (824,513) -- (204,603) (216,604)
Increase in other assets (32,822) (43,840) (4,899) (31,006)
Increase (decrease) in accounts payable and
accrued expenses 943,945 697,375 908,112 479,952
Increase in deferred revenue 72,239 -- (72,239) 154,864
----------- ----------- ----------- -----------
Total cash used by operating activities (1,107,636) 1,325,322 20,787 (288,062)
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (52,863) -- -- (41,585)
Increase in goodwill (736,118) -- -- --
Increase in product license (954,881) (616,184) (69,616) (328,470)
----------- ----------- ----------- -----------
Total cash used by investing activities (1,743,862) (616,184) (69,616) (370,055)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in loans payable 858,599 783,342 (98,397) (36,880)
Decrease in due from related parties 1,505,179 (1,488,884) (62,514) (686,074)
Increase in due to related party 484,058 -- 201,613 --
----------- ----------- ----------- -----------
Total cash provided by financing activities 2,847,836 (705,542) 40,702 649,194
----------- ----------- ----------- -----------
EFFECTS OF EXCHANGE RATE
CHANGES ON CASH 2,453 (1,406) 7,929 7,811
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,209) 2,190 (198) (1,112)
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS - BEGINNING 2,190 -- 981 2,190
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS - ENDING $ 981 $ 2,190 $ 783 $ 1,078
=========== =========== =========== ===========
CASH PAID DURING THE YEAR FOR:
Interest expense $ 102,000 $ 48,000 $ 38,000 $ 1,000
=========== =========== =========== ===========
Income taxes $ -- $ -- $ -- $ --
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
10
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 (AUDITED)
AND
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presentation
The accompanying consolidated financial statements include the
accounts of Musicline AG (the "Company"), a holding company
organized under the laws of Switzerland on July 16, 1998 and its
subsidiaries:
1) JM Sontel AG, ("JM"), incorporated under the laws of
Switzerland on December 12, 1991 (owned 100% by the Company);
and
2) SSC Selected Sound Carrier, AG, ("SSC"), incorporated under
the laws of Switzerland on July 1, 1998 (owned 100% by
Company).
All significant intercompany accounts and transactions have
been eliminated in consolidation. See also Note 3.
b) Unaudited Financial Statements
The financial statements for the three months ended September 30,
1999 and 1998 are unaudited; however, in the opinion of management,
such statements include all adjustments (consisting solely of normal
recurring adjustments) necessary to a fair presentation of the
financial position, results of operations and changes in financial
position of the Company. The results of operations for the three
months ended September 30, 1999 are not necessarily indicative of
the results to be obtained for the full fiscal year.
c) Line of Business
The Company is a provider of musical compact discs ("CDs")
throughout Europe. These CDs are sold to large retail outlets and
customers.
d) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results
could differ from those estimates.
e) Revenue Recognition
Revenue from the sale of CDs is recognized at the time of sale.
11
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 (AUDITED)
AND
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f) Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.
g) Inventory
Inventory, consisting mainly of CDs, is stated at the lower of cost
or market. Cost is determined on a first-in, first-out basis.
h) Prepaid license costs
Prepaid license costs are recorded at cost as of the date of
purchase. These costs represent various expenses related to the
production of the CDs. These costs are expensed in relation to the
volume of sales, usually over a period of one year.
i) Property and Equipment
Property and equipment is stated at cost. Depreciation is computed
using the straight-line method based upon the estimated useful lives
of the various classes of assets. Maintenance and repairs are
charged to expense as incurred.
j) Goodwill
Goodwill represents the cost in excess of the fair market value of
the Company's acquisitions. Amortization is computed using the
straight-line method over a period of fifteen years.
k) Product license costs
Product license costs are recorded at cost as of the date of
purchase. These costs represent various royalty, production and
license fees the Company must pay to utilize the licensed and
copyrighted compositions. Amortization is computed using the
straight-line method over a period of one to three years.
l) Bank Overdraft
The Company maintains overdraft positions at certain banks. Such
overdraft positions are included in current liabilities.
m) Deferred Revenue
Deferred revenue represents advanced billings collected on sales not
shipped.
12
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 (AUDITED)
AND
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
n) Translation of Foreign Currency
The Company translates the foreign currency financial statements of
its Swiss, Belgian and United Kingdom subsidiaries, in accordance
with the requirements of Statement of Financial Accounting Standards
("SFAS") No. 52, "Foreign Currency Translation". Assets and
liabilities are translated at current exchange rates, and related
revenue and expenses are translated at average exchange rates in
effect during the period. Resulting translation adjustments are
recorded as a separate component in stockholders' equity. Foreign
currency transaction gains and losses are included in the statement
of operations.
o) Advertising Costs
Advertising costs are expensed as incurred and included in selling,
general and administrative expenses. For the years ended June 30,
1999 and 1998, advertising expense amounted to $177,063 and $0,
respectively.
p) Income Taxes
Income taxes are provided for based upon the tax laws of
Switzerland.
q) Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, accounts
receivable, accounts payable and accrued expenses approximates fair
value due to the relatively short maturity of these instruments.
r) Long-Lived Assets
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of", requires that
long-lived assets and certain identifiable intangibles to be held
and used or disposed of by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company has
adopted this statement and determined that an impairment loss should
not be recognized for applicable assets of continuing operations.
s) Earnings Per Share
SFAS No. 128, "Earnings Per Share", requires presentation of basic
earnings per share ("Basic EPS") and diluted earnings per share
("Diluted EPS").
13
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 (AUDITED)
AND
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
s) Earnings Per Share (continued)
The computation of basic earnings per share is computed by dividing
income available to common stockholders by the weighted average
number of outstanding common shares during the period. Diluted
earnings per share gives effect to all dilutive potential common
shares outstanding during the period. The computation of diluted EPS
does not assume conversion, exercise or contingent exercise of
securities that would have an anti-dilutive effect on earnings. The
Company does not have any potential common shares outstanding, and
thus, diluted EPS is not presented. The shares used in the
computations were 100 for all periods presented.
t) Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income", establishes
standards for the reporting and display of comprehensive income and
its components in the financial statements. The items of other
comprehensive income that are typically required to be displayed are
foreign currency items, minimum pension liability adjustments, and
unrealized gains and losses on certain investments in debt and
equity securities. As of June 30, 1999 and 1998, the Company has
items that represent comprehensive income, and thus, has included a
statement of comprehensive income.
u) Impact of Year 2000 Issue
During the year ended June 30, 1999, the Company conducted an
assessment of issues related to the Year 2000 and determined that it
was necessary to modify or replace portions of its software in order
to ensure that its computer systems will properly utilize dates
beyond December 31, 1999. The Company expects to complete any Year
2000 systems modifications and conversions by August of 1999.
Currently, the Company does not expect costs associated with
becoming Year 2000 compliant to be material. At this time, the
Company cannot determine the impact the Year 2000 will have on its
key customers or suppliers. If the Company's customers or suppliers
don't convert their systems to become Year 2000 compliant, the
Company may be adversely impacted. The Company is addressing these
risks in order to reduce the impact on the Company.
14
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 (AUDITED)
AND
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
NOTE 2 - DUE FROM RELATED PARTIES
<TABLE>
<CAPTION>
June 30, September 30,
------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Meditercasa AG $ 7,017 $ 51,008 $ -- $ --
K&P AG -- 675,145 -- --
P&A Sugar Trading AG -- 6,285 -- --
Ibercasa AG -- 5,323 -- --
PL&T AG -- 44,013 -- --
Loan receivable -- 860,739 -- 890,663
Berger Music AG 64,541 -- 134,072 --
Less: Allowance for doubtful accounts -- (65,776) -- --
----------- ----------- ----------- -----------
$ 71,558 $ 1,576,737 $ 134,072 $ 890,663
=========== =========== =========== ===========
</TABLE>
NOTE 3- INVESTMENTS
a) On July 1, 1998, the Company acquired a 100% ownership interest in
JM for 784,488 Swiss Francs or approximately $468,000. This
acquisition was accounted for as a reverse acquisition due to the
fact that JM was the only operating company at the time of the
acquisition. Therefore, the financial statements reflect the
historical financial statements of JM.
b) The Company acquired a 100% ownership in SSC for 616,797 Swiss
Francs or approximately $398,000.
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows:
<TABLE>
<CAPTION>
June 30, September 30,
------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Computer Equipment and Software $ 22,363 $ -- $ 22,363 $ 16,085
Furniture and Fixtures 30,500 -- 30,500 25,500
---------- --------- -------- --------
52,863 -- 52,863 41,585
Less: Accumulated Depreciation (17,365) -- (20,850) (1,337)
---------- --------- -------- --------
$ 35,498 $ -- $ 32,013 $ 40,248
========== ========= ======== ========
</TABLE>
Depreciation expense for the year ended June 30, 1999 and 1998 was
approximately $18,654 and $0, respectively.
15
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998 (AUDITED)
AND
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
NOTE 5 - DUE TO RELATED PARTY
On October 21, 1998, the Company was advanced 750,000 Swiss Francs
or $484,058 from Interfinance Investment Company.
NOTE 6 - LOANS PAYABLE
Loans payable represent the following:
<TABLE>
<CAPTION>
June 30, September 30,
----------------------- -------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
a) Credit Suisse - SSC $ 533,031 $ -- $ 555,611 $ --
b) Mira Misic 161,353 -- -- --
c) Aarauische Kontanalbank 52,295 235,474 55,125 220,511
d) Credit Suisse - JM 587,505 -- 621,969 111,875
e) Vereinigte Union Holding AG 64,541 -- 68,027 72,443
f) Paul Leder 64,541 230,218 247,619 133,633
g) Disc Patrizia 110,924 110,767 117,193 110,000
h) Hans Antknecht 189,751 328,883 -- 220,000
---------- ---------- ----------- -----------
$1,763,941 $ 905,342 $ 1,665,544 $ 868,462
========== ========== =========== ===========
</TABLE>
a) Credit Suisse "SSC" - This represents a line of credit and overdraft
positions totaling 825,878 Swiss francs or $533,031 as of June 30,
1999 bearing interest at 6.25% per annum and payable on demand.
b) Mira Misic - This represents a loan payable by SSC of 250,000 Swiss
francs or $161,353 as of June 30, 1999. The loan date was June 1,
1999 and is payable in full on September 10, 1999 along with accrued
interest of 37,500 Swiss francs. The loan is secured by a personal
draft from Pius Boog totaling 287,500 Swiss francs and accounts
receivable totaling 418,000 Deutsche marks.
c) Aarauische Kontanalbank - This represents a line of credit and
overdraft positions totaling 81,029 Swiss francs or $52,295 as of
June 30, 1999 and totaling 357,991 Swiss francs or $235,474 as of
June 30, 1998. The loan bears interest at 6% per annum and is
payable on demand.
d) Credits Suisse "JM" - This represents a line of credit and overdraft
positions totaling 910,281 Swiss francs or $587,505 as of June 30,
1999 bearing interest at 6.25% per annum and payable on demand.
e) Vereinigte Union Holding AG - This represents a loan totaling
100,000 Swiss francs or $64,541 as of June 30, 1999 bearing interest
at 7% per annum and payable on demand with 3 months cancellation
notice.
16
<PAGE>
MUSICLINE AG
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
AND FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
NOTE 6 - LOANS PAYABLE (Continued)
f) Paul Leder - This represents a loan totaling 100,000 Swiss francs or
$64,541 as of June 30, 1999 and totaling 350,000 Swiss francs or
$230,218 as of June 30, 1998. The loan bears interest at 8% per
annum and payable on demand.
g) Disc Patrizia - This represents a loan totaling 171,866 Swiss francs
or $110,924 as of June 30, 1999 and totaling 168,399 Swiss francs or
$110,767 as of June 30, 1998. The loan bears interest at 10% per
annum and payable on demand.
h) Hans Antknecht - This represents loans with three entities totaling
294,000 Swiss francs or $189,751 as of June 30, 1999 and 500,000
Swiss francs or $328,883 as of June 30, 1998. The loan bears
interest at various rates payable on demand.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
a) The Company's future minimum annual aggregate rental payments
required under operating and capital leases that have initial or
remaining non-cancelable lease terms in excess of one year are as
follows:
Operating
June 30, Leases
-------- ----------
2000 $ 65,000
2001 65,000
2002 65,000
2003 65,000
----------
Total Minimum Lease Payments $ 260,000
==========
Rent expense under operating leases for the years ended June 30,
1999 and 1998 was $56,388 and $0, respectively.
b) The Company is a party to claims and lawsuits arising in the normal
course of operations. Management is of the opinion that these claims
and lawsuits will not have a material effect on the financial
position of the Company. The Company believes these claims and
lawsuits should not exceed $10,000, and accordingly, has established
a reserve included in accounts payable and accrued expenses.
NOTE 8 - FOREIGN OPERATIONS
As described in Note 1c, substantially all of The Company's
operations take place throughout Europe and its identifiable assets
are located in Switzerland.
NOTE 9 - SUBSEQUENT EVENTS
The Company entered into a Stock Purchase Agreement dated as of
August 9, 1999 with Ueli Ernst, the Company's Chairman and Chief
Executive Officer, to acquire a majority of the capital stock of
MusicLine AG, a Swiss corporation ("Music Line"), in consideration
for 1,750,000 shares of the Company's common stock, the assignment
to Mr. Ernst of a receivables account in the principal amount of
approximately $790,000, and, an additional 350,000 shares of the
Company's common stock if Music Line's net profits reach at least
$300,000 during the fiscal year ending March 31, 2000 or March 31,
2001. At a stockholders' meeting held on October 22, 1999, the
Company's stockholders other than Mr. Ernst or persons affiliated or
associated with him approved such stock purchase agreement by an
affirmative vote of more than two-thirds of the shares of common
stock held by such stockholders. The closing of this transaction has
occurred in November 15, 1999.
17
<PAGE>
UNAUDITED PROFORMA CONSOLIDATED FINANCIAL DATA
The Unaudited Proforma Consolidated Statements of Operations of the Company for
the fiscal year ended March 31, 1999 and for the six months ended September 30,
1999 (the "Proforma Statements of Operations"), and the Unaudited Proforma
Consolidated Balance Sheet of the Company as of September 30, 1999 (the
"Proforma Balance Sheet" and, together with the Proforma Statements of
Operations, the "Proforma Financial Statements"), have been prepared to
illustrate the estimated effect of the Musicline AG Acquisition. The Proforma
Financial Statements do not reflect any anticipated cost savings from the
Acquisition, or any synergies that are anticipated to result from the
Acquisition, and there can be no assurance that any such cost savings or
synergies will occur. The Proforma Statements of Operations give proforma effect
to the Musicline AG Acquisition as if it had occurred on April 1, 1998. The
Proforma Balance Sheet gives proforma effect to the Acquisition as if it had
occurred on September 30, 1999. The Proforma Financial Statements do not purport
to be indicative of the results of operations or financial position of the
Company that would have actually been obtained had such Acquisition been
completed as of the assumed date and for the period presented, or which may be
obtained in the future. The proforma adjustments are described in the
accompanying notes and are based upon available information and certain
assumptions that the Company believes are reasonable. The Proforma Financial
Statements should be read in conjunction with the separate historical
consolidated financial statements of Musicline AG and the notes thereto and the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere or incorporated by reference.
A preliminary allocation of the purchase price has been made to major categories
of assets and liabilities in the accompanying Proforma Financial Statements
based on available information. The actual allocation of purchase price and the
resulting effect on income from operations may differ significantly from the
proforma amounts included herein. These proforma adjustments represent the
Company's preliminary determination of purchase accounting adjustments and are
based upon available information and certain assumptions that the Company
believes to be reasonable. Consequently, the amounts reflected in the Proforma
Financial Statements are subject to change and the final amounts may differ
substantially.
18
<PAGE>
UTG COMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Pro Forma Pro Forma
UTG Musicline Adjustments Combined
----------- ----------- --------------------------
<S> <C> <C> <C> <C>
NET SALES $ 3,502,659 $ 5,266,898 $ 8,769,557
COST OF SALES 2,687,984 4,012,337 6,700,321
----------- ----------- ----------- -----------
GROSS PROFIT 814,675 1,254,561 -- 2,069,236
----------- ----------- ----------- -----------
SELLING AND TECHNICAL EXPENSES
Consulting Fees -- 62,331 62,331
Technical Fees 150,322 -- 150,322
Sales Salaries 33,898 200,000 233,898
Other Selling Expenses -- 388,958 388,958
----------- ----------- ----------- -----------
Total Selling and Technical
Expenses 184,220 651,289 -- 835,509
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS BEFORE
GENERAL AND ADMINISTRATIVE EXPENSES 630,455 603,272 -- 1,233,727
----------- ----------- ----------- -----------
GENERAL AND ADMINISTRATIVE EXPENSES
Management and Consulting Fees 76,420 104,139 180,559
Salaries and Employee Benefits 526,351 52,232 578,583
Bad Debt Expense 4,601 96,001 100,602
Depreciation and Amortization 359,406 151,126 219,627(a) 730,159
Professional Fees 108,955 18,343 127,298
Travel Expenses 3,500 100,388 103,888
Rent Expense 56,586 31,704 88,290
Other Operating Expenses 326,449 87,482 413,931
----------- ----------- ----------- -----------
Total General and
Administrative Expenses 1,462,268 641,415 219,627 2,323,310
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (831,813) (38,143) (219,627) (1,089,583)
----------- ----------- ----------- -----------
</TABLE>
19
<PAGE>
UTG COMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Pro Forma Pro Forma
UTG Musicline Adjustments Combined
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OTHER INCOME (EXPENSES)
Interest Income 32 11,026 11,058
Interest Expense (21,364) (75,053) (96,417)
Loss From Foreign Currency (123,786) 23,381 (100,405)
Other Income (Expenses) 1,202,890 (33,091) 1,169,799
----------- ----------- ----------- -----------
Total Other Income (Expenses) 1,057,772 (73,737) -- 984,035
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE MINORITY INTEREST 225,959 (111,880) (219,627) (105,548)
MINORITY INTEREST 31,044 0 -- 31,044
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 257,003 $ (111,880) $ (219,627) $ (74,504)
=========== =========== =========== ===========
</TABLE>
NOTES TO PROFORMA UNAUDITED STATEMENT OF OPERATIONS
Note 1
For purposes of this Pro Forma consolidated statement of operations, the
following 6 month periods were used:
1) UTG - the six months ended September 30, 1999
2) Musicline - the six months ended September 30, 1999
Note 2
The following is a description of the Pro Forma adjustments for the 12 month Pro
Forma consolidated statement of operations:
(a) Amortization of acquired goodwill relating to the acquisition of
Musicline by UTG.
Amortization is recorded as if the acquisition took place as of the
first day of the period.
Amortization is computed over a period of 15 years.
20
<PAGE>
UTG COMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
UTG Musicline
--- ---------
For The Year For The Year Pro Forma Pro Forma
Ended March Ended June Adjustments Combined
31, 1999 30, 1999
-----------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $ 5,400,256 $ 7,950,818 $ 13,351,074
COST OF SALES 4,237,686 5,886,909 10,124,595
------------ ------------ ------------ ------------
GROSS PROFIT 1,162,570 2,063,909 -- 3,226,479
------------ ------------ ------------ ------------
SELLING AND TECHNICAL EXPENSES
Consulting Fees -- -- --
Technical Fees 564,543 -- 564,543
Sales Salaries 163,730 200,000 363,730
Other Selling Expenses -- 388,958 388,958
------------ ------------ ------------ ------------
Total Selling and Technical
Expenses 728,273 588,958 -- 1,317,231
------------ ------------ ------------ ------------
INCOME FROM OPERATIONS BEFORE
GENERAL AND ADMINISTRATIVE EXPENSES 434,297 1,474,951 -- 1,909,248
------------ ------------ ------------ ------------
GENERAL AND ADMINISTRATIVE EXPENSES
Management and Consulting
Fees 97,814 201,051 298,865
Salaries and Employee
Benefits 795,980 127,572 923,552
Bad Debt Expense 124,854 96,001 220,855
Depreciation and Amortization 1,173,645 523,031 439,255(a) 2,135,931
Professional Fees 180,198 63,351 243,549
Travel Expenses 64,188 85,761 149,949
Rent Expense 85,645 56,388 142,033
Other Operating Expenses 406,531 216,940 623,471
------------ ------------ ------------ ------------
Total General and
Administrative Expenses 2,928,855 1,370,095 439,255 4,738,205
------------ ------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS (2,494,558) 104,856 (439,255) (2,828,957)
------------ ------------ ------------ ------------
</TABLE>
21
<PAGE>
UTG COMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
UTG Musicline
--- ---------
For The Year For The Year Pro Forma Pro Forma
Ended March Ended June Adjustments Combined
31, 1999 30, 1999
--------------------------------------------------------
<S> <C> <C> <C> <C>
OTHER INCOME (EXPENSES)
Interest Income 35,030 47,428 82,458
Interest Expense (78,360) (102,784) (181,144)
Loss From Foreign Currency (403,228) (36,378) (439,606)
Other Income (Expenses) 195,233 19,600 214,833
----------- ----------- --------- -----------
Total Other Income (Expenses) (251,325) (72,134) -- (323,459)
----------- ----------- --------- -----------
INCOME (LOSS) BEFORE MINORITY
INTEREST (2,745,883) 32,722 (439,255) (3,152,416)
MINORITY INTEREST 74,468 -- -- 74,468
----------- ----------- --------- -----------
INCOME (LOSS) BEFORE INCOME TAXES (2,671,415) 32,722 (439,255) (3,077,948)
INCOME TAXES -- (4,986) (4,986)
----------- ----------- --------- -----------
NET INCOME (LOSS) $(2,671,415) $ 27,736 $(439,255) $(3,082,934)
=========== =========== ========= ===========
</TABLE>
NOTES TO PROFORMA UNAUDITED STATEMENT OF OPERATIONS
Note 1
For purposes of this Pro Forma consolidated statement of operations, the
following 12 month periods were used:
1) UTG - the year ended March 31, 1999
2) Musicline - the year ended June 30, 1999
Note 2
The following is a description of the Pro Forma adjustments for the 12 month Pro
Forma consolidated statement of operations:
(a) Amortization of acquired goodwill relating to the acquisition of
Musicline by UTG.
Amortization is recorded as if the acquisition took place as of the
first day of the year.
Amortization is computed over a period of 15 years.
22
<PAGE>
UTG COMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
UTG Musicline
--- ---------
September 30, 1999 Pro Forma Pro Forma
Adjustments Consolidated
---------------------------- ------------------------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 298,050 $ 783 $ 298,833
Accounts Receivable 1,481,896 1,868,461 3,350,357
Inventory 519,197 1,029,116 200,000 (a) 1,748,313
Other Receivables 1,093,243 134,072 (790,000) (b) 437,315
Prepaid license costs 629,134 629,134
Prepaid Expenses 261,831 317,251 579,082
------------ ------------ ------------ ------------
Total Current Assets 3,654,217 3,978,817 (590,000) 7,043,034
Property and Equipment 1,912,011 32,013 1,944,024
Product licenses 569,015 569,015
Goodwill 198,989 675,226 6,588,823 (d) 7,023,783
(439,255) (e)
Customer Lists 843,917 -- 843,917
Other Assets 118,819 37,721 156,540
------------ ------------ ------------ ------------
$ 6,727,953 $ 5,292,792 $ 5,559,568 $ 17,580,313
============ ============ ============ ============
</TABLE>
23
<PAGE>
UTG COMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
UTG Musicline
--- ---------
Pro Forma Pro Forma
September 30, 1999 Adjustments Consolidated
--------------------------- --------------------------------
<S> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank Overdraft 732,445 -- 732,445
Accounts Payable and
Accrued Expenses 3,591,053 2,821,902 6,412,955
Loan Payable 371,250 1,665,544 2,036,794
Due to related parties (195,730) 685,671 489,941
Capital Lease Obligation,
Current 212,467 212,467
------------ ------------ ------------ ------------
Total Current Liabilities 4,711,485 5,173,117 -- 9,884,602
Capital Lease Obligation,
Long-Term 436,463 -- 436,463
Loan Payable 210,547 -- -- 210,547
------------ ------------ ------------ ------------
TOTAL LIABILITIES 5,358,495 5,173,117 -- 10,531,612
------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY
Common Stock 21 65,000 17 (c) 38
(65,000)(d)
Additional Paid-in Capital 9,078,143 -- 6,124,983 (c) 15,203,126
--
Accumulated Deficit (7,495,401) 93,027 (439,255)(e) (7,934,656)
(93,027)(f)
--
Treasury Stock (300,000) -- (300,000)
--
Cumulative Foreign Currency
Translation Adjustment 185,279 (38,352) 146,927
--
Minority Interest (98,584) -- 31,850 (g) (66,734)
------------ ------------ ------------ ------------
--
Total Stockholders' Equity 1,369,458 119,675 5,559,568 7,048,701
------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 6,727,953 $ 5,292,792 $ 5,559,568 $ 17,580,313
============ ============ ============ ============
</TABLE>
24
<PAGE>
UTG COMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
NOTES TO PROFORMA UNAUDITED BALANCE SHEET
Note 1
For purposes of this Pro Forma consolidated Balance Sheet, September 30,
1999 unaudited information was used.
Note 2
The following is a description of the Pro Forma adjustments as of
September 30, 1999 for the Pro Forma consolidated Balance Sheet
(a) Adjusted fair market value of inventory acquired relating to
the acquisition.
(b) Assignment to seller of all of its right, title and interest
in a certain Receivable totaling $790,000.
(c) To record issuance of 1,750,000 of UTG's shares relating to
acquisition
(d) To record estimated goodwill relating to acquisition.
(e) Amortization of acquired goodwill relating to the acquisition
of Musicline by UTG. Amortization is recorded as if the
acquisition took place as of the first day of the period.
Amortization is computed over a period of 15 years.
(f) To eliminate pre-business combination retained earnings and
common stock of Musicline.
(g) To record 49% minority interest of Musicline.
25
<PAGE>
Signature
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 hereunto duly authorized in Geroldswil, Switzerland on this 31st day
of January 2000.
UTG COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ Ulrich Ernst
-------------------------------
Ulrich Ernst
Chairman and CEO
(Principal Executive Officer)
<PAGE>
Exhibit Index
-------------
Number Description
- ------ -----------
10.37 Stock Purchase Agreement dated as of August 9, 1999 between the
Company and Ulrich Ernst (incorporated by reference to Exhibit 10.37
to the Company's quarterly report on Form 10-QSB for the quarter
ended June 30, 1999 and incorporated herein by reference.)
23.1 Consent of Merdinger, Fruchter, Rosen & Corso, P.C.
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use in this Form 8k1a filing of our report dated
January 14, 2000 of Musicline AG and Subsidiaries for the years ended June 30,
1999 and 1998 and of the unaudited proforma consolidated financial statements of
UTG Communications International, Inc. relating to the acquisition of Musicline
AG.
/s/ MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
Certified Public Accountants
New York, New York
January 31, 2000
