UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________ to ________
Commission file number 001-13999
HITCOM CORPORATION
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 87-0389677
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
700 North Second Street, Third Floor
St. Louis, Missouri 63102
(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number, Including Area Code (314) 231-1000
Check 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.
Yes [ ] No [X]
State the number of shares outstanding of each of the issuer's common
equity, as of the latest practicable date: As of May 14, 1999 -
Class Shares Outstanding
Common Stock 12,328,221
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - FINANCIAL STATEMENTS
HITCOM CORPORATION
Condensed Consolidated Balance Sheet
(unaudited)
ASSETS
March 31,
1999
----------
Current Assets:
Cash and cash equivalents $ 204,118
Accounts receivable, net of allowance for
doubtful accounts of $51,250 636,595
Inventory 27,928
Other current assets 14,676
- --------------------------------------------------------------------------------
Total current assets 883,317
- --------------------------------------------------------------------------------
Property and equipment, net 377,325
Goodwill, net of amortization of $333,142 3,664,558
Investment in service bureau 23,440
- --------------------------------------------------------------------------------
$4,948,640
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Revolving line of credit $ 137,746
Accounts payable 1,004,109
Deferred revenue 450,564
Due to officers and directors 48,925
Current portion of long-term obligations 82,156
Net liability for discontinued segment 31,724
- --------------------------------------------------------------------------------
Total current liabilities 1,755,224
- --------------------------------------------------------------------------------
Long term obligations 761,679
- --------------------------------------------------------------------------------
Total liabilities 2,516,903
- --------------------------------------------------------------------------------
Shareholders' equity
Convertible preferred stock $.001 par value,
liquidation preference of $0.80 per share
($764,239 aggregate liquidation preference),
convertible into 0.25 shares of common stock;
5,000,000 authorized; 955,298 issued and outstanding 955
Common stock $.004 par value, 25,000,000 authorized;
12,328,221 issued; 12,320,971 outstanding 49,313
Additional paid in capital 2,901,705
Accumulated deficit (504,934)
Cumulative foreign currency translation adjustment 4,494
Treasury stock - at cost; 7,250 common stock (19,796)
- --------------------------------------------------------------------------------
2,431,737
- --------------------------------------------------------------------------------
$4,948,640
================================================================================
See accompanying notes to the condensed consolidated financial statements
<PAGE>
HITCOM CORPORATION
Condensed Consolidated Statements of Operations
(unaudited)
Three-Month Period
Ended March 31,
1999 1998
-------------------------
Net service revenues $1,418,692 $ 772,523
Cost of services 1,168,743 368,311
- --------------------------------------------------------------------------------
Gross margin 249,949 404,212
- --------------------------------------------------------------------------------
Operating expenses:
Selling, general and administrative 332,082 334,248
Amortization of goodwill 99,943 -
Depreciation of property and equipment 33,422 21,650
- --------------------------------------------------------------------------------
Total operating expenses 465,447 355,898
- --------------------------------------------------------------------------------
Operating income (loss) (215,498) 48,314
Other income (expense)
Interest expense (26,345) (12,096)
Interest income 1,207 21,562
- --------------------------------------------------------------------------------
Total other income (expense) (25,138) 9,466
- --------------------------------------------------------------------------------
Income (loss) before taxes and minority interest (240,636) 57,780
Provision for income taxes - -
Minority interest - 27,007
- --------------------------------------------------------------------------------
Income (loss) from continuing operations (240,636) 30,773
Loss from discontinued segment: - 79,492
- --------------------------------------------------------------------------------
Net loss $ (240,636) $ (48,719)
================================================================================
Net loss available to common shareholders $ (240,636) $ (48,719)
================================================================================
Basic and diluted earnings (loss) per share
Income (loss) from continuing operations $ (0.02) $ -
Loss from discontinued segment $ - $ (0.01)
- --------------------------------------------------------------------------------
Net loss $ (0.02) $ (0.01)
================================================================================
Weighted average shares - basic 12,257,092 7,944,042
Weighted average shares - diluted 12,257,092 7,944,042
See accompanying notes to the condensed consolidated financial statements
<PAGE>
HITCOM CORPORATION
Condensed Consolidated Statement of Cash Flows
(unaudited)
Three-Month Period
Ended March 31,
1999 1998
--------------------
Operating activities:
Net loss $(240,636) $ (48,719)
Adjustments to reconcile net loss to net cash used
in operating activities:
Goodwill amortization 99,943 -
Depreciation 33,422 21,650
Minority interest in earnings of subsidiary - 27,007
Issuance of common shares for services - 20,156
Equity in loss of affiliated Company (357) -
Changes in assets and liabilities, excluding acquisition:
Accounts receivable--net (147,535) 791
Inventory (720) -
Other assets (3,424) 11,865
Accounts payable and accrued expenses 29,558 (48,700)
Deferred revenue 60,484 29,504
- --------------------------------------------------------------------------------
Net cash used in operating activities (169,265) 13,554
- --------------------------------------------------------------------------------
Investing activities:
Purchases of property and equipment (68,935) (17,298)
- --------------------------------------------------------------------------------
Net cash used in investing activities (68,935) (17,298)
- --------------------------------------------------------------------------------
Financing activities:
Proceeds from bank term loan 30,000 -
Repayment of bank term loan (16,823) -
Repayment of capital leases (9,510) (2,160)
Repayment of due to officers and directors (9,578) -
Increase in revolving line of credit 107,746 -
- --------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 101,834 (2,160)
- --------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (136,366) (5,904)
Cash and cash equivalents at beginning of period 340,484 188,800
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 204,118 $ 182,896
================================================================================
Supplemental disclosure of cash flow information
Cash paid for interest during the period $ 15,745 $ 4,182
Cash paid for income taxes during the period - -
Non cash investing and financing activities:
Conversion of preferred shares into common shares $ 119 $ 4
See accompanying notes to the condensed consolidated financial statements
<PAGE>
HITCOM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of HitCom
Corporation and subsidiaries (collectively "the Company" or "HitCom") have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and Securities and Exchange Commission ("SEC") regulations.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. In the
opinion of management, the financial statements reflect all adjustments (of a
normal and recurring nature) which are necessary to present fairly the financial
position, results of operations, stockholders' equity and cash flows for the
interim periods. These unaudited condensed consolidated financial statements
should be read in conjunction with the audited financial statements and notes
thereto for the year ended December 31, 1998, as set forth in HitCom's Annual
Report on Form 10-KSB. The results for the three months ended March 31, 1999,
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1999. All amounts presented are in US dollars.
2. NATURE OF BUSINESS
HitCom Corporation and its subsidiaries (collectively referred to as "Hitcom" or
the "Company") is a telecommunication Company providing two principal services
for businesses and individuals: i. Enhanced communication including 800-based
services, voice and data messaging which the Company delivers through its
network.
ii. Prepaid telecommunication services through its switching platforms.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. Investment in a 50% owned
affiliate has been accounted for on the equity method.
REVENUE RECOGNITION AND DEFERRED REVENUE
The Company recognizes revenue as services are rendered as follows:
800-BASED SERVICES
The Company generally requires its customers to establish minimum account
balances prior to receiving services. Revenues consists of usage fees based on
per minute rates and monthly fees. Account balances in excess of services
rendered are recorded as deferred revenue. Revenue for unused account balances
is recognized when there has been no activity for six months.
PREPAID CARD SERVICES
The Company's revenue originates from customer usage of (i) Company and
cobranded prepaid calling cards sold through retailers, (ii) recharges of
existing calling cards, and (iii) cards sold for promotional marketing
campaigns. The Company sells cards to distributors and retailers with normal
credit terms. When the distributor or retailer is invoiced, deferred revenue is
recognized. The Company recognizes revenue in accordance with the terms of the
card as the ultimate card users utilize calling time and service fees. The terms
of the card refer to the rates, fees and expiration dates of the card. All
prepaid cards sold by the Company expire upon either six or twelve months after
first usage. Upon expiration and cancellation of the prepaid phone card, the
Company recognizes the related deferred amount as revenue.
GOODWILL
Goodwill represents the excess of cost over the fair value of net assets
acquired for the Channel Telecom acquisition effective May 31, 1998, and is
being amortized on a straight-line basis over a ten year period beginning from
the date of acquisition.
4. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings
(loss) per share:
THREE-MONTH PERIOD ENDED MARCH 31,
1999 1998
--------------------------------
NUMERATOR:
Net loss available to common shareholders $( 240,636) $( 48,719)
DENOMINATOR:
Denominator for basic earnings (loss) per share -
weighted-average shares 12,257,092 7,944,042
Dilutive potential common shares - Adjusted
weighted-average shares and assumed conversions 12,257,092 7,944,042
- --------------------------------------------------------------------------------
Basic and diluted earnings (loss) per share: $ (0.02) $(0.01)
================================================================================
At March 31, 1999, employee stock options to purchase 392,917 common shares,
convertible preferred stock, totaling 268,344 common shares, convertible
debentures, totaling 1,056,000 common shares, and warrants, totaling 155,000
common shares, were excluded from the computation of diluted earnings per share
as such options, convertible preferred stock, convertible debentures and
warrants are anti-dilutive due to the net loss available to common shareholders.
5. PRO FORMA EFFECTS OF CHANNEL ACQUISITION
The following unaudited pro forma summary presents the Company's combined
results as if the acquisition of Channel occurred at the beginning of the
respective periods, after giving effect to certain adjustments including
goodwill amortization, depreciation and interest expense. These pro forma
results are not necessarily indicative of those that would have occurred had the
acquisition occurred at the beginning of the three month period ended March 31,
1998:
Three-Month Ended
March 31, 1998
-----------------
Net service revenues $1,106,028
Cost of services 566,273
- --------------------------------------------------------------------------------
Gross margin 539,755
================================================================================
Net loss available to common shareholders $ (66,483)
================================================================================
Loss per share $ (0.01)
================================================================================
6. SEGMENTED INFORMATION
At March 31, 1999, HitCom has two separately managed business segments,
CHANNEL ONE PLUS TOTAL
THREE MONTHS ENDED, MARCH 31, 1998
Revenues from external customers $ - $ 772,523 $ 772,523
Interest income - 21,562 21,652
Interest expense - 12,096 12,096
Depreciation - 21,650 21,650
Segment loss - (48,719) (48,719)
Segment assets $ - $ 671,556 $ 671,556
THREE MONTHS ENDED, MARCH 31, 1999
Revenues from external customers $ 910,043 $ 508,649 $1,418,692
Interest income 1,123 84 1,207
Interest expense 383 25,962 26,345
Depreciation 9,422 24,000 33,422
Goodwill amortization 99,943 - 99,943
Segment net income (loss) (245,493) 4,857 (240,636)
Segment assets $4,472,333 $ 476,307 $4,948,640
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
OVERVIEW
The Company principally derives its revenues through two operating subsidiaries:
CHANNEL TELECOM INC. (CHANNEL)
Channel is a provider of long distance services to retail customers. Channel
currently provides its retail services by marketing Prepaid Cards, primarily
under the Phone Cash and Phone Saver brand name, through an extensive network of
independent retail outlets (through independent sales agents) and distributors
throughout Canada. Channel targets retail markets with substantial international
long distance calling requirements, such as ethnic communities, and believes
that its Prepaid Cards provide consumers with a convenient, attractively priced
alternative to traditional presubscribed long distance services.
ONE PLUS MARKETING INC. (ONE PLUS)
One Plus derives its revenues from the sale of interactive voice response/voice
processing services to the independent agents of Direct Sales Organizations
(DSO). Therefore, One Plus is dependent upon the DSOs to provide referrals of
their sales agents to use the services. The revenues of One Plus are derived
primarily in the United States.
RESULTS OF OPERATION
THREE MONTHS ENDED March 31, 1999 COMPARED TO THREE MONTHS ENDED March 31, 1998
REVENUE
Total revenue increased 84% to $1,418,692 in the first quarter of 1999 from
$772,523 for the same period in 1998. The increase is due to the Channel
acquisition, which was consummated on May 31, 1998. Channel provided HitCom
$910,043 in revenue in the first quarter of 1999. Channel has experienced
significant growth during the year due to increased usage of the Channel card,
an increase in the number of retail storefronts in which the Company's products
are distributed, and greater brand awareness.
COST OF SERVICES:
Cost of services primarily includes payments to other carriers for origination,
transport and termination of international and domestic long distance traffic.
Cost of services increased to 82% of revenue ($1,168,743) in the first quarter
of 1999 from 48% of revenue ($368,311) for the same period in 1998. The increase
in cost of services is primarily due to the Channel acquisition. Channel's
business has a higher cost of services than One Plus due to significant
international long distance traffic as compared to the traffic of One Plus which
is only in North America. The international long-distance traffic is intensely
competitive and therefore placing downward pressure on the prices Channel can
sell its services.
Channel will be completing the implementation of a new carrier-class Excel(R)
switch in the Second Quarter of 1999. The new carrier-class switch is far
superior to the PC based switch that the Company currently operates. The new
switch will provide significant increase in call volume capacity over the
current switch. However, of greater significance, the new switch is capable of
concurrently utilizing numerous long distance carriers thereby resulting in
greater choice in optimizing least cost routing which should decrease the
Company's cost of services and correspondingly increase gross margin. Channel's
cost of services in the first quarter of 1999 was significantly high due to the
existing switch inability to utilize multiple carriers thereby not allowing
efficient least cost routing utilization.
SELLING GENERAL & ADMINISTRATIVE (SG&A):
SG&A expenses decreased to 23% of revenue ($332,082) in the first quarter of
1999 from 43% of revenue ($334,248) for the same period in 1998. The significant
increase in revenue due to Channel's acquisition, enabled the decrease of SG&A
expense as a percentage of revenue.
GOODWILL AMORTIZATION
Goodwill represents the excess of cost over the fair value of net assets
acquired for the Channel acquisition effective May 31, 1998 and is being
amortized on a straight-line basis over a ten year period beginning from the
date of acquisition. Amortization expense was $99,943 in the first quarter in
1999.
DEPRECIATION OF PROPERTY AND EQUIPMENT
Depreciation increased to $33,422 in the first quarter of 1999 from $21,650 for
the same period in 1998. The increase in dollar amount was primarily
attributable to increased capital expenditures for property and equipment to
support the growth of the business resulting in increased depreciation expense.
NET INTEREST EXPENSE/INCOME:
Net interest expense was $25,138 in the first quarter of 1999 as compared to net
other income of $9,466 for the same period in 1998. This was attributable to
increased bank borrowings and interest expense on the convertible debentures
issued in October 1998.
DISCONTINUED OPERATIONS
In August 1998, HitCom completed the sale of all of the Internet Service
division including certain computer equipment and customer accounts for $30,000.
This division had focused on providing various levels of Internet access to
customers in the St. Louis, Missouri area. The disposal of the ISP division is
reflected as a discontinued operations. The direct expenses and associated
overhead costs net of revenue earned from these operations, was $79,492 for the
first quarter of 1998.
EBITDA - CONTINUING OPERATIONS
EBITDA in the first quarter of 1999 was a loss of $82,133 as compared income of
$69,964 in the first quarter of 1998. Decrease in EBITDA is due to the decrease
in gross margin at Channel due to the existing switch inability to utilize
multiple carriers thereby not allowing optimized least cost routing. The
implementation of Channel's new carrier-class switch in the second quarter of
1999 should decrease cost of services and increase gross margin.
NET LOSS
Net loss in the first quarter of 1999 increased to $240,636 from $48,719 for the
same period in 1998. Increase in net loss is due to the goodwill amortization of
$99,943, and decrease in gross margin at Channel due to the existing switch
inability to utilize multiple carriers thereby not allowing optimized least cost
routing. The implementation of Channel's new carrier-class switch in the second
quarter of 1999 should decrease cost of services and increase gross margin.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at March 31, 1999 decreased to $204,118 from $340,484
at December 31, 1998. The Company's liquidity requirements were largely used by
working capital needs and investment needs including capital expenditures for
the new switch for Channel. These requirements were funded by increased bank
borrowings.
Cash used by operating activities in the first quarter of 1999 was $169,265 as
compared to cash generated of $13,554 for the same period in 1998. Significant
utilization of cash in the first quarter were the net cash loss of $107,271 and
$147,535 increase in account receivable due to revenue growth at Channel.
Increase in account payable - $29,558 - and deferred revenue - $60,484 were
sources of working capital.
Cash used for capital expenditures in the first quarter of 1999 was $68,935
which was primarily used for the implementation of the new carrier-class switch
at Channel.
Cash proceeds from financing activities in the first quarter of 1999 were
$101,834 as compared to net repayments of $2,160 for the same period in 1998.
Financing activities proceeds consisted primarily of increased bank borrowings
through increases in revolving line of credit facilities.
At March 31, 1999, the Company is not committed to completing any acquisition,
however, the Company is continually looking for further acquisitions which will
expand the Company's product lines and competitive position. Any potential
acquisitions in 1999 will be funded either through stock issuance, new equity
financing and/or increased bank borrowings.
In the first quarter of 1999, Channel obtained a new operating credit facility
from a commercial bank in Canada for approximately $100,000. The new credit
facility is secured by a general security agreement on Channel Telecom Inc.,
$50,000 Guaranteed Investment Certificate and corporate guarantees from HitCom.
NEED FOR ADDITIONAL CAPITAL TO FINANCE GROWTH AND CAPITAL REQUIREMENTS
HitCom believes that it must continue to enhance and expand its network and
build out its telecommunications network infrastructure in order to maintain its
competitive position and continue to meet the increasing demands for service
quality, capacity and competitive pricing. HitCom's ability to grow depends, in
part, on its ability to expand its operations through the ownership and leasing
of network capacity, which requires significant capital expenditures, that are
often incurred prior to HitCom's receipt of the related revenue.
HitCom believes that, based upon its present business plan and its existing cash
resources and expected cash flow from operating activities; it will have
sufficient liquidity to support operations at current levels. If HitCom's growth
exceeds current expectations, or if HitCom obtains one or more attractive
opportunities to purchase the business or assets of another company, or if
HitCom's cash flow from operations after the end of such period is insufficient
to meet its working capital and capital expenditure requirements, HitCom will
need to raise additional capital from equity or debt sources.
YEAR 2000 COMPUTER PROGRAM FAILURE
A significant percentage of the software that runs most of the computers relies
on two-digit date codes to perform computations and decision-making functions.
Commencing on January 1, 2000, these computer programs may fail from an
inability to interpret date codes properly, misinterpreting "00" as the year
1900 rather than 2000. HitCom is in the process of evaluating and implementing
Year 2000 compliance programs to ensure that its software, systems and equipment
are Year 2000 compliant and to ensure that the software and technology of their
third party vendors and customers are also Year 2000 compliant. The Company has
not incurred any Year 2000 costs as at December 31, 1998 and has preliminarily
determined that it will not experience any material Year 2000 risks or
expenditures to bring its systems compliant with Year 2000 issues.
In additional to assessing its own systems, the Company is conducting an
external review of its suppliers, and any other third parties with which it does
business, including equipment and systems providers and other telecommunications
service providers, to determine their vulnerability to Year 2000 problems and
any potential impact on the Company. In particular the Company may experience
problems to the extent that telecommunications carriers to which the Company
sends traffic for termination are not Year 2000 compliant. The Company's ability
to determine the ability of these third parties to address issues relating to
the Year 2000 problem is necessarily limited. To the extent that a limited
number of carriers experience disruption in service due to the Year 2000 issue,
the Company believes that it will be able to obtain service from alternate
carriers. However, the Company's ability to provide certain services to
customers in selected geographic locations may be limited.
The Company believes it will complete its evaluation of Year 2000 issues by June
30, 1999 and all necessary actions will be implemented by September 30, 1999.
The Company currently anticipates that its information technology and
non-information technology systems will be Year 2000 compliant before January 1,
2000, though no assurances can be given that its compliance testing will not
detect unanticipated Year 2000 compliance problems. HitCom does not currently
have contingency plans to prepare for a Year 2000 failure, however, it does plan
to develop one by September 30, 1998. There can be no assurance that such
contingency plans will be adequate. If either HitCom's and/or third parties are
not Year 2000 compliant as of such date and if such contingency plans are
inadequate or fail to address a particular Year 2000 risk, HitCom may be
required to incur unanticipated costs, change relationships with third parties,
forego revenues or be subjected to other material adverse effects.
NEW ACCOUNTING STANDARDS
ACCOUNTING FOR DERIVATIVES AND HEDGING ACTIVITIES
In June 1998, the FASB issued SFAS No. 133 "Accounting foe derivatives and
hedging activities," which establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. SFAS No. 132 is effective for years beginning after December 15,
1997 and requires comparative information for all fiscal quarters of fiscal
years beginning after June 15, 1999. The Company does not expect the adoption of
this statement to have significant impact on the Company's results of
operations, financial position or cash flows.
SOP 98-5 REPORTING ON THE COSTS OF START-UP ACTIVITIES
SOP 98-5 "Reporting on the Costs of Start-up Activities," requires that the
costs, be expensed as incurred. This statement is effective for financial
statements issued for fiscal years beginning after December 15, 1998. Management
believes that the adoption of SOP 98-5 will have no material effect on its
financial statements.
PART II
OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
3.1* Certificate of Incorporation, as amended
3.2* Bylaws
4.1* Certificate of Designation for 8% Convertible Preferred Stock
10.1* Share Exchange Agreement Between HitCom Corporation and Scott Beil
dated April 14, 1997
10.2* Stock Purchase Agreement Between HitCom Corporation and Rajan
Arora/Jeffrey Shier and The Jeffrey Samuel Shier Family Trust For
Purchase of All Outstanding Stock of Channel Telecom Inc. dated
February 18, 1998
10.4** Letter agreement between the registrant, Rajan Arora and Jeffrey
Shier dated June 30, 1998 regarding forgiveness of indebtedness.
10.5** Stock Purchase Agreement between Scott A. Beil and registrant dated
August 10, 1998 regarding 20% minority interest in One Plus Marketing
10.6** Letter agreement between registrant and Scott A. Beil dated August 11,
1998 regarding voting of stock in registrant.
21.1* List of Subsidiaries of Registrant
27.0 Financial Data Schedule
* Filed as exhibit to the Company's Registration Statement on Form 10-SB
** Filed as Exhibit to the Company's Quarterly Report on Form 10-QSB for
the quarter ended September 30, 1998
B. Form 8-K filings
The Registrant did not file a Form 8-K during the last quarter of the
period covered by this report.
SIGNATURES
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.
HITCOM CORPORATION
(Registrant)
By: /s/ John S. Nashmi
-----------------------
John S. Nashmi,
Chief Financial Officer and Corporate Secretary
Date: June 8, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 204,118
<SECURITIES> 0
<RECEIVABLES> 687,845
<ALLOWANCES> (51,250)
<INVENTORY> 27,928
<CURRENT-ASSETS> 883,317
<PP&E> 628,362
<DEPRECIATION> (251,037)
<TOTAL-ASSETS> 4,948,640
<CURRENT-LIABILITIES> 1,755,224
<BONDS> 761,679
0
955
<COMMON> 49,313
<OTHER-SE> 2,381,469
<TOTAL-LIABILITY-AND-EQUITY> 4,948,640
<SALES> 1,418,692
<TOTAL-REVENUES> 1,418,692
<CGS> 1,168,743
<TOTAL-COSTS> 1,634,190
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,138
<INCOME-PRETAX> (240,636)
<INCOME-TAX> 0
<INCOME-CONTINUING> (240,636)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (240,636)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
