U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________ to _________________
Commission file number 0-
BIZCOM U.S.A., INC.
-------------------
(Exact name of small business issuer as specified in its charter)
FLORIDA
-------
(State or other jurisdiction of incorporation or organization)
65-0681772
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IRS Employer Identification Number
914 MATANZAS AVENUE, CORAL GABLES, FLORIDA 33146
------------------------------------------------
(Address of principal executive offices)
(305) 667-2538
--------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the issuer has required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No ___
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date. 12,500 shares of
common stock, par value $.0001 per share, as of April 30, 1997.
Transitional Small Business Disclosure Format (check one):
Yes ___ No X
<PAGE>
BIZCOM U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1997
(UNAUDITED)
ASSETS
CURRENT ASSET - Cash and cash equivalents $ 11,444
DEFERRED OFFERING COSTS 13,685
ORGANIZATION COSTS, net 395
---------
TOTAL $ 25,524
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 9,804
Due to officer 18,008
---------
TOTAL CURRENT LIABILITIES 27,812
---------
STOCKHOLDERS' DEFICIT:
Preferred stock, $.0001 par value;
20,000,000 shares authorized;
900 shares of Series A issued and outstanding 1
Common stock, $.0001 par value;
200,000,000 shares authorized;
12,500 shares issued and outstanding 1
Additional paid-in capital 30,898
Deficit (33,188)
---------
STOCKHOLDERS' DEFICIT, NET (2,288)
---------
TOTAL $ 25,524
=========
See notes to condensed condolidated financial statements.
-2-
<PAGE>
BIZCOM U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND
FOR THE PERIOD FROM JULY 1, 1996 (DATE OF INCORPORATION)
THROUGH MARCH 31, 1997
(UNAUDITED)
From
Incorpora-
3 Months tion
Ended Through
3/31/97 3/31/97
-------- ----------
REVENUES $ - $ -
GENERAL AND ADMINISTRATIVE EXPENSES 9,573 33,188
-------- ---------
LOSS BEFORE INCOME TAX PROVISION (9,573) (33,188)
PROVISION FOR INCOME TAXES - -
-------- ---------
NET LOSS $ (9,573) $ (33,188)
======== =========
PER SHARE AMOUNTS:
Net loss per common share outstanding $ (0.766) $ (2.655)
======== =========
COMMON SHARES OUTSTANDING AT MARCH 31, 1997 12,500 12,500
======== =========
See notes to condensed condolidated financial statements.
-3-
<PAGE>
BIZCOM U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 1, 1996 (DATE OF INCORPORATION)
THROUGH MARCH 31, 1997
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (33,188)
Items not affecting cash flow from operations:
Amortization 60
Current liabilities 27,812
----------
NET CASH USED IN OPERATING ACTIVITIES (5,316)
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Deferred offering costs incurred (13,685)
Organization costs incurred (455)
----------
CASH USED IN INVESTING ACTIVITIES (14,140)
----------
CASH FLOWS FROM FINANCING ACTIVITY -
Sales of common and preferred stock 30,900
----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 11,444
CASH AND CASH EQUIVALENTS, Beginning of period -
----------
CASH AND CASH EQUIVALENTS, End of period $ 11,444
==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ -
==========
Cash paid for income taxes $ -
==========
See notes to condensed condolidated financial statements.
-4-
<PAGE>
BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 1997
(UNAUDITED)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
BizCom U.S.A., Inc. was incorporated in the State of Florida
effective as of July 1, 1996. Through its wholly-owned subsidiary
corporations, BizCom U.S.A., Inc. is engaged in the business of owning,
operating, and managing for itself and for others 220-222 MHz mobile radio
systems (220 MHz systems) located in the United States. BizCom U.S.A.,
Inc. and its subsidiaries are collectively referred to as the "Company".
The accompanying financial statements have been prepared in
accordance with the instructions to Form 10-QSB of the Securities and
Exchange Commission. In accordance with SEC rules applicable to interim
financial statements, certain disclosures have been condensed or omitted.
Therefore, these statements do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. The financial statements should be read in
conjunction with the audited financial statements and accompanying notes
of the Company for the period from incorporation through October 31, 1996,
which are included in its registration statement on Form SB-2, dated
January 31, 1997.
In the opinion of management of the Company, the accompanying
condensed consolidated financial statements reflect all adjustments
necessary (consisting solely of normal recurring adjustments) to present
fairly the financial position of the company as of March 31, 1997 and the
results of its operations, and its cash flows for the three month and
initial periods then ended.
The results of operations for the initial period ended March 31,
1997 are not necessarily indicative of the results to be expected for the
entire year.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed by the company are set forth in
Note 2 to the Company's October 31, 1996 financial statements included in
its registration statement on Form SB-2, dated January 31, 1997.
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with the
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes," which requires the recognition of deferred tax liabilities
and assets at currently enacted tax rates for the expected future tax
consequences of events that have been included in the financial statements
or tax returns. A valuation allowance is recognized to reduce the net
deferred tax asset to an amount that is more likely than not to be
realized. The tax provision shown on the accompanying statement of
operations is zero, as the deferred tax asset of $6,500 that is generated
from the net operating loss is offset in its entirety by a valuation
allowance.
- 5 -
<PAGE>
BIZCOM U.S.A., INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 1997
(UNAUDITED)
NOTE 4 - DEFERRED OFFERING COSTS
These costs, which are being incurred in anticipation of selling
common shares of the Company pursuant to its registration statement on
Form SB-2 , are being deferred until the offering is complete, at which
time such costs will be offset against the proceeds of the offering. On
January 31, 1997, the Company had its registration statement on Form SB-2
with the Securities and Exchange Commission declared effective, making
1,000,000 shares of the Company's common stock available for sale to the
general public. The Company is proceeding to sell 1,000,000 shares of its
Common Stock for $3 per share. As of March 31, 1997, the common shares
being sold in the offering are still in the process of being placed.
NOTE 5 - LOSS PER COMMON SHARE
Net loss per common share outstanding, as shown on the statement
of operations, is based on the number of common shares outstanding at
March 31, 1997. Weighted average shares outstanding was not computed as it
would not be meaningful in the circumstances, as all shares issued during
the period from incorporation through March 31, 1997 were issued to one
individual. Therefore, the total shares outstanding at the end of the
period was deemed to be the most relevant number of shares to use for
purposes of this disclosure.
NOTE 6 - PENDING ASSET ACQUISITIONS
In September 1996, the Company entered into agreements to
purchase the licenses and assets of nine 220 MHz Systems located in the
southern United States in exchange for an aggregate of 656,248 restricted
shares of Common Stock of the Company. The owners of these nine systems
are unrelated to the Company and its officers and directors.
The nine purchase agreements were separately negotiated.
Management believes that the nine systems have an aggregate fair market
value of approximately $1,575,000. For accounting purposes, these asset
acquisitions will be recorded using the fair value of the common stock
issued by the Company at the date consummated. Federal Communications
Commission approval has been received for the transfer of all of the
licenses. As of April 8, 1997, none of the acquisitions have closed.
The issuance of shares of common stock in connection with the
nine asset acquisitions will result in a change in control of the Company.
On a pro-forma basis, if the nine asset acquisitions had been consummated
as of March 31, 1997, then, as of that date, six persons would have each
owned more than 5% of the Company's outstanding voting stock, with the
largest single person owning 22% of the Company's outstanding voting
stock. However, until the Company's next meeting of shareholders, the
current directors and management are in a position to effectively control
the affairs of the Company. Management believes that any new shareholders
will allow management to further the Company's operating plan. Management
is not aware of any voting arrangements or understandings among any of the
Company's potential shareholders.
- 6 -
<PAGE>
ITEM 2. PLAN OF OPERATION.
OVERVIEW
BizCom U.S.A., Inc. is a recently formed Florida holding corporation
currently engaged on a limited basis through its wholly-owned subsidiaries
(collectively, the "Company"), in the development, operation and management of
220 MHz analog Specialized Mobile Radio ("SMR") wireless communications
services. The Company's current primary operations objective is to commence
direct sales marketing efforts to attract subscribers to its current SMR
systems. The Company's operations plan also provides for it to expand its
existing coverage area by purchasing select assets, including additional SMR
licenses and equipment and to manage SMR systems for itself and others.
The Company's Registration Statement on Form SB-2, Commission File No.
333-5660-A, covering the offering of up to 1,000,000 shares of the Company's
common stock, par value $.0001 per share (the "Common Stock"), at a price of
$3.00 per share, was declared effective by the Securities and Exchange
Commission on January 31, 1997. This Quarterly Report on Form 10-QSB should be
read in conjunction with the prospectus dated January 31, 1997 comprising a
portion of the Registration Statement.
PLAN OF OPERATION
The Company's capital raising objective is to effectuate the sale of
shares of Common Stock recently registered with the Securities and Exchange
Commission on Form SB-2. The funds which may be raised thereby will allow the
Company to execute its operations plan to achieve its operations objectives.
(See "Liquidity and Capital Resources," below.)
The Company's operations objectives over the next twelve months are to
market to and obtain subscribers to utilize the communications services offered
and intended to be offered on its SMR systems, thereby realizing fee based
subscriber revenues, and to extend its service or coverage area, thereby
increasing its subscriber base by purchasing select assets from other SMR system
owners, including SMR licenses and related equipment. Through the management of
existing operating systems and the acquisition of select assets to expand its
service or coverage area, management believes that the Company will increase its
subscriber base and corresponding revenues within each market. The plan is to
select markets with adequate available channel density and population base to
prove its operating capability and to generate sufficient revenues to ultimately
realize positive cash flow and profitability. No assurances can be given,
however, that the Company will realize its objectives, that its business will
ever be successful or that the Company will ever be or remain profitable.
To date, the Company's activities have been limited to securing minimal
capital for operations, entering into management agreements with nine systems
currently under management, entering into agreements to acquire select assets
(subject to FCC approval), which assets comprise those SMR systems currently
under management, and conducting discussions with certain persons for senior
Company
7
<PAGE>
management and key and other employee positions having substantial marketing,
sales, and related industry experience. As of the date hereof, the Company has
received approval from the FCC to acquire nine systems, but the Company has not
closed any of such acquisitions.
The Company offers two-way dispatch wireless communications services as
well as mobile telephone services whereby individual users may, through
interconnection with the PSTN, access the public telephone landlines in order to
make or receive telephone calls from any location within the Company's service
network, to or from any telephone number that is accessible through the local
and long distance wireline system. As subscriber demand may require, the Company
may also later offer such services as voice mail, call forwarding, follow me
roaming and data transmission. The Company uses and plans to use leased
facilities on existing towers wherever possible to avoid the cost of tower and
shelter construction.
Over the next twelve months, the marketing objective is to activate
subscribers on the Company's current systems in addition to any systems the
Company may operate in connection with its purchase of select assets, including
SMR licenses and related equipment. While management believes, based upon
informal discussions with industry trade association personnel, that there may
be many owner/operators of SMR systems with minimal or no subscriber base who do
not desire to further proceed with the substantial effort, time and expense
required to load and otherwise operate their SMR systems and may be desirous of
selling certain assets comprising their systems for cash and/or securities, no
assurances are given that the Company is correct in its belief. Further, to the
extent the Company may be successful in purchasing any such select assets, no
assurances are given that the Company will be successful in integrating such
assets with its current systems. The Company will generally be limited to
effecting asset purchases, if at all, involving SMR equipment compatible with
the Company's systems and equipment.
The Company's anticipated recurring revenues will consist primarily of
subscriber network usage revenues, which consist of monthly access fees per
unit, incremental charges based on minutes of use, sales and leasing of
communication equipment, and management fees. From time to time, changes in the
Company's plans may dictate that certain assets, originally intended to be
included in an operating system, will be sold, traded or used in joint venture
or in partnership with existing service providers in a particular market to
provide either additional cash flow for growth or to begin or strengthen
specific strategic alliances.
The Company has elected to focus its marketing efforts primarily upon
establishing a direct sales, marketing and service staff, and to a lesser extent
establishing dealer networks and retaining independent agents. The Company
intends to establish one or more direct sales offices on a regional basis to
coordinate sales and marketing efforts within several markets within a
particular region. To further develop the Company's distribution network, dealer
networks as well as independent agent relationships will be established in
certain markets. The Company believes that it will not necessarily have to
significantly increase the number of employees as it expands its business, in
view of the Company's knowledge of certain competitors within the 220 MHz analog
SMR industry who have substantially more subscribers than the Company currently
has and appear to be able to manage such subscriber base as well as engage in
continued growth with a fairly small number of employees.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Management is of the view that in the event of the Company's receipt of
between approximately $750,000-$3,000,000 gross proceeds in connection with its
offering of 1,000,000 shares of Common Stock, of which no assurances are given,
that such funds, together with any funds from operations, will provide
sufficient capital to meet the Company's cash and operational requirements for
approximately twelve months from the Company's receipt thereof. Should the
Company determine to accelerate its marketing and operational plans, or
conversely, should the Company receive substantially less than approximately
$750,000, such time frame will be diminished and the Company will require
substantial additional capital, the availability of which no assurances are
given. In the event of the Company's receipt of substantially less than
approximately $750,000, the Company, nevertheless, intends to proceed with its
marketing and operational plans, albeit in a curtailed manner as further
described below.
In the event of the Company's receipt of less than approximately
$750,000 gross proceeds, management of the Company has agreed in principle to
accrue their respective annual salaries until such time as the Company may be in
a financial position to commence payment of such salaries while also maintaining
a sales and marketing force of at least one full time sales manager and two
telemarketing personnel. Further, in such event, no expenses of the offering,
totaling approximately $8,000, will be reimbursed. Management of the Company
may, in such event, itself effect loans and/or one or more additional equity
investments of the Company and may also seek such financing from the Company's
shareholders as well as third parties. There are, however, no agreements,
arrangements or understandings in this regard at this time.
If required as determined by management, additional steps would also be
undertaken in the following order: (i) reduce level of planned staffing; (ii)
continue to outsource sales and telemarketing efforts on a commission-only
basis; (iii) emphasize efforts to manage other systems on a "best efforts"
subscriber loading monthly cash basis; and (iv) sell select assets, as may be
required, from time to time, for cash proceeds.
In the event the Company receives no or nominal proceeds in the
offering, such level of proceeds will significantly restrict the Company's
operations and will have a substantial adverse effect on the Company and
investors. The failure of the Company to obtain financing as needed would have a
material adverse effect upon the Company and its business. No assurances are
given that the Company will be able to obtain additional capital, if so required
in any such events, or otherwise obtain additional capital on terms acceptable
to the Company.
9
<PAGE>
PART II--OTHER INFORMATION
ITEM 5. OTHER INFORMATION.
The Company's Registration Statement on Form SB-2, Commission File No.
333-5660-A, covering the offering of up to 1,000,000 shares of the Company's
common stock, par value $.0001 per share, at a price of $3.00 per share, was
declared effective by the Securities and Exchange Commission on January 31,
1997. On April 30, 1997, the Company announced that its offering of shares of
common stock had been extended to May 30, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) No exhibits are required to be filed with this Quarterly Report
on Form 10-QSB.
(b) No Current Reports on Form 8-K were filed by the Registrant during
the three month period ended March 31, 1997.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BIZCOM U.S.A., INC.
Date: May 12, 1997 By /S/GARY D. LIPSON
-------------------
Gary D. Lipson, Chairman of the Board
and Chief Executive Officer
10
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