<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K-A1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
December 30, 1999
Date of Report
(Date of Earliest Event Reported)
CYBERTEL, COMMUNICATIONS CORP.
(Exact Name of Registrant as Specified in its Charter)
Nevada 0-26913 86-0862532
(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
4275 Executive Square, Suite 510
La Jolla, California 92037
(Address of Principal Executive Offices)
(858) 646-7410
Registrant's Telephone Number
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
(i) Telenomics, Inc. financial statements.
<PAGE>
TELENOMICS, INC.
FINANCIAL STATEMPNTS
2 Years Ended December 31, 1998 and 1997
and the-Six Months Ended June 30, 1999 (unaudited)
October 20, 1999
<PAGE>
Malone & Bailey, PLLC [letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Telenomics, Inc.
Temecula, California
We have audited the accompanying balance sheet of Telenomics, Inc. as of
December 31, 1998, and the related statements of income, stockholders, equity,
and cash flow for the two 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 audit 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 financial statements referred to above present fairly, in
all material respects, the financial position of Telenomics, Inc. as of
December 31, 1998, and the results of their operations and cash flows for the
two years then ended in conformity with generally accepted accounting
principles.
October 20, 1999
/s/Malone & Bailey, PLLC
MALONE & BAILEY, PLLC
Houston, Texas
<PAGE>
<TABLE>
TELENOMICS, INC.
Balance Sheets
(unaudited)
June 30, December 31,
ASSETS 1999 1998
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 19,514 $ 95,067
Accounts receivable, net of $0
allowance for doubtful accounts 38,235 80,512
TOTAL CURRENT ASSETS 57,749 175,579
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $74,615 and $63,053 72,364 83,926
130,113 259,505
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank credit line $ 47,559 $ 30,435
Installment debt 11,775 22,625
Accounts payable 27,412 70,638
Accrued expenses 78,713 78,285
Accrued salary to stockholders 131,246 134,246
TOTAL CURRENT LIABILITIES 296,705 336,229
STOCKHOLDERS' EQUITY
Common stock, no par, 100,000 shares
authorized, 1000, 60,162.5 shares
issued and outstanding 36,600 36,600
Retained (deficit) (203,192) (113,324)
TOTAL STOCKHOLDERS' EQUITY (166,592) (76,724)
$130,113 $259,505
</TABLE>
See summary of accounting policies and notes to financial statements.
<TABLE>
TELENOMICS, INC.
Income Statements
(unaudited)
For the Six
Months Ended For the Year Ended
June 30, December 31,
1999 1998 1997
<S> <C> <C> <C>
Sales $604,454 $2,302,209 $1,176,093
Cost of sales 472,840 1,579,313 701,780
Gross margin 131,614 722,896 474,313
Operating expenses
Selling and customer support 54,318 139,717 135,288
General and administrative 69,422 269,418 294,469
Research and development 82,880 144,000 96,566
Depreciation 11,562 30,995 25,853
Total operating expenses 221,482 584,130 552,176
Net income (loss) from
operations (86,568) 138,766 (77,863)
Other income and (expense)
Interest and other income 362 949 1,171
Interest (expense) 3,662) (10,896) (11,611)
Net income (loss) before taxes (89,868) 128,819 (88,303)
Income taxes - - -
Net income (loss) $(89,868) $128,819 $(88,303)
</TABLE>
See summary of accounting policies and notes to financial statements.
<TABLE>
TELENOMICS, INC.
Statements of Stockholders, Equity
Capital Stock Retained
Shares Amount (deficit) Totals
<S> <C> <C> <C> <C>
Balances, December 31, 1996 54,162.5 $( 11,400) $(153, 840) $(165,240)
Stock issued for services 4,000.0 32,000 32,000
Net (loss) ( 88,303) ( 88,303)
Balances, December 31, 1997 58,162.5 20,600 (242,143) (221,543)
Stock issued for services 2,000.0 16,000 16,000
Net income 128,819 128,819
Balances, December 31, 1998 60,162.5 36,600 (113,324) (76,724)
Net (loss) (unaudited) (89,868) (89,868)
Balances, June 30, 1999 60,162.5 $36,600 $(203,192) $(166,592)
</TABLE>
See summary of accounting policies and notes to financial statements.
<TABLE>
TELENOMICS, INC.
Statements of Cash Flows
<CAPTION>
(unaudited)
For the Six
Months Ended For the Year Ended
June 30, December 31,
1999 1998 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $( 89,868) $ 128,819 $( 88,303)
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation 11,562 30,995 25,853
Stock issued for services 16,000 32,000
Net changes in:
Accounts receivable 42,277 (31,695) (17,704)
other current assets 800 (800)
Accounts payable (46,226) 21,636 49,002
Accrued expenses 428 (29,792) 11,448
Accrued salary to stockholders (11,500)
NET CASH (USED BY) PROVIDED FROM
OPERATING ACTIVITIES (81,827) 125,263 11,496
CASH FLOWS (USED BY) INVESTING ACTIVITIES
Purchase of equipment. (27,795)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from (payment to)
bank credit line 17,124 (14,901) 31,559
Repayment of capital lease payable(10,850) (19,206) (24,768)
NET CASH (USED BY) PROVIDED FROM
FINANCING ACTIVITIES 6,274 (34,107) 6,791
NET INCREASE (DECREASE) IN CASH ( 75,553) 91,156 ( 9,508)
CASH AT BEGINNING OF PERIOD 95,067 3,911 13,419
CASH AT END OF PERIOD $ 19,514 $ 95,067 $ 3,911
SUPPLEMENTAL DISCLOSURES
Interest paid $ 3,662 $ 10,896 $ 11,611
</TABLE>
See summary of accounting policies and notes to financial statements.
TELENOMICS
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
Nature of Business. Formed in 1982 and incorporated on September 1, 1983, as
a California Corporation, the Company sells Hewlett-Packard HP3000 mini
computers and develops and markets telephone productivity management and
accounting software, principally using the oracle and Informix databases
running on the HP3000. The Company also develops and licenses a version which
runs on the HP9000 Unix PC Server.
Cash and cash equivalents. For purposes of the cash flow-statement, the
Company considers cash in savings accounts with a 90-day maturity or less as
cash and cash equivalents.
Revenue and cost recognition. Revenues from sales of hardware and software are
recognized when equipment and/or software are installed at customer sites.
Revenue from customer support services is recognized as the services are
performed, or on a monthly basis for monthly maintenance contracts. No
allowance for doubtful accounts is considered necessary, as bad debts, if any,
are minimal.
Inventory is not kept on hand. Equipment is ordered from a distributor as
needed.
Property and equipment. The Company calculates depreciation for financial
reporting using the straight-line method over a 5-year estimated useful life
of its computer equipment.
Computer maintenance and minor upgrades are charged to expense as incurred.
Effective in 1997, the Company adopted SFAS No. 121 "Accounting for the
Impairment of Long-Lived Assets." The statement requires the recognition of an
impairment loss on a long-lived asset held for use when events and
circumstances indicate that the estimate of undiscounted future cash flows
expected to be generated by the asset are less than its carrying amount.
Estimates and assumptions. Preparing financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenue and expenses at the balance sheet date and for the period then ended.
Actual results could differ from these estimates.
NOTE 2 - BANK CREDIT LINE ARRANGEMENTS
The Company has a $50,000 line of credit with Bank of America, N. A. This
account allows for the extension of credit of, and is not collateralized. The
credit line accrues interest at Bank's prime rate plus 4.525%.
NOTE 3 - INSTALLMENT DEBT
(Unaudited)
June 30, December 31,
1999 1998
Capital lease payable to FirstCorp (First Portland
Corporation), with interest imputed at 16.5%,
in monthly payments of $2,058, collateralized
by equipment, due December 1999 $11,775 $22,625
NOTE 5 - INCOME TAXES
Net operating losses have exceeded net income since inception, so there is no
federal or state income tax expense due or accrued in any period presented.
Net operating loss carryforwards of about $190,000 are available to offset
future taxable income. These expire in the years 2005 - 2019.
NOTE 6 - OPERATING LEASE
The Company leases 1,359 square feet of office space in Temecula, California,
for $1,156 per month during the 12 months ended August 31, 2000, and $1,203
per month during the 12 months ended August 31, 2001, when the lease expires.
NOTE 7 - MARKETING AGREEMENT WITH HEWLETT-PACKARD
The Company is an authorized Hewlett-Packard ("H-P") Channel Partner and
Authorized Reseller. In August 1999, H-P and the Company signed a "Strategic
Alliance Agreement" to jointly co-market Company telephone call accounting and
call management utility services directly through the Internet. Pursuant to
this agreement, H-P will provide Internet hosting services and related
hardware and software, and the Company will share resulting revenues. As of
August 20, 1999, no revenues or liabilities have accrued under this
Agreement.
<PAGE>
(ii) Like Dat Music Financial
Audited financial statements of Like Dat Music acquisition have not
been included because the Company feels that this was not a sufficiently
material transaction requiring audited and proforma financials.
(b) Pro Forma Financial Information.
<TABLE>
CYBERTEL COMMUNICATIONS CORPORATION
BALANCE SHEET (Proforma)
December 31,1998
Cybertel Telenomics Adjustments Consolidation
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash 50,344 95,067 145,411
Accounts Receivable 1,278 80,512 81,790
Subscriptions Receivable 34,500 34,500
Total Current Assets 86,122 175,579 - 261,701
Equipment 10,697 158,541 169,238
Accumulated Depreciation (2,612) (74,615) (77,227)
Total Fixed Assets 8,085 83,926 - 92,011
Deposits 4,500 4,500
Total Other Assets 4,500 4,500
TOTAL ASSETS 98,707 259,505 - 358,212
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable 2,241 70,638 72,879
Installment Debt 22,625 22,625
Bank Credit Line 30,435 30,435
Current portion-
long term debt 2,554 2,554
Other Current Liabilities 14,373 78,285 92,658
Accrued salary to
stockholders 134,246 134,246
Total Current Liabilities 19,168 336,229 - 355,397
Long Term Liabilities 2,575 2,575
Total Liabilities 21,743 336,229 - 357,972
Equity
Retained Earnings (1,439,156) (113,324) (1,552,480)
Capital Stock 2,807 36,600 (36,000) 3,407
Stock Subscriptions
Receivable (113,500) (113,500)
Paid in capital 1,626,813 36,000 1,662,813
Total Equity 76,964 (76,724) - 240
TOTAL LIABILITIES & EQUITY 98,707 259,505 - 358,212
</TABLE>
UNAUDITED
<TABLE>
CYBERTEL COMMUNICATIONS CORPORATION
PROFIT AND LOSS (Proforma)
For the year ended
September 30, 1999
<CAPTION>
Cybertel Telenomics Adjustments Consolidation
<S> <C> <C> <C> <C>
Revenues $1,602,333 $ 983,543 $2,585,876
Cost of Goods Sold 1,556,536 764,430 2,320,966
Gross Profit 45,797 219,113 0 264,910
Operating Expenses
Selling 11,844 157,308 169,152
General and Administrative 800,774 122,000 922,774
Research and Development - - -
Depreciation 1,567 43,109 44,676
Interest (income) (6,355) (393) (6,748)
Interest expense 750 2,150 2,900
Total Operating Expenses 808,580 324,174 0 1,132,754
NET INCOME (LOSS) ($762,783) ($105,061) 0 ($867,844)
UNAUDITED
</TABLE>
<TABLE>
CYBERTEL COMMUNICATIONS CORPORATON
PROFIT AND LOSS (Proforma)
For the year ended
December 31, 1998
<CAPTION>
Cybertel Telenomics Adjustments Consolidation
<S> <C> <C> <C> <C>
Revenues $ 16,004 $2,302,209 0 $ 2,318,213
Cost of Goods Sold 0 1,579,313 1,579,313
Gross Profit 16,004 722,896 0 738,900
Operating Expenses
Selling 26,657 139,717 166,374
General and Administrative 1,150,879 269,418 1,420,297
Research and Development 144,000 144,000
Depreciation 2,400 30,995 33,395
Interest (income) (1,553) (949) (2,502)
Interest Expense 2,262 10,896 13,158
Total Operating Expenses 1,180,645 594,077 0 1,774,722
NET INCOME (LOSS) ($1,164,641) $128,819 $0 ($1,035,822)
UNAUDITED
</TABLE>
(c) Exhibits.
None.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
CYBERTEL, COMMUNICATIONS CORP.
Date: March 9, 2000 By:/s/Richard D. Mangiarelli
-------------- -------------------------------------
Richard D. Mangiarelli
CEO, President and Director
