FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-34283
STAMPEDE WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
FLORIDA
(State or other jurisdiction of incorporation or organization)
58-2235301
(I.R.S. Employer Identification No.)
3910 Riga Boulevard, Tampa, Florida 33619
(Address of principal executive offices) (Zip Code)
(813) 630-2762
(Registrant's telephone number, including area code)
Chronicle Communications, Inc.
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has 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
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the issuer's classes of common
stock, as of May 10, 2000, was 64,734,297 shares, all of one class, $0.001
value.
Transitional Small Business Disclosure Format (check one);
Yes ___ No X
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements.
Chronicle Communications and Affiliates, Inc.
Consolidated Balance Sheets
(Unaudited)
Assets As of March 31,
2000 1999
----------- -----------
Current Assets:
Cash $ 443,652 $ 8,008
Accounts receivable 141,798 216,090
Inventory 51,577 45,100
Other current assets 600,189 57,053
----------- -----------
Total current assets 1,237,216 326,251
Property and Equipment, net of
accumulated depreciation 817,708 1,412,736
Advances to stockholders 946,031 400,855
Other assets 857,916 267,643
----------- -----------
Total assets $3,858,871 $2,407,485
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Bank overdraft $ -0- $ 104,913
Short-term notes 121,346 94,067
Current maturities of
long-term debt -0- 1,195,065
Accounts payable 303,190 859,289
Accrued payroll liabilities 444,192 342,150
Other accrued liabilities 75,387 460,110
----------- -----------
Total current liabilities 944,115 3,055,594
Long-term liabilities 135,000 140,011
Stockholders' equity:
Common stock, $0.001 par value,
100,000,000 shares authorized,
62,157,063 and 7,207,329 shares
issued and outstanding at March
31, 2000 and 1999, respectively 11,723,862 3,976,977
Accumulated deficit (8,944,106) (4,765,097)
----------- -----------
Total stockholders' equity 2,779,756 (788,120)
----------- -----------
Total liabilities and
stockholders' equity $3,858,871 $2,407,485
=========== ===========
Chronicle Communications and Affiliates, Inc.
Consolidated Statements of Operations
(Unaudited)
For the three months ended
March 31,
2000 1999
----------- -----------
Sales $ 344,762 $ 547,929
Cost of sales 295,343 498,091
----------- -----------
Gross profit 49,419 49,838
----------- -----------
Operating expenses:
General and administrative 1,831,527 909,812
Interest 19,139 56,285
----------- -----------
Total operating expenses 1,850,666 966,097
----------- -----------
Net loss from operations $(1,801,247) $ (916,259)
Loss on disposal of assets (90,717) -0-
Gain on disposal of
discontinued operations 1,388,657 -0-
----------- -----------
Net loss $ (503,307) $ (916,259)
=========== ===========
Net loss per share $ (0.01) $ (0.15)
=========== ===========
Weighted average shares outstanding 42,184,841 6,022,944
=========== ===========
Chronicle Communications and Affiliates, Inc.
Consolidated Statements of Operations
(Unaudited)
For the six months ended
March 31,
2000 1999
----------- -----------
Sales $ 903,918 $ 1,061,999
Cost of sales 700,630 856,379
----------- -----------
Gross profit 203,288 205,620
----------- -----------
Operating expenses:
General and administrative 2,649,267 1,184,462
Interest 82,039 109,669
----------- -----------
Total operating expenses 2,731,306 1,294,131
----------- -----------
Net loss from operations $(2,528,018) $(1,088,511)
Loss on disposal of assets (90,717) -0-
Gain on disposal of
discontinued operations 1,388,657 -0-
----------- -----------
Net loss $(1,230,078) $(1,088,511)
=========== ===========
Net loss per share $ (0.03) $ (0.18)
=========== ===========
Weighted average shares outstanding 42,184,841 6,022,944
=========== ===========
Chronicle Communications, Inc and Affiliates
Consolidated Statements of Cash Flows
(Unaudited)
For the three months ended
March 31,
2000 1999
----------- -----------
Operating activities
Net loss $ (503,307) $(1,088,511)
Adjustments to reconcile
net loss to net cash
provided by operating activities:
Depreciation and amortization 45,150 84,254
Loss on disposal of assets 90,717 -0-
Gain on disposal of
discontinued operations (1,388,657) -0-
Common stock issued for operations 1,223,569 999,459
Increase or decrease in, net of
effects of acquisitions and
segment disposal:
Accounts receivable (6,550) (93,035)
Inventory (21,156) 40,197
Other current assets 122,130 28,427
Other assets (91,313) (267,643)
Accounts payable (359,532) (225,348)
Accrued payroll liabilities (110,975) 17,183
Other accrued liabilities (118,915) 161,872
----------- -----------
Net cash used by operating
activities (1,118,839) (343,145)
----------- -----------
Investing activities
Liquidation of segment (6,303) -0-
Purchase of fixed assets (511,569) -0-
Increase in investments (199,471) (50,000)
----------- -----------
Net cash used by investing activities (717,343) (50,000)
----------- -----------
Financing activities
Bank overdraft (7,959) 99,899
Increase in debt -0- 140,011
Principal payments of debt (23,444) (8,318)
Stockholders advances (12,365) (167,980)
Proceeds from issuance of stock 2,302,607 323,084
----------- -----------
Net cash provided by
financing activities 2,258,839 386,696
----------- -----------
Net increase (decrease) in cash 422,657 (6,449)
----------- -----------
Cash at beginning of period 20,995 14,457
Cash at end of period $ 443,652 $ 8,008
=========== ===========
Supplemental schedule of noncash investing and financing activities
Stock issued for
stockholders' advances $ 194,706 $ 72,584
Stock issued for acquisitions $ 36,667 $ 29,063
Stock issued for debt repayment $ 303,669 $ 37,152
Stock issued for receivables $ 576,000 $ -0-
Fixed assets disposals $ 1,015,453 $ -0-
Liquidation of notes payable $ 1,207,371 $ -0-
Item 2. Management's Discussion and Analysis
This quarterly report contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
and Section 27A of the Securities Act of 1933, as amended, and is subject
to the safe harbors created by those sections. These forward-looking
statements are subject to significant risks and uncertainties, including
information included under Parts I and II of this annual report, which may
cause actual results to differ materially from those discussed in such
forward-looking statements. The forward-looking statements within this
annual report are identified by words such as "believes", "anticipates",
"expects", "intends", "may", "will" and other similar expressions regarding
the Company's intent, belief and expectations. However, these words are not
the exclusive means of identifying such statements. In addition, any
statements that refer to expectations, projections or other
characterizations of future events or circumstances and statements made in
the future tense are forward-looking statements. Readers are cautioned that
actual results may differ materially from those projected in the forward-
looking statements as a result of various factors, many of which are beyond
the control of the Company. The Company undertakes no obligation to
publicly release the results of any revisions to these forward-looking
statements that may be made to reflect events or circumstances occurring
subsequent to the filing of this quarterly report with the SEC. Readers are
urged to carefully review and consider the various disclosures made by the
Company in this quarterly report.
Background:
During the three months ended March 31, 2000 and 1999, the Company's
activities were conducted primarily in its subsidiaries. During the
quarter ended March 31, 2000, the Company's subsidiaries and their
respective businesses were as follows:
Chronicle Commercial Printing, Inc. - commercial web offset printing
Stampede Network.com, Inc. - web design and hosting, and proprietary
database programming
Spiderscape.com, Inc. - internet and catalog based computer hardware
and software retailing
Bartow Communications, Inc. - publisher of new homes real estate
guides in Metropolitan Washington, DC
Americomp Computers, Inc. - full line computer sales and service
business in Houston, Texas
The Company maintained an additional subsidiary, Bright Now, Inc., which
was engaged in commercial web offset printing and filed for protection
under Chapter 11 of the Federal Bankruptcy Code on November 23, 1999 that
was converted to Chapter 7 liquidation on February 7, 2000. The Company
consolidated the operations of its Americomp subsidiary into its new
Spiderscape.com subsidiary located in Tampa during March 2000. Also, the
Company has several dormant subsidiaries that it does not intend to
reactivate at the present.
During the quarter ended March 31, 1999, the Company's subsidiaries and
their respective businesses were as follows:
Bright Now, Inc. - commercial web offset printing
Bartow Communications, Inc. - publisher of new homes real estate
guides in Metropolitan Washington, DC
In February 1999 the Company discontinued publication of two tabloid style
shopper newspapers in the South Georgia market. Additionally, the Company
acted as a contract publisher of trade association publications in South
Florida.
Financial results:
The Company greatly improved its financial position as of March 31, 2000 in
contrast to its financial position at March 31,1999. Current assets
increased by $908,965 and current liabilities decreased by $2,111,479 for
the report dates. The cash balance increased by $540,557 and the accounts
payable and accrued liabilities balances decreased by $838,780 as of the
aforementioned dates. Furthermore, bank overdrafts have been eliminated
and there are no current maturities of long-term debt as of the report
date. Stockholders' equity has increased by $3,567,876 from a deficit of
$788,120 at March 31, 1999 to a balance of $2,779,756 at March 31, 2000.
Overall, the balance sheet has increased by $1,451,386 from March 31, 1999
to March 31, 2000.
The Company showed a decrease in revenues for the three months and six
months ended March 31, 2000 in the amounts of $203,167 and $158,081,
respectively, in contrast with the same periods of 1999. The reduction in
revenue may be attributed to the ceasing of the Bright Now printing
operations, the downtime for the installation of the new press for
Chronicle Commercial Printing, and the elimination of the retail portion of
Americomp Computers. However, in spite of the revenue reduction,
management was able to decrease the cost of sales and improve the gross
profit margin by 5.24% and 3.1% for the three-month and six-month periods,
respectively.
Net loss per common share, basic decreased by $0.14 to $(0.01) for the
quarter ended March 31, 2000 versus ($0.15) for the same quarter of 1999.
Additionally, net loss per common share, basic decreased by $0.15 to
$(0.03) for the six months ended March 31, 2000 versus ($0.18) for the same
period of 1999.
During the current quarter the Company's management has vigorously been
eliminating and rectifying ongoing operational and administrative matters
to more effectively continue with its ongoing efforts to strengthen and
ultimately bring profitability to the Company and its shareholders. These
efforts have included significant reduction of payables, resolution of
litigation and employment contracts, and refocusing on core business
objectives. To this end, in January 2000 the Company moved into a 32,000
square foot facility that can comfortably house all divisions with more
than adequate room for growth. The new state of the art FAST-300 press
(cost - $695,000) was installed in February 2000. In March the Company
acquired the assets and talent of ETA Internet Solutions, Inc. to establish
Stampede Network.com, Inc. Also, in March 2000 the Company redeployed the
assets of our Houston based Americomp Computers to Tampa to begin the
creation of Spiderscape.com, Inc. On April 5, 2000 the Company purchased
its new Tampa facility for $2,250,000 with better than market seller
financing and no mortgage payments required before the first quarter of our
next fiscal year.
Liquidity and financial resources:
On February 22, 2000 the Company filed Form SB-2 for the registration of
securities to be sold to the public. In this registration the Company
offered 40,000,000 shares of its common stock to be sold by the Company.
As of the date of this filing the Company has sold only 15,265,695 shares
of common stock made available by the aforementioned registration.
Therefore, the Company still has 24,734,305 shares of common stock to offer
for future sale.
During the quarters ended March 31, 2000 and 1999, the Company funded much
of its working capital needs through the sale of its common stock.
The Company's working capital position is positive as of March 31, 2000 and
has continued to remain in that position through the date of this filing.
Working capital at March 31, 2000 was $293,101. This is an increase in
working capital of $3,020,444 from the negative $2,727,343 working capital
at March 31, 1999. The Company's current ratio at March 31, 2000 is a
positive 1.3:1.0 ratio in sharp contrast to the negative current ratio of
0.1:1.0 at March 31, 1999.
PART II--OTHER INFORMATION
Item 2. Changes in Securities
During the three-month period ended there was no modification of any
instruments defining the rights of holders of the Company's common stock
and no limitation or qualification of the rights evidenced by the Company's
common stock as a result of the issuance of any other class of securities
or the modification thereof. Effective January 27, 2000, with written
consent of stockholders in lieu of a special meeting, the Company's
authorized common stock was increased to one hundred million shares from
thirty-five million shares. Additionally, after the three month period
ended and effective April 13, 2000, with written consent of stockholders in
lieu of a special meeting, the Company amended the Articles of
Incorporation to authorize preferred stock in the amount of ten million
shares having a par value, stated value, liquidation preference, dividend
preference, voting rights, rights to convert, as determined by the board of
directors.
Item 4. Submission of Matters to a Vote of Security Holders
During the three month period ended March 31, 2000, the Company submitted
to a vote of its security holders by written consent the matters described
in Items 2 and 5.
Item 5. Other Information
During the second quarter of the fiscal year, the Company completed a short
form merger, solely for the purpose of changing its domicile to Florida
from Georgia. After March 31, 2000 the Company changed its name to
Stampede Worldwide, Inc. from Chronicle Communications, Inc.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 6.1 Articles of Merger
Exhibit 6.2 Articles of Amendment
Exhibit 6.3 Independent Accountant's Review Report
Exhibit 27 Financial Data Schedule
SIGNATURES
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 thereunto duly authorized.
Stampede Worldwide, Inc.
(Registrant)
Date: May 12, 2000
/s/ John V. Whitman, Jr.
John V. Whitman, Jr., President and Chief Executive Officer
Date: May 12, 2000
/s/ Jay E. Ostrow
Jay E. Ostrow, Chief Financial and Accounting Officer
Exhibit 6.1 Articles of Merger
ARTICLES OF MERGER
Merger of Parent into a Wholly Owned Subsidiary
Pursuant to the provisions of 607.1104, Fla. Stat., the Florida
Business Corporation Act, and 0. C. G. 14-2-1104, the Georgia Business
Corporation Code Chronicle Communications, Inc., a Georgia corporation,
(the "Parent Company") which is the owner of all the issued and outstanding
common stock of Chronicle Communications, Inc., a Florida corporation, (the
"Subsidiary Company), being the only equity securities of the Subsidiary
Company issued, outstanding and entitled to vote on the merger provided
herein, has, by action of its Board of Directors taken and approved on
February 1, 2000, adopted the following Plan of Merger:
1. The name of the parent corporation is Chronicle
Communications, Inc., a Georgia corporation, and the name of the subsidiary
corporation is Chronicle Communications, Inc., a Florida corporation.
2. The Parent Company shall be merged into the Subsidiary
Company and the Subsidiary Company, a Florida corporation, shall be the
surviving corporation. The sole purpose of the merger hereby effected is to
change the state of incorporation of the Parent Company to Florida from
Georgia.
3. The Articles of Incorporation of the surviving corporation
shall be the Articles of Incorporation of the Subsidiary Company.
4. The Articles of Incorporation of the Subsidiary Company are
identical in substance to the Restated and Amended Articles of
Incorporation of the Parent Company, excepting only such information
identifying the initial registered agent and registered office of the
Subsidiary Company as is required to be included therein under Florida
Business Corporation Act.
5. The each share of the Parent Company's issued and
outstanding common stock and Series A Zero Coupon Preferred Stock shall
become and be automatically converted into the corresponding share of the
Subsidiary Company, as the surviving corporation, without the requirement
that any certificate representing such shares be tendered for reissue.
6. The Parent Company, being the owner of all the issued and
outstanding equity securities of the Subsidiary Company and there being no
other stockholder of the Subsidiary Company, is the only person entitled to
vote on and it has voted for approval of the merger.
5. The holders of record of the Parent Company's common stock
and Series A Zero Coupon Preferred Stock are the only persons entitled to
receive notice of the merger by mailing.
6. The Bylaws of the Parent Company shall be the Bylaws of the surviving
corporation.
IN WITNESS WHEREOF, the undersigned, John V. Whitman, Jr.,
Chairman of the Board both of the Parent Company and of Subsidiary Company
has executed the within Articles of Amendment this 1st day of February,
2000, on behalf of all said corporations, and caused said Articles to be
filed in the office of the Secretaries of State for the States of Florida
and of Georgia, effective upon the filing thereof
(CORPORATE SEAL)
Chronicle Communications, Inc.
a Georgia corporation
By:
/s/ John V. Whitman, Jr.
John V. Whitman, Jr.
(CORPORATE SEAL)
Chronicle Communications, Inc.
a Florida corporation
By:
/s/ John V. Whitman, Jr.
John V. Whitman, Jr.
Attest:
/s/ Jackson L. Morris
Jackson L. Morris
Exhibit 6.2 Articles of Amendment
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
CHRONICLE COMMUNICATIONS, INC.
Pursuant to the provisions of 607.1003, Fla. Stat., the Florida
Business Corporation Act, Chronicle Communications, Inc. does hereby amend
its Articles of Incorporation as follows:
1. The name of the corporation is Chronicle Communications, Inc.
2. This Amendment to the Articles of Incorporation was duly approved
and adopted on February 7, 2000 by written consent of a majority of the
stockholders as a whole, there being no class of stockholders entitled to
vote hereon as a separate voting group, pursuant to 607.0726, Fla. Stat.,
by written consent without a meeting, pursuant to 607.0704, Fla. Stat.,
upon the recommendation of the board of directors on February 4, 2000 by
written consent of all directors pursuant to 607.0821, Fla. Stat.
3. The total number of shares of common stock issued and outstanding
at the date of approval hereof was 31,372,522 shares and the vote of such
shares in favor hereof was 16,300,340 shares, being sufficient in all
respects for approval hereof.
4. Article 1, Section 1, of the Articles of Incorporation shall be,
and it hereby is amended to change the name of the Corporation to Stampede
Worldwide, Inc.
5. 4. Article IV of the Articles of Incorporation, as amended,
shall be and hereby is amended to add a clause "(c)", as follows:
(c) The authorized preferred stock of the Corporation shall be Ten Million
(10,000,000) Shares, having, as determined by the board of directors, a par
value, stated value, liquidation preferences and other preferences,
dividend preference, voting rights (including super majority voting
rights), right to convert into other authorized securities of the
Corporation, limitations and other features and relative rights and being
issueable, as determined by the board of directors, in one or more classes
or series within classes, each of which may be, as determined by the board
of directors, to different from all others as to the features provided
herein to be determined by the board of directors.
IN WITNESS WHEREOF, the undersigned, President of Chronicle
Communications, Inc., has executed the within Articles of Amendment this
13th day of April, 2000 and caused said Articles to be filed in the office
of the Secretary of State for the State of Florida, effective upon the
filing thereof.
(CORPORATE SEAL)
ATTEST:
/s/ Jackson L. Morris
Jackson L. Morris, Secretary
Chronicle Communications, Inc.
/s/John V. Whitman, Jr.
By John V. Whitman, Jr. President
Exhibit 6.3 Independent Accountants Review Report
We have reviewed the accompanying consolidated Balance Sheets, Statements
of Operations and Cash Flows of Stampede Worldwide, Inc and subsidiaries as
of March 31, 2000 and 1999, and for the three-month periods then ended.
These financial statements are the responsibility of the company's
management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
/s/ Bella, Hermida, Gillman, Hancock & Mueller
Bella, Hermida, Gillman, Hancock & Mueller
Certified Public Accountants
Plant City, Florida
May 10, 2000
[TYPE]EX-27
<SEQUENCE>2
<TABLE> <S> <C>
[ARTICLE] 5
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] SEP-30-2000
[PERIOD-END] MAR-31-2000
[CASH] 443,652
[SECURITIES] 0
[RECEIVABLES] 141,798
[ALLOWANCES] 0
[INVENTORY] 51,577
[CURRENT-ASSETS] 1,237,216
[PP&E] 817,708
[DEPRECIATION] 0
[TOTAL-ASSETS] 3,858,871
[CURRENT-LIABILITIES] 944,115
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 11,723,862
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 3,858,871
[SALES] 344,762
[TOTAL-REVENUES] 344,762
[CGS] 295,343
[TOTAL-COSTS] 295,343
[OTHER-EXPENSES] 1,831,527
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 19,139
[INCOME-PRETAX] (1,801,247)
[INCOME-TAX] 0
[INCOME-CONTINUING] (1,801,247)
[DISCONTINUED] 1,388,657
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (503,307)
[EPS-BASIC] (0.01)
[EPS-DILUTED] (0.01)
</TABLE>
