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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 quarter ended _______September 30, 1999___________________
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission File Number:____0-26075_______________________
American Kiosk Corporation
(Exact name of small business issuer as specified in its charter)
Delaware 59-3452641
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4400 PGA Blvd., suite 500, Palm Beach Gardens, FL 33410
(Address of Principal Executive Office)
(561) 627-9002
(Issuer s Telephone Number)
__________________________________Not Applicable________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the Issuer (1) filed all reports required to be filled by Section 13 or15 (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 Yes __X____ No ________
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d)
of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes______ No________
Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer s classes of common
Equity, as of the latest practical date:
Common Stock $.001____Par value____ 4,226,200 as of 11/17/99.
Transitional Small Business Disclosure Format (check one) Yes _______ No __X____
Part I:______FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements and documents required by Item 310(b) of
Regulation S-B are attached hereto as Exhibits "A-D":
Condensed Balance Sheets As of
September 30, 1999, and December 31, 1998 Exhibit A
Condensed Statements of Changes
In Shareholder s Equity For the
Period from December 31, 1998 through
September 30, 1999 Exhibit B
Condensed Statements of Operations
For the three months ended & nine months Exhibit C
ended September 30, 1999 and 1998, as well as
the period from inception April 26, 1997
to September 30, 1999. Exhibit C
Condensed Statements of Cash Flows
For the nine months ended September 30, 1999 Exhibit D
and 1998, as well as the period from inception
April 26, 1997 to September 30, 1999 Exhibit D
Notes to Condensed Financial Statements
Exhibit A
AMERICAN KIOSK CORPORATION
Condensed Balance Sheet as of
September 30, 1999 and December 31, 1998
YEAR END
9/30/99 12/31/98
(UNAUDITED) (AUDITED)
ASSETS
CURRENT ASSETS:
CASH AND EQUIVALENTS $51,728 $350,136
ACCOUNTS RECEIVABLE $18,422 $7,674
INVENTORIES $8,992 $80,925
DEPOSITS & OTHER CURRENT ASSETS $279,531 $30,590
DEFERRED LOAN COSTS $147,071 $37,431
TOTAL CURRENT ASSETS $505,744 $506,756
PROPERTY & EQUIPMENT $303,387 $38,559
LOANS TO AREA REPS $121,907
OTHER ASSETS $266,457 $181,895
TOTAL ASSETS $1,197,495 $727,210
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE & ACCRUALS $172,983 $119,293
CONVERTIBLE NOTES PAYABLE $300,000 $293,125
DEFERRED FRANCHISE REVENUE $65,113 $39,950
TOTAL CURRENT LIABILITIES $538,096 $452,368
NOTES PAYABLE - 30 MONTH $1,643,420 $365,050
TOTAL LIABILITIES $2,181,516 $817,418
SHAREHOLDERS' EQUITY:
COMMON STOCK, $.0001 PAR $420 $415
ADDITIONAL PAID-IN-CAPITAL $1,131,689 $1,108,484
UNEARNED COMPENSATION ($48,600) ($48,600)
ACCUMULATED DEFICIT ($2,067,530) ($1,150,507)
TOTAL SHAREHOLDERS' EQUITY ($984,021) ($90,208)
TOTAL LIABILITIES AND EQUITY $1,197,495 $727,210
3
Exhibit B
AMERICAN KIOSK CORPORATION
(A Development Stage Company)
Condensed Statement of Changes in Shareholder's Equity
for the nine months ended September 30, 1999
(Unaudited)
DEFICIT
COMMON ADDITIONAL ACCUMULATED
STOCK PAID-IN DURING DEVELOPMENT UNEARNED SHRHLDR'S
SHARES AMOUNT CAPITAL STAGE COMPENSATION EQUITY
BALANCE DECEMBER 31, 1998 4,149,900 $415 $1,108,484 ($1,150,507) ($48,600) ($90,208)
STOCK ISSUED ALONG WITH 49,416 $5 $23,205 23,210
SECURED NOTES
NET LOSS ($917,025) ($917,025)
BALANCE SEPTEMBER 30, 1999 4,199,316 $420 $1,131,689 ($2,067,532) ($48,600) ($984,023)
4
Exhibit C
AMERICAN KIOSK CORPORATION
(A Develpoment Stage Company)
Condensed Statement of Operations
(Unauited)
PERIOD
FROM 4/26/97
3 MO ENDED 3 MO ENDED 9 MO ENDED 9 MO ENDED (INCEPTION)
9/30/99 9/30/98 9/30/99 9/30/98 TO 9/30/99
TOTAL REVENUES $9,947 $13,477 $32,531 $39,493 $98,021
COST OF GOODS ($9,450) $0 ($31,897) ($5,843) ($54,556)
SELLING, GENERAL & ADMIN EXPENSES ($191,659) ($398,628) ($861,848) ($734,352) ($2,030,184)
LOSS FROM OPERATIONS ($191,162) ($385,151) ($861,214) ($700,702) ($1,986,719)
OTHER EXPENSES ($17,112) ($21,791) ($55,811) ($57,405) ($80,815)
NET (LOSS) ($208,274) ($406,942) ($917,025) ($758,107) ($2,067,534)
NET LOSS PER SHARE ($0.050) ($0.129) ($0.219) ($0.237) ($0.599)
WEIGHTED AVG SHARES OUTSTANDING 4,197,816 3,143,105 4,196,773 3,199,644 3,450,712
5
Exhibit D
AMERICAN KIOSK CORPORATION
(A Development Stage Company)
Condensed Statement of Cash Flow
(Unaudited)
PERIOD
FROM 4/26/97
9 MO ENDED 9 MO ENDED (INCEPTION)
9/30/99 9/30/98 9/30/99
CASH USED IN OPERATING ACTIVITIES ($210,594) ($992,135) ($2,086,119)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment ($49,525) ($111,312) ($358,576)
Other 25,163 ($230,842)
Net cash provided by (used in) investing activities ($24,362) ($111,312) ($589,418)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Notes Payable $109,513 $296,864 $1,918,085
Proceeds from issuance of stock $918,161 $809,177
Cash provided by financing activities $109,513 $1,215,025 $2,727,262
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($125,443) $234,353 $51,725
CASH AND CASH EQUIV., BEGINNING OF PERIOD $177,169 $69,212
CASH AND CASH EQUIV, AT END OF PERIOD $51,726 $303,565 $51,725
AMERICAN KIOSK CORPORATION
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
Note 1 Financial Statements
In the opinion of the Company s management, the accompanying unaudited condensed financial statements contain
all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial position of
the Company as of September 30, 1999 and the results of operations for the three months and nine months ended
September 30, 1999 and 1998, and for the period from April 26, 1997 (inception) to September 30, 1999, and cash
flows for the nine months ended September 30, 1999 and 1998 and for the period from April 26, 1997 (inception) to
September 30, 1999. Certain information and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been condensed or omitted. These statements
should be read in conjunction with the audited financial statements for the fiscal year ended December 31, 1998, and
notes thereto contained in the Company s Form 10-SBA filed with the Securities and Exchange Commission on July
27, 1999. The results of operations for the three months and nine months ended September 30, 1999 are not
necessarily indicative of operating results to be expected for the full fiscal year.
Note 2 - Inventories
Inventories at September 30, 1999 consist of:
Food and supplies $ 1,445
Equipment and displays 7,547
$8,992
Note 3 - Notes Payable and Stock Issuance
During the three months ended September 30, 1999, the Company issued 3,000 shares of Common Stock (49,416 for
the nine months ended September 30, 1999) valued at $.50 per share related to the funding of additional Private
Placement Units of 11% Secured Notes aggregating $399,794 (1,225,194 for the nine months ended September 30,
1999).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTORY STATEMENT
The following information should be read in conjunction with the financial statements and notes appearing
elsewhere in this report.
Certain statements included in this Form 10-QSB are forward looking and are based upon the Company s
current expectations and are subject to risks and uncertainties that could cause actual results to differ significantly
from results expressed or implied in any forward-looking statements made by or on behalf of the Company. The
Company assumes no obligation to update any forward-looking statements contained herein or that may be made
from time to time by or on behalf of the Company.
BUSINESS
The Company, incorporated in Delaware in May, 1997, has developed and implemented a national brand
franchise system of kiosk-style and stand alone, drive-thru retail outlets to deliver popular food products to
consumers. The Company initially is focusing primarily on brick oven pizza. The Company is still classified as a
development Company , however, two drive-thru units are scheduled to open in September of 1999 in the West
Palm Beach and Atlanta areas.
The Company is engaged in the sale of fast food pizza and other products, and franchises to operate fast
food pizza outlets from stand alone drive-thru retail units and kiosk style units. The Company s outlets sell a
proprietary brick oven pizza , baked in a patented oven.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1999, the Company had working capital of $191,263 compared to working capital of
$54,388 at December 31, 1998. This increase is attributable primarily to the sale of private placement units offset
by operating deficits and purchase of operating equipment.
RESULTS OF OPERATIONS:
REVENUES
Revenues for the three months ended September 30, 1999, were $9,947 as compared to $12,784 for the
three months ended September 30, 1998. Revenues for the nine months ended September 30, 1999, were $32,531 as
compared to $39,493 for the nine months ended September 30, 1998. The revenues generated were from the Beta
Test unit and limited franchise sales.
COST OF GOODS
Cost of goods sold for the three months ended September 30, 1999, were $9,450 as compared to $0.00 for
the same period ending September 30, 1998. Cost of goods sold for the nine months ended September 30, 1999,
were $31,897 as compared to $5,843 for the nine months ended September 30, 1998.
SELLING EXPENSES & ADMINISTRATIVE COSTS
Selling, General and Administrative costs for the three months ended September 30, 1999 were $191,659
as compared to $398,628 for the period ending September 30, 1998. Selling, general and administrative costs for
the nine months ended September 30, 1999 were $861,848 as compared to $734,352 for the nine months ended
September 30, 1998. This increase in costs is attributable to the costs incurred in the development of a larger and
more attractive drive-thru stand-alone unit.
NET PROFIT/LOSS
The Company s net loss per share for the three months ended September 30, 1999 was 5.0 cents as
compared to 12.9 cents per share for the three months ended September 30, 1998. The net loss per share for the
nine months ended September 30, 1999 was 21.9 cents as compared to 23.7 cents for the nine months ended
September 30, 1998. These increases in net loss per share are attributable to the expenses associated with the further
development of the drive-thru unit.
ADDITIONAL CAPITAL
The Company, during the last quarter, raised $132,723 from a private placement consisting of 11% secured
notes, bringing the total raised under this plan to $1,650,295. In addition, $243,125 rolled from a one-year bridge
note, into the 11% Private Placement.
PART II: OTHER INFORMATION
ITEM 5 SUBSEQUENT EVENTS
On October 14, 1999, the Company signed a letter of intent to purchase the assets of Zero s Mr.
Submarine Inc., for a combination of American Kiosk common stock, stock options and cash
payments. Zero s, a hot submarine concept, was established in 1967 in Virginia Beach, VA and currently has
55 stores operating within the chain and 10 more under construction.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits.
Exhibit No. Description
*27 Financial Data Schedule
*Filed as exhibit to this Report.
Reports on Form 8-K.
No reports were filed.
In accordance with Section 12 (g) of the Securities Exchange Act of 1934, the Registrant caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN KIOSK CORPORATION
By: /s/ Richard J. Michael
-------------------------------------------
Richard J. Michael, President
By: /s/ Larry E. Graybill
------------------------------------------
Larry E. Graybill
Vice-President, Chief Financial Officer
and Principal Accounting Officer
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<CASH> $ 51,728
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<COMMON> $ 420
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