U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _______________ to _______________
Commission file number
AMERICANA PUBLISHING, INC.
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
(Exact name of small business issuer as specified in its charter)
COLORADO 84-1453702
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
303 SAN MATEO NE, SUITE 104A, ALBUQUERQUE, NM 87108
---------------------------------------------------
(Address of principal executive offices)
505-265-6121
------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 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 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_____.
APPLICABLE ONLY TO CORPORATE ISSUERS
As of June 30, 1999, there were 3,000,000 shares of common stock outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes X No_____.
<PAGE>
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets
June 30, 1999 (Unaudited) and
December 31, 1998 3
Condensed Statements of Operations
Three and Six months ended June 30, 1999
and June 30, 1998 4
Condensed Statements of Cash Flows
Six months ended June 30, 1999 and
June 30, 1998 (Unaudited) 5
Notes to Condensed Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8 - 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of
Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - Press Releases and other
Exhibits
(b) Reports on Form 8-K
SIGNATURES
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
AMERICANA PUBLISHING, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
June 30, December 31,
1999 1998
(Unaudited) (Audited)
----------- ---------
ASSETS
CURRENT ASSETS:
Cash $ 150,000 $ 667
----------- -----------
Total Current Assets 150,000 667
PROPERTY AND EQUIPMENT
Database and Circulation List 21,377 18,411
Computer Equipment 26,914 14,629
Furniture and Fixtures 4,816 3,944
Software 1,857 --
Web Site Development and Name -
Americana Books 15,603 --
Less: Accumulated Depreciation
and Amortization (13,600) (7,396)
----------- -----------
Total Property and Equipment 56,967 29,588
TOTAL ASSETS $ 206,967 $ 30,255
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note Payable, Bank $ 48,000 $ --
Accounts Payable 3,282 --
Payroll Taxes Payable 529 --
Deferred Federal Income Tax 10,981 2,589
Cash Reserve Account 2,977 --
----------- -----------
Total Liabilities, All Current 65,769 2,589
STOCKHOLDERS' EQUITY
Preferred Stock 20,000,000 Shares, No
Par Value, Authorized, None Issued
Common Stock 100,000,000 Shares
Authorized $.001 Par Value, 2,535,000
& 3,000,000 Issued and Outstanding
for 1998 and 1999, Respectively 3,000 2,535
Paid-In Capital 1,147,925 510,887
Deficit Accumulated During the
Development Stage (1,009,727) (485,756)
----------- -----------
Total Stockholders' Equity 141,198 27,666
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 206,967 $ 30,255
=========== ===========
See Accompanying Notes to Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
AMERICANA PUBLISHING, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Revenues $ 586 $ 3,000 $ 9,909 $ 3,000
Operating Expenses
Salaries and Wages 3,090 -- 3,090 --
Payroll Taxes 261 -- 261 --
Audio Expenses 404 -- 404 --
Bank Charges 200 41 233 44
Compensation Expense 112,503 -- 225,003 --
Consulting Fees 15,247 -- 195,247 --
Credit Card Fees 153 122 280 235
Contributions -- 1,700 -- 1,700
Depreciation and Amortization 3,571 -- 6,204 --
Entertainment 242 -- 242 --
Freight 1,710 -- 1,710 --
Independent Contractors 2,530 -- 2,530 --
Interest Expense 168 -- 168 --
Licenses and Permits 60 -- 410 --
Management Fees 36,000 -- 45,000 --
Office Expense 5,784 400 6,229 400
Postage and Freight 7,038 6,129 13,783 6,129
Printing 8,543 2,664 8,942 3,622
Professional Fees 5,000 1,452 12,224 2,252
Repairs and Maintenance 132 -- 222 --
Telephone Expense 393 -- 393 --
Taxes - Other (50) -- -- --
Travel 2,178 -- 2,913 --
----------- ----------- ----------- -----------
Total Expenses 205,157 12,508 525,488 14,382
Income Tax - Deferred 7,471 -- 8,392 --
----------- ----------- ----------- -----------
Net Income (Loss) $ (212,042) $ (9,508) $ (523,971) $ (11,382)
=========== =========== =========== ===========
Weighted Average Number of
Common Shares Outstanding 2,873,985 1,270,000 2,873,985 1,270,000
Income (Loss) Per Share - Basic $ (.07) $ (.01) $ (.18) $ (.01)
Income (Loss) Per Share - Diluted $ (.07) $ (.01) $ (.18) $ (.01)
Dividends Per Common Share $ -- $ -- $ -- $ --
See Accompanying Notes to Financial Statements.
4
</TABLE>
<PAGE>
AMERICANA PUBLISHING, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Six Months Ended
June 30, June 30,
1999 1998
---- ----
Cash Flows From Operating Activities:
Net Loss $(523,971) $ (11,382)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation 6,204 --
Capital Transactions 398,743 --
Increase in Accounts Payable 6,789 9,223
Increase in Income Taxes Payable 8,392 --
--------- ---------
Total Adjustments 420,128 9,223
Net Cash Used by Operating Activities (103,843) (2,159)
Cash Flows From Financing Activities:
Proceeds From Sale of Common Stock 232,500 --
Proceeds From Borrowings 48,000 --
--------- ---------
Net Cash Provided by Financing Activities 280,500 --
Cash Flows From Investing Activities:
Purchase of Property and Equipment (33,581) --
--------- ---------
Net Cash Used in Investing Activities (33,581) --
Net Increase (Decrease) in Cash 143,076 (2,159)
Cash and Cash Equivalents at Beginning of Period 667 2,159
--------- ---------
Cash and Cash Equivalents at End of Period $ 143,743 $ --
========= =========
Supplemental Disclosures:
Interest Paid $ 168 --
Taxes Paid $ 0 --
See Accompanying Notes to Financial Statements.
5
<PAGE>
AMERICANA PUBLISHING, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1.
The unaudited internal condensed financial statements and related notes have
been prepared by Americana Publishing, Inc. (the "Company"), without audit
pursuant to the rules and regulations of the Securities and Exchange Commission.
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and cash flows at June 30, 1999, and for all periods
presented, have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these condensed financial statements be
read in conjunction with the Company's audited financial statements and notes
thereto for the fiscal year ended December 31, 1998. The results of operations
for the six months ended June 30, 1999 are not necessarily indicative of the
operating results for the full year.
NOTE 2. INCOME TAXES
The Company did not recognize any income tax benefits in 1998 and 1999 for its
current losses as utilization of operating loss carryforwards in the future are
not assured to be realized.
NOTE 3. EARNINGS (LOSS) PER COMMON SHARE
The Company adopted Statement of Financial Accounting Standards No. 128 (SFAS
No. 128) Earnings Per Share, which supersedes APB Opinion No. 15. SFAS No. 128
requires the presentation of earnings per share by all entities that have common
stock or potential common stock, such as options, warrants, and convertible
securities, outstanding that trade in a public market. Basic per share amounts
are computed, generally, by dividing net income or loss by the weighted-average
number of common shares outstanding. Diluted per share amounts assume the
conversion, exercise or issuance of all potential common stock instruments
unless the effect is antidilutive, thereby reducing a loss or increasing the
income per common share. The Company has options outstanding in the amount of
1,950,000 for a three year period ending December 31, 2001. The exercise price
varies between $.10 per share to $.30 per share depending upon when the shares
are purchased. The inclusion of these potential common shares in the calculation
of diluted earning (loss) per share would have an antidilutive effect.
Therefore, basic and diluted earnings (loss) per share are the same.
6
<PAGE>
AMERICANA PUBLISHING, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 4. NOTE PAYABLE
The Company has a $50,000 line of credit established with First Security Bank at
7.5% fixed. The note is collateralized by a $50,000 Certificate of Deposit. As
of June 30, 1999, a total of $48,000 had been borrowed on this line.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
All phases of the Company's operations are subject to influences outside of the
Company's control. Any one, or a combination, of these factors could materially
affect the results of the Company's operations. These factors include
competitive pressures, inflation, trade restrictions, interest rate fluctuations
and other capital market conditions, weather, future and options trading of
paper commodities, and the availability of natural resources and services from
other sources. Forward-looking statements are made by or on behalf of the
Company's knowledge of its business and the environment in which it operated,
but because of the factors listed above, as well as other environmental factors
over which the Company has no control, actual results may differ from those in
the forward-looking statements. Consequently, all of the forward-looking
statements made are qualified in their entirety by these cautionary statements
and there can be no assurance that the actual results or developments
anticipated by the Company will be realized or, even if substantially realized,
that they will have the expected effect on the business and/or operations of the
Company. The revenue earned in the first two years as low due to the fact that
the Company is in a development stage mode. The compensation expense of $285,913
in 1998 represents the value of stock received by George Lovato over the cost of
the stock. The $95,109 of outside consulting services in 1998 includes $92,750
of expense which represents the value of stock received by the remaining four
(4) directors, plus one additional individual, over their cost in the stock. The
printing cost dropped significantly from 1997 to 1998 due to the use of a less
expensive printing method and the use of less expensive paper. The Company did
not own any depreciable assets in 1997 but did purchase assets in 1998, hence
the increase in depreciation expense in 1998 over 1997. Other "operating
expense" of 39,311 and 32,324 for 1998 and 1997 respectfully is comprised of
miscellaneous expense paid by George Lovato for the development of the database
and circulation list.
The first quarter in 1999 includes compensation expense of $112,500. This
represents 25% of the annual FMV of stock options issued to the five directors,
plus $62,500 of forfeited compensation by George Lovato, Jr. This represents
1/4th of the annual Employment Agreement with George Lovato, Jr., which totals
$250,000. The $180,000 in outside consulting expense represents the total FMV of
stock options issued to nonemployees. The increase in management fees of $9,000
is the contractual obligation of $3,000 per month owed to BHCL, which began
January 1, 1999. The increase of $7,224 in professional fees are fees paid to
accountants and attorneys for the audit of Americana and legal advice of the
public registration.
The Company currently has limited internal and external sources of liquidity.
8
<PAGE>
At this time, the Company has no material commitment for capital expenditures.
There are no known trends, events or uncertainties that are expected to have a
material impact on the net sales and income from continuing operations.
Americana Publishing is not subject to seasonal aspects, but by selling books it
is expected that the Christmas Season will be the busiest part of its fiscal
year.
The fiscal year ended December 31, 1998, was marked by a number of events which
in the opinion of management will strengthen the Company and ensure a continuous
growth pattern.
Year 2000 issues result from the inability of computer programs or computerized
equipment to accurately calculate, store or use a date subsequent to December
31, 1999. The erroneous date can be interpreted in a number of different ways;
typically the year 2000 is represented as the year 1900. This could result in a
system failure or miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process transactions, send invoices
or engage in similar normal business transactions. The Company has reviewed the
majority of its primary Information Technology (IT) systems with the vendors
from which the systems were purchased and believes these systems were 2000
compliant as of December 31, 1998. The Company is also reviewing its non-IT
systems (such as technology embedded within its operational equipment) and any
material third-party relationships for year 2000 problems that could affect the
Company's operations. The Company expects to complete this review by mid-1999.
The Company believes the potential impact, if any, of these IT, non-IT or
third-party systems not being Year 2000 compliant should not materially impact
the Company's ability to continue activities. Based on reviews conducted to date
and other preliminary information, costs of addressing potential problems are
not expected to have a material adverse impact on the Company's financial
position, results of operations or cash flows in future periods. Cost to date
has been immaterial. The Company relies on third part internet providers to
conduct its basic operations. Should any third party with which the Company has
a material relationship fail, the impact could be a significant challenge to the
Company's ability to perform its basic operations. An example of such a
challenge would be the inability of customers to access its website. As part of
the above-mentioned review, the Company will address the most reasonably likely
worst-case Year 2000 scenarios and potential costs. The Company will also
develop a Year 2000 contingency plan for unknown events. The Company is
scheduled to have these plans completed by June 1999. Statements in this section
are intended to be and are hereby designated "Year 2000 Readiness Disclosure"
within the meaning of the Year 2000 Information and Readiness Disclosure Act.
Mr. Lovato is the only person dedicated to Y2K compliance matters.
9
<PAGE>
RESULTS OF OPERATIONS
The table below shows (a) the relationship of income and expense items to net
revenues, and (b) the change between comparable prior period and current period,
for the three and six-month periods ended June 30, 1999 and 1998, respectively.
This table should be read in the context of the Company's condensed statements
of income presented elsewhere herein:
<TABLE>
<CAPTION>
Three Six
Months Months
Three Months Six Months Ended Ended
Ended Ended June 30, June 30,
June 30, June 30, 1998 to 1998 to
1999 1998 1999 1998 1999 1999
% % % % % %
--------- ------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues 100.0 100.0 100.0 100.0 (80.4) 230.3
Operating Expenses:
General and
Administrative 35,009.7 416.9 5,303.1 479.4 1,540.2 3,553.7
---------- ------- --------- ------- --------- ---------
Operating Income
(Loss) (34,909.7) (316.9) (5,203.1) (379.4) (2,020.0) (4,529.8)
Net Interest
Expense - - - - - -
---------- ------- --------- ------- --------- ---------
Income (Loss) Before
Income Taxes (34,909.7) (316.9) (5,203.1) (379.4) (2,020.0) (4,529.8)
Federal and State
Income Taxes
(Benefit) 1,274.9 - 84.7 - * *
---------- ------- --------- ------- --------- ---------
Net Income (Loss) (36,184.6) (316.9) (5,287.8) (379.4) (2,130.1) (4,503.5)
========== ======= ========= ======= ========= =========
* Because the data changes from negative to positive, or from positive to
negative, the percentage of change is not meaningful.
</TABLE>
Quarter Ended June 30, 1999 Compared to Quarter Ended June 30, 1998
- -------------------------------------------------------------------
Net revenues decreased by $2,414. During this quarter management was involved in
preparing the necessary paperwork in preparation for taking the Company public.
Therefore, no issue of Americana Corporate Reporter was published and no
advertisements were sold.
10
<PAGE>
Total expenses increased from $12,508 to $205,157. However, of the $205,157,
approximately $125,000 was a non-cash expense having to do with the forgiveness
of salary by George Lovato and the Fair Market Value of stock options issued to
certain directors over the cost. This non-cash expense was charged to
compensation expense and consulting expense.
During this quarter, $36,000 was paid to B. H. Capital and George Lovato for
lease and management expense. A majority of the other costs had to do with the
registration of Americana Publishing, Inc. as a public company.
Six Months Ended June 30, 1999 Compared to the Six Months Ended June 30, 1998
- -----------------------------------------------------------------------------
The revenue increased $6,909 for the six months ended June 30, 1999. The
increase was mainly due to a related party purchasing $8,000 of advertising
space in the first quarter 1999 issue of the Americana Corporate Finance
Reporter.
The expenses increased $511,106. However, approximately $400,000 was a non-cash
expense charged to compensation and consulting fees. This charge resulted from
the forgiveness of salary by George Lovato and the Fair Market Value of stock
options over their cost issued to certain individuals and directors. $45,000 has
been paid to B. H. Capital and George Lovato for lease and management fees. Once
again, a majority of the other expenses related to the cost of the registration
of Americana Publishing, Inc. as a public company.
Liquidity and Capital Resources
- -------------------------------
The Company has historically financed its operations through capital infusion by
Mr. George Lovato, Jr., the Chairman of the Board and Chief Executive Officer.
Mr. Lovato has also paid certain expenses on behalf of the Company from other
business, such as B. H. Capital Limited, of which he is sole owner. Mr. Lovato
has provided office space, complete use of his equipment, facilities, and
personnel free of charge up to March 1st, 1999. The Company as of that date
began to pay B. H. Capital Limited the Corporate Finance Consulting Agreement
dated January 1st, 1999. The Company will be obligated to pay B. H. Capital
Limited a monthly retainer/lease payment of $3,000 per month for continued use
of Mr. Lovato's equipment and facility, along with some personnel.
In the two proceeding years, Americana Publishing lost $485,756 from operations.
Of this amount, $7,396 was depreciation expense, a non-cash expense. The
majority of the loss came from the handling of certain stock transactions
between Americana, the directors and outside consultants. These transactions
resulted in an additional $442,113 of non-cash expense reflected on the income
statement. The balance of the loss from operations, or $36,247, was supplemented
by an increase in payables of $24,752 and proceeds from the sale of common stock
in the amount of $12,162, resulting in a cash balance on December 31, 1998 of
$667.
11
<PAGE>
For the period ended March 31, 1999, the operating loss was $311,099 of which
$2,633 consisted of depreciation expense. A majority of the loss resulted from
the treatment of stock options made available to the five directors and certain
outside consultants which resulted in a non-cash expense of $230,000 reflected
on the income statement. In addition, George Lovato, Jr. forfeited $62,500 of
compensation due him based on the Employment Agreement dated January 1, 1999.
This represents 1/4th of the annual compensation of $250,000 as per the
Employment Agreement. Equipment in the amount of $15,860 was purchased,
primarily computers and office furniture. Taxes payable increased by $921. In
addition, 465,000 shares of common stock were sold at $.50 per share in
February, 1999 for a total of $232,500, resulting in a cash balance of $201,431
on March 31, 1999.
The Company raised the maximum of approximately $232,500 to subsidize future
operations through a private placement under the 504 exemption. These funds are
to be used for:
Circulation Development-20% of proceeds-AMERICANA proposes to expand circulation
from 100,000 to 500,000 by the year 2001. More specifically AMERICANA will
purchase and mine more databases while focusing on selling multi-unit
subscriptions. This will involve printing, postage, and telemarketing
expenses.
Publication Development-10% of proceeds-The AMERICANA CORPORATE FINANCE REPORTER
will be expanded from 16 pages to 32 pages over the next 3 years and convert
from a quarterly publication to a monthly. The AMERICANA CORPORATE FINANCE
REPORTER will require editorial enhancement and design improvements. A
certain amount of editorial research will be required to meet the continuing
needs of the readership. These expenses will include labor, direct mail,
telemarketing, and editorial subcontract fees.
Publishing Company Acquisition Development-20% of proceeds-Various
professionals, such as lawyers and accountants, will be required to examine,
analyze and execute the proposed acquisition. These professional fees will be
allocated from these proceeds.
Working Capital-40% of proceeds-In order to operate the publishing enterprise
certain expenses will be incurred. To support these expenses in addition to
funds derived from revenues, these proceeds will be utilized for general and
administrative and working capital costs.
Cost of Offering an Investor Relations Program-5% of proceeds-Americana proposes
to manage its own investor relations program on an ongoing basis. The Company
does not intend to hire an investor relations firm and no negotiations for
such has taken place. AMERICANA will incur various expenses such as
professional fees, printing, postage, telemarketing, federal and state
offering registration fees, travel, entertainment, and underwriters' fees and
commissions.
12
<PAGE>
Further the company intends to employ an investor relations program. This
will complement the stock trading activities after the company has completed
the public registration process.
Miscellaneous Expenses-5% of proceeds-The aforementioned expenses may vary in
type and size.
The Company does not anticipate the need for any additional financing until
after the end of this fiscal year for this operation. However, should the
Company require additional capital the Company has identified the potential need
for an asset-based credit facility and the registration of an SB-2 with the SEC.
Although the Company has not yet secured a financing commitment from a
commercial financing institution or a letter of intent with an investment
banker/underwriter, the Company remains confident that the financing resources
should be available to meet the Company's future financing needs. There can be
no assurance that favorable financing terms may be available to Americana at the
time financing is desired. Further, poor financial performance may adversely
effect Americana's ability to attract a commercial lending source or investment
banker to underwrite any future financings or stock offering.
Should the Company require the rapid infusion of capital it would consider the
sale of a land asset it owns. This property was given to the Company by Mr.
Lovato in exchange for common stock for the purpose to either sell or to
leverage and secure future borrowings for the Company. The value of the land is
estimated at $25,000. Although the Company does not anticipate the need for such
a transaction, the land remains available as a potentially liquidatable asset.
The Company does not anticipate the need for any additional financing until
after December 31, 1999, the end of its fiscal year.
The Company will require future financing in various forms. The Company proposes
to finance working capital timing differences with an asset-based line of
credit. Capital improvements should be financed by intermediate-term debt. All
future expansion and acquisition should be financed by a secondary equity
offering. The Company is not in possession of any commercial bank commitment
letters or a letter of intent from a capable underwriter at this time.
The Company is somewhat dependent upon the successful completion of its Form 10
filing with the SEC and active stock trading activity on NASD's Bulletin Board.
The Company proposes to utilize the common stock to acquire other sponsored book
13
<PAGE>
publishing companies and other business enterprises as previously described.
Therefore, active trading of the stock will be important to the principals of
the target companies. Americana is very dependent on the active trading of its
stock. The Company plans on using the stock to acquire publishing companies. If
the stock is not actively traded, the ability of Americana to acquire these
companies would be seriously jeopardized. Without financing, it would be
difficult to cover working capital requirements and future capital expenditures.
No assurance can be given that the stock will be actively traded or that
Americana will be able to find financing.
The Company's assets equal $30,255 and $244,246 with equity of $27,666 and
$240,736 as of December 31, 1998 (audited) and the stub period March 31, 1999
(unaudited) respectively. The only liability consisted of a deferred tax payable
of $2,589 as of December 31, 1998 and $3,510 as of March 31, 1999. Therefore,
the asset to equity ratio is basically 1:1 for both periods. The Company's total
revenues since inception to December 31, 1998 equals $13,819 and as of the
unaudited stub period of March 31, 1999, $23,142. In 1999, the Company projects
ad revenue per issue of the AMERICANA CORPORATE FINANCE REPORTER to approximate
$10,000 to $45,000 or more.
CAPITAL EXPENDITURES
The Company anticipates the need for additional computer equipment to handle the
integrated website. This is estimated at $10,000 for 1999. These websites are
designed to produce an additional source of revenue as a result of the digital
book catalogue and other product sales. The Company has retained the services of
Mark Whitman to develop and administer the website at a cost of $2,500 per month
for a period of one year. Mr. Whitman also has been issued a 100,000 common
stock option agreement under the same terms and conditions as the board of
directors. The Company also added additional computer equipment and office
furniture approximating $8,000. The Company successfully raised $235,000 through
its recently completed private placement. This capital resource is the source of
funds for the described expenditures.
As part of the integrated publishing concept, the Company intends to acquire a
books on cassette production company, state of the art digital recording studio,
a heat set web press, and a book binding company in order to lower overall
production costs of book reprint and conversion of book titles to audio books.
ACQUISITION
As part of the "Integrated Publishing Plan" the Company anticipates it will
acquire small sponsored book publishing companies and list their book titles on
its website as well as list book titles they do not own, that complement and
enhance the consumer appeal of the catalogue overall. These enterprises will
14
<PAGE>
account for the majority of revenue of the Company in the future. The Company
has identified hundreds of potential targets. These acquisitions will be
transacted with the use of the Company's common stock. Furthermore, the Company
intends to acquire a small book-on-cassette production company, state of the art
digital recording studio, heat set web press company, and book binding company.
These enterprises will vertically integrate production and control quality of
audio conversion and book re-prints as well as consolidate profitability. The
Company proposes the following method and approach:
ACCOUNTING ASPECTS OF BUSINESS COMBINATIONS
Business combination occurs when a company and one or more businesses are
brought together into one accounting entity. These combinations are accounted
for under either the purchase or pooling of interest methods. As Americana
acquires the various companies it has targeted, a decision will have to be made
on a case-by-case basis as to which method is appropriate and in the best
interest of the shareholders.
Management is knowledgeable concerning the various tax consequences of
acquisitions and will strive at all times to ensure the interest of the
shareholders is best served.
Part II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
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
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 150,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 150,000
<PP&E> 70,567
<DEPRECIATION> 13,600
<TOTAL-ASSETS> 206,967
<CURRENT-LIABILITIES> 65,769
<BONDS> 0
0
0
<COMMON> 3,000
<OTHER-SE> 138,198
<TOTAL-LIABILITY-AND-EQUITY> 206,967
<SALES> 9,909
<TOTAL-REVENUES> 9,909
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 525,320
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (168)
<INCOME-PRETAX> (515,579)
<INCOME-TAX> (8,392)
<INCOME-CONTINUING> (523,971)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (523,971)
<EPS-BASIC> (0.18)
<EPS-DILUTED> (0.18)
</TABLE>
