SECURITIES AND EXHANGE COMMISSION
Washington, D.C. 20546
FORM 10-SB/A#2
GENERAL FORM FOR REGISTRATION OF SECURITIES
Small Business Issuers
Under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934
Americana Publishing, Inc.
------------------------------------------------
(Name of Small Business Issuer in its Charter)
Colorado 84-1453702
- --------------------------- ------------------------------
(State or other jurisdiction (IRS Employer Identification Number)
Corporation or organization)
303 San Mateo NE, Suite 104A, Albuquerque, New Mexico 87108
- ----------------------------------------------------- -----
(505) 265-6121
(Issuer's Telephone Number)
Securities to be registered under Section12(b) of the Act:
Title of each class to be so registered Name of each exchange on which
Each class is to be registered:
N/A N/A
--------------------------- --------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of Class)
<PAGE>
Americana Publishing, Inc.
FORM 10-SB
TABLE OF CONTENTS
PART I
Item 1 Description of Business
Item 2 Management's Discussion and Analysis of Current Financial
Condition and Plan of Operation
Item 3 Description of Property
Item 4 Security Ownership of Certain Beneficial Owners & Management
Item 5 Directors and Executive Officers
Item 6 Executive Compensation
Item 7 Certain Relationship and Related Transactions
PART II
Item 1 Legal Proceedings
Item 2 Market Price of and Dividends on the Registrants Common
Equity and Other Shareholder Matter
Item 3 Changes in and Disagreements with Accountants
Item 4 Recent Sales of Unregistered Securities
Item 5 Indemnification of Directors and Officers
Item 6 Financial Statements
PART III
Item 1 Index to Exhibits
Item 2 Description of Exhibits
<PAGE>
Item 1 - Description of Business
AMERICANA PUBLISHING, INC. (hereinafter referred to as "AMERICANA") was
incorporated under the laws of the State of Colorado on April 17, 1997. Prior to
that date AMERICANA operated as a division of B. H. Capital Limited for
approximately 18 months as a development stage enterprise. During the
development stage various activities such as publication design research,
industry and competition research, demographic research, and the formation of
the integrated publishing concept were achieved.
There are two large web-based booksellers. They are amazon.com and Barnes and
Noble.com. These two web-based booksellers comprise the majority of internet
book sales. This is a relatively new industry and the precise percentage of
total internet books sales is or can not be determined. However, these two
companies combined clearly dominate this segment of E-commerce. These companies
have substantially more capital available for marketing and advertising and are
more highly developed with respect to consumer name identification. These two
competitors have established themselves in the E-commerce marketplace over the
past four years. Price of books has been the main or primary thrust of the
competition between amazon.com and BarnesandNoble.com. The quality of books
availability of or in inventory and quick delivery of books to customers has not
been emphasized. Further, the design of these competitor bookseller websites
emphasizes the sale of the top fifty sellers in each book category. Therefore,
the consumer has difficulty in utilizing these website search engines to easily
locate the hundreds of other books titles listed in each category.
americanabooks.com proposes to eliminate this discriminatory search engine
feature and allow for easy access to all book titles in each category.
americanabooks.com proposes to also focus on simplifying the book delivery
process by having the publisher drop ship the book(s) to the consumer. The
agreement requires publisher to dropship their product upon receipt of an
americanabooks.com order. americanabooks.com proposes not to warehouse books in
the same manner as others such as the other website booksellers currently do.
Should a publisher be unable to fulfill americanabooks.com orders as the
agreement requires then americanabooks.com may not choose to do business with
that publisher. This procedure avoids having the book shipped from the publisher
to americanabooks.com at the publishers expense and then shipped from
americanabooks.com central warehouse to the consumer. americanabooks.com
proposes at its website once the order is made by the customer to fax or e-mail
a preprinted shipping label with the customers shipping information and book
title(s) identified. The publisher then receives this preprinted label, fills
the order and ships the order directly to the customer at the customer's
expense. (When ordering the customer pays for shipping and handling.) Therefore,
the publisher may be able to lower shipping expenses. americanabooks.com,
therefore, should not incur substantial overhead associated with fulfillment
costs such as warehouse space, labor, inventory handling and carrying costs.
This process also reduces time taken to ship products to the customer. The
publisher by virtue of the publisher agreement is obligated to fill orders
within twenty-four hours and report available inventory twice per month. The
website software, now under development is being designed so that the customer
will not be able to confirm an order of a book(s) if they are not readily
available. The website system design proposes to notify the customer that they
will receive a message by e-mail when the book is available for purchase. This
customer ordering feature should reduce the customer waiting for orders and or
left to wonder when an order may arrive.
<PAGE>
Management feels that the website design, the order fulfillment and drop ship
features are competitive advantages and unique. Management has been unable to
identify any of these features in the amazon.com and BarnesandNoble.com websites
or other booksellers websites proposing to offer these order fulfillment
components. The research activities comprised approximately 50 hours of Mr.
Lovato's time for each of past two fiscal years. Currently, there are two full
time employees and one part time employee presently working for Americana.
The integrated publishing concept incorporates acquiring various publishing
enterprises through use of AMERICANA common stock after the company has received
approval from the SEC concerning the filing of its Form 10-SB and filed a
15c2-11 with the NASD and trading of the Americana stock has been permitted to
commence on the OTC Bulletin Board. Then selected business periodicals and books
are converted to a condensed or, more rarely, an unabridged reading onto audio
books and redistributed through AMERICANA'S Website digital catalogue along with
thousands of non-owned books by other publishing companies and music. Other
distribution vehicles include printed catalogues, the company's own publication
(the AMERICANA CORPORATE FINANCE REPORTER).
The AMERICANA concept sets forth a plan to acquire small business press and
entertainment book publishers, since there are hundreds of small book publishers
with a multitude of titles that are unable to cost-effectively distribute their
works. AMERICANA proposes to acquire, re-mine, and/or reprint these titles
concomitant with converting them to audio books and redirecting them into
AMERICANA'S marketing and distribution process. To complement this integrated
plan, AMERICANA may also consider acquiring companies with the following
capabilities: audio-book production, state-of-the-art digital recording,
bookbinding, and heat-set web printing.
The various acquisitions are proposed to be accomplished through the exchange of
AMERICANA common stock. These transactions should, by their structure, enhance
the balance sheet while not depleting cash reserves. Thus an anticipated
positive effect on the balance sheet should occur from the added value created
as a result of each acquisition transaction. AMERICANA intends to acquire the
titles, author contracts, and distribution contracts of each book publisher with
their respective authors and not the core going concern. Therefore no
liabilities should migrate onto the AMERICANA balance sheet, only the printed
book title assets. As a result of the consolidation in acquisition structure,
AMERICANA may be able to realize improvement in certain economies of scale
efficiencies.
<PAGE>
The Americana Corporate Finance Reporter competes with publications such as
Barrons, Inc., Forbes, Fortune Venture, The Wall Street Journal as well as small
local and regional business publications. This competition as a whole is better
recognized by the public, is better established in the marketplace and has
substantially greater capital resources, marketing, sales, distribution and
readership.
The Americana Corporate Finance Reporter, however, currently offers finance and
management solutions as its main editorial content along with identifying
specific resources such as finance companies and consulting companies that offer
services that can aid a small business. The editorial content focuses not so
much on reporting up to the minute news such as the Wall Street Journal or
Barrons, Inc., but providing informative from an advisory perspective.
Management feels this editorial perspective is a competitive advantage for the
Americana Corporate Finance Reporter.
The AMERICANA CORPORATE FINANCE REPORTER, as a periodical, is a logical
self-fulfilling source to advertise and promote these printed works, audio
books, and music.
Although Americana has not executed any agreements that would indicate any
acquisitions are in process, the plan proposes that any acquisitions in the
future may be accomplished through the exchange of AMERICANA publicly trading
and/or restricted common stock. These transactions should, by their structure,
enhance the balance sheet while not depleting cash reserves. Thus, a positive
effect on the balance sheet could occur from the added value created as a result
of each acquisition transaction. Each potential acquisition may dilute investors
ownership through the issuance of additional common stock of Americana. There
can be no assurance that these acquisitions will favorably affect Americana or
its shareholders. AMERICANA proposes to attempt to acquire the titles, author
contracts, and distribution contracts of each book publisher with their
respective authors and not the core going concern. However, this may be decided
on a case by case basis. Americana proposes to evaluate each potential
acquisition under the following criteria. The publisher must have at least fifty
book titles. Each of these titles must have sold at least 5,000 copies within
the first two years after publication, and are continuing to sell at least 250
copies annually. At least forty percent of these books must not exceed two
hundred and twenty five pages in length so that they may be converted to audio
(more lengthy books are not suitable). The value of each book may range from
$500 to $2,500 depending on sales history. Through the due diligence process
performed by Americana's management a total value may be determined and an offer
to purchase these books will be made by utilizing common stock. It is estimated
that based on an average book, value of $1,500 multiplied by 50 books and
divided by a $2.00 Americana stock value that each acquisition could result in
the issuance of 37,500 shares of Americana's common stock. There can be no
assurance that Americana's common stock will reach a market price of $2.00, a
lower market price could result in greater understand dilution. Further, there
can be no assurance that the trading history and market liquidity will be
significant enough to attract publishers. As a result of the consolidation in
acquisition structure, AMERICANA should be able to realize improvement in
various economies of scale efficiencies.
<PAGE>
As a result of the anticipated consolidation of several smaller companies into
one larger company, Americana should be able to realize improvement in various
economies of scale efficiencies. The improvement in various economies of scale
efficiencies refers to the anticipated ability of Americana to effect cost
savings in such purchases as paper, bookbinding, printing cost, advertising
cost, etc., due to the larger purchases of these items. There should also be a
more efficient use of personnel since fewer people will be involved in certain
functions, such as accounting, advertising, etc. (i.e., instead of personnel
from 10 small companies handling advertising, one or two employees of Americana
will handle this function.)
Americana will begin actively seeking publisher acquisitions after October 1st,
1999. Americana proposes to utilize the Books In Print and Literary Marketplace
databases to screen publishers that fit the profile set forth above. Preliminary
research through the use of these databases which are over 1,000 potential
targets.
Americana proposes to consider acquisitions where the book titles are free of
any encumbrance. Therefore, no liabilities will migrate onto the AMERICANA
balance sheet, only the printed book title assets. Small book publishers are
generally not known to carry large amounts of long-term debt. Usually the debt
is short term and related more directly to accounts receivable due from book
distributors. There can be no assurance that every potential acquisition target
is going to meet this criteria. However, in exploratory discussions with five
small publishers discussed previously, Americana feels that there may be
publishers meeting this criteria that may demonstrate interest in an acquisition
structure of this nature.
Americana has identified an audio book production company, Sunset Productions,
as a potential acquisition target. At this time, no written offer to purchase or
agreement has been signed or discussed by either party. Americana has discussed
with the principal of Sunset Productions the possibility of an acquisition
involving an exchange of Americana common stock. There can be no assurance,
however, that these discussions may result in an acquisition and further no
specific terms have been established. The Principal of Sunset Productions is a
Mr. Jerome J. Ruther, a shareholder of Americana.
Americana has identified a state-of-the-art digital recording studio, Wagner
Recording Studios, as an additional potential acquisition target. At this time
no written offer to purchase or agreement has been agreed upon by either party.
Americana has discussed with the principal, Mr. John Wagner, the possibility of
an acquisition involving an exchange of Americana common stock and interest of
such has been discussed. There can be no assurance, however, that these
discussions may result in an acquisition and further no specific terms have been
established.
Insofar as a heat-set web printing company in concerned, Americana has not
identified a specific acquisition target. There can be no assurance that a
suitable target may be identified or that a transaction involving Americana's
common stock may be attractive to such a company.
<PAGE>
General Business
The Company's books and records are kept at its executive offices at 303 San
Mateo NE, Suite 104A, Albuquerque, New Mexico 87108. Each prospective investor
or his/her authorized representative may review these documents at any
reasonable time. The Company's officers will answer any questions raised by
prospective investors or their representatives in connection with this Offering
and will provide them with any additional related information available to such
officers, or such additional related information that can be acquired without
unreasonable effort or expense.
The Company completed two successful printings of the AMERICANA CORPORATE
FINANCE REPORTER in 1997 and 1998. Various reader polls resulted in design and
editorial changes to better meet the demands of the readership. The major design
change allowed for the AMERICANA CORPORATE FINANCE REPORTER to increase from
9"x12" to 11 3/4"x17" and to utilize newsprint stock paper, and later uncoated
webpress stock with the latest issue of the magazine in 1999. The addition of a
business book review section in the magazine by Dr. David Poling increased the
entertainment value of the publication.
Americana has focussed mainly on in all of the aspects associated with the
development of a digital website and the continuing development of a
publication. This mainly has centered around design elements of the website and
editorial development for the magazine. Further development of Americana's
integrated publishing concept has also been a focus of management.
AMERICANA has spent six months developing a retail bookselling website to
complement the company's publishing activities. Although the website is still
under development and approximately only 50% complete, the continuing
development include continuing refinement of highly customized, technologically
advanced promotional systems exclusively for this website, or "digital
catalogue." The website is being developed modularly, each module being
developed to completion before proceeding to subsequent modules. Complete at
this time are the design, programming, and database associated with entering and
storing publisher and product information. The website currently provides
publishers with information about the americanabooks.com website and they are
provided with a facility for beginning an account and adding books to the
catalogue. Layout design is expected to be completed by on or about June 15th,
1999 and all supporting programming is expected to be completed on or about July
15th, 1999. The costs for completion are estimated at $15,000, which includes
Mr. Whitman's professional time and one other programmers time. These
promotional programs mimic hand-selling techniques while stimulating customer
patronage and increasing visits to the website. The term "hand selling" is a
term of art in the book selling industry to mean a more personalized and
informational approach to selling books. These promotional programs are "Digital
Dollars", "Audio Samples", "Books By The Pound" and "Discounts by Americana".
These programs coupled with the marketing promotions, which include; Affiliate
Programs, Opt-in Advertising, Search Engine Promotions and Newsletter
Distribution are being designed to work together to encourage the customer to
purchase from americanabooks.com. This digital catalogue, still under
development, is designed by Americana management with the small publisher in
mind. Thus, the company anticipates to promote thousands of titles it does not
own through promotions tailored for the small book publishers. The digital
catalogue proposes to eliminate many of the discriminatory search engine and key
word search features incorporated in other large bookseller websites. This
allows the customer access to all books listed by title, publisher, author,
category, or key word search. AMERICANA will load only books inventoried by the
publisher, current books in circulation, popular books, and books that
demonstrate good sales history. All books listed in the catalogue, not just top
sellers, will be easily located.
<PAGE>
The digital catalogue features several unique software enhancements that reduce
the need for human intervention while reducing operating and other fulfillment
costs. Among other things, this includes the elimination of transshipment of
book orders. The book publisher, through an advanced electronic connection,
ships directly to the purchaser of the product, after the Company confirms
receipt of payment. Americana will utilize UPS software to preprint customer
information on a preprinted UPS label, which in turn is to be e-mailed to the
publisher. Americana is the first company to interface its own e-commerce
website exclusively with this shipping company and utilize e-mail in this
manner. This alone speeds the delivery of the product to the purchaser while
eliminating transshipment and fulfillment costs.
Further, the Company has developed the capability to have audio publications
read to the customer as well as to download audio books directly to the
customer's computer. From this point the customer can choose to store the audio
file on their hard drive or print a CD from a CD burner, a relatively high
priced accessory not owned by the majority of home computer users, connected to
their computer, as is the case with audio books mentioned previously. The
Company does currently have the technology to allow website users to hear audio
books being "read" in real time from the website. The hardware requirement for
the user would be a sound card and speakers. Most consumer grade computer
packages sold at the retail level are equipped with the required equipment. The
Company also has the capability to download books to a client computer. Once
downloaded the audio book may be "played" from the consumer's computer. In order
for the consumer to produce a CD copy of the downloaded book the consumer must
have a CD "burner". This optional computer accessory is relatively high priced
and it is assumed that a majority of home users do not currently have a CD
"burner" at their disposal. This same capability is expected to be provided for
music recordings from the same website. The instant music download proposes to
feature small and independent record labels and artists attempting to market
their latest releases. The customer will be able to access this catalogue
section by the URL americanasongs.com or a combined music and audio books
version of the catalogue by the URL americanamedia.com. These multiple URL's may
enhance search engine placement and recognition. The Company intends to add the
music sales product to the website by year-end. No research has been conducted
by Americana to determine the percentage of CD burners currently owned by home
computer users as to if this equipment may be more affordable priced in the
future. This equipment requirement may adversely effect Americana's audio
download concept.
In effect, these integrated business operations will allow the Company to
rapidly convert their own book titles to audio, reprint books, and print its own
periodical publications. Furthermore, the Company will contract the audio
conversions and book reprints from other publishing company's products it does
not own but lists on the Company's digital catalogue. This aspect of the
Company's business plan allows the Company to control all aspects of
reproduction and distribution while capturing profits from the individual
activities.
<PAGE>
Website Development
To date there have been over 200 responses from publishers via telephone, e-mail
and written as a result of send direct mail to over 14,000 nationwide. Of the
200, forty have executed agreements with Americana and another 20 have indicated
verbally they will execute the Publisher Agreement within the next 30 days.
Internet marketing has become the new distribution channel of choice for many
retailers and service providers. AMERICANA proposes to develop websites that
will perform several different functions while presenting a compellingly diverse
access format.
This unique website structure offers five dynamic options for the user to:
1. Purchase a single back issue copy of the AMERICANA CORPORATE FINANCE
REPORTER at $4.00.
2. Subscribe for 1-2-3 years to the magazine.
3. Purchase books, music and videos from AMERICANA'S website digital
catalogue, americanabooks.com, or promoted or reviewed in the
magazine.
4. Purchase and download directly to the customer's computer specific
titles that are converted to audio books, CD titles, and music.
5. Order and pay for re-released, republished, and reformatted books from
backlists.
All products listed above are secured by credit card purchases. AMERICANA has a
Visa-Master Card merchant account in place.
This website proposes to incorporate the most current website tools enhancing
simple user access. This website proposes also to incorporate the most
up-to-date marketing methods to facilitate worldwide user awareness. AMERICANA
proposes to market this website through the AMERICANA CORPORATE FINANCE REPORTER
and directly to the existing controlled circulation base. The controlled
circulation consists of over 100,000 individuals that meet certain demographic
requirements (see Demographic Development) Americana developed this circulation
base through purchasing various databases from third parties. These databases
were then screened to fit the demographic as described herein and added to the
circulation base. These subscribers receive the magazine free of charge.
Americana, however, encourages paid circulation through or by running various
ads in the magazine. Currently, there are 50 paid subscribers. This method of
circulation development is considered controlled circulation. AMERICANA also
proposes to increase awareness of the AMERICANA CORPORATE FINANCE REPORTER and
americanabooks.com through direct mail, radio, and cable television
advertisements. Americana proposes to advertise on AM talk radio programs;
purchase consumer databases that identify internet book buyers and forward
direct mail, purchase 30 second cable television ad spots. The total budget for
these activities should approximate $25,000 by year-end 1999. As a result of
these activities and continuing patronage and visits to the website, AMERICANA
proposes to develop a customer/visitor database. This proposes to be an
invaluable marketing tool for future use in other marketing activities. Any
other product or service advertised in the magazine will available for purchase
through this website. AMERICANA expects to act as a bridge to expand sales for
its advertisers in the magazine and publisher's books on the website.
<PAGE>
AMERICANA has contracted these services to Mark Whitman as the principal website
developer and marketing consultant. Mr. Whitman is the owner/operator of WebStuf
Internet Publications. WebStuf was established in 1995 and has produced
commercial websites continuously from that time forward. Mr. Whitman has been
the primary developer of all websites created by WebStuf. The variety of
websites created by Mr. Whitman range from small to very large. He has developed
E-commerce websites, a large-scale community website, and a wide variety of
commercial informational sites. Mr. Whitman has also maintained an ongoing
educational program, learned from many of the leaders in the fields of website
design, graphic design, Internet marketing, and Internet programming. The
following development and marketing plan outlines various options available to
AMERICANA in this endeavor.
AMERICANA'S Digital Catalogue - americanabooks.com
AMERICANA'S website, still under development, is designed to complement
publishing activities. This bookseller website better meets the demands of the
small publisher. This is accomplished through better use of technology, more
prominent display of publisher and author profiles, customized and proprietary
hand-selling techniques, elimination of discriminatory search engine or key word
search features and more customer-friendly promotional and pricing programs. The
small publisher's book titles are more easily located and do not compete against
millions of titles, but rather in the tens of thousands. When trying to and
access books on the two major competitor websites, generally only the top fifty
best sellers in each book category are prominently listed. All other book titles
require specific title names or authors. Americana is currently designing a
feature whereby all books in a specific category can be accessed alphabetically.
Further, if the consumer knows the author or publisher name but not the title
then all titles from that author or publisher will be listed. Yet if the
consumer knows only one word in the title, yet knows the category of the book it
is listed in all the titles with that specific word in the title will be listed
in that category.
Americana is approximately 50% complete with the site and expects this database
software module to be complete by June 15th. The other two major website
booksellers do not offer these specific search engine features. Also,
prominently listing only the top fifty sellers in a category discriminates
against all other book titles in a category. This is the principal reason the
Company feels "elimination of key word search engines." Americana proposes to
offer more ways to locate books and more information on each book then the two
major bookseller websites.
Other booksellers download the entire Books in Print directory. Some of these
titles may be in print but out of stock. AMERICANA is prepared to list only
books that are in stock by a publisher or where inventory is active. This will
eliminate unfulfilled and delayed orders. AMERICANA will also cooperate with the
small publisher on order fulfillment by avoiding transshipment to the AMERICANA
warehouse. Instead AMERICANA will drop-ship from the publisher to the customer
after AMERICANA electronically notifies shipper and publisher and collects the
customer's payment. This saves unnecessary fulfillment costs and speeds delivery
to the customer.
<PAGE>
AMERICANA has developed unique features within the digital catalogue to
stimulate purchase and encourage returns and traffic to the website. Upon entry
onto the website the customer can enter the book category, publisher, author,
book title or key word he/she seeks. Upon entering this information the customer
is then led to the specific section of the catalogue. Or if the customer wants
to peruse the catalogue, then he/she can click and simply turn catalogue page by
catalogue page just like an ordinary printed catalogue.
Each book cover is digitized onto the catalogue page. The book cover along with
publisher, author, and price is displayed with 5-7 other book covers on the same
page. Once the customer identifies a book, he/she clicks on the digitized cover
and immediately a second page appears displaying a book summary, publisher
profile, author profile, and reviews from AMERICANA and other book review
sources. Should the customer want to read a sample chapter, then they simply
click to turn that page to read a sample chapter or have it read to them in real
time through a streaming audio program. This audio feature is available when the
book has been converted to an audio book. Further, if the customer wants to
purchase the audio book they may choose to download the audio file directly to
their computer after they engage in the purchase procedure. This same capability
will be provided for music recordings from the same website. The Company intends
to add the music sales product to the website by year-end 1999.
To enhance the appeal of the Americanabooks.com website and to promote music in
the Americana catalogue, the website will also feature Americana Radio. Working
much like a radio station, the Americana Broadcast continuous webcast will
feature disc jockeys playing songs from the Americana play list. These songs
will be drawn exclusively from the Americana music catalogue. As each customer
accesses the Americanabooks.com home page, a default radio channel will "stream"
to his or her computer and play on its speakers in real time, without any delay
for downloading. The customer may click an Americana Broadcast "button" on the
website to select from a variety of channels, each featuring a specific musical
format. These formats include original recordings in the genres of adult
contemporary, popular music, rock, country and western, instrumental, etc. Far
from being like the Muzak concept, Americana Broadcast is a legitimate
promotional outlet for recording artists on independent labels who often find it
impossible to get their music played on broadcast radio. To enhance the appeal
of the americanabooks.com website and to promote music in the Americana
catalogue, the website will also feature Americana Radio. Working much like a
radio station, the Americana Broadcast continuous webcast will feature
pre-recorded disc jockey announcements playing 30 second samples of songs from
the americanasongs.com catalogue. As each customer accesses the
americanabooks.com home page, a default radio channel will "stream" to his or
her computer and play on its speaker in real time, without any delay for
downloading. The customer may click an Americana Broadcast "button" on the
website to select from a variety of channels, each featuring a specific musical
format. These formats include original recordings in the genres of adult
contemporary, popular music, rock, country and western, instrumental, etc. Far
from being like the Muzak concept, Americana Broadcast is a legitimate
promotional outlet for recording artists on independent labels who often find it
impossible to get their music played on broadcast radio. Technology-wise,
Americana has the capability to produce Americana radio, however, this phase of
our development is projected to commence on or about October 1st. Estimated
costs for development should not exceed $2,000.00. This phase should be
completed on or about December 31, 1999. On a random basic it is proposed that
song samples will be selected to play and on an intermediate basis an announcer
or disc jockey will announce who was playing and how that specific artist
song(s) or CD can be purchased from the Americana digital catalogue. The artist
or record label will agree to have promotional sound bites played on the site at
no cost to them or Americana.
<PAGE>
Every few songs, the webcast will include advertising in the form of 15-second,
30-second, and 60-second commercials for a variety of products suited to the
website's demographics. These ads serve two functions, generating additional
revenue for Americana and promoting books, audio books, magazines, music, and so
on from the Americana catalogue.
In effect, these integrated business operations will allow the Company to
rapidly convert their own book titles to audio, reprint books, and print its own
periodical publications. Furthermore, the Company will contract the audio
conversions and book reprints from other publishing company's products it does
not own but lists on the Company's digital catalogue. This aspect of the
Company's business plan allows the Company to control all aspects of
reproduction and distribution while capturing profits from the individual
activities.
There are several pricing and promotional incentives. These various pricing
programs are voluntary and are subject to selection by the publisher on each
individual book. The publisher may choose to select one, a combination, or all
of the pricing programs and may do so on a book by book basis. The publishers
goal is to sell books, therefore, these pricing programs are designed to aid in
that effort. There can be no assurance that publishers will find these pricing
programs attractive and therefore they may be subject to change. They are
designed to increase the sale of books, prevent the customer escaping to a
competitive bookseller site for a lower price, and encourage the customer to
return to americanabooks.com. Although the site is under development and
currently no book orders are being taken, it is anticipated that the full site
will be open to the public on or about August 15th, 1999. The various pricing
programs, they are voluntary and chosen by the publisher and specific to each
book when the publisher enters the book information. The promotional programs
should be available for viewing at that time. These promotional programs are as
follows:
More Money for Your Books
The standard discount is 45%. Americana proposes to pay publishers 5% more than
the two major competitors. The reason for this incentive is to attract
publishers to enter complete book information onto the website. This maybe
subject to change if market conditions warrant.
Price Program 1, Cover Price: Americana pays publisher 60% of title when
title is sold for cover price. No discounts apply. Digital Dollars and
Free Books incentives do apply to Customer purchase of these titles.
Americana will also pay 60% if Digital Dollars and other discount
programs do not exceed 20% off cover price.
<PAGE>
Programs to Compete on Price with other Online Booksellers
Price Program 2, Standard Discounts and Bidding: Americana pays Publisher
40% of cover price for each title in this program. Americana
establishes price in AMERICANA book catalogue for title. AMERICANA 's
exclusive "Bid on Books" feature enables the customer to make a bid on
the book. Bid option only appears if customer exits book page without
adding title to shopping cart. A bid floor will be established for
each title to prevent underselling by the competition. The rationale
for bidding is to prevent customer from escaping to another Web
bookseller for a better price. Digital dollars still apply at
pre-specified price breaks. AMERICANA reserves the right to sell any
title at any price.
Price Program 3, Books by the Lb.: Publisher designates slow-selling
backlist titles. These titles are literally sold "by the pound" from a
special catalogue page at AMERICANA books.com. Price per pound is
determined by Publisher. Publisher must provide weight of all
Publishers' books listed in Books by the Lb. catalogue. Books by the
Lb. titles may also be eligible for Free Book program (see below).
Price Program 4, Free Book: Customer receives a free book when he/she
purchases from AMERICANA more than $65 (actual sale) in books from
Publisher's titles. This program is offered as an incentive to
encourage Customer to buy multiple titles from Publisher. Publisher is
responsible for identifying books for Free Book program on Book
Profile page. Books identified by Publisher for Free Book program are
to be considered promotional expense by Publisher. These titles may
also be listed in Books by the Lb.
Digital Dollars: Digital Dollars are a customer incentive supported by
AMERICANA, not Publisher. Customers accrue $2 Digital Dollars upon
purchasing $30 in books, $4 for $50 in books, and so forth. The
customer can carry over Digital Dollars from one purchase to the next,
but they expire in 30 days. Digital Dollars are not applicable to
Books by the Free Book program. To obtain Digital Dollars, Customer
must complete a demographic survey.
Price Program 5: Hot Sellers. Hot sellers will be featured in special
promotions by AMERICANA. This program is designed to penetrate the
market with new releases by combining a shared, deep discount by
Publisher and AMERICANA with featured presentation. AMERICANA will
purchase from the publisher those books meeting specified sales
criteria (high volume sellers). Publisher sells books to AMERICANA for
35% of cover price. AMERICANA offers Customer automatic 50% off cover
price. Digital Dollars can not be applied to purchasing a Hot Seller.
AMERICANA guarantees no books will be returned to publisher. AMERICANA
can in any manner dispose, sell, or discount any books it purchases
from Publisher.
<PAGE>
Americanabooks.com will be able to compete on price where price is the sole
concern of the customer. Alternatively, the number of book titles in the
catalogue is far less than the competition. The marketing strategy emphasizes
that quality books are listed in the catalogue free of search feature
impediments. This more personal approach to design pricing and promotional
programs sets americanabooks.com apart from other bookseller websites. The
overall strategy as to how the website is designed, marketed and promoted is the
product of over 100 years of combined publishing and book retailing experience
on the part of management and various consultants to the company. AMERICANA
feels less is better to do justice to the hand-selling techniques necessary for
maximizing every opportunity to sell books. Americanabooks.com selling strategy
is, "you can't do justice to selling 8 million book titles." Therefore
americanabooks.com advertising stresses, "Only the best on americanabooks.com".
AMERICANA CORPORATE FINANCE REPORTER - Unique Bridge of Information on the
Internet Highway Gathering Tolls in Both Directions
The AMERICANA CORPORATE FINANCE REPORTER connects both the corporate finance
industry to American enterprise and vice versa. That is why this publication is
a "unique bridge of information on the internet highway gathering tolls in both
directions."
The AMERICANA CORPORATE FINANCE REPORTER regularly discusses issues affecting
the availability of credit and capital, from whom it is available, and proper
application of various financing mechanisms. In other words, it emphasizes the
"how" of capital formation while directing readers to the "who." As a result of
the publication, business executives of all disciplines now have access to
important real-time information that can affect decisions of expansion
financing, merger and acquisition, refinancing, or general capitalization of a
going concern. The AMERICANA CORPORATE FINANCE REPORTER is a vital resource for
executives who are directly involved and regularly affected by the rapidly
expanding and diverse corporate finance industry. Subjects covered are:
* Asset-based lending
* Long-term financing
* Working capital financing
* Economic conditions and factors affecting commercial financing
* New methods in financial statement presentation
* Legal issues affecting commercial finance
* Dynamic structural techniques used to finance business
* Government regulations affecting the commercial finance industry
* New financing sources
* New financing products
* The cost of money
* Mergers and acquisitions
* Movers and shakers in the commercial finance industry
* Bankruptcy as a financing tool
* General management concepts that improve financing efficiencies
<PAGE>
Demographic Development
During the formative months following inception of AMERICANA, the process to
develop a demographic profile for the AMERICANA CORPORATE FINANCE REPORTER
encompassed an informal survey conducted by Americana through telephone and
direct mail reaching over 1,000 corporate finance industry professionals and
business owners attempting to identify the needs of the corporate finance
industry and American enterprise at large. The survey ascertained the needs of
information and access by each of these demographic segments from the other. The
informal survey concluded that businesses under $50 million in annual sales
wanted access to sources and specific methods of finance. Alternatively, the
corporate finance industry desired a cost-effective medium to reach American
enterprise as previously profiled.
A demographic profile was developed as a result of the aforementioned survey.
The profile is as follows:
Age 45 years
Gender 75% male 25% female
Education 85% College Graduate
47% Post Graduate
Income $138,000 average household
$600,000 average net worth
Position 75% Top/Executive Management
35% CEO's
64% Partners
Readers per Copy 3.08 x
The following represents specific industry and professional readership:
* CEOs, CFOs, COOs of private and public companies ranging in size
between $1 million and $50 million in annual sales.
* Entrepreneurs and managers of private and public companies ranging in
size between $250,000 and $25 million in annual sales.
* Brokers of securities, loans, and real estate.
* Bankers and alternative lending professionals.
* Lawyers specializing in bankruptcy, transactional, real estate,
general corporate, business litigation, banking, tax, and contract
law.
* Business and finance consultants specialists that have developed a
practice learning toward commercial clientele.
* Venture capital professionals who focus on business development
investments.
<PAGE>
* Investment bankers in all disciplines of securities, loans, and real
estate.
* Sophisticated investors with a net worth greater than $5 million.
Current circulation has been developed from scores of different databases that
have been researched and purchased over the past five years. These databases are
analyzed and then specific profile information such as annual sales, number of
employees, type of enterprise, etc. is applied. From this analysis, specific
listings are mined and extracted. This data mining process has been a very
dynamic and useful tool for AMERICANA. The Americana Corporate Finance Reporter
purchased several databases. When the databases were purchased they were
purchased with respect to only acquiring names that meet the Americana Corporate
Finance Reporter demographic profile. This process of purchasing spceific names
that meet specific demographic profiles is defined, as a term of art is "data
mining". Currently, the circulation database consists of over 100,000 listings
and is updated from over 20 master database resources containing over 10,000,000
individual listings on a monthly basis.
The current circulation reaches across the United States, Mexico, and Canada
with high concentration of distribution in major metropolitan cities. This type
of geographic and demographic distribution is considered in the publishing
industry to be controlled circulation.
Circulation Expansion
Controlled circulation development and data mining will continue in the same
manner the primary database was developed. The goal is to reach controlled
circulation of 250,000 . Contained development of p aid circulation will be
accomplished through outsourcing circulation sales. More specifically,
multi-copy subscription sales will be emphasized. There are scores of
circulation sales companies in the U.S. and Canada. To execute this activity
successfully, AMERICAN will select the best company offering the most
competitive commission terms. Paid circulation is expected to increase. However,
the Company intends to expend $5,000 to $10,000 on this effort over the next two
years and precise paid circulation cannot be accurately estimated.
<PAGE>
This process will require the subscription sales contractor to contact corporate
finance industry and general business associations and large employee-based
enterprises. For example, through contacting an association, the contractor
would sell a 150-multi-unit or -copy magazine subscription to a single
organization. This subscription would be deeply discounted. However, the cost of
sales would be considerably less than selling 150 subscriptions individually. An
added benefit to the organization would be to include the issues as part of the
membership fee. Memberships could conceivably convert to value-added sales for
the association as the member receives something tangible with payment of the
member dues. Alternatively, associations may raise the cost of dues as a money
making proposition when including the magazine issue. AMERICANA will cooperate
with these associations to utilize the magazine to develop membership through
customized subscription discount structure.
Large employee-based enterprises such as banks and other financial institutions
are excellent targets for single subscription, multi-unit sales. Large
organizations typically subscribe to business publications and order multiple
copies. This is due not only to the number of employees but the number of
locations where such material is viewed by staff as well as customers.
Discounting methods apply to the body of subscribers as well.
Examples of such associations are:
Corporate Finance Industry--National, State and Local Associations
* Banking
* Commercial Finance
* Leasing
* Investment Banking
* Mortgage Banking
* Bar Associations
* Accountants
* Venture Capital
* Investment Corporations
* Real Estate Appraisers
* Real Estate Sales/Brokers
* Asset Based Lenders
General Business Readership--National, State, and Local Associations
* Service
* Government Contractors
* Manufacturing
* Computer Services
* Retailers
* Construction
* Agriculture/Livestock
* Insurance
* Financial Services
* Automotive
* Travel and Leisure
* Hotel/Hospitality
* Food and Beverage
* Food Processing/Packing
* Professional services
* Transportation
<PAGE>
Advertising Sales
The large number of listings in the existing database under the corporate
finance category are the most logical prospects for advertising sales. It is
rare that a publication can match its demographic to ad sales development. The
AMERICANA CORPORATE FINANCE REPORTER has that unique feature. As the integrated
publishing plan suggests, these financing resources want a cost-effective medium
that can reach businesses matching the AMERICANA CORPORATE FINANCE REPORTER
reader demographic. Ad sales can be generated from advertising in each AMERICANA
CORPORATE FINANCE REPORTER issue. The AMERICANA demographic includes 20,000
finance and banking organizations. These leads can then be turned over to the ad
sales division. Also, direct mail can be utilized to solicit ad sales from this
demographic group. AMERICANA has successfully sold advertising approximating
over $22,000 in the first three issues of the AMERICANA CORPORATE FINANCE
REPORTER. AMERICANA has developed a superior-quality media sales kit that it
incorporates into its currents sales activities. These rates have been sold at
the published rates to advertisers with the exception of B. H. Capital Limited
and North American Loan Brokers who have paid approximately half of the
advertising rates.
On the other side of the demographic, public companies may desire to advertise
completion of offerings, investor relations announcements, improvement of stock
trading, pricing, and/or general tombstone advertisements. Part of the AMERICANA
demographic includes over 12,000 public companies. This segment is
well-developed prospecting list for a professional ad sales staff.
Advertising rates are calculated on a per-column-inch basis. Current per column
inch rates are:
BLACK AND WHITE
(per column inch)
Contract Rate
- -------- ----
Open $139.50
50 inches 118.50
100 inches 115.20
200 inches 111.60
500 inches 109.20
1,000 inches contact an account executive
COLOR
2nd color add $300.00
3rd color add $525.00
4th color add $750.00
PREMIUM POSITIONS
(full page only)
Page 3 add $900.00
Inside back cover add $900.00
Back cover add $1,200.00
A column inch in the AMERICANA CORPORATE FINANCE REPORTER is 2 3/8" x 1" deep.
Page Size: 11 3/8" x 17"
Image size: 10 1/4" x 13"
<PAGE>
The terms for payment are 50% of the total cost of the ad down and the balance
due when the issue is printed. For multi-issue advertising contracts, 25% of the
total contract is required upon signature of the contract and full payment for
each ad when each issue is printed.
The other prospective advertisers are:
* Accountants
* Long-distance providers
* Lawyers
* Financial printers
* Office equipment suppliers
* Banks
* Brokerage houses
* Leasing companies
* Non-regulated lenders
* Real estate companies
* Hotels/airlines
* Car rental companies
* Cellular phone companies
* Pager companies
* Overnight mail services
* Courier services
* United State Post Office
* Business software companies
* Telephone equipment companies
* Marketing companies
* Bookkeeping companies
* Consultants
* Office furniture companies
* Computer companies
* Internet suppliers
* Business colleges
* Seminar providers
* Business book publishers
* Temporary personnel services
* Travel agencies
* Commercial finance associations
* Appraisers
* Convention planners
The AMERICANA CORPORATE FINANCE REPORTER will range from 16-32 pages in length.
Advertising will account for 40% to 65% of the printed space, depending upon the
level reached by ad sales.
Other considerations are the quality of the advertisers. No advertising will be
accepted if the company or individual is financially impaired with a poor credit
rating and a negative reputation within the industry. Only one advertiser of
each type will advertise in each issue such as one loan broker will be allowed
to advertise; North American Loan Brokers of Houston, Texas. The one merchant
banking and corporate finance consulting firm will be B. H. Capital Limited.
These are currently the only - advertising limitations.
<PAGE>
Publication Specifics
The AMERICANA CORPORATE FINANCE REPORTER regularly features specific sections in
each magazine. These magazine sections are formatted consistently from issue to
issue. The subject matter is consistent and specific to the heading. Each issue
emphasizes these subject formats and topics.
The sections are:
Publishers Column
This lead column is written by George Lovato, Jr. Advice, opinions and
observations will focus on current topics affecting finance for American
enterprise. Topics have included banking and finance trends, tips on adding
value to a business, and management systems that enhance a business.
Credit and Capital Index
Major Concern: where can a business go to identify the cost of money besides
listing at prime rate? Yet prime rate can be a misleading cost of commercial
funds. Depending on the type of financing, the current rate may vary. Our Credit
and Capital Index listed on the front page publishes cost of funds depending
upon the type of financing. An average cost of money from five different
financing sources will be displayed. From time to time, the lowest rate from a
specific source, such as leasing, is presented featuring the source. The finance
source pays for this front-page advantage.
Book Review
This section is written by the renowned and well-published Dr. David Poling. In
each issue, business book reviews are emphasized. In addition, a small
percentage of review books are of the fiction/non-fiction entertainment
category. Further, the AMERICANA website will allow subscribers to directly
purchase books reviewed here every issue.
Grapevine
This category section emphasizes news releases and personality profiles that are
relevant to the corporate finance industry. Recently completed financing,
professional personnel changes in the finance industry, as well as new finance
products, are highlighted.
<PAGE>
Item 2 - Management's Discussion and Analysis or Plan of Operation
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.
At this time, the Company has no material commitment for capital expenditures.
<PAGE>
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.
<PAGE>
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.
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:
1) 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.
2) 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.
3) 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.
4) 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.
<PAGE>
5) 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.
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.
6) 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.
The Company has not yet secured a financing commitment for future needs, from a
commercial financing institution or a letter of intent with an investment
banker/underwriter. 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. T he 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
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.
<PAGE>
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
$1 0,000 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
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:
<PAGE>
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.
Item 3 - Description of Property
The Company's principal officers are located at 303 San Mateo NE, Suite 104A,
Albuquerque, NM 87108. This leased location encompasses approximately 2,000
square feet. The Lease is between B. H. Capital Limited and the Company at a
cost of $3,000 per month and also provides complete use of B. H. Capital
Limited's up-to-date computing, data management, printing, duplicating and
direct mail processing equipment. This lease/retainer agreement began January 1,
1999 and is for a term of three years. The Company intends to expand its
operations and has identified a location near its current offices, which it may
lease additional office and new warehouse space when the company can best afford
the added operating expense. The Company owns certain assets that were
contributed to the Company by Mr. George Lovato, Jr. in exchange for stock. (See
Exhibit attached herewith) Americana has identified a building near its current
offices. This office space is currently under renovation and specific lease its
terms have not been discussed; however, the owners have orally indicated space
may be available. There can be no assurance that at the time the space is
available that Americana can afford the lease terms offered.
Item 4 - Security Ownership of Certain Beneficial Owners & Management
The following table sets forth, the stock ownership of each person known by the
Company to be a beneficial owner of five percent (5%) or more of the Company's
equity securities, each Director individually and all, Directors and Officers of
the Company as a group. Each person has sole voting and investment power with
respect to the Shares shown unless otherwise indicated.
Shares
Name and Address of Beneficially
Beneficial Owner Title of Class Amount Owned Owned % of Class
---------------- -------------- ------------ ----------------
George Lovato, Jr. Common 2,004,000 66.7
12310 Claremont NE
Albuquerque, NM 87112
Don White Common 210,000 6.7
8106 Devonwood
Houston, TX 77070
Marjorie N. Lovato Common 50,000 1.7
6951 Forest Hills Dr., NE
Albuquerque, NM 87109
Jay Simon Common 50,000 1.7
5528 E. Cheryl Drive
Paradise Valley, AZ 85253
David Poling Common 105,000 2.0
3616 San Rio Place NW
Albuquerque, NM 87107
Lowell Fixler Common 253,500 8.5
1081 Sheridan Rd.
Highland Park, IL 60035
Total Shares of Officers 2,672,500 85%
and Directors as a Group
<PAGE>
Item 5 - Directors and Executive Officers
Name Age Position # of Shares
- ---- --- -------- -----------
George Lovato, Jr.* 42 CEO/Chairman/President 2,004,000
Don White* 46 Director/Vice President 210,000
David Poling* 70 Director/Vice President 105,000
Robert Cochnar* 57 Advisor to the Board/Consultant 0
Jay Simon 40 Director/Secretary/Treasurer 50,000
Marjorie Lovato 65 Director 50,000
*These persons may be deemed "promoters" of the Company as that term is defined
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder. Jay Simon is Secretary/Treasurer of AMERICANA.
Officers and Directors
All Directors of the Company will hold office until the next annual meeting of
shareholders of the Company or until their successors are duly elected and
qualified.
The Officers of the Company are elected by the Board of Directors at the first
meeting after each annual meeting of the Company's shareholders, and hold office
until their death, or until they shall resign or have been removed.
George Lovato, Jr.
Mr. Lovato is founder and has been a Director and Chairman and President since
inception, and has extensive management experience with startup companies,
corporate finance, computer system and software development, international trade
and relations, strategic planning, and sales and marketing development over the
last 15 years. He has been employed by and associated with companies engaged in
business management, public relations, advertising, corporate finance,
agriculture, automotive industry consulting, travel, auto rental and leasing,
and insurance.
Mr. Lovato was educated in New Mexico and has founded and developed several
nationally recognized companies ranging from local financial firms such as CEO
and President of TRVLSYS, Inc. to international travel and
communications-related businesses. His expertise in marketing, management and
corporate finance, in addition to numerous international contacts, coupled with
his service on the Governor Business Advisory Board of New Mexico, offer a
diverse alternative resource not often found in the marketplace. His
accomplishments have been featured in several national publications and books
such as Venture, Inc., The Wall Street Journal, New Mexico Business Journal, The
New Mexico Experience. He devotes substantially full time necessary to the
management and general affairs of AMERICANA. Mr. Lovato is the principal and
sole owner of B. H. Capital Limited, a successful 14 year old Merchant Banking
and corporate finance consulting enterprise, located in Albuquerque, New Mexico
with branch offices in Denver, Colorado and Houston, Texas.
Don White
Mr. White is a Director/Vice President of Americana, and is a CPA in Houston,
Texas, and has operated a successful accounting practice for over 20 years. Mr.
White was educated at Sam Houston State University and received his degree in
accounting in 1972. Mr. White has broad expertise in the development of market
value financial statements. He currently advises the company on general
financial matters and corporate development and oversees the audit and
acquisition committee. Mr. White will fulfill the duties and responsibilities of
the Chief Financial Officer of AMERICANA when it requires his expertise. He
devotes 20 to 40 hours per month to oversee the audit and acquisition committees
and general management affairs of AMERICANA. Mr. White has served on the board
as director and vice president since inception of the company, April 17,1997 and
serve on the board for a period of one year until otherwise re-elected at the
next annual shareholders meeting.
Dr. David Poling
Chairman, Sierra Publishing Group. Author of a dozen books; nationally
syndicated columnist, 600 newspapers. As New York publisher headed The Christian
Herald, half million monthly circulation. Also, President of the Family
Bookshelf, largest religious book club in the U.S. Poling, a Presbyterian
clergyman educated at College of Wooster, Ohio and Yale University. Special
interests: ecumenical, inter-faith expressions of life. He devotes 20 to 40
hours per month to oversee the acquisition committee and general management
affairs of AMERICANA and is also Director/Vice President of AMERICANA. Dr.
Poling has served on the board as director and vice president since inception of
the company, April 17,1997 and serve on the board for a period of one year until
otherwise re-elected at the next annual shareholders meeting.
<PAGE>
Jay Simon
Mr. Simon is currently employed as Director/Syncor oversees the Caribbean, Latin
America and South Africa of Syncor International Corporation, one of the worlds
largest nuclear pharmaceutical companies. His duties with Syncor International
Corporation involve international business development. Mr. Simon advises the
management on corporate finance matters and international circulation and
acquisition development and is Secretary/Treasurer and Director of AMERICANA.
Mr. Simon has served on the board as director and secretary/treasurer since
inception of the company, April 17,1997 and serve on the board for a period of
one year until otherwise re-elected at the next annual shareholders meeting.
Marjorie N. Lovato
Mother of the chairman, Mrs. Lovato is a Director, and has vast experience in
business administration with General Dynamics Corporation and consumer retail
store management as Retail Supervisor at the J.C. Penny Corporation. She has
worked in management for major aerospace corporations during her business
career. Mrs. Lovato advises the chairman in general business matters and
circulation development. Mrs. Lovato has served on the board as director since
inception of the company, April 17,1997 and serve on the board for a period of
one year until otherwise re-elected at the next annual shareholders meeting.
Advisor to the Board of Directors is Robert Cochnar
Sierra Publishing, Inc.'s president and CEO, is a publishing executive who has
edited newspapers in California (including the San Francisco Chronicle, the San
Jose Mercury News, and The Oakland Tribune) and South Carolina and is former
publisher of the World Almanac. He has been vice president and editorial
director of Newspaper Enterprise Association, New York, one of the country's
largest newspaper syndicates, a Scripps Howard subsidiary. Mr. Cochnar provides
design and production services on the AMERICANA CORPORATE FINANCE REPORTER in
exchange for corporate finance, marketing, and management consulting services
that B. H. Capital Limited/Mr. Lovato provides to Sierra Publishing. Mr. Cochnar
has served as advisor to the board of directors since inception.
Item 6 - Executive Compensation
On January 1, 1999, the Company entered into an employment agreement with its
chairman and majority stockholder. Under the terms of the one year agreement,
which shall be automatically be renewed for a period of three years provided
that either party has not elected to terminate the agreement as provided for
therein, the employee shall receive a salary of $250,000 per year or 5% of gross
revenue of the Company, whichever is greater. Mr. Lovato will not receive any
back pay from Americana and Americana is not responsible for such. The Company
may not terminate the agreement for any reason as it relates to the employee's
disability, illness or incapacity. Should the employee die during the term of
employment, the Company shall pay the employee's estate $500,000 in fifty
monthly installments of $10,000. Subject to certain events, including the sale
of substantially all of the Company's assets to a single purchaser and
bankruptcy, among others, the Company may terminate the agreement upon 90 days
written notice and pay the employee $500,000 in twelve consecutive monthly
installments. With cause, the Company may terminate the agreement with twelve
months written notice. During the notice period, the employee shall be paid full
compensation and, receive a severance allowance of $250,000 in twelve
consecutive monthly installments beginning on the date of termination. Without
cause, the employee may terminate employment upon twelve months written notice
to the Company. Directors of Americana do not currently receive any form of cash
compensation for their participation in Americana's activities.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
--------------------------
LONG TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Rest- Secur- All
Name Annual ricted ities Other
And Compen Stock Underlying LTIP Compensa
Principal Salary Bonus sation Award(s) Options/ payouts tion
Position Year ($) ($) ($) ($) SAR(#) ($) ($)
-------- ---- --- --- --- --- ------ --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George Lovato 1997 0 0 0 1,950 0 0 0
CEO/Director 1998 0 0 0 285,913 0 0 0
Jay Simon 1997 0 0 0 0 0 0 0
Sec/Treasurer/Director 1998 0 0 0 8,750 0 0 0
David Poling 1997 0 0 0 0 0 0 0
Vice President/Director 1998 0 0 0 17,500 0 0 0
Marjorie Lovato 1997 0 0 0 0 0 0 0
Director 1998 0 0 0 8,750 0 0 0
Don White 1997 0 0 0 0 0 0 0
Vice President/Director 1998 0 0 0 52,500 0 0 0
</TABLE>
Item 7 - Certain Relationships and Related Transactions
AMERICANA has executed a Corporate Finance Consulting Agreement with B. H.
Capital Limited as of January 1, 1999. This agreement calls for among other
things for a 1% success fee to be paid by AMERICANA to B. H. Capital Limited of
the gross amount of financing for a period of five years. This transaction was
approved by the board of directors and was considered to be within fair
standards which would be offered to or by any third party in an arms length
transaction.
AMERICANA will also pay B. H. Capital Limited a $3,000.00 monthly facility use
fee for use of B. H. Capital Limited's office, personnel, and facilities for a
period of five years.
The Directors of AMERICANA have each been issued stock option agreements dated
January 1, 1999 that allows for the purchase of 300,000 shares of stock over a
period of three years. Should the purchase be exercised by December 31, 1999,
the cost per share is $.10 cents; by December 31, 2000, $.20 cents; and by
December 31, 2001, $.30 cents. The directors may purchase all or a portion of
the shares at any time in any of the denomination described therein. Directors
also are allowed out-of-pocket expenses reimbursements of up to $400.00 per
meeting. Stock option agreements dated January 1, 1999, have been issued to each
Sarah Moyers and Robert Cochnar whereby 100,000 shares may be purchased over the
next three years under the same terms and conditions as the directors stock
option agreements allow for inclusive of the additional purchase of stock as a
poison pill caveat for 100,000 shares each.
<PAGE>
Mr. Lovato contributed all of the assets of AMERICANA and provided services and
use of the B. H. Capital Limited facility and paid certain cash expenses on
behalf of AMERICANA for a period of eighteen months in exchange for common stock
in AMERICANA. Mr. Lovato provided a total of $71,309 in cash and equipment. In
addition, he provided $287,863 worth of services and received 2,000,000 shares
covering the period from inception to December 31, 1998.
A poison pill is also incorporated into the option agreement, whereby all the
directors may purchase 300,000 additional shares for $1.00 should any of the
following occur:
a) The sale of substantially all of the Company's assets to a single
purchaser or group of associated purchasers; or
b) The purchase of substantially all of the Company's issued and
outstanding stock in an effort to take the Company Private; or
c) The attempt by an individual or associated group of individuals
or corporation or entity to purchase stock in the Company for the
purposes of a hostile take over; or
d) The sale, exchange, or other disposition, in one transaction of
the majority of the Company's outstanding corporate shares; or
e) The Company's decision to terminate its business and liquidate
its assets; or
f) The merger or consolidation of the Company with another company
where by the directors of the Company as a whole are no longer
majority shareholders.
AMERICANA will attempt to hire additional personnel, which may include Don White
a director and Vice President of AMERICANA and this employment agreement may be
similar to that of Mr. Lovato's.
Common Stock
The Company is authorized to issue 100,000,000 shares of common stock at .001
per value. The holders of each share are entitled to one vote for each share
held, and are entitled to dividends when and as declared by the Board of
Directors. At March 31, 1999 common shares issued and outstanding totaled
3,000,000.
<PAGE>
Preferred Stock
The Company is authorized to issue 20,000,000 shares of no par value per share
preferred stock, which may be issued in classes or series with various rights
and designation by the Board of Directors. No shares were issued and outstanding
as of March 31, 1999. Each share of preferred stock is entitled to dividends
when and if declared by the Board of Directors.
Part II
Item 1 - Legal Proceedings
The Company not aware of any legal proceedings threatened or contemplated
against any of its officers or directors, respectively, in their capacity as
such. In addition, the Company is not a party to any pending legal proceedings.
The Company is not aware of any legal proceedings pending, threatened or
contemplated against any officer or directors, presently, in their capacities as
such.
Item 2 - Market Price of and Dividends on the Registrants Common Equity and
Other Shareholder Matters
There is no public trading market for the Company's Common Stock. The Company
intends to apply to have the Common Stock traded on the OTC Bulletin Board. No
assurance can be given that such application will be approved and, if approved,
that an active trading market for the Common Stock will be established or
maintained.
There are outstanding options, shares of common stock, however, they may not be
exercised until 90 days after Americana stock is listed on the OTC Bulletin
Board.
As of the date hereof, there are 465,000 shares of Common Stock that could be
sold pursuant to Rule 144 under the Securities Act of 1933, as amended.
As of March 31st, 1999 there were 24 holders of record of the Company's Common
Stock, and the number of beneficial holders was approximately 7.
The Company has approximately twenty-four (24) shareholders.
The Company has not paid and does not anticipate to pay dividends in the
foreseeable future.
Item 3 - Changes in and Disagreements with Accountants
None.
Item 4 - Recent Sales of Unregistered Securities
As of March 31, 1999, the Company has 3,000,000 shares of its common stock
issued and outstanding, of which shares were issued in transactions exempt by
reason of Section 4(2) of the Securities Act of 1933, as amended, and were
issued in transactions exempt by reason of Rule 504 of Regulation and
promulgated pursuant to Section 3(b) of the Securities Act of 1933, as amended.
<PAGE>
As of December 31, 1998, in connection with its formation, the Company issued a
total of 2,535,000 at the par value of $.001 for a total consideration of
$510,887 . The issuance was exempt by reason of Section 4(2) of the Securities
Act of 1933, as amended.
On February 10, 1999, the Company issued a Confidential Private Offering
Memorandum pursuant to Rule 504 of Regulation D of the Securities Act of 1933,
as amended, for 465,000 shares of $.001 par value common stock at $.50 per
share. The offering was totally subscribed in the total amount of $232,500. As
of May 31, 1999, $226,250 had been received.
<TABLE>
<CAPTION>
Issue No. of Shares
Date Title Shares Issued to Consideration Amount
---- ----- ------ --------- ------------- ------
<S> <C> <C> <C> <C> <C>
February 12, 1999 Common 10,000 Don White Purchase $5,000
February 12, 1999 Common 45,000 David Poling Purchase $22,500
February 12, 1999 Common 20,000 Max A. Sklower Purchase $10,000
February 12, 1999 Common 10,000 Debra Ruther Purchase $5,000
February 12, 1999 Common 4,000 Jean Beth Ruther Purchase $2,000
February 12, 1999 Common 4,000 David Lewis Ruther Purchase $2,000
February 12, 1999 Common 63,000 Jerry & Barbara Ruther Purchase $31,500
February 12, 1999 Common 34,000 Gerald R. Anderson Purchase $17,000
February 12, 1999 Common 5,000 Mark Lounsbury Purchase $2,500
February 12, 1999 Common 6,000 Thomas & Judith Rau Purchase $3,000
February 12, 1999 Common 5,500 Jerry Hall Purchase $2,750
February 15, 2999 Common 253,500 Lowell S. Fixler Purchase $126,750
February 15, 1999 Common 4,000 George Lovato, Jr. Purchase $2,000
</TABLE>
Item 5 - Indemnification of Directors and Officers
The Articles of Incorporation of the Company provide that the company shall:
Pursuant to the Colorado Business Corporation Act and the Colorado Articles of
Incorporation and By-laws, officers and directors of the Company (and former
officers and directors are entitled to indemnification from the Company to the
full extent permitted by law. The Company's Articles of Incorporation and
By-laws generally provide for such indemnification for claims arising out of
acts or omissions of the Company's officers and directors in their capacity as
such, undertaken in good faith and in a manner reasonably believed to be in, or
not opposed to the best interests of the Company and with respect to any
criminal action or proceeding, had no reasonable cause to believe that his/her
conduct was unlawful. The conditions and extent of indemnification are set forth
in the Articles of Incorporation and By-laws of the Company. Insofar, as
indemnificati8on for liabilities arising under the Securities of 1933, as
amended may be permitted to officers and directors or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and is therefore unenforceable.
<PAGE>
Item 6 - Financial Statements
INDEX TO FINANCIAL STATEMENTS
Independent Auditor's Report
FINANCIAL STATEMENTS
Balance Sheet
Statement of Income (Loss)
Statement of Changes in Stockholder's Equity
Statement of Cash Flows
Notes to Financial Statements
<PAGE>
Independent Auditor's Report
To the Board of Directors
Americana Publishing, Inc.
(A Development Stage Company)
Albuquerque, New Mexico
We have audited the accompanying balance sheet of Americana Publishing, Inc. as
of December 31, 1998 and 1997, and the related statements of income (loss),
changes in stockholders' equity and cash flows for the one year period ended
December 31, 1998 and the period April 17, 1997 (inception) through December 31,
1997. 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 audit.
We conducted our audit 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 audit provides 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 Americana Publishing, Inc. as
of December 31, 1998 and 1997 and the results of its operations and cash flows
for the one year period ending December 31, 1998 and the period April 17, 1997
(inception) through December 31, 1997in conformity with generally accepted
accounting principles.
/s/ Blomstrom & Co., P.C.
- -------------------------
Houston, TX
March 10, 1999
<PAGE>
<TABLE>
<CAPTION>
Americana Publishing, Inc.
(A Development Stage Company)
Balance Sheet
December 31,
ASSETS March 31, 1999
1998 1997 Unaudited
----------- ----------- -----------
Current Assets
<S> <C> <C> <C>
Cash $ 667 $ 2,159 $ 201,431
Property and Equipment
Database and Circulation List 18,411 18,411
Computer Equipment 14,629 18,777
Furniture and Fixtures 3,944 11,102
Web Site Development and Name - Americanna Books 4,554
Less: Accumulated depreciation and amortization (7,396) (10,029)
----------- ----------- -----------
Total Property and Equipment 29,588 -- 42,815
----------- ----------- -----------
TOTAL ASSETS $ 30,255 $ 2,159 $ 244,246
=========== =========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Deferred Federal Income Taxes $ 2,589 $ 3,510
Accounts Payable to Related Party $ 22,163
----------- ----------- -----------
Total Liabilities, All Current 2,589 22,163 3,510
Stockholder's 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, 1,270,000 & 3,000,000
Issued and Outstanding for 1998, 1997 & 1999 Respectively $ 2,535 $ 1,270 $ 3,000
Paid-In Capital 510,887 33,402 1,035,422
Deficit Accumulated During the Development Stage (485,756) (54,676) (797,686)
----------- ----------- -----------
27,666 $ (20,004) $ 240,736
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 30,255 $ 2,159 $ 244,246
=========== =========== ===========
See Accompanying Notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Americana Publishing, Inc.
(A Development Stage Company)
Statement of Income (Loss)
For the Periods
Inception
Inception Three Months Ended April 17, 1997 to
April 17, 1997 to Year Ended March 31, 1999 March 31, 1998
December 31,1997 December 31, 1998 (Unaudited) (Unaudited)
---------------- ----------------- ----------- -----------
Revenues
<S> <C> <C> <C> <C>
Publishing Fees $ 4,745 $ 9,074 $ 9,323 $ 23,142
Expenses
Compensation Expense -- 285,913 112,500 398,413
Outside Consulting Services 13,471 95,109 180,000 288,580
Printing 11,460 3,622 400 15,482
Postage & Freight 2,166 6,214 6,745 15,125
Depreciation -- 7,396 2,633 10,029
Management Fees -- -- 9,000 9,000
Professional Fees -- -- 7,224 7,224
Other Operating Expenses 32,324 39,311 1,830 73,465
----------- ----------- ----------- -----------
Total Expenses $ 59,421 $ 437,565 $ 320,332 $ 817,318
Income (Loss) Before Income Taxes (54,676) (428,491) (311,009) (794,176)
Provision for Income Taxes (2,589) (921) (3,510)
----------- ----------- ----------- -----------
Net Loss $ (54,676) $ (431,080) $ (311,930) $ (797,686)
=========== =========== =========== ===========
Basic and Diluted Loss Per Share $ (0.04) $ (0.33) $ (0.11) $ (0.53)
=========== =========== =========== ===========
Weight Average Shares Outstanding 1,270,000 1,325,452 2,788,167 1,499,685
=========== =========== =========== ===========
See Accompanying Notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Americana Publishing, Inc.
(A Development Stage Company)
Statement of Cash Flows
Inception
Inception Three Months Ended April 17, 1997 to
April 17, 1997 to Year Ended March 31, 1999 March 31, 1999
December 31, 1997 December 31, 1998 (Unaudited) (Unaudited)
----------------- ----------------- -------------- -----------------
Cash Flows From Operating Activities:
<S> <C> <C> <C> <C>
Net Loss $ (54,676) $(431,080) $(311,930) $(797,686)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation 7,396 2,633 10,029
Capital Transactions 27,450 414,663 292,500 734,613
Increase in Accounts Payable 22,163 22,163
Increase in Income Taxes Payable 2,589 921 3,510
--------- --------- --------- ---------
Total Adjustments 49,613 424,648 296,054 770,315
Net Cash Used by Operating Activities (5,063) (6,432) (15,876) (27,371)
Cash Flows From Financing Activities:
Proceeds From Sale of Common Stock 7,222 4,940 232,500 244,662
--------- --------- --------- ---------
Net Cash Provided by Financing Activities 7,222 4,940 232,500 244,662
Cash Flows From Investing Activities
Purchase of Property and Equipment -- -- (15,860) (15,860)
--------- --------- --------- ---------
Net Cash Used in Investing Activities -- -- (15,860) (15,860)
Net Increase (Decrease) in Cash 2,159 (1,492) 200,764 201,431
Cash and Cash Equivalents at Beginning of Period -- 2,159 667 --
--------- --------- --------- ---------
Cash and Cash Equivalents at End of Period $ 2,159 $ 667 $ 201,431 $ 201,431
========= ========= ========= =========
Supplemental Disclosures:
Interest Paid -0- -0- -0-
Taxes Paid -0- -0- -0-
Non-Cash Transaction
Contribution of property and equipment in exchange
for common stock 36,984 36,984
Forgiveness of accounts payable in exchange for
common stock 22,163 22,163
See Accompanying Notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Americana Publishing, Inc.
(A Development Stage Company)
Statement of Changes in Stockholder's Equity
For the Period April 17, 1997 (inception)
Through March 31, 1999
Deficit Accumulated
Common Paid-In During the
Stock Capital Development Stage Total
----------- ----------- ----------------- -----------
<S> <C> <C> <C>
Stock Issued on May 1, 1997
1,000,000 Shares to Majority
Stockholder in Exchange for
$7,222 in Cash and Publishing
and Internet Distribution Expertise $ 1,000 $ 6,222 $ 7,222
Stock Issued on May 1, 1997
270,000 Shares to Others in
Exchange for Services Rendered 270 1,680 $ 1,950
Contributed Services 25,500 $ 25,500
Deficit Accumulated During the
Period April 17, 1997 (inception)
through December 31, 1997 $ (54,676) (54,676)
----------- ----------- ----------- -----------
Balance December 31, 1997 $ 1,270 $ 33,402 $ (54,676) $ (20,004)
=========== =========== =========== ===========
Stock Issued on December 15, 1998
1,000,000 Shares to Majority
Stockholder in Exchange for $4,940
in Cash, Forgiveness of Accounts
Payable Debt of $22,163,
Contribution of Property,
Equipment of $36,984 and Consulting Services 1,000 349,000 350,000
Stock Issued on December 15, 1998
265,000 Shares to Others in Exchange
for Services Rendered 265 92,485 92,750
Contributed Capital 36,000 36,000
Deficit Accumulated During the
Year Ended December 31, 1998 (431,080) (431,080)
----------- ----------- ----------- -----------
Balance December 31, 1998 $ 2,535 $ 510,887 $ (485,756) $ 27,666
=========== =========== =========== ===========
Stock Issued During February and March
1999 Through a Private Offering
Memorandum 465,000 Shares (Unaudited) 465 232,035 232,500
Contributed Capital 62,500
Deficit Accumulated During the Three
Months Ended March 31, 1999
(Unaudited) (311,930) (311,930)
Stock Options 230,000 230,000
----------- ----------- ----------- -----------
Balance March 31, 1999 (Unaudited) $ 3,000 $ 1,035,422 $ (797,686) $ 240,736
=========== =========== =========== ===========
See Accompanying Notes
</TABLE>
<PAGE>
Americana Publishing, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information pertaining to the three months ended March 31, 1999 is unaudited)
Note 1: Summary of Significant Accounting Policies
Background and Nature of Operations
Americana Publishing, Inc. (the Company) was organized as a Colorado corporation
on April 17, 1997 for the purpose of publishing books, audio books and
periodicals, and to utilize the internet as its primary distribution channel to
prospective customers. Additionally the Company will utilize the latest
technology to download audio files directly to customers who desire to purchase
books and music and other audio materials immediately.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.
Property and Equipment
Property and equipment were contributed to the Company by the Company's chairman
and majority stockholder in exchange for common stock. Property and equipment is
carried at the contributors cost basis. Depreciation of property and equipment
is provided using the straight-line method for financial reporting purposes at
rates bases on their estimated useful lives.
Revenue Recognition
Revenue from sales of services is recognized when the service is performed and
billable. Revenue from sales of services to related parties was approximately
50% 50% 95% and 68% for the period April 17, 1997 through December 31, 1997, the
one year period ending December 31, 1998, the three month period ending March
31, 1999 and the period April 17, 1997 through March 31, 1999, respectively.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the basis of property and equipment for
financial and income tax reporting. The deferred tax assets and liabilities
represent the future tax return consequences of those differences, which will
either be taxable or deductible when the assets and liabilities are recovered or
settled. Deferred taxes are also recognized for operating losses that are
available to offset future federal income taxes.
<PAGE>
Americana Publishing, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information pertaining to the three months ended March 31, 1999 is unaudited)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Interim Financial data
Financial data for the three months ended March 31, 1999 is unaudited, however
in the opinion of management, the interim data includes all adjustments
consisting only of normal recurring adjustments, necessary for a fair statement
of the results of the interim period.
Note 2: Liquidity
The Company currently has insufficient revenue to meet forecasted operating
expenses for the next year. The Company's profitability and continued operation
are dependent upon significant assumptions, some of which are the ability of the
Company to acquire publishing companies and market products on a profitable
basis. There is no assurance that profitable operations will be achieved.
Subsequent to year-end, the Company did raise approximately $232,500 (refer to
note 6) to fund operations. Management believes cash available at March 31, 1999
will be adequate to fund operation for the next twelve months.
Note 3: Related Party Transactions
During the period April 17, 1997 (inception) through December 31, 1998, a
related party, B.H. Capital Limited (BHCL) which is a proprietorship of the
Company's chairman and majority stockholder, provided management, office space,
use of equipment and personnel to the Company. Also refer to Note 1, Property
and Equipment regarding the contribution of property and equipment in exchange
for common stock..
In December 1998 the Company issued 1,000,000 shares to the Company's chairman
in exchange for approximately $64,087 of cash, property and equipment,
foregiveness of accounts payable and consulting services. The transaction was
recorded based on the estimated fair value of the Company's stock. In addition
265,000 shares were issued to other related parties in exchange for financial,
Internet and other consulting services performed for the Company. This
transaction was also recorded at the estimated fair value of the Company's
stock.
<PAGE>
Americana Publishing, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information pertaining to the three months ended March 31, 1999 is unaudited)
Note 4: Stock Purchase Options
On January 1, 1999, the Company granted to ten individuals, five of who are
directors, options to purchase a total of 1,950,000 shares of common stock for a
purchase option cost of $250 per individual. The purchase price is $.10 per
share if exercised on or before December 31, 1999, $.20 per share if exercised
on or before December 31, 2000 and, $.30 per share if exercised on or before
December 31, 2001.
For the options relating to Directors the Company applies APB Opinion 25 and
related interpretations in accounting for its stock option plan. As a result of
their plan, although no stock options were exercised, the Company recognized
$50,000 of compensation expense for the three-month period ended March 31, 1999.
Had compensation cost for the Company's purchase option plan been determined
based on the fair value at the grant date for such options consistent with the
method of Financial Accounting Standards Board 123 (FAS123), the Company's net
loss for the three months ended March 31, 1999 would have increased by
approximately $8,000. The effects of applying FAS 123 in this pro forma
disclosure are not indicative of future amounts. The fair value of each option
grant is estimated on the date of grant using a present value calculation, risk
free interest of 4.6%, no dividends and expected life of 3 years.
In the event of a merger, sale of the Company, a hostile take over attempt or
other sales of the Company's asset, each Director previously granted options
will have the option to purchase 300,000 additional shares for $1. The Company
recognized $230,000 of expense relating to options granted to non-employees or
directors.
Stock options available for future grant amounted to 1,950,000 shares at March
31, 1999. Exercisable stock options amounted to 1,950,000 shares at March 31,
1999.
<PAGE>
Americana Publishing, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information pertaining to the three months ended March 31, 1999 is unaudited)
Note 5: Earnings Per Share
Basic earnings per share are computed by dividing net loss available to common
stockholders by the weighted average number at common shares. Diluted earnings
per share are determined on the assumption that the outstanding stock options
have been converted using the average price for the quarter. Common stock
options have been excluded from the computation of diluted earnings per share as
in lost years it is anti-dilutive.
The following table represents a summary of the weighted average shares used in
the calculation of basic and diluted earnings per share.
<TABLE>
<CAPTION>
Three Months Inception
Ending March April 17, 1997 to
1997 1998 31, 1998 March 31, 1999
---------- ---------- ----------- --------------
<S> <C> <C> <C> <C>
Stock Outstanding at the
Beginning of the period 0 1,270,000 $2,535,000 0
Initial Common Stock
Insurance in May 1997 1,270,000 0 0 1,270,000
Common Stock issued in
December 1998 0 55,452 0 196,325
Common Stock issued in
February 1999 offering 0 0 253,167 33,360
---------- ---------- ---------- ----------
Weighted Average Number
Of Common Shares
Outstanding 1,270,000 1,325,452 2,788,167 1,499,685
========== ========== ========== ==========
</TABLE>
<PAGE>
Americana Publishing, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information pertaining to the three months ended March 31, 1999 is unaudited)
Note 6: Income Taxes
The following is a reconciliation of the income tax provision computed by
applying the federal statutory income tax rate to net loss before income taxes.
<TABLE>
<CAPTION>
Inception Inception
April 17, 1997 Year Ended Three Months April 17, 1997
to December December 31, March 31, to March 31,
31, 1998 1998 1998 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Income tax (benefit) computed
At the federal statutory rate
of 35% (19,137) (150,878) (86,978) (256,993)
Permanent Difference 9,608 158,157 76,054 243,819
Valuation Allowance 9,529 (4,690) 11,845 16,684
-------- -------- -------- --------
Tax Expense 0 2,589 921 3,510
======== ======== ======== ========
</TABLE>
Net deferred income tax liability consists of the following at December 31,
1998 1997 March 31, 1999
---- ---- --------------
Deferred tax asset
Net operating loss carry forward $ 4,839 $ 9,529 $ 16,684
Less: valuation allowance (4,839) (9,529) (16,684)
-------- -------- --------
Net $ 0 $ 0 $ 0
Deferred tax liability
Depreciation and amortization $ (2,589) -0- $ (921)
-------- -------- --------
Deferred tax liability, net $ (2,589) -0- $ (921)
<PAGE>
Americana Publishing, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information pertaining to the three months ended March 31, 1999 is unaudited)
Note 7: Subsequent Events
Financial Consulting Agreement
On January 1, 1999, the Company entered into a non-cancelable Corporate
Financial Consulting Agreement with BHCL, a related party. The agreement calls
for the Company to pay BHCL a monthly fee of $3,000 for a period of five years
in consideration for BHCL providing general assistance in identifying
credit/capital resources as well as providing office, personnel and facilities
to the Company. In addition, the agreement calls for the Company to pay BHCL a
1% success fee for any gross amount of financing or net worth of any entity
merged or acquired on behalf of the Company by BHCL and a 1% renewal fee of the
amount of such financial arrangements for a period of five years. Management
believes that the monthly fee approximates the value of these services had the
Company obtained these services from an unaffiliated party. In addition, for the
Year ended December 31, 1998 and for the periods April 17, 1997 (inception)
through December 31, 1997, management estimates that the value of services and
facilities provided at no cost were $36,000 and $25,500 respectively. The
Company recognized these as expenses in their respective period.
Employment Agreement
On January 1, 1999, the Company entered into an employment agreement with its
chairman and majority stockholder. Under the terms of the one year agreement,
which shall be automatically be renewed for a period of three years provided
that either party has not elected to terminate the agreement as provided for
therein, the employee shall receive a salary of $250,000 per year or 5% of gross
revenue of the Company, whichever is greater. The Company may not terminate the
agreement for any reason as it relates to the employee's disability, illness or
incapacity. Should the employee die during the term of employment, the Company
shall pay the employee's estate $500,000 in fifty monthly installments of
$10,000. Subject to certain events, including the sale of substantially all of
the Company's assets to a single purchaser and bankruptcy, among others, the
Company may terminate the agreement upon 90 days written notice and pay the
employee $500,000 in twelve consecutive monthly installments. With cause, the
Company may terminate the agreement with twelve months written notice. During
the notice period, the employee shall be paid full compensation and, receive a
severance allowance of $250,000 in twelve consecutive monthly installments
beginning on the date of termination. Without cause, the employee may terminate
employment upon twelve months written notice to the Company.
<PAGE>
Americana Publishing, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information pertaining to the three months ended March 31, 1999 is unaudited)
Employment Agreement (continued)
Employee may be required to perform his duties and will be paid the full
compensation described herein up to the termination date and shall receive a
severance allowance of $250,000 which shall be made in twelve equal and
consecutive monthly installments beginning on the date of termination. Due to
the Company's limited liquidity, the employee has waived his first quarter
compensation of $62,500. This compensation was treated as a capital
contribution.
Private Offering Memorandum
On February 10, 1999, the Company issued a Confidential Private Offering
Memorandum pursuant to Rule 504 of Regulation D of the Securities Act of 1933,
as amended, for 465,000 shares of $.001 par value common stock at $.50 per
share. The offering was totally subscribed in the total amount of $232,500. As
of March 10, 1999, $226,250 had been received. Of the total 465,000 shares sold,
59,000 shares were sold to related parties.
Note 8: Other Matters
Management's Estimate of Value
The balance sheet presents property and equipment at the contributor's cost.
Management believes that certain assets have a significantly higher fair market
value than reflected on the financial statements. Management's estimate of such
value is set forth below.
Database and Circulation List $175,000
Computers and audio Equipment 21,500
Publication Library 6,000
Land 25,000
--------
$227,500
These estimates reflect management's judgment as to the fair market value of
certain assets as of December 31, 1998. Management's determination of the fair
value for the data base and circulation list was based on the estimated cost of
contractors and outside parties to compile such information. The computers and
audio equipment, and publication library was based on their approximate
replacement cost.
<PAGE>
Americana Publishing, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1998
(Information pertaining to the three months ended March 31, 1999 is unaudited)
Management's Estimate of Value (continued)
The value of the land was based on the appraised value as set by a real estate
professional. There will usually be differences between the estimated market
value and the market value ultimately realized, and the differences may be
material.
Part III
Item 1 - Index to Exhibits
The following list describes the exhibits filed as part of this Registration
Statement on Form 10-SB:
Exhibit
Number Description of Document
- ------ -----------------------
3.1 Articles of Incorporation filed April 16, 1998
3.2 Amendment of Articles of Incorporation April 6, 1999
3.3 Bylaws
4.0 Form of Stock Certificate
10.1 Employment Agreement dated January 1, 1999
10.2 Form of Stock Option Agreement dated January 1, 1999
10.3 Corporate Finance Consulting Agreement dated January 1, 1999
27.1 Financial Data Sheet
* Filed herewith
Item 2 - Description of Exhibits
The required exhibits are attached hereto, as noted in Item 1 above.
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Americana Publishing, Inc.
Date: By: /s/ George Lovato, Jr.
------------------- --------------------------
George Lovato, Jr.
3.1
ARTICLES OF INCORPORATION
OF
AMERICANA PUBLISHING, INC.
--------------------------
TO THE SECRETARY OF STATE
STATE OF COLORADO
The undersigned Incorporators, whose names and addresses are shown below,
being legally competent to enter into contracts, the for the purpose of forming
a corporation under the "Colorado Business Corporation Act" of the State of
Colorado, do hereby adopt the following Certificate of Incorporation:
1. Name and Principal Place of Business. The name of the Corporation is
AMERICANA PUBLISHING, INC. The principal place of business is 555 E. IOTH Ave.,
Suite 101, Denver, CO 80203.
2. Registered Office and Agent. The address of the Corporation's registered
office in the State of Colorado is 555 E. IOTH Ave., Suite 101, Denver, CO
80203.
The name of the registered agent at such address is George Lovato, Jr.
3. Purpose and Duration. The purpose of the Corporation is: (1) publishing;
and (2) any other lawful purposes. The duration of the Corporation is perpetual.
4. Capital Stock. The aggregate number of shares of capital stock which the
Corporation shall have authority to allot is one hundred million (100,000,000)
shares of One Dollar ($.001) par value common stock and 20,000,000 of preferred
which shall be no par value stock. The Board of Directors may, from time to
time, fix a consideration for which said shares may be issued and sold, which
consideration shall not be less than .001 cents per share.
5. Directors. The powers of the Incorporators are to terminate upon the
filing of the Certificate of Incorporation, after which such powers shall be
exercised by the Directors who shall serve in such capacity until the first
annual meeting of Shareholders, or until their successors are elected and
qualify. The names and mailing addresses of the persons who are to serve as
Directors until the first annual meeting of Shareholders are as follows:
<PAGE>
Americana Publishing, Inc.
Articles of Incorporation
Directors Mailing Address
--------- ---------------
George Lovato, Jr. 555 E. 10TH Ave., Suite 101, Denver, CO 80203.
Jay Simon 5528 E. Cheryl, Paradise Valley, AZ 85253
Don White 8203 Willow Place South # 605, Houston TX 77070
The number of Directors of the Corporation shall be specified in the
Bylaws, and such number may from time to time be increased or decreased under
the Bylaws of any amendment or change thereto.
6. Bylaws. The Directors of the Corporation shall have the power to adopt,
alter or replace Bylaws for governing the Corporation, the conduct of its
affairs, the management of its property, the transfer of shares and the rights
or powers of the Shareholders, Directors, Officers and employees of the
Corporation. Such power shall be exercised by two-thirds (2/3) majority vote of
the Directors at any regular or special meeting duly convened after proper
notice to such Directors has been given. Provided, however, nothing herein shall
divest the Shareholders of the power, nor limit their power to adopt, amend or
repeal such Bylaws.
7. Preemptive Rights. The holders of shares of common stock of the
Corporation shall have the preemptive right to purchase ratable according to
their respective holdings any shares of the Corporation hereafter issued or
allotted or any securities exchangeable for or convertible into such shares or
other instruments evidencing rights or options to subscribe for, purchase or
otherwise acquire shares.
8. Indemnification. The Corporation shall indemnify any and all persons who
may serve or who have served a any time as directors or officers and their
respective heirs, administrators, successors and assigns, against any and all
expenses, including any amounts paid upon judgments, counsel fees and amounts
<PAGE>
Americana Publishing, Inc.
Articles of Incorporation
paid in settlement (before or after suit is commenced), actually and necessarily
incurred by such persons in connection with the defense or settlement or any
claim, action, suit or proceedings in which they, or any of them, are made
parties, or a party, or which may be asserted against them or any of them, by
reason of being or having been directors or officers or a director or an officer
of the Corporation, except in relation to matters as to which any such director
or officer or former director or officer or person shall be adjudged in any
action, suit or proceedings to be liable for his fraud, gross negligence or
gross misconduct involving the Corporation in the performance of his duties.
This paragraph shall be in addition to, and shall in no way limit, the power of
the Corporation to indemnify any person by reason of the fact that he is or was
a director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officers, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
9. Incorporators. The name and mailing address of the Incorporators are as
follows:
Name Mailing Address
---- ---------------
George Lovato, Jr. 555 E. 10th Ave., Suite 101, Denver, CO 80203.
Gordon H. Rowe III 40 N. Washington St.
Monte Vista, CO 81144
The undersigned Incorporators do make, file and record this Certificate of
Incorporation, and do certify that the facts herein stated are true.
INCORPORATOR:
George Lovato, Jr.
Gordon H. Rowe III
<PAGE>
Americana Publishing, Inc.
Articles of Incorporation
STATE OF )
) SS.
COUNTY OF )
Before me, the undersigned, a notary public in and for said county and
state, personally appeared George Lovato, Jr., the above-named Incorporator, to
me known to be the identical person who executed the foregoing Certificate of
Incorporation, who acknowledged to me that he executed the same as his free and
voluntary act and deed and that the statements contained herein are true, on
this _________ day of ____________ , 199___.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
last above written.
--------------------------
Notary Public
My Commission Expires:
- ---------------------------
STATE OF NEW MEXICO )
)SS.
COUNTY OF BERNALILLO )
Before me, the undersigned, a notary public in and for said county and
state, personally appeared Gordon H. Rowe III, the above-named Incorporator, to
me known to be the identical person who executed the foregoing Certificate of
Incorporation, who acknowledged to me that he executed the same as his free an
act and deed and that the statements contained herein are true, on this ________
day of __________ , 1999.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
last above written.
------------------------
Notary Public
My Commission Expires:
- ---------------------------
SIGNATURE OF REGISTERED AGENT:
- ------------------------------
George Lovato, Jr.
3.2
For Office Use Only
Mail to: Secretary of State
Corporations Section
1560 Broadway, Suite 200
Denver, CO 80202
(303) 894-2251
Fax (303) 894-2242
Please include a typed
self-addressed envelope
MUST BE TYPED
FILING FEE: $60.00
MUST SUBMIT TWO COPIES
RESTATED ARTICLES OF INCORPORATION
WITHOUT AMENDMENTS
Pursuant to the provisions of the Colorado Corporation Code, the undersigned
corporation adopts the following restated Articles of Incorporation. These
articles only restate and integrate and do not further amend the provisions of
the corporation's Articles of Incorporation as theretofore amended or
supplemented. There is no discrepancy between articles. These restated Articles
of Incorporation supersede the original Articles of Incorporation and all
amendments and supplements there to.
FIRST: The name of the Corporation is Americana Publishing, Inc.
SECOND: The following restated Articles of Incorporation were adopted on April
16th, 1997, in the manner marked with an "X" below:
The restated Articles of Incorporation were adopted by the Board of
Directors
- -------
The restated Articles of Incorporation were adopted by the
shareholders. The number of shares voted for the restated Articles of
X Incorporation was sufficient for approval.
- -------
The restated Articles of Incorporation were adopted by the
- ------- Incorporators where no shares have been issued or directors elected.
ATTACH A COPY OF YOUR RESTATED ARTICLES OF INCORPORATION
WITHOUT AMENDMENTS
The Restated Articles of Incorporation are incorporated herein as Exhibit
A, which is attached hereto.
Americana Publishing, Inc.
By
Its
<PAGE>
ARTICLES OF INCORPORATION
OF
AMERICANA PUBLISHING, INC.
--------------------------
TO THE SECRETARY OF STATE
STATE OF COLORADO
The undersigned Incorporators, whose names and addresses are shown below,
being legally competent to enter into contracts, the for the purpose of forming
a corporation under the "Colorado Business Corporation Act" of the State of
Colorado, do hereby adopt the following Certificate of Incorporation:
1. Name and Principal Place of Business. The name of the Corporation is
AMERICANA PUBLISHING, INC. The principal place of business is 555 E. 10TH Ave.,
Suite 101, Denver, CO 80203.
2. Registered Office and Agent. The address of the Corporation's registered
office in the State of Colorado is 555 E. 10TH Ave., Suite 101, Denver, CO
80203.
The name of the registered agent at such address is George Lovato, Jr.
3. Purpose and Duration. The purpose of the Corporation is: (1) publishing;
and (2) any other lawful purposes. The duration of the Corporation is perpetual.
4. Capital Stock. The aggregate number of shares of capital stock which the
Corporation shall have authority to allot is one hundred million (100,000,000)
shares of One Dollar ($.001) par value common stock and twenty million
(20,000,000) of preferred which shall be no par value stock. The Board of
Directors may, from time to time, fix a consideration for which said shares may
be issued and sold, which consideration shall not be less than .001 cents per
share.
5. Directors. The powers of the Incorporators are to terminate upon the
filing of the Certificate of Incorporation, after which such powers shall be
exercised by the Directors who shall serve in such capacity until the first
annual meeting of Shareholders, or until their successors are elected and
qualify. The names and mailing addresses of the persons who are to serve as
Directors until the first annual meeting of Shareholders are as follows:
Directors Mailing Address
--------- ---------------
George Lovato, Jr. 555 E. 10TH Ave., Suite 101, Denver, CO 80203.
Jay Simon 5528 E. Cheryl Drive, Paradise Valley, AZ 85253.
Don White 8203 Willow Place South, #605, Houston, TX 77070.
<PAGE>
The number of Directors of the Corporation shall be specified in the
Bylaws, and such number may from time to time be increased or decreased under
the Bylaws of any amendment or change thereto.
6. Bylaws. The Directors of the Corporation shall have the power to adopt,
alter or replace Bylaws for governing the Corporation, the conduct of its
affairs, the management of its property, the transfer of shares and the rights
or posers of the Shareholders, Directors, Officers and employees of the
Corporation. Such power shall be exercised by two-thirds (2/3) majority vote of
the Directors at any regular or special meeting duly convened after proper
notice to such Directors has been given. Provided, however, nothing herein shall
divest the Shareholders of the power, nor limit their poser to adopt, amend or
repeal such Bylaws.
7. Indemnification. The Corporation shall indemnify any and all persons who
may serve or who have served any time as directors or officers and their
respective heirs, administrators, successors and assigns, against any and all
expenses, including any amounts paid upon judgements, counsel fees and amounts
paid in settlement (before or after suit is commenced), actually and necessarily
incurred by such persons in connection with the defense or settlement or any
claim, action, suit or proceedings in whic they, or any of them, are made
parties, or a party, or which may be asserted against them or any of them, by
reason of being or having been directors or officers or a director or an officer
of the Corporation, except in relation to matters as to which any such director
or officer or former director or officer or person shall be adjudged in any
action, suit or proceedings to be liable for his fraud, gross negligence or
gross misconduct involving the Corporation in the performance of his duties.
This paragraph shall be in addition to and shall in no way limit the power of
the Corporation to indemnify any person by reason of the fact that he is or was
a director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officers, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
(a) The corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, (other than an action by or in the right of the corporation)
by reason of the fact that he was a director, officer, employee, fiduciary
or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, fiduciary or agent of another
corporation, partnership, joint venture, trust, or other enterprise,
against expenses (including attorney fees), judgements, fines, and amounts
paid in settlement actually and reasonably believed to be in the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suite, or proceeding by judgement, order,
settlement, or conviction or upon a pleas of nolo contendere or its
equivalent shall not of itself create a presumption that the person did not
act in good faith and in a manner which he reasonable believed to be in the
best interests of the corporation and, with respect to any criminal action
or proceeding, had reasonable cause to believe his conduct was unlawful.
(b) The corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action or suit by or in the right of the corporation to procure a judgement
in its favor by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request
of the corporation as a director, officer, employee, fiduciary or agent of
another corporation, partnership, joint venture, trust, or other enterprise
against expenses (including attorney fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit
if he acted in good faith and in a manner he reasonably believed to be in
the best interests of the corporation; but no indemnification shall be made
in respect of any claim, issue, or matter as to which such person has been
adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless and only to the extent that the court in
which such action or suit was brought determines upon application that,
despite the adjudication of liability, but in view of all circumstances of
the case, such person is fairly and reasonably entitled to indemnification
for such expenses which such court deems proper.
<PAGE>
(c) To the extent that a director, officer, employee, fiduciary or agent of a
corporation has been successful on the merits in defense of any action,
suit, or proceeding referred to in (a) or (b) of this Article VII or in
defense of any claim, issue, or matter therein, he shall be indemnified
against expenses (including attorney fees) actually and reasonably incurred
by him in connection therewith.
(d) Any indemnification under (a) or (b) of this Article VII (unless ordered by
a court) and as distinguished from (c) of this Article shall be made by the
corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee, fiduciary or agent
is proper in the circumstances because he has met the applicable standard
of conduct set forth in (a) or (b) above. Such determination shall be made
by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit, or proceeding, or, if
such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested directors so directs.
(e) Expenses (including attorney's fees) incurred in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding as
authorized in Section (d) of this Article, upon receipt of an undertaking
by or on behalf of the director, officer, employee, or agent to repay such
amount, unless it shall ultimately be determined that he is entitled to be
indemnified by the corporation as authorized in this Article.
(f) The board of directors may exercise the corporation's power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this Article
(g) The indemnification provided by this Article shall not be deemed exclusive
of any other rights to which those seeking indemnification may be entitled
under these Articles of Incorporation, the Bylaws, agreements, vote of the
shareholders or disinterested directors, or otherwise both as to action in
his official capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs and personal representatives of
such a person.
<PAGE>
8. Incorporators. The name and mailing address of the Incorporators are as
follows:
Name Mailing Address
---- ---------------
George Lovato, Jr. 555 E. 10 TH Ave., Suite 101, Denver, CO 80203
Gordon H. Rowe, III 40 N. Washington St., Monte Vista, CO 81144
The undersigned Incorporators do make, file and record this Certificate of
Incorporation, and do certify that the facts herein stated are true.
INCORPORATOR:
-----------------------------------
George Lovato, Jr./Registered Agent
3.3
By-laws of Americana Publishing, Inc.
By-laws of Americana Publishing, Inc., a corporation incorporated under the laws
of the State of Colorado.
1. Corporate Office and Registered Agent. The Board of Directors has the power
to determine the location of the corporation's principal place of business and
registered office, which need not be the same location. The Board of Directors
also has the power to designate the corporation's registered agent, who may be
an officer or director.
2. Date and Time of Shareholders Annual Meeting. The annual shareholders meeting
will be held on the 24th of March of every year at 9:00 a.m., or no more than 83
days after the fiscal year end. This meeting is for the purpose of electing
directors and for transacting any other necessary business. If this day is a
legal holiday, the meeting will be held on the next day.
3. Shareholders Special Meetings. Special meetings of the shareholders may be
called at any time and for any purpose. These meetings may be called by either
the president or the Board of Directors or upon request of 51 percent of the
shareholders of the corporation. The request for a special meeting must be made
in writing which states the time, place and purpose of the meeting. The request
should be given to the secretary of the corporation who will prepare and send
written notice to all shareholders of record who are entitled to vote at the
meeting.
4. Place of Shareholders Meetings. The Board of Directors has the power to
designate the place for shareholders meetings, unless a waiver of notice of the
meeting signed by all shareholders designates the place for the meeting. If no
place is designated, either by the Board of Directors or all of the
shareholders, then the place for the meeting will be the principal office of the
corporation.
5. Notice of Shareholders Meetings. Written notice of shareholders meetings must
be sent to each shareholder of record entitled to vote at the meeting. The
notice must be sent no less than 8 days nor more than 10 days before the date of
the meeting. The notice should be sent to the shareholder's address as shown in
the corporate Stock Transfer Book. The notice will include the place, date, and
time of the meeting. Notices for special meetings must also include the purpose
of the meeting. When notices are sent, the secretary of the corporation must
prepare an Affidavit of Mailing of Notices. Shareholders may waive notice of
meetings if done in writing, except that attendance at a meeting is considered a
waiver of notice of the meeting.
6. Shareholders Entitled to Notice, to Vote, or to Dividends. For the purpose of
determining which shareholders are entitled to notice, to vote at meetings, or
to receive dividends, the Board of Directors may order that the corporate Stock
Transfer Books be closed for 30 days prior to a meeting or the issuance of a
dividend. The shareholders entitled to receive notice, vote at meetings, or
receive dividends are those who are recorded in the Stock Transfer Book upon the
closing of the Book. Instead of closing the Books, the Board of Directors may
also set a Record Date. The shareholders recorded in the Stock Transfer Book at
the close of business on the Record Date will be entitled to receive notice,
vote at meetings, or receive dividends. A list of shareholders entitled to
receive notice, vote at meetings, or receive dividends will be prepared by the
secretary when necessary and provided to the officers of the corporation. Every
shareholder who is entitled to receive notice, vote, or receive dividends is
also entitled to examine this list and the corporate stock transfer book.
7. Shareholders Quorum. A quorum for shareholders meeting will be a majority of
the outstanding shares which are entitled to vote at the meeting, whether in
person or represented by proxy. Once a quorum is present, business may be
conducted at the meeting, even if shareholders leave prior to adjournment.
8. Shareholders Proxies. At all meetings of shareholders, a shareholder may vote
by signed proxy or by power of attorney. To be valid, a proxy must be filed with
the secretary of the corporation prior to the stated time of the meeting. No
proxy may be valid for over 12 months, unless the proxy specifically states
otherwise. Proxies may always be revocable prior to the meeting for which it is
intended. Attendance at the meeting for which a proxy has been authorized always
revokes the proxy.
<PAGE>
9. Shareholders Voting. Each outstanding share of the corporation which is
entitled to vote as shown on the Stock Transfer Book will have one vote. The
vote of the holders of a majority of the shares entitled to vote will be
sufficient to decide any matter, unless a greater number is required by the
Articles of Incorporation or by state law. Adjournment shall be by majority vote
of those shares entitled to vote.
10. Shareholder Consent Resolutions. Any action which may be taken at a
shareholders meeting may be taken instead without a meeting if a resolution is
consented to, in writing, by all shareholders who would be entitled to vote on
the matter.
11. Shareholders Cumulative Voting. For the election of directors, each
shareholder may vote in a Cumulative manner, if desired. Cumulative voting will
mean that if each shareholder has one vote per director to be elected, the
shareholder may vote all votes for a single director or spread the votes among
directors in any manner.
12. Powers of the Board of Directors. The affairs of the corporation will be
managed by the Board of Directors. The Board of Directors will have all powers
available under state law, including the power to appoint and remove officers,
agents, and employees; the power to change the offices, registered agent, and
registered office of the corporation; the power to issue shares of stock; the
power to borrow money on behalf of the corporation, including the power to
execute any evidence of indebtedness on behalf of the corporation; and the power
to enter into contracts on behalf of the corporation.
13. Number of Directors and Term of Office. The number of directors will be as
shown in the Articles of Incorporation and may be amended. The number is
currently 5. Each director will hold office for 1 year and will be elected at
the annual meeting of the shareholders.
14. Date and Time of Annual Meeting of the Board of Directors. The annual Board
of Directors meeting will be held on the 24th day of March of every year at 9:00
a.m. This meeting is for the purpose of appointing officers and for transacting
any other necessary business. If this day is a Sunday or a legal holiday, the
meeting will be held on the next day. These meetings may be conducted
telephonically.
15. Special Meetings of the Board of Directors. Special meetings of the Board of
Directors may be called at any time and for any purpose. These meetings may be
called by either the president or the Board of Directors. The request for a
special meeting must be made in writing which states the time, place and purpose
of the meeting, further these meetings may be conducted telephonically. The
request should be given to the secretary of the corporation who will prepare and
send written notice to all directors
16. Place of Board of Directors Meetings. The Board of Directors has the power
to designate the place for directors meetings. If no place is designated, then
the place for the meeting will be the principal office of the corporation.
17. Notice of Board of Directors Meetings. Written notice of Board of Directors
meetings must be sent to each director. The notice must be sent no less than 8
days nor more than 10 days before the date of the meeting. The notice should be
sent to the director's address as shown in the corporate records. The notice
will include the place, date, and time of the meeting, and for special meetings
the purpose of the meeting. When notices are sent, the secretary of the
corporation must prepare an Affidavit of Mailing of Notices. directors may waive
notice of meetings if done in writing, except that attendance at a meeting is
considered a waiver of notice of the meeting.
18. Board of Directors Quorum. A quorum for directors meetings will be a
majority of the directors. Once a quorum is present, business may be conducted
at the meeting, even if directors leave prior to adjournment.
<PAGE>
19. Board of Directors Voting. Each director will have one vote. The vote of a
majority of the directors will be sufficient to decide any matter, unless a
greater number is required by the Articles of Incorporation or state law.
Adjournment shall be by majority vote.
20. Board of Directors Consent Resolutions. Any action which may be taken at a
directors meeting may be taken instead without a meeting if a resolution is
consented to, in writing, by all directors.
21. Removal of Directors. A director may be removed from office, with or without
cause, at a special meeting of the shareholders called for that purpose.
22. Filling Directors Vacancies. A vacancy on the Board of Directors may be
filled by majority vote of the remaining directors, even if technically less
than a quorum. A director elected to fill a remaining term will hold office
until the next annual shareholders meeting.
23. Salaries of Directors. The salaries of the directors will be fixed by the
Board of Directors and may be altered at any time by the board. A director may
receive a salary even if she/he receives a salary as an officer.
24. Fiduciary Duty of Directors. Each director owes a fiduciary duty of good
faith and reasonable care with regard to all actions taken on behalf of the
corporation. Each director must perform her/his duties in good faith in a
manner, which she/he reasonably believes to be in the best interests of the
corporation, using ordinary care and prudence.
25. Number of Officers. The officers of the corporation will include a
president, vice-president, treasurer, and secretary. Any two or more offices may
be held by the same person.
26. Appointment and Terms of Officers. The officers of the corporation will be
appointed by the directors at the first meeting of the Board of Directors. Each
officer will hold office until death, resignation or removal by the Board of
Directors.
27. Removal of Officers. Any officer may be removed by the Board of Directors,
with or without cause. Appointment of an officer does not create any contract
rights for the officer.
28. Filling Officers Vacancies. A vacancy in any office for any reason may be
filled by the Board of Directors for the unexpired term.
29. Duties of the President. The president is the principal executive officer of
the corporation and is subject to control by the Board of Directors. The
president will supervise and control all of the business and activities of the
corporation. The president will preside at all shareholders and directors
meetings, and perform any other duties as prescribed by the Board of Directors.
30. Duties of the Vice-President. If the president is absent, dies, or is
incapacitated, the vice-president will perform the duties of the president. When
acting for the president, the vice-president will have all of the powers and
authority of the president. The vice-president will also perform any other
duties as prescribed by the Board of Directors.
31. Duties of the Secretary. The secretary will keep the minutes of all
shareholders and directors meetings. The secretary will provide notices of all
meetings as required by the By-laws. The secretary will be the custodian of the
corporate records, corporate stock transfer book, and corporate seal. The
secretary will keep a list of all shareholders, directors, and officers
addresses. The secretary will sign, along with other officers, the corporation's
stock certificates. The secretary will also perform any other duties as
prescribed by the Board of Directors.
32. Duties of the Treasurer. The treasurer will be custodian of all corporate
funds and securities. The treasurer will receive and pay out funds, which are
receivable or payable to the corporation from any source. The treasurer will
deposit all corporate funds received into the corporate bank accounts as
designated by the Board of Directors. The treasurer will also perform any other
duties as prescribed by the Board of Directors.
<PAGE>
33. Salaries of Officers. The salaries of the officers will be fixed by the
Board of Directors and may be altered at any time by the board. An officer may
receive a salary even if she/he receives a salary as a director.
34. Stock Certificates. Certificates which represent shares of ownership in the
corporation will be in the form designated by the Board of Directors.
Certificates will be signed by all officers of the corporation. Certificates
will be consecutively numbered. The name and address of the person receiving the
issued shares, the certificate number, the number of shares and the date of
issue will be recorded by the secretary of the corporation in the corporate
stock transfer book. Shares of the corporation's stock may only be transferred
on the stock transfer book of the corporation by the holder of the shares in
whose name they were issued as shown on the stock transfer book, or by his or
her legal representative.
35. Financial Matters. The Board of Directors will determine the accounting
methods and fiscal year of the corporation. All checks, drafts, or other methods
for payment shall be signed by an officer determined by resolution of the Board
of Directors. All notes, mortgages, or other evidence of indebtedness shall be
signed by an officer determined by resolution of the Board of Directors. No
money will be borrowed or loaned by the corporation unless authorized by a
resolution of the Board of Directors. No contracts will be entered into on
behalf of the corporation unless authorized by a resolution of the Board of
Directors. No documents may be executed on behalf of the corporation unless
authorized by a resolution of the Board of Directors. A board of Director's
resolution may be for specific instances or a general authorization.
36. Loans to Officers or Directors. The corporation may not lend any money to an
officer or director of the corporation unless the loan has been approved by a
majority of the shares of all stock of the corporation, including those shares
that do not have voting rights.
37. Assistant Secretaries. The Assistant Secretaries shall perform such duties
and possess such powers as from time to time shall be assigned to them by the
Board of Directors, the President, or the Secretary. In the absence, inability
or refusal to act of the Secretary, the Assistant Secretary in the order
determined by the Board of Directors shall perform the duties and exercise the
power of the Secretary.
38. Assistant Treasurers. The Assistant Treasurers shall perform such duties and
possess such powers as from time to time shall be assigned to them by the Board
of Directors, the President, or the Treasurer. In the absence, inability or
refusal to act of the Treasurer, the Assistant Treasurer in the order determined
by the Board of Directors shall perform the duties and exercise the power of the
Treasurer.
39. Bond of Officers. The Board of Directors may require any officer to give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory of the Board of Directors for such terms and conditions as the
Board of Directors may specify, including without limitation for the faithful
performance of his duties and for the restoration of the Corporation of all
property in his possession or under his belonging to the Corporation
40. Salaries. Officers of the Corporation shall be entitled to such salaries,
emoluments, compensation or reimbursement as such be fixed or allowed from time
to time by the Board of Directors.
41. Third party actions. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another Corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonable believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
<PAGE>
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contender or its equivalent, shall not of
itself create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
42. Derivative actions. The Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
Corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation, except that no indemnification shall be made
in respect of any claim, issue, or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Corporation unless and only to the extent that the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability and in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
43. Extent of indemnifications. To the extent that a director, officer, employee
or agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
44. Determination. Any indemnification under these Bylaws or Articles of
Incorporation (unless ordered by a court) shall be make by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the officer, director and employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in these Bylaws.
Such determination shall be made (a) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suitor proceeding, or (b) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (c) by the affirmative vote of the holders of a
majority of the shares of stock entitled to vote and represented at a meeting
called for such purpose.
45. Payment in advance. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors as provided in Section 4 of this Article VI upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article VI.
46. Insurance. The Board of Directors may exercise the Corporation's power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability hereunder or
otherwise.
47. Other Coverage. The indemnification provided by these Bylaws shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under the Articles of Incorporation, these Bylaws, agreement, vote
of stockholders or disinterested directors, the Colorado Corporation Code, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, office, employee or agent and shall inure to
the benefit of the heirs and personal representatives of such a person.
<PAGE>
48. Execution of Instruments. The President or any Vice President shall have
power to execute and deliver on behalf and in the name of the Corporation any
instrument requiring the signature of an officer of the Corporation, except as
otherwise provided in these Bylaws or where the execution and delivery thereof
shall be expressly delegated by the Board of Directors to some other officer or
agent of the Corporation. Unless authorized so to do by these Bylaws or by the
Board of Directors, no officer, agent or employee shall have any power or
authority to bind the Corporation in any way, to pledge its credit or to render
it liable pecuniarily for any purpose or in any amount.
49. Loans. No loan shall be contracted on behalf of the Corporation, and no
evidence of indebtedness shall be issued, endorsed or accepted in its name,
unless authorized by the Board of Directors or a standing committee designated
by the Board of Directors so to act. Such authority may be general or confined
to specific instances. When so authorized, the officer or officers thereunto
authorized may effect loans at any time for the Corporation form any bank at any
time for the Corporation from any bank or other entity and for such loans may
execute and deliver promissory notes or other evidences of indebtedness of the
Corporation, and when authorized as aforesaid, as security for the payment of
any and all loans (and any obligations incident thereto) of the Corporation, may
mortgage, pledge, or otherwise encumber any real or personal property, or any
interest therein, at any time owned or held by the Corporation, and tot hat end
may execute and deliver such instruments as may be necessary or proper in the
premises.
50. Checks and Endorsements. All checks, drafts or other orders for the payment
of money, obligations, notes or other evidences of indebtedness, bills of
lading, warehouse receipts, trade acceptances, and other such instruments shall
be signed or endorsed by such officers or agents of the Corporation as shall
from time to time be determined by resolution of the Board of Directors, which
resolution may provide for the use of facsimile signatures.
51. Deposits. All funds of the Corporation not otherwise employed shall be
deposited from time to time to the Corporation's credit in such banks or other
depositories as shall from time to time be determined by resolution of the Board
of Directors, which resolution may specify the officers or agents of the
Corporation who shall have the power, and the manner in which such power shall
be exercised, to make such deposits and to endorse, assign and deliver for
collection and deposit checks, drafts and other orders for the payment of money
payable to the Corporation or its order.
52. Proxies. Unless otherwise provided by resolution adopted by the Board of
Directors, the President or any Vice President may from time to time appoint one
or more agents or attorneys in fact of the Corporation, in the name and on
behalf of the Corporation, to cast the votes which the Corporation maybe
entitled to cast as the holder of stock or other securities in any other
Corporation, association or other entity any of whose stock or other securities
may be held by the Corporation, at meetings of the holders of the stock or other
securities of such other name of the Corporation, association or other entity,
or to consent in writing, in the name of the Corporation as such holder, to any
action by such other Corporation, association or other entity, and may instruct
the person or persons so appointed as to the manner of casting such votes or
giving such consent and may execute or cause to be executed in the name and on
behalf of the Corporation and under its corporate seal, or otherwise, all such
written proxies or other instruments as he may deem necessary or proper in the
premises.
53. Certificates of Stock. Every holder of stock of the Corporation shall be
entitled to have a certificate certifying the number of shares owned by him in
the Corporation and designating the class of stock to which such shares belong,
which shall otherwise be in such form as is required by law and as the Board of
Directors shall prescribe. Each such certificate shall be signed by the
President and the Treasurer/Secretary of the Corporation; provided, however,
that where such certificate is signed or countersigned by a transfer agent or
registrar (other than the Corporation or any employee of the Corporation) the
signatures of such officers of the Corporation may be in facsimile form. In case
any officer of the Corporation who shall have signed, or whose facsimile
signature shall have been placed on, any certificate shall cease for any reason
to be such officer before such certificate shall have been issued or delivered
by the Corporation, such certificate may nevertheless be issued and delivered by
the Corporation as though the Person who signed such certificate, or whose
facsimile signature shall have been placed thereon, had not ceased to be such
officer of the Corporation.
<PAGE>
54. Record. A record shall be kept of the name of each person or other entity
holding the stock represented by each certificate for shares of the Corporation
issued, the number of shares represented by each such certificate, and the date
thereof, and, in the case of cancellation, the date of cancellation. The person
or other entity in whose name shares of stock stand on the books of the
Corporation shall be deemed the owner thereof, and thus a holder of record of
such shares of stock, for all purposes as regards the Corporation.
55. Transfer of Stock. Transfers of shares of the stock of the Corporation shall
be made only on the books of the Corporation by the registered holder thereof,
or by his attorney thereunto authorized, and on the surrender of the certificate
or certificates for such shares properly endorsed.
56. Transfer Agents and Registrars; Regulations. The Board of Directors may
appoint one or more transfer agents or registrars with respect to shares of the
stock of the Corporation. The Board of Directors may make rules and regulations,
as it may deem expedient, not inconsistent with these Bylaws, concerning the
issue, transfer and registration of certificates for shares of the stock of the
Corporation.
57. Lost, Destroyed or Mutilated Certificates. The holder of any certificate
representing shares of stock of the Corporation shall immediately notify the
Corporation of any loss or destruction of the certificate representing the same.
The Corporation may issue a new certificate in the place of any certificate
previously issued by it, alleged to have been lost or destroyed. On production
of such evidence of loss or destruction as the Board of Directors in its
discretion may require, the owner of the lost or destroyed certificate, or his
legal representatives, to give the Corporation a bond in such sum as the Board
may direct, and with such surety or sureties as may be satisfactory to the Board
to indemnify the Corporation against any claims, loss, liability or damage it
may suffer on account of the issuance of the new certificate. A new certificate
may be issued without requiring any such evidence or bond when, in the judgment
of the Board of Directors, it is proper to do so.
58. Corporate Seal. The corporate seal shall be in such form, as shall be
approved by resolution of the Board of Directors. Said seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced. The impression of the seal may be made and attested by either
the Secretary or an Assistant Secretary for the authentication of contracts or
other papers requiring the seal.
59. Fiscal Year. The fiscal year of the Corporation shall be such year as shall
be established by the Board of Directors.
60. Corporate Books. The books and records of the Corporation may be kept within
or without the State of Colorado at such place or places as may be from time to
time designated by the Board of Directors.
61. Addresses of Stockholders. Each shareholder shall furnish to the Secretary
of the Corporation or the Corporation's transfer agent an address to which
notices from the Corporation, including notices of meetings, may be directed and
if any shareholder shall fail so to designate such an address, it shall be
sufficient for any such notice to be directed to such shareholder at his address
last known to the Secretary of transfer agent.
62. Record Date. In lieu of closing the stock ledger of the Corporation, the
Board of Directors may fix, in advance, a date not exceeding sixty (60) days,
nor less than ten (10) days, as the record date for the determination of
stockholders entitled to receive notice of, or to vote at, any meeting of
stockholders, or to consent to any proposal without a meeting, or for the
purposes of determining stockholders entitled to received payment of any
dividends or allotment of any rights, or for the purpose of any other action. If
no record date is fixed, the record date for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if no notice is given, the day preceding the day on which the meeting is
held-, the record date for determining stockholders for any other purpose shall
be at the close of business on the day on which the resolution of the directors
relating thereto is adopted. When a determination of stockholders of record
entitled to notice of or to vote at any meeting of stockholders has been made as
provided for herein, such determination shall apply to any adjournment thereof,
unless the directors fix a new record date for the adjourned meeting.
<PAGE>
63. Audits of Books and Accounts. The Corporation's books and accounts shall be
audited at such times and by such auditors as shall be specified and designated
by resolution of the Board of Directors.
64. Emergency Bylaws. The Board of Directors may adopt emergency Bylaws in
accordance with and pursuant to the provisions therefor from time to time set
forth in the Colorado Corporation Code.
65. Amendments. All Bylaws of the Corporation shall be subject to alteration,
amendment or repeal, and new bylaws may be added, by the affirmative vote of a
majority of a quorum of the members of the Board of Directors at any regular or
special meeting.
Dated ______________________
Signature of the Secretary of the Corporation ____________________________
Adopted by the Board of Directors on __________________ , 1999
Signature of the Chairperson of the board _____________________________
Approved by the Shareholders on ___________________ , 1999
Signature of the Secretary of the Corporation ______________________________
Form of Stock Certificate
Number Shares
This Certifies that _________________________ is the registered holder of
_________________Shares
transferable only on the books of the Corporation by the holder hereof in person
or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed this _____________ day of __________________AD.
Seal
10.1
Employment Agreement
Employment Agreement, between Americana Publishing, Inc. (the "Company") and
George Lovato, Jr. (the "Employee"), for good consideration, the Company employs
the Employee on the following terms and conditions:
1. Term of Employment. Subject to the provisions for termination set
forth below, this agreement will begin on January 1st, 1999.
2. Salary. The Company shall pay Employee a salary of $250,000 per year
or 5% of gross sales of the company, whichever is greater for services
of the Employee, payable in regular pay periods, however, such
compensation shall commence when the Company can afford to pay such
compensation or compensation may begin April 1st, 1999.
3. Duties and Position. The Company hires the Employee in the capacity of
Editor in Chief and Chief Executive Officer. The duties may be
reasonably modified at the Company's discretion from time to time.
4. Employee to Devote Time Necessary to Company. The Employee will devote
the time necessary, attention and energies to the business of the
Company, and during this employment, however, may engage in other
business activities related to or unrelated to the company for profit,
gain and or primary advantage. These activities by the Employee are
not prohibited by the Company and further does not prohibit Employee
from making personal investments in any other business of any kind.
5. Confidentiality of Proprietary Information. Employee agrees during or
after the term of this employment, not to reveal confidential
information, or trade secrets to any person, firms, corporation or
entity.
6. Reimbursement of Expenses. The Employee may incur reasonable expenses
for furthering the Company's business including entertainment, travel
and similar items. The Company shall reimburse Employee within seven
working days for all business expenses after the Employee presents an
itemized account of expenditures.
7. Vacation. The Employee shall be entitled to a yearly vacation of a
total of five weeks at full pay. The Employee may take such time off
for vacation at any time and in any quantity of days.
8. Disability. If Employee cannot perform the duties because of illness
or incapacity for more than two weeks, the compensation otherwise due
during said illness or incapacity will continue as stated herein. The
Company may not terminate this agreement for any reason as it relates
to any disability, illness or incapacity.
<PAGE>
9. Termination of Agreement. With cause, the Company may terminate this
agreement with twelve months written notice to the Employee. The
Employee may continue to perform his duties and will be paid the full
compensation during regular pay periods stated herein during the
notice period of twelve months. In addition, the Company will pay the
Employee on the date of termination a severance allowance of one full
year of minimum salary of two hundred and fifty thousand dollars
($250,000) which may be made in twelve equal and consecutive monthly
installments beginning on the date of termination. Without cause, the
Employee may terminate employment upon twelve months written notice to
the Company. Employee may be required to perform his duties and will
be paid the full compensation described herein up to the termination
date and shall receive a severance allowance of two hundred and fifty
thousand dollars ($250,000) which may be made in twelve equal and
consecutive monthly installments beginning on the date of termination.
The Company may terminate the Employees employment upon 90 days
written notice to the Employee and be responsible to pay two years
minimum salary of a total of five hundred thousand dollars ($500,000)
in twelve consecutive monthly installments beginning on the date of
termination should any of the following events occur:
a) The sale of substantially all of the Company's assets to a
single purchaser or group of associated purchasers; or
b) The purchase of substantially all of the Company's issued
and outstanding stock in an effort to take the Company
Private; or
c) The attempt by an individual or associated group of
individuals or corporation or entity to purchase stock in
the Company for the purposes of a hostile take over; or
d) The sale, exchange, or other disposition, in one transaction
of the majority of the Company's outstanding corporate
shares; or
e) The Company's decision to terminate its business and
liquidate its assets; or
f) The merger or consolidation of the Company with another
company where by the directors of the Company as a whole are
no longer majority shareholders; or
g) Bankruptcy or Chapter 11 reorganization.
10. Death Benefit. Should Employee die during the term of employment of
the Company shall pay the Employees estate five hundred thousand
dollars ($500,000) in fifty equal and consecutive monthly installments
beginning 10 days from the date of his death.
<PAGE>
11. Assistance in Litigation. Employee shall upon reasonable notice,
furnish such information and proper assistance to the Company as it
may reasonably require in connection with any litigation in which it
is, or may become, a party either during or after employment. Should
the Employee be involved in any litigation personally as a result of
activities or association with or for the Company, the Company agrees
to pay for all such legal and professional fees incurred by the
Employee.
12. Settlement by Arbitration. Any claim or controversy that arises out of
or relates to this agreement, or breach of it, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association. Judgement upon the award rendered may be entered in any
court with jurisdiction.
13. Limited Effect of Waiver by Company. Should the Company waive breach
of any provision of this agreement by the Employee, that waiver will
not operate or be construed as a waiver of further breach by the
Employee.
14. Assumption of Agreement by Company's Successor and Assignees. The
Company's rights and obligations under this agreement will inure to
the benefit and be binding upon the Company's successors and
assignees.
15. Oral Modification Not Binding. This instrument is the entire agreement
of the Company and the Employee. Oral changes shall have no effect. It
may be altered only by a written agreement signed by the party against
whom the enforcement of any waiver, change, modification, extension,
or discharge is sought.
16. Situs of This Agreement. The terms and conditions of this agreement
shall be interpreted under the laws of the state of New Mexico.
17. Automatic Renewal. This agreement shall automatically be renewed for a
period of three years provided that either party has not otherwise
elected to terminate this agreement as provided for herein.
Company Date
Employee Date
Witness Date
10.2
Option to Purchase Common Stock of
AMERICANA PUBLISHING, INC.
Agreement (hereinafter referred to as "Option Agreement") made January 1st, 1999
between (Director) of (city) (state) (herein after referred to as "Purchaser")
and AMERICANA PUBLISHING, INC. (hereinafter referred to as "Seller") a Colorado
Corporation.
Whereas, Purchaser desires to purchase certain unissued but authorized common
stock of Seller.
Whereas, it is agreed Seller is duly authorized to issue new common stock and
will issue common stock to accommodate the purchase by the Purchaser under this
Option Agreement.
Whereas, the Seller and Purchaser have agreed upon all the terms and conditions
of this Option Agreement and execution and delivery of this Option Agreement has
been duly authorized by the Board of Directors of the Seller.
Whereas the Purchaser is granted an option by the Seller to purchase common
stock of the Seller.
Now, therefore, in consideration of the foregoing, and the mutual covenants
contained herein, and for consideration for this Option Agreement of two hundred
and fifty dollars to paid by Purchaser to Seller at execution of this Option
Agreement, the purchase of common stock pursuant to the exercise of this Option
Agreement shall be as follows:
<PAGE>
1. The Seller agrees to sell shares of common stock to the Purchaser at
anytime and in any denomination up to 300,000 shares in total, whereby the
Purchaser may purchase all or part of the total shares, however.
2. The Purchaser may purchase common stock of the Seller for a purchase Price
of ten cents (.10 cents) per share on or before December 31st, 1999.
3. The Purchaser may purchase common stock of the Seller for a purchase price
of twenty cents (.20 cents) per share on or before December 31st, 2000.
4. The Purchaser may purchase common stock of the Seller for a purchase price
of thirty cents (.30 cents) per share on or before December 31st, 2001.
5. Time For Payment For Common Stock. The stock option price of the shares to
be purchased pursuant to the exercise of the option hereinbefore granted
shall be paid in full at the time of the excise of the option at the stated
price per share for that time period as set forth herein.
6. Time Of Exercise Of This Option. The option hereinbefore granted may be
exercised by the Purchaser in whole or in part on or before three years
from the date of this Option Agreement but not to exceed December 31st,
2001.
7. Method of Exercising Option. At least five (5) days prior to the date upon
which the option hereinbefore granted is to be exercised, the Purchaser
shall deliver to the Seller written notice of its election to exercise the
option, which notice shall specify the date, place, time, amount of common
stock and purchase price for the exercise of the option in respect of which
the option is to be exercised.
The written notice shall be sent by U.S. mail addressed to the Seller at
the following address:
Americana Publishing, Inc.
303 San Mateo NE, Suite 104A
Albuquerque, NM 87108
Attn: Chairman of the Board
<PAGE>
8. Payment And Delivery Of Shares. The Purchaser shall at the date and time
specified in such notice, deliver a cashiers check or certified funds to
the Seller in the amount of the cash price for such purchase and Seller
shall deliver to the Purchaser a certificate of common stock of the Seller,
duly endorsed and properly issued to Purchaser in the correct number of
shares as represented by the funds and notice received by the Seller.
9. In the event of any of the following condition the Company will issue an
additional 300,000 shares of common stock to the Purchaser for compensation
of $1.00.
a) The sale of substantially all of the Company's assets to a single
purchaser or group of associated purchasers; or
b) The purchase of substantially all of the Company's issued and
outstanding stock in an effort to take the Company Private; or
c) The attempt by an individual or associated group of individuals
or corporation or entity to purchase stock in the Company for the
purposes of a hostile take over; or
d) The sale, exchange, or other disposition, in one transaction of
the majority of the Company's outstanding corporate shares; or
e) The Company's decision to terminate its business and liquidate
its assets; or
f) The merger or consolidation of the Company with another company
where by the directors of the Company as a whole are no longer
majority shareholders.
10. Sellers Representations And Warranties. The Seller is a corporation duly
organized under the state of Colorado and is organized as a publishing
enterprise.
a. Seller has no subsidiaries.
b. All of the current issued and outstanding common stock of the Seller
is a total of 2,535,000 shares, but does not include the 300,000
shares in this Option Agreement or other Option Agreements or other
offerings.
c. The foregoing representations and warranties shall be true at the time
of the date of this Option Agreement.
<PAGE>
11. Modifications. This Option Agreement shall become effective as of the date
hereof and unless sooner terminated, shall remain in full force and effect
until December 31st, 2001. No modifications or amendments of this Option
Agreement shall be effective unless such modification or amendment shall be
in writing and signed by the parties hereto.
12. Construction. This Option Agreement shall be deemed to be made under and
shall be construed in accordance with the laws of Colorado.
13. Binding and Benefit. This Option Agreement shall be binding upon and inure
to the benefit of the Purchaser, its successors and assigns.
14. Termination. This Option Agreement may be terminated by the Chairman of the
Board of the Seller, without cause by a 30 day written notice given to the
Purchaser via regular mail.
15. All Purchase Payment Retained By Seller. Consideration for this agreement
and all subsequent stock option payments shall be retained by Seller and
all stock purchases are considered fully paid and non-assessable. In
witness whereof, the parties of this Option Agreement have set their hands
and the corporate party has caused this Option Agreement to be executed
under its respective corporate seal.
Purchaser Date
Seller Date
Witness Date
10.3
CORPORATE FINANCE CONSULTING AGREEMENT
In consideration of the mutual promises herein contained, the project principals
Americana Publishing, Inc., hereinafter referred to as "Principals", located,
303 San Mateo NE, Suite 104A, Albuquerque, New Mexico 87108, hereby engage B. H.
Capital Limited, located at 303 San Mateo NE, Suite 104A, Albuquerque, NM 87108,
hereinafter referred to as "BHCL" to perform the services generally described
herein to the best of its ability, and Principals fully understand that such
services performed by "BHCL" will only be provided on a best efforts basis,
under the following terms and conditions:
1. This agreement will constitute an open account between Principals and
BHCL, and more specifically, references activities outlined below. The
term of this Agreement shall commence upon execution hereof by the
parties, and will continue to be in force until such time as
Principals notify BHCL, in writing, at the last known address for
BHCL. Such written notification to BHCL shall be tendered at least 120
days prior to the expected termination date of this Agreement. BHCL
shall have the right to terminate this Agreement upon written
notification to Principals, at the last known address for Principals.
Such written notification to Principals shall be tendered at least 10
days prior to the expected termination date of this Agreement.
2. Upon execution of this Agreement, Principals agree to pay the sum of
$1,000 as an initial retainer for professional time provided plus New
Mexico Gross Receipts Tax, plus $1,000 as an initial expense advance
(in the form of a cashiers check or other acceptable liquid funds),
for services provided by BHCL. It is agreed that the principals have
retained BHCL for the services described in paragraph 4-A and shall
compensate BHCL $3,000 per month for three years due and payable on
the 1st of each month thereafter until cancellation plus pre-approved
out of pocket expenses. Further, the Principal shall provide 1 1/2page
of advertising for BHCL, as BHCL chooses in each issue of the
Americana Corporate Finance Reporter for the term of this agreement.
BHCL shall provide such services without limitation of time necessary.
3. It is fully understood and agreed that in the event Principals do not
utilize or implement such services as outlined below, the
consideration heretofore paid shall be retained by BHCL and Principals
shall have no right or claim for return of said funds.
4. For and in consideration of services rendered by BHCL, on behalf of
Principals, BHCL shall be compensated by Principals as follows:
<PAGE>
A. BHCL shall provide general assistance in the identification of
additional credit/capital resources that may provide asset-based
lines of credit, operating lines of credit, working capital line
of credit, factor financing, fixed asset financing, acquisition
financing, equipment leasing, credit enhancements, private equity
capital, public equity capital, additional support collateral,
bridge financing, where applicable and will consult general
management efficiency issues, marketing, corporate strategy,
budgeting, financial statement presentation, corporate structure,
fiscal management techniques, dispute resolution, mergers and
acquisitions and shall advise the board of directors on corporate
governance, and shall provide office space accommodating two
desks, computer equipment, one support employee and use of all of
BHCL's office equipment and facilities.
Additional Compensation as follows:
1. Principals will compensate BHCL in an amount equal to one
percent (1%) simultaneous with closing, of the gross amount
of any credit facility(s), line(s) of credit, equity,
refinanced, restructured capital or credit, credit
enhancement in any form into the Principals company and or
subsidiary and will compensate a one percent (1%) success
fee equal to the gross amount of the net worth of any entity
merged or acquired by or into the Principals company and a
one percent (1%) success fee upon renewal of any of the
aforementioned within a five (5) year period from the date
of this contract. Principals further agree that BHCL has the
right to exchange success fees for additional common stock
of the Principals Company. Further, Principal agrees to
provide for an one full page advertisement in each issue of
Americana Corporate Finance Reporter of BHCL's choice for
the term of this agreement.
B. In the event additional services are provided in the future,
as specified under paragraph 4(A) above, fees shall be paid at
the rate so indicated in paragraph 4(A) above.
C. Any and all expenses paid by BHCL in its efforts to perform on
behalf of Principals shall be reimbursed immediately upon receipt
of copies of expense receipts by Principals. Any and all
anticipated individual expenses, which exceed the sum of $100.00,
shall be submitted to and approved by Principals before such
expense is incurred. Further, Principals agree to pay all
expenses as per invoice presented and is due and payable on
receipt.
D. At such time as BHCL is successful in obtaining funding,
pledges, guarantees or services as generally described in
paragraph 4(A) above, BHCL shall submit to Principals a statement
for services rendered, plus applicable New Mexico gross receipts
tax.
<PAGE>
E. All amounts billed by BHCL in accordance with paragraphs 4(A)
through 4(D) herein, are to be paid upon receipt but unpaid after
15 days of mailing, will incur a monthly service fee of one and
one half percent (1 1/2%). BHCL will further suspend professional
services until such fees are received.
5. Principals will provide to BHCL, as requested by BHCL, any and all
materials, reports, documents, studies and/or information necessary
for BHCL to perform under the terms of this Agreement.
6. Principals shall provide and contract for the services of other
professionals, as necessary.
7. In the event termination of this Agreement occurs prior to the funding
or performance, as outlined or pledged, directly or indirectly, for
Principals, through the efforts of BHCL the fees, as stated in
paragraph 4(A) above, shall be tendered to BHCL as if this Agreement
was still in force and effect. BHCL shall also have the right to
collect such other fees as described herein.
8. In the event of termination of this Agreement, Principals agree to pay
to BHCL any and all fees due to BHCL, plus applicable New Mexico gross
receipts tax, resulting from pledges or performance under this
Agreement, directly or indirectly, for Principals, from individuals or
entities that have been engaged through contact with BHCL during the
term of this Agreement.
9. Principals fully understand that George Lovato, Jr. may be engaged,
under separate Agreement, with companies or other entities that he has
an interest in, to provide services on behalf of BHCL relating to this
Agreement as described herein.
10. It is fully understood and agreed that on occasion Principals will
require consultation time from BHCL during the term of this Agreement.
BHCL will be notified that Principals desire such consultations and a
date and time for meeting will be scheduled in accordance with the
availability of the parties. Travel time will be billed at $150.00 per
hour with advanced approval by Principals or their authorized
representatives. This shall apply only upon agreement to compensate
BHCL on an hourly basis and not on a monthly retainer.
11. It is fully understood and agreed by Principals that Principals will
not circumvent the efforts of BHCL under any and all provisions of
this Agreement. Also Principals recognize that all sources, contacts,
vendors, suppliers, securities underwriters, lenders, dealers are
considered as property of BHCL and, as such, Principals will not
disclose, to any third party, information relating to these sources
for a period of not less than 60 months from completion of this
project.
<PAGE>
12. There shall be a continuing relationship, which extends beyond the
provisions outlined in paragraph 1. Principals agree that for a period
of 60 months commencing upon completion of services under this initial
project, any additional services, funding, pledges or guarantees
provided through individuals or entities that have been provided to
Principals under this project, fees shall be paid by Principals to
BHCL under provisions in paragraphs 2 and 4. -
13. In the event Principals and BHCL desire to change any or all terms of
this Agreement by addendum, such changes shall be made in writing and
executed by all parties.
14. This Agreement shall be binding upon and inure to the benefit of the
heirs, successors, and assigns of the parties hereto.
15. In the event an attorney is engaged by BHCL to enforce any or all of
its rights under the terms of this Agreement, Principals agree to pay
any and all reasonable attorney's fees, as well as any and all
applicable court costs and expenses incurred by BHCL in enforcing any
or all of its rights herein. Expenses shall include the time
involvement, at $150.00 per hour, by BHCL and/or its principals,
agents and/or employees in preparation of such litigation or mediation
of this Agreement.
16. Principals agree to hold harmless BHCL and/or its employees or
contractors from any wrongful act or acts known or unknown at this
time or that may arise during the course of this Agreement between the
signatories or their assigns or successors.
17. If any provision contained in this Agreement shall not be in
compliance with the laws of the State of New Mexico, the remaining
provisions shall remain in full force and effect to the extent
permitted by law.
18. This Agreement shall be governed and interpreted by the laws of the
State of New Mexico.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this _______
day of _____________, 1999.
By By
---------------------------- -------------------------------
Representative
<TABLE> <S> <C>
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<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> MAR-31-1999 DEC-31-1998
<CASH> 201,431 667
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 201,431 667
<PP&E> 42,815 36,984
<DEPRECIATION> 10,815 1,396
<TOTAL-ASSETS> 244,246 30,255
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<BONDS> 0 0
0 0
0 0
<COMMON> 2,000 2,535
<OTHER-SE> 237,736 25,131
<TOTAL-LIABILITY-AND-EQUITY> 0 30,255
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<TOTAL-COSTS> 320,332 437,565
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<INCOME-PRETAX> (311,009) (428,491)
<INCOME-TAX> 921 2,589
<INCOME-CONTINUING> (311,930) (431,080)
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