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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-SB/A-1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
ATLANTIC SYNDICATION NETWORK, INC.
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(Exact name of Small Business Issuers in Its Charter)
NEVADA 88-0325940
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2140 West Charleston, Suite B, Las Vegas, Nevada 89102
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(Address of principal executive offices) (Zip code)
(702) 388-8800
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(Issuer's Telephone Number)
Securities registered under Section 12(b) of the Exchange Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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n/a n/a
Securities registered under Section 12(g) of the Exchange Act:
Common Equity, Par Value $.001
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(Title of Class)
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ATLANTIC SYNDICATION NETWORK, INC.
FORM 10-SB
TABLE OF CONTENTS
PART I
NO. TITLE PAGE NO.
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Item 1. Description of Business....................................................................... 3
Item 2. Managements Discussion and Analysis or Plan of Operation...................................... 11
Item 3. Description of Property....................................................................... 15
Item 4. Security Ownership of Certain Beneficial Owners and
Management.................................................................................... 15
Item 5. Directors, Executive Officers, Promoters and Control Persons ................................ 16
Item 6. Executive Compensation........................................................................ 18
Item 7. Certain Relationships and Related Transactions................................................ 19
Item 8. Description of Securities..................................................................... 19
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and other Shareholder Matters ......................................................... 20
Item 2. Legal Proceedings ............................................................................ 21
Item 3. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure........................................................... 21
Item 4. Recent Sales of Unregistered Securities....................................................... 22
Item 5. Indemnification of Directors and Officers..................................................... 25
PART F/S
Financial Statements ......................................................................... 26
PART III
Item 1. Index to Exhibits............................................................................. 26
Item 2. Description of Exhibits....................................................................... 26
Signatures.................................................................................... 27
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FORM 10-SB
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Atlantic Syndication Network, Inc. (the Registrant) was originally
incorporated under the laws of the state of Nevada on September 25, 1978 as
Casino Consultants, Inc. Prior to September 1992 the Registrant was
non-operating. On September 15, 1992 the Registrant entered into an Agreement
and Plan of Reorganization with Ad Show Network, Inc., a Nevada corporation,
whereby the Registrant would acquire the assets of Ad Show Network, Inc.,
subject to liabilities, for shares of common stock in the Registrant. On
September 15, 1992, prior to completion of the asset purchase Casino
Consultants, Inc. changed its name to A.S. Network, Inc.
On October 14, 1992, Casino Consultants, Inc. (A.S. Network, Inc.)
filed an Amendment to its Articles of Incorporation changing the corporate
name to Ad Show Network, Inc. On August 17, 1995, Registrant filed an
amendment to the Articles of Incorporation changing the name to Atlantic
Syndication Network, Inc.
The asset purchase was accounted for as a tax free reorganization
under Section 368(a)(i)(c) of the Internal Revenue Code of 1986, as amended.
As a result, the acquiring Company, Casino Consultants, Inc. purchased 100%
of the net assets of Ad Show Network ($690,975) and transferred 4,500,000
shares of its common stock in exchange for these assets. As this was an
exempt isolated transaction, the securities received in such a transfer shall
not be registered under federal or state securities laws.
From the time of the asset purchase on September 25, 1992 until the
Registrant changed it's name on May 25, 1995 to Atlantic Syndication Network,
Inc., the Registrant's personnel and operations were engaged in the promotion
and advertising of local businesses and products in locations such as the
U.S. Post Offices through the use of automated computer kiosks. Successful
development and implementation of advertising operations occurred, however;
the U.S. Postal Service subsequently changed the U.S. Post Master and their
contract personnel and policy in dealing with third party contractors. In
making these changes the Postal Service caused he discontinuation of
operations by the Registrant in Post Offices throughout
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the Western U.S. The Registrant's financial resources had been expended in
developing this business and with the cessation of its kiosk advertising in
late 1995 followed in early 1996 by an assignment of the Registrant's
advertising operations to a third party. By year-end February 1996, the
Registrant had an accumulated deficit in retained earnings of ($755,999).
Corporate assets of $210,711 were nearly all non-liquid consisting primarily
of organizational and development costs and fixed assets.
The Registrant private placements as well as a capital restructuring
during this period from 1995 through 1997. The Registrant, through a private
placement, issued new shares from fiscal years 1995 through 1997 raising a
total of $224,700. The amounts raised were $64,000, $67,500 and $93,200
respectively. Stock sold was at $ 0.50 per share. In addition to the private
placement activity the Registrant also met with various note holders and
accounts payable vendors and negotiated exchanges of 144 stock for various
liabilities of the Registrant during this period.
An important factor in the re-capitalization of the Registrant was
the understanding by note holders and liability claimants that the management
team was committed and that the future prospects of the Registrant did have
value. This realization added to the sale of unregistered securities with
debt converted to stock.
There were also shares issued and accepted for services rendered. In
the past two fiscal years 67,600 shares were issued resulting in $25,400 of
notes payable and accounts payable being converted to 144 stock. Liability
conversion took place at varying share valuations from $.19 per share to $.50
per share with debt conversion amounts being $20,000 and $5,400 respectfully
for the fiscal years 1997 and 1998. In the most current 1998 fiscal year
ending February 28, 1999 there were 429,600 shares of restricted stock issued
for services rendered resulting in an increase in paid-in capital of $25,776.
Part of the visualization of future potential lies in the management
strength and commitment of the principal shareholders, Kent Wyatt and Sarah
Wyatt. The principals also contributed to the re-capitalization and continued
viability of the Registrant as they have not only worked for the past four
years without substantive remuneration, but from 1995 through 1998 have
loaned money to ASNI.
These loans to the Registrant began with $15,660 advanced in 1995
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and the current amount outstanding to the principals totals $83,915 as of
fiscal year end February 28, 1999. The amount due shareholders in 1997 was
$106,326, the $22,411 reduction in 1998 represents $22,411 repaid to
shareholder in 1998.
Private placement proceeds, capitalized liabilities of the
Registrant, and advances from principal shareholders were used to redirect
the Registrant's endeavors in design, development, production and
distribution of multi-media television programs, commercials, and
commissioned products requiring digital editing and computer animation. These
products benefit from management's talent and experience in video production.
The videotapes and television shows produced are Registrant owned, copyright
protected and available for distribution via satellite, cable, and broadcast
release.
Previous year's revenues in 1998 and 1999 (February year end) are
the results of consulting, editing, and advertisement sold from the
Registrant's shows. Nature of operating costs are that total operating costs
consist of general and administrative expenses, including non-cash charges
resulting from depreciation and amortization, other expenses and also
interest expense. At 1997 year end (February 1998) non-cash charges were
depreciation $6,105. amortization $44,358. Other costs, which included rent,
lease payments, contract labor, entertainment and miscellaneous, were
$148,599 of which $5,000 was for services paid with stock. Interest amounted
to $10,629. At 1998 year end (February 1999), non-cash charges were
depreciation $7850 and amortization $56,065. Other costs, which included
rent, lease payments, contract labor, entertainment, and miscellaneous, were
$72,249, of which $7000 was for services paid with stock. Interest was for
$22,970.
Prior to February 28, 1999, Kent Wyatt and Sarah Wyatt, controlling
69.4% of the outstanding and issued stock. The value of the Registrant at
year end was its cash on hand of $165,494 and the accumulated asset value of
the television shows and video products the Registrant has produced and those
it has developed and has ready for production. The Registrant has continued
to rebuild its equity position from the low of a negative ($76,899) position
at fiscal year end 1996 to a positive $24,017 at February 1998 year end, and
most recently to a current February 1999 year end total of $155,102. The
Registrant also has an operating loss carry forward of ($ 1,053,424) as of
February year end 1999 to apply against future earnings.
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The historical audited financial statements presented are those of
ASNI. The rights, preferences, privileges and restrictions of the common
shares are fully described in Item 11 of this document entitled "Description
of Securities." The principal offices of the Registrant are located in Las
Vegas, Nevada and production facilities are located in Hollywood, California.
Registrant concentrates on the development, production, and
distribution of television programs and specific projects created for
domestic and international markets. The goal is to produce powerful,
effective television programming and commissioned projects and to be known as
a notable provider of niche market television programs.
The Registrant participates in the video production industry with
state-of-the-art real time digital editing equipment and computer graphic
stations with 2D/3D and animation capabilities. This in-house equipment provides
a major cost savings in post-production expense and conforms to the necessary
technology for broadcast production. The Registrant has a strong production team
with top industry professionals experienced in production and distribution.
These completed Television 'Shows' represent a long-term asset and establish an
inventory for a video library of shows in different categories. Each show
retains its own long-term residual value once shown, for generating additional
and future income by airing all or part of these productions.
Registrant's success over the past 4 years has been its ability to
survive during a period of Show design, development, and packaging. The
Registrant has created required brochures, marketing tools, and developed an
advertising campaign for each show. Registrant also has a market advantage as
the Registrant has strategically aligned itself with an international publisher
and public relations firm to publish, accelerate promotion, and distribute niche
market books tied to its Show Categories. It also has a strategic agreement with
a manufacturer of home drug test kits. These drug test kits will be available
for marketing through the Registrant's Intervention Show and videotapes.
Registrant produces a superior product because of its ability to
control the production process and maintain quality control through its creative
development, production, and post production process. As broadcast editing
standards are used with its state-of-the-art digital video equipment and
personnel, the Registrant is able to produce television shows and videos at a
reduced cost compared to using third party studio production vendors.
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REGISTRANT'S PRODUCT DEVELOPMENT INCLUDES THE
FOLLOWING SHOW CATEGORIES:
The production of corporate owned projects includes Masters of the Martial Arts,
Starring Sho Kosugi, Ninjaerobics, and The Stock Show.
The Registrant produced Ninjaerobics in 1996 which aired in 1997;
Masters of the Martial Arts in 1996 and 1997 which aired 1997 and 1998; The
Stock Show produced and aired in 1997. These productions account for 60 weekly
shows currently in the Registrant's video library archive. None are currently
being rebroadcast or generating additional income at this date.
Pre-production on the Intervention Show began in 1998 with actual
production and post-production to be completed during 1999.
ASNI created, developed, and is currently producing a video project for
television and video entitled "Intervention" which will begin airing during the
summer of 1999. The biggest problem confronting America families today is
teenage drug and alcohol abuse. With one teenager dying every five days in San
Diego County, California there are ~ 75 teenagers dying per year in San Diego or
five times as many teenage fatalities as experienced in the Littleton, Colorado
shooting disaster in the spring of 1999. The significant difference is that the
problem isn't localized but is pervasive and is a disease that exists
nation-wide. ASNI recognized and is participating in solving the problem. The
Registrant is focusing on Intervention, a proven path to treatment and recovery
for the disease of drug and alcohol abuse.
The Registrant obtained the services of Dr. Sally St. John a Ph.D. and
Certified Substance Abuse Counselor. Dr. St. John has extensive
experience in treating addiction, in intervention techniques, and in treating
teenage drug abuse. Dr. St. John has had her own radio and TV shows and
lectured to medical groups throughout the U.S., and is imminently qualified
to host the Intervention Show. Of significance is the fact that the American
Medical Association (AMA) recognized the problem of drug addiction as a
disease in 1956. The American Society of Addiction Medicine has now
implemented a certification program for doctors in drug and alcohol
addiction. Tapes from the Intervention Show will be provided to schools, and
appropriate agencies and institutions for educational use.
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The Show will feature Intervention problems, modern techniques, and
current solutions for the millions of families faced with and involved with the
disease of teenage drug abuse. Show profit producing areas are varied with the
advertising and sponsorship revenues. Added profit areas are book revenues from
intervention books sold through the show in cooperation with a publishing
partner. Revenues will also come from sale of videotapes of each show to
viewers, institutions, agencies, and members of the 4,000 drug coalition groups
in the U.S. In addition, there will be revenues from the sale of in-home drug
tests made available through the Show at a discount from the retail market
price.
To highlight the home drug test kit potential, it is noted that the
sale of in-home drug test kits is one of the fastest growing segments of the
pharmacological industry. Current sales according to news reports are in excess
of a billion dollars and are projected to double during the next year.
Of societal interest to concerned citizens is that the Registrant
intends to participate with a non-profit foundation dedicated to promoting
awareness and furthering Intervention for teenage addicts. 2.5% of the net
earnings from ASNI's Intervention Show videotape sales will to go to the Angel
Heart Foundation at such time as it receives it's non-profit corporate status.
This non-profit corporation was established by Sarah Wyatt to insure that funds
donated would be fully applied to empowering families faced with drug and
alcohol abuse.
Master of the Martial Arts Show - With the growth in popularity of
Judo, Karate, Tae Kwon Do, Aikido and other oriental martial art forms over the
past decade, the Registrant saw an opportunity to bring instructional knowledge
and appreciation of these art forms to a wider audience. To this end the
Registrant produced 50 segments of interviews with world-wide "Masters of the
Martial Arts". Each show in this Show Category provides interviews with Masters
of a given martial art form. These Shows are ready for re-release and the
Registrant has regional and international TV distribution companies interested
in syndication of the Show. As the Registrants cash flow increases sufficiently
to acquire air time, the reintroduction of the Master of the Martial Arts will
commence.
Ninjaerobics Show - An out growth of the interest in martial arts has
been the development of exercise classes, which focus on martial art
techniques and movements. ASNI, recognizing this opportunity, designed
and developed a Show Category called Ninjaerobics. Several Shows were
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produced but financial sponsors were not secured and financial requirements
along with need to invigorate the instructional medium put this Show Category on
hold.
The Stock Show - With the biggest and longest Bull Market in the
history of Wall Street beginning in the mid-1990s, ASNI conceived of and
developed a Show Category it has named The Stock Show. The Stock Show sets,
promotional materials, advertising kits, demonstration tapes, and show
layouts have been developed, produced and are ready for full operational
production. Several Shows were produced and tested over a period of three
months. Initial acceptance of The Stock Show was very positive. ASNI's
commitment to professional integrity; its long-term commitment to
shareholders; and its own corporate policy toward maintaining and controlling
intellectual property rights has necessitated keeping The Stock Show is on
hold until proper financial backing can be secured. The developmental risk
and time required to put The Stock Show together and to complete all the
particulars required for production and operation are in place and
consequently investor concerns and investment risk have been minimized toward
operational deployment of The Stock Show.
The Franchise Connection is a television show that's created to focus
on one of the largest groups of business owners in the United States. The show
has been developed in terms of format, brochures, advertising materials and
concept. When produced, this show will provide exposure to franchisers,
franchisees, their vendors and professional associates and provide information
to those interested in owning their own business.
The FCC regulates the television entertainment industry. The Registrant's
philosophy in any of the Show Categories produced prohibits show violence or
graphically depicting sex in any form; consequently, the Registrant's ability to
operate once on the air is regulated primarily by its ability to obtain and
retain sponsorship, sell advertising, and generate production fees.
There are certain windows of opportunity available to Registrant as
success breeds competition and capital investment for ASNI is necessary for each
show to go into production and to be broadcast over the air. The Registrant does
have a strong competitive position in terms of products, efficient production
cost, and creative design of Show Categories. Given these factors and by
capitalizing on viewer interest and responding with
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prompt customer service and by immediate delivery of products ordered; the
proper steps will have been taken to help insure the Registrant's success.
Each Show Category has its own unique specifications and production
requirements, which are documented and adhered to throughout the entire
production process. The following steps for The Stock Show illustrate this
Production Process:
Pre-Production - Potential candidates are screened for suitability and
corporate research is conducted on each Registrant selected to be a guest on the
Show. Planning and scheduling are critical as there are two (2) featured guests
on each show and up to two other mini guest spots. The cost of support personnel
becomes crucial and time must be carefully allocated. Pre-production factors
included are: Set Design and Image Layout - Construction of Sets. Personnel
Scheduled - Technical Director (1); Lighting Technicians (2); Sound Technician
(1); Director and Assistant Director (2); Cameramen (2); Grips (2); Tape
Operator (1); Script Girl (1); Producers, segment producers, and Writers. Guests
Scheduled - Sixteen guests scheduled and interviewed over 4 days each month.
Production - Conducting interviews with scheduled guests is primary in
the over-all process. A number of events have to be coordinated in order to
create success:
1. Design and layout of Show for advertising in the paper media and
magazines.
2. Develop advertising kits and brochure for recruiting advertisers.
3. Develop brochure for recruiting guests who come on the Show.
4. Secure Show Sponsor who, in turn, gets opening and closing
entitlement.
5. Sell up to ten advertising segments for each show.
6. Select regions where the Show will air and purchase air time.
7. Schedule shoots for four days a month.
8. Satellite feed of the Show to the various stations selected is
arranged.
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Post-Production - Post-production is a fairly intense and pressure
oriented time with a tight schedule requiring precision editing in order to
meet the defined Show format. Twenty-minute interviews are edited into
5-minute segments for each featured guest. A quality control staff and edit
staff oversees and verifies that each show segment is within the proper
specifications. The digital and computerized editing includes blending guest
spots with computer graphics and the advertisements. The aired broadcast is
put into a video format which, in turn, becomes a revenue source as the
guests use the videos for shareholders and other purposes. A re-edit of each
interview frequently provides sufficient video for subsequent telecasts.
Media Air time - Primarily, the Registrant purchases, as a syndicator,
its regional Air time for each show from one of the regional TV stations either
directly or from a media broker. However, the media and Air time are commodity
items and as a TV series or show grows in popularity and viewer interest
expands, the Air time becomes less expensive.
To date the Registrant has aired shows in Southern California and on
satellite via International Channel Network (ICN) which telecasts throughout the
Western Hemisphere. The Registrant plans to telecast this year in the
southwestern region of the United States and also via satellite.
Registrant has 3 full-time employees and 2 part-time employees.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Registrant develops, produces, and distributes entertaining,
educational, and informational television programming. The Company endeavors to
present its programming on network, cable and public television.
Primary income is generated from the sale of advertising and promotion
during the shows and from companies who sponsor these shows.
Recognizing the importance of reaching families in crisis due to
alcohol and drug addiction, management is currently producing "Intervention",
videotapes that focus on drug and alcohol abuse. The videotapes will initially
be offered for sale via 1 and 2-minute infomercials and commercials aired on
television with an (800) number provided for call-ins. To date, the Company has
not marketed a videotape series in this manner, nor has it sold other products
to viewers.
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The Registrant has a strategic relationship and agreement established
with Promotion Publishing to publish books that compliment the Registrants
projects and shows. This Agreement, provided herein as Exhibit 6.3, implements a
venture to co-publish niche market books covering subject areas on shows that
the Registrant is producing. These and other niche market books will be offered
through productions such as the Intervention Show, which is scheduled to air in
the summer of 1999.
The Registrant also has an arrangement with Applied Biotech, Inc. (ABI)
a manufacturer/wholesaler of home drug test kits for in-home use. Registrant
intends to purchase their FDA diagnostic tests as a VAR (value added reseller)
and include them as part of the Intervention videotape sales package.
With each video on Intervention, the Registrant will make available to
viewers a tape of the show featuring various experts, authors, and celebrities
as well as real world situations involving teenage drug and alcohol abuse, and
the recovery process. Other tapes covering this subject matter will also be
available for purchase along with a book on Intervention. An in-home drug test
kit and workbook will also be made available with each purchase. The Registrant
has an 800 phone number providing ease of ordering for viewers.
REVENUES FROM OPERATIONS CAN BE ALLOCATED AS FOLLOWS:
Primary Income: Show revenues are generated from (1) sale of advertising and
promotions to be shown during the show; (2) companies sponsoring the show
because of its content; (3) video post-production services and (4) videotape
sales.
Secondary revenues may be derived from sale of products made available during
the course of a show such as added value products that complement videotape
sales.
It is anticipated that revenues will increase from interested sponsors
for the Intervention videotape commercial and infomercial project as it begins
airing. Many viability campaigns are currently on television that identify the
problem and create interest in the drug and alcohol addiction programs and
in-home drug testing.
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YEAR 2000 ISSUE
The Registrant has had outside consultants in to update and test the
computers hardware and software. They have assured the Registrant that the
computer systems they have are year 2000 compliant.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant's cash position at February 28, 1999 was $165,494, an
increase of $161,523 from February 28, 1998. The increase was primarily
attributable to $75,000 received in the placement of 300,000 shares of common
stock of the Registrant and $100,000 received from an investor to participate
in a profit sharing agreement for the Intervention Show.
Working capital at 1998 year end (Feb. 28, 1999) was a negative
(37,163). However, the current liabilities included $83,915 due the principal
stockholder which, although this is currently due, no demand has or is
intended to be made. This effectively would leave a positive working capital
of $46,752.
RESULTS OF OPERATIONS
During fiscal year ending February 28, 1998, the net profit before
tax position deteriorated 68% from the 1997 year end loss of ($111,863) to a
negative ($187,871). During this period, existing projects and shows were
being developed. Revenues for 1997 and 1998 came from the sale of advertising
for Registrant shows and were $24,000 and $24,950 respectively. Principals in
the Registrant have restricted taking salaries and therefore the Registrants
total operating expenses including General and Administrative costs, and
other costs including interest, rent, lease payments, contract labor,
entertainment, and misc. are used to reflect operations in 1997 and 1998.
Total costs exceeded sales for 1997 and 1998 by 850% and 550%, respectively.
The operating costs include non-cash items, which comprise 82% and 25%
respectfully of the total costs. Depreciation and amortization for 1997 was
$111,217 while 1998 is $50,463 and 1999 is $63,915. Depreciation and
amortization dropped considerably in 1998 and 1999 compared to 1997 because
of the now defunct Post Office Kiosk Project. Each year a portion of
operating expenses has been capitalized as Project Development Costs. For
1997 and 1998 the amounts capitalized were $170,966 and $50,000, respectively.
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The Registrants Shows and developed projects are the principal
assets of the Registrant. By the end of fiscal year (February 28, 1998), the
Registrant had produced 50 weeks of "Masters of the Martial Arts" show. The
Ninjaerobics Show and The Stock Show have been developed, produced and aired
regionally; and, the Franchise Connection has been developed. These Shows are
structured for a studio, investor, or other financial partner to participate
in producing them as a weekly series.
As identified in the Profit Participation Agreement (Exhibit 6.2)
for the Intervention Show, the investor receives 80% of the net profits until
his initial contribution is returned, then 50% of the net profit in
perpetuity.
REGISTRANT
Sales for 1998 (Feb 1999) increased $102,250 over 1997 primarily
from increased consulting services.
As in the two previous years the Registrant's principals restricted
their salary draws and therefore the total operating expenses essentially
reflect costs associated with Production of Shows and the resulting net
profit (loss) before taxes is used for comparison purposes. At February 28,
1999 year end the Registrants total expenses declined 33% to $137,271. This
reduction in expenses, helped reduce the net loss from the prior 1997 years
deficit of ($187,871) to a deficit of only ($791) after depreciation.
The Registrants working capital position at 1998 year end (Feb 28,
1999) was a negative ($37,163); however, this is before considering that
current liabilities have consistently included notes due principal
stockholders of $83,915, which, if added back, would provide for a positive
working capital position of $46,752 at February 28, 1999.
As of February 1998 year end, the former Ad Show Network assets were
fully amortized.
There was no Federal tax expense for the year ended February 28,
1999. The Registrant has a tax loss benefit to carry-forward of $1,034,856,
which is available to offset future tax liabilities.
The Registrant plans to expand its operations during the current
fiscal year through putting on-air other Shows it has developed utilizing
distribution management sectors. Specific Shows to be introduced are The
Stock Show and the Ninja Aerobics Show. Each sector draws on its unique
composition of businesses and industries requiring specialized sector
advertising.
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Distribution management is the term used to define regional acceptance of the
Registrants products in a sector while delineating the advertising support
network for each sector. This will be accomplished through selecting
qualified sales personnel for each sector selected and pairing them with
research specialists who evaluate the existing businesses and industries in a
given sector along with the demographic makeup of each region. The Registrant
plans to offer a broad range, multi-media service portfolio encompassing
tapes, books, CDS, drug test kits, and newsletter subscription services.
ITEM 3. DESCRIPTION OF PROPERTY.
The Registrant maintains its corporate offices at 2140 West
Charleston, Suite B in Las Vegas, Nevada. The Registrant has also maintained
for the past four (4) years a 1,500 square foot production office located at
6363 Sunset Drive, Hollywood, California. These offices are on a month to
month basis and the facility is located adjacent to the offices of Sho
Kosugi, the star of the Registrants Master of Martial Arts Show and in
proximity to many of the other music and technical support entities used
during show production.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
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TITLE OF NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
OF CLASS BENEFICIAL OWNER BENEFICIAL OWNER CLASS
<S> <C> <C> <C>
Common Kent G. Wyatt 7,983,000 (1) 58.4%
Common Sarah E. Wyatt 1,505,000 11.0%
Common James Shadlaus 210,000 (2) 1.5%
Common Bill Madon 1,050,000 (3) 7.7%
Common Ramon Bonin 600,000 (4) 4.4%
Common Don B. Dale 22,340 (5) LESS THAN .1%
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Footnotes to Item 4 (percentages based on 13,667,100 shares
outstanding): (1) The common shares listed include 450,000 shares held in
joint tenancy with Sarah Wyatt, and 400,000 shares held as trustee in-trust
for Kent G. Wyatt Jr. and Lisa Wyatt. (2) James Shadlaus was beneficial
owner of 200,000 shares at fiscal year-end. Another 10,000 shares was
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acquired on March 2, 1999 for $.50 per share. As Director and Registrant
promoter, he was granted warrants, valued at par value and to be issued
during 1999, which entitle him to purchase up to 100,000 shares of stock in
the Registrant. The warrants will run to 2009. (3) Bill Madon's address is
23072 via Celeste, Cota de Caza, CA 92679, he has no relationship with the
Registrant other than as a shareholder. (4) Ramon Bonin is an investor in a
profit participation agreement with the Registrant in its Intervention Drug
and Alcohol Addition Show. (5) Don Dale was a nominee for the Board of
Directors as of February 28, 1999, and was subsequently elected to the Board
on May 4, 1999. Shares owned include 17,340 shares acquired March 1, 1999 at
$0.50 per share resulting from conversion of a note. As a Director he was
granted warrants, valued at par and to be issued during 1999, which entitle
him to purchase up to 225,000 shares of stock in the Registrant. Warrants
were purchased at $.01 per share valuation and must be exercised in whole or
part at $.25 per share by February 28, 2009. Warrants were granted for
services rendered and/or for director services or commitments to advise the
Registrant.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
<TABLE>
<CAPTION>
NAME AGE POSITION/OFFICE TERM SERVED SINCE
<S> <C> <C> <C> <C>
Kent G. Wyatt Sr. 59 Director, President, CEO 1 yr. 9/92
Sarah E. Wyatt 59 Director, Corporate Secretary 1 yr. 9/92
James Shadlaus 49 Director, Treasurer 1 yr. 5/95
Don B. Dale 57 Director 1 yr. 5/99
Ramon Bonin 60 Profit Participation Partner n/a n/a
</TABLE>
KENT G. WYATT, SR. - Mr. Wyatt brings over 20 years of combined experience in
business management which includes television and film production. He served
as executive producer and producer of shows such as, This is San Francisco,
which featured many celebrities and entertainment personalities and other
outstanding professional guests. Mr. Wyatt has produced weekly series,
television specials, and written, produced, and sold commercials for national
corporations including New York Life Insurance, Pizza Hut, City of Las Vegas,
Prudential, and Thrifty Car Rental. He attended Colorado University where he
majored in business administration. He is committed to expanding Registrant
operations and on-line distribution of Registrant developed shows in a
cost-effective manner. His vision is for Registrant to
<PAGE>
become a recognized leader in quality television programming and, through niche
market shows like the Intervention Show, improve the quality of life for
teenagers suffering from drug and alcohol abuse. Mr. Wyatt also successfully
built and managed a nationwide chain of several hundred dealerships under the
name of Centurion Design Wall Printing in the 1970's, which he sold in 1985. He
has maintained a California real estate broker license since 1968.
SARAH E. WYATT - Ms. Wyatt has extensive business and management experience
and is well qualified as Registrants Administrative Officer, Corporate
Secretary and Director. She manages client relations and coordinates
production personnel and studio facilities. She is senior producer and chief
writer of the Intervention Show. She served as co-producer of the show
Masters of the Martial Arts starring Sho Kosugi. She has a degree in French
from The Union Institute. She supervised all commercial advertising
production for Ad Show Network, the predecessor to ASNI, and was co-owner and
administrative manager of the Centurion Design Wall Printing business in the
1970's and early 1980's with her husband, Kent Wyatt.
JAMES SHADLAUS - Mr. Shadlaus brings twenty-four years of combined experience
in finance, accounting, mortgage banking, and corporate management to the
Registrant. He was a founder and majority owner of Lenders Corporation, a
full service financial services firm with approximately 200 employees, which
completed financing of over Two Billion Dollars. He also served as Chief
Financial Officer and Executive Vice President of Lenders Corporation. Mr.
Shadlaus graduated Magna Cum Laude from California State University in
Northridge with a Masters of Science in Accounting, and currently acts as a
partner and consultant to various corporations in the area of financing,
mergers, and stock or bond financing.
DON B. DALE - Mr. Dale comes to the Registrant's Board with over 30 years of
combined experience in banking, finance, and corporate management. He held a
number of executive positions with San Diego National Bank serving as
Executive Vice President, Chief Financial Officer, and Director; and
President of the Bank Subsidiaries. Prior to leaving in 1985, he grew the
bank to $130 million dollars in footings and premier bank status in 4 years.
Mr. Dale was a registered member of NASD in the early 1990is and retired from
financial and business consulting in 1996. Mr. Dale graduated from the
University of Kansas and holds his Masters in Business Administration from
Long Beach State University. Mr. Dale assists several non-profit entities
including United States Internet Genealogical Society and PARTS, a teenage
drug abuse program.
<PAGE>
RAMON BONIN - Mr. Bonin, president of Dynamic Builders, is nationally
regarded for his expertise and skill in real estate development and is widely
acclaimed as one of the largest industrial real estate builders and
developers in Los Angeles, California. Mr. Bonin shares with the principals
of ASNI a mutual desire to contribute to the education of families faced with
the disease of alcohol and drug addiction. He participates as a profit
sharing partner in its Intervention Show videotapes.
Of the above listed Officers and/or Directors two were involved with
a business which had a bankruptcy petition filed by them. Kent Wyatt and
Sarah Wyatt owned Centurion Enterprises, Ltd., whose primary asset was a
commercial building. As a result of the Savings and Loan debacle than ran
from 1988 through 1994, the building became empty and on depletion of all
corporate and personal resources the only alternative left in 1993 was to
file corporate and personal bankruptcy. The lender on the building took back
the real estate and Centurion Enterprises had no other liabilities. None of
the above officers or directors have been convicted in a criminal proceeding
or been subject to a pending criminal proceeding nor been subject to any
order, judgment, or decree which would permanently or temporarily enjoin,
bar, suspend or otherwise limit their involvement in any type of business,
securities or banking activities. None of them has been found to have
violated any Federal or State securities or commodities law.
ITEM 6. EXECUTIVE COMPENSATION.
Employment Contracts: There are no employment contracts in place.
Over the years two key full time employees, Kent Wyatt, CEO and Sarah Wyatt,
Secretary, received most of their compensation in 1997 (year-end Feb 1998)
with the issuance of 5,000,000 shares of stock. Cash payment to these
employees for fiscal year-end February 28, 1997, 1998 and 1999 was $13,600,
$32,205 and $10,000 respectively. Additional compensation to the Wyatt's is
interest payments made to them for monies they advanced to the Registrant.
This payment for fiscal year-end February 28, 1997, 1998 and 1999 was $-0-,
$-0- and $10,305, respectively.
As of March 1, 1997, Registrant's debt to these principal stockholders was
$106,325 and at year-end February 28, 1999 the debt had been reduced to
$83,915.
Management salaries of $120,000 for Kent Wyatt and $60,000 for Sarah Wyatt
have been approved by the Board of Directors as of May 4, 1999.
<PAGE>
Options/Stock Appreciation Rights - There are no stock options or stock
appreciation rights currently effective.
Aggregated Option/SAR Exercises Fiscal Year End Option/SAR - There are no
SAR's.
Long Term Incentive Plan ("LTIP") Awards - There are no long-term incentive
plans in place. The Board has authorized management of the Registrant to
investigate various insurance programs and to use its discretion to secure a
program; which, if purchased, would also provide for management succession
and continuation of Registrant operations.
Compensation of Directors There is no cash compensation for directors other
than expenses directly associated with Director Meetings. The two outside
Directors were granted warrants to purchase stock of the Registrant on May 4,
1999 as follows: Jim Shadlaus granted warrant to purchase up to 100,000
shares and Don Dale granted warrants to purchase up to 225,000 shares.
Warrants were purchased at $.01 per share valuation and must be exercised in
whole or part at $.25 per share by February 28, 2009. Warrants were granted
for services rendered and/or for director service or commitments to advise
the Registrant.
ITEM 7. CERTAIN RELATIONS AND RELATED TRANSACTIONS.
There were no transactions during the last two years, or proposed
transaction, to which the small business issuer was or is to be a party, in
which any director, executive officer, nominee for directorship,
security-holder or immediate family member had a direct or indirect material
interest as defined by Rule 404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES.
(a) COMMON STOCK. At September 1, 1999 the Registrant had 13,806,440
shares of its common stock issued and outstanding. Of the outstanding shares
857,500 were free trading and 12,948,940 were restricted.
Registrant's Articles of Incorporation, filed September 25, 1978
were amended October 14, 1992 and authorized the issuance of up to 50,000,000
of Registrant's common equity shares with a par value of .001 and 500,000
preferred shares with a par value of .001. Holders of shares of the common
stock are entitled to one vote for each share on all matters to be voted on
by the stockholders. Holders of common stock have no
<PAGE>
cumulative voting rights. Holders of shares of common stock are entitled to
share ratably in dividends, if any, as may be declared from time to time by
the Board of Directors in its discretion; from funds legally available
therefor.
In the event of a liquidation, dissolution or winding up of the
Registrant, the holders of shares of common stock are entitled to share pro
rata all assets remaining after payments in full of all liabilities. Holders
of common stock have no preemptive rights to purchase the Registrant's common
stock. All of the outstanding shares of common stock are fully paid and
non-assessable.
(b) PREFERRED STOCK. At February 28, 1999 the Registrant had 500,000
shares of preferred stock authorized at a par value of $.01. None of the
Registrant's preferred stock is issued and outstanding.
Article 4th of the Amended Articles of Incorporation of the
Registrant set forth in Exhibit 3.2 hereto permits the Board of Directors to
issue one (1) or more series of Preferred Stock in such amounts and under
such conditions as the Board may decide, in that the Registrant has no plans
to issue Preferred stock in the foreseeable future, accordingly the
Registrant has not addressed or does it plan to address the specific terms
and conditions of any such series of Preferred stock.
(a) STOCK TRANSFER RESTRICTIONS: The following stock transfer
restrictions are set forth in the Registrant's By-Laws. ARTICLE IV SECTION 5.
The Stock Transfer Books shall be closed for all meetings of the stockholders
for the period of 10 days prior to such meetings and shall be closed for the
payment of dividends during such periods as from time to time may be fixed by
the Board of Directors, and during such periods no stock shall be
transferable.
Notwithstanding this stock transfer restriction, the Registrant has
waived this restriction and all shareholders have been and will continue to
have the ability to transfer their respective shares during this 10 day
period.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS.
(a) MARKET INFORMATION: The Registrant's common stock trades on the
OTC Bulletin Board under the symbol ASNI. The Registrant's common stock price
at close of business on August 1, 1999 was $.25 per share.
<PAGE>
(b) PRICE RANGE: The following is the range of the high and low bids
for the Registrant's common stock for each quarter within the last two fiscal
years as determined by over-the-counter market quotations. These quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission
and may not represent actual transactions.
<TABLE>
<CAPTION>
1998 1997
-------- --------
QUARTER HIGH BID LOW BID HIGH BID LOW BID
<S> <C> <C> <C> <C>
Feb .25 .01 .25 .125
May .25 .01 .25 .125
Aug. .25 .01 .25 .125
Nov. .25 .01 .25 .125
</TABLE>
(c) HOLDERS: The Registrant has approximately 142 common stock
shareholders.
(d) DIVIDENDS: The Registrant has never paid a cash dividend. It is
the present policy of the Registrant to retain any extra profits to finance
growth and development of the business. Therefore, the Registrant does not
anticipate paying cash dividends on its common stock in the foreseeable
future.
(e) CRITERIA FOR LISTING ON NASDAQ SMALLCAP MARKET: The Issuer at
this time does not satisfy the minimum criteria for listing on the NASDAQ
Smallcap Market.
ITEM 2. LEGAL PROCEEDINGS.
The Registrant is not presently involved in any litigation.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The accountant has not resigned, declined to stand for re-election nor
were they dismissed. The principal accountant's report on the financial
statements for the past two years contains no adverse opinion for the 1998
fiscal year ending February 28, 1999 nor disclaimer of opinion. The
accountants audited report for the fiscal year-end February 1997 did present
its report assuming the Registrant continues as a going concern due to
PAGE 21
<PAGE>
previous years operating losses and need for capital or project financing,
both of which were obtained in fiscal year 1998. During the past two years
neither audited statement was modified as to uncertainty, audit scope, or
accounting principles. There have been no disagreements with any former
accountants on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
(a) RECENT SALES: The Registrant had the following stock issuances
within the last three years. All such shares were sold by the officers and
directors of the Registrant and no underwriters were utilized.
<TABLE>
<CAPTION>
MARCH 1, 1996 TO FEBRUARY 28, 1997
DATE CLASS NO. OF SHARES CONSIDERATION AMOUNT
<S> <C> <C> <C> <C>
1. 03-01-96 Common 12,000 Services $ 240
2. 04-04-96 Common 9,000 Conversion 7,200
3. 04-04-96 Common 9,000 Services 180
4. 04-04-96 Common 4,500 Conversion 3,600
5. 04-04-96 Common 3,000 Conversion 2,400
6. 04-08-96 Common 3,200 Purchase 1,600
7. 04-22-96 Common 30,000 Services 600
8. 04-22-96 Common 3,000 Conversion 2,400
9. 04-22-96 Common 4,500 Conversion 3,600
10. 04-22-96 Common 1,500 Conversion 1,200
11. 04-22-96 Common 3,200 Purchase 1,600
12. 05-20-96 Common 12,000 Conversion 9,600
13. 06-13-96 Common 100,000 Services 2,000
14. 07-19-96 Common 150,000 Purchase 75,000
15. 07-19-96 Common 25,000 Services 500
16. 07-19-96 Common 120,000 Conversion 54,370
17. 07-24-96 Common 5,000 Services 100
18. 07-29-96 Common 25,000 Services 500
19. 11-22-96 Common 120,000 Services 2,400
20. 11-22-96 Common 150,000 Purchase 75,000
21. 11-27-96 Common 25,000 Services 500
22. 12-20-96 Common 3,000 Services 60
23. 02-28-97 Common 75,000 Conversion 31,000
------ --------
TOTAL 892,900 $275,650
======= ========
SUMMARY
Services 354,000 $ 7,080
Purchases 306,400 153,200
Conversion 232,500 115,370
------- --------
TOTAL 892,900 $275,650
======= ========
</TABLE>
PAGE 22
<PAGE>
MARCH 1, 1997 TO FEBRUARY 28, 1998
<TABLE>
<CAPTION>
DATE CLASS NO. OF SHARES CONSIDERATION AMOUNT
<S> <C> <C> <C> <C>
1. 05-22-97 Common 5,000,000 Services $ 5,000
2. 05-22-97 Common 605,000 Purchase 54,000
3. 08-28-97 Common 6,000 Conversion 3,000
4. 09-15-97 Common 32,000 Purchase 3,372
5. 09-15-97 Common 6,000 Conversion 3,000
6. 09-15-97 Common 400,000 Purchase 42,178
7. 12-24-97 Common 28,000 Conversion 14,000
--------- --------
TOTAL 6,077,000 $125,000
========= ========
SUMMARY
Services 5,000,000 $ 5,000
Purchases 1,037,000 100,000
Conversion 40,000 20,000
--------- --------
TOTAL 6,077,000 $125,000
========= ========
</TABLE>
<TABLE>
MARCH 1, 1998 TO FEBRUARY 28, 1999
DATE CLASS NO. OF SHARES CONSIDERATION AMOUNT
<S> <C> <C> <C> <C>
1. 06-08-98 Common 25,000 Services $ 1,500
2. 06-08-98 Common 50,000 Purchase 12,500
3. 08-12-98 Common 9,600 Conversion 1,920
4. 10-22-98 Common 10,400 Purchase 2,600
5. 10-22-98 Common 6,000 Conversion 1,080
6. 10-22-98 Common 13,000 Services 780
7. 10-22-98 Common 1,600 Services 96
8. 10-22-98 Common 10,000 Purchase 2,600
9. 10-22-98 Common 200,000 Services 12,000
10. 10-22-98 Common 100,000 Services 6,000
11. 10-22-98 Common 50,000 Services 3,000
12. 10-22-98 Common 12,000 Conversion 2,400
13. 11-09-98 Common 13,600 Purchase 3,400
14. 11-18-98 Common 18,400 Purchase 4,600
15. 11-18-98 Common 40,000 Services 2,400
16. 01-17-99 Common 300,000 Purchase 75,000
------- ------
TOTAL 860,000 $131,876
======= ========
SUMMARY
Services 429,600 $ 25,000
Purchases 402,800 100,700
Conversion 27,600 5,400
------- --------
TOTAL 860,000 $131,876
------- --------
------- --------
</TABLE>
PAGE 23
<PAGE>
(b) EXEMPTIONS FROM REGISTRATION: With respect to the issuance of
all of the common shares listed at Item 12(a), such issuances were made in
reliance on the private placement exemptions provided by Section 4(2) of the
Securities Act of 1933, as amended (the "Act"), SEC Regulation D, Rule 504 of
the Act ("Rule 504") and Nevada Revised Statutes Sections 78.211, 78.215,
73.3784, 78.3785 and 78.3791 (collectively, the "Nevada Statutes").
In each instance, each of the share purchasers had access to
sufficient information regarding the Registrant so as to make an informed
investment decision. More specifically, each purchaser signed a written
subscription agreement with respect to their financial status and investment
sophistication wherein they warranted and represented, among other things,
the following:
1. That he had the ability to bear the economic risks of investing
in the shares of the Registrant.
2. That he had sufficient knowledge in financial, business, or
investment matters to evaluate the merits and risks of the
investment.
3. That he had a certain net worth sufficient to meet the
suitability standards of the Registrant.
4. That the Registrant has made available to him, his counsel and
his advisors, the opportunity to ask questions and that he has
been given access to any information, documents, financial
statements, books and records relative to the Registrant and an
investment in the shares of the Registrant.
PURCHASED FOR CASH DURING FISCAL YEAR FEBRUARY 28, 1999
<TABLE>
<CAPTION>
TITLE SHARE AMOUNT NAME
<S> <C> <C>
Common 300,000 Ramon Bonin
Common 50,000 Robbins Residual Trust
Common 32,000 Narcisco Avila
Common 10,400 Ed Avila
Common 10,400 Guadalupe Portillo
</TABLE>
PAGE 24
<PAGE>
NOTES CONVERTED
<TABLE>
<CAPTION>
TITLE SHARE AMOUNT NAME
<S> <C> <C>
Common 12,000 Narcisco Avila
Common 9,600 Guadalupe Portillo
Common 6,000 David Harjung
SERVICES RENDERED
<CAPTION>
TITLE SHARE AMOUNT NAME
<S> <C> <C>
Common 25,000 Bill Robbins
Common 200,000 Carmine Bua
Common 100,000 James Shadlaus
Common 50,000 Kent Wyatt, Jr.
Common 40,000 Sho Kosugi
Common 14,600 Ed Avila
-------
TOTAL 860,000
-------
-------
</TABLE>
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and Bylaws of the Registrant provide
for indemnification of the Registrant's officers and directors for
liabilities arising due to certain acts performed on behalf of the Registrant
that are not a result of any act or omission by any such director or officer;
provided, however, that the foregoing provision shall not eliminate or limit
the liability of a director or officer (I) for acts or omissions which
involve intentional misconduct, fraud or (ii) a knowing violation of law, or
(iii) the payment of dividends in violation of Section 78.300 of the Nevada
Revised Statues. Although the state statues allow for indemnification of
officers and directors, the Federal Securities and Exchange rules prohibit
indemnification of officers and directors of publicly held companies.
PART F/S
The following financial statements are submitted pursuant to the
information required by Item 310 of Regulation S-B:
PAGE 25
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NO. DESCRIPTION
<S> <C>
FS-1 Atlantic Syndication Network, Inc. Balance Sheets
Years Ending February 28, 1999 and 1998
FS-2 Atlantic Syndication Network, Inc. Statements of
Income and Expenses For the Years Ended February 28,
1999 and 1998
FS-3 Atlantic Syndication Network, Inc. Statements of
Stockholders' Equity For the Years Ended February
28, 1999 and 1999.
FS-4 Atlantic Syndication Network, Inc. Statements of
Cash Flows For the Years Ended February 28, 1999 and
1998.
</TABLE>
PART III
ITEM 1. INDEX TO EXHIBITS.
The exhibits listed and described below in Item 2 are filed herein
as the part of this Registration Statement.
ITEM 2. DESCRIPTION OF EXHIBITS.
The following documents are filed herein as Exhibit Numbers 2, 3, 5,
6 and 7 as required by Part III of Form 1-A:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
2 CHARTER AND BY-LAWS
<S> <C> <C>
2.1 Articles of Amendment of Casino
Consultants, Inc.
2.2 Articles of Incorporation of Casino
Consultants, Inc.
</TABLE>
PAGE 26
<PAGE>
<TABLE>
<S> <C> <C>
2.3 Articles of Amendment of A.S. Network, Inc.
2.4 By-Laws of Registrant
3-NONE INSTRUMENTS DEFINING THE RIGHTS OF
SECURITY HOLDERS
5-NONE VOTING TRUST AGREEMENTS
6 MATERIAL CONTRACTS
6.1 Plan of Reorganization between
Casino Consultants, Inc. and
Ad Show Network, Inc. (now ASNI).
6.2 Profit Participation Agreement
6.3 Agreement with Promotion Publishing
Company.
7-NONE MATERIAL FOREIGN PATENTS
27 FINANCIAL DATA SCHEDULE
</TABLE>
SIGNATURES
In accordance with Section 12 the Securities and Exchange Act of
1934 the Registrant caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
ATLANTIC SYNDICATION
NETWORK, INC.
DATED: October 25, 1999 BY: /s/ KENT G. WYATT
------------------------
KENT G. WYATT
President
PAGE 27
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NO. DESCRIPTION
<S> <C>
FS-1 Atlantic Syndication Network, Inc. Balance Sheets
Years Ending February 28, 1999 and 1998
FS-2 Atlantic Syndication Network, Inc. Statements of
Income and Expenses For the Years Ended February 28,
1999 and 1998
FS-3 Atlantic Syndication Network, Inc. Statements of
Stockholders' Equity For the Years Ended February
28, 1999 and 1999.
FS-4 Atlantic Syndication Network, Inc. Statements of
Cash Flows For the Years Ended February 28, 1999 and
1998.
</TABLE>
<PAGE>
EXHIBIT FS-1
ATLANTIC SYNDICATION NETWORK, INC.
BALANCE SHEETS YEARS ENDING
FEBRUARY 28, 1999 AND 1998
<PAGE>
A S N I
ATLANTIC SYNDICATION NETWORK, INC.
------------------------------
Audited Financial Statements
February 28, 1999 and 1998
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
TABLE OF CONTENTS
FEBRUARY 28, 1999 and 1998
<TABLE>
<S> <C>
INDEPENDENT AUDITOR'S REPORT . . . . . . . . . . . . . . . Page 1
FINANCIAL STATEMENTS:
Balance Sheets . . . . . . . . . . . . . . . . . .Page 2
Statements of Income and Expenses . . . . . . . .Page 3
Statements of Stockholders' Equity . . . . . . . .Page 4
Statements of Cash Flows . . . . . . . . . . . . .Page 5
NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . .Page 6
</TABLE>
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To: Board of Directors
ATLANTIC SYNDICATION NETWORK, INC.
Las Vegas, Nevada
We have audited the accompanying balance sheet of ATLANTIC SYNDICATION
NETWORK, INC. (a Nevada corporation), as of February 28, 1999 and 1998 and
the related statements of income and expenses, stockholders' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph
above present fairly, in all material respects, the financial position of
ATLANTIC SYNDICATION NETWORK, INC. at February 28, 1999 and 1998 and the
results of its operations and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
SELLERS & ASSOCIATES, P.C.
Sellers & Associates, P.C.
April 26, 1999
Ogden, Utah
Page 1
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Balance Sheets
Years Ending February 28,
<TABLE>
<CAPTION>
A S S E T S 1999 1998
------------ -----------
<S> <C> <C>
Current Assets
Cash $ 165,494 $ 3,971
Investments -- 5,620
Prepaid Expense -- 24,000
Assets Held For Sale 20,000 30,000
------------ -----------
Total Current Assets 185,494 63,591
------------ ------------
Property and Equipment, Net 23,374 28,224
------------ ------------
Net Property and Equipment 23,374 28,224
------------ ------------
Other Assets
Project Development Costs 346,371 220,966
(Accumulated) Amortization-Project Development Costs (97,022) (47,498)
Initial Organization & Franchise Development Costs 205,098 205,098
(Accumulated) Amortization - All Other (205,098) (198,557)
------------ ------------
Net Other Assets 249,349 180,009
------------ ------------
$ 458,217 $ 271,824
------------ ------------
------------ ------------
L I A B I L I T I E S A N D S T O C K H O L E R S' E Q U I T Y
Current Liabilities
Accounts Payable $ 21,668 $ 43,184
Notes Payable 7,074 7,830
Refundable Deposits 10,000 14,804
Due to Stockholder 83,915 106,326
Deposit For Project Development 100,000 -
------------ ------------
Total Current Liabilities 222,657 172,144
------------ ------------
Long-Term Liabilities 80,458 75,663
------------ ------------
Total Liabilities 303,115 247,807
------------ ------------
Stockholders' Equity
Preferred Stock, $.01 par value,
authorized 500,000 shares,
issued and outstanding -none
Common Stock, $.001 par value, authorized
50,000,000 shares, issued and outstanding 13,667,100
shares at 2-28-98 and 12,807,100 shares at 2-28-98 13,667 12,807
Additional Paid-In Capital 1,197,959 1,066,943
Retained Earnings (Deficit) (1,056,524) (1,055,733)
------------ ------------
Net Stockholders' Equity 155,102 24,017
------------ ------------
Total Liabilities and Stockholders' Equity $ 458,217 $ 271,824
------------ ------------
------------ ------------
</TABLE>
See Accompanying Independent Auditor's Report and Notes
to the Financial Statement Page 2
<PAGE>
EXHIBIT FS-2
ATLANTIC SYNDICATION NETWORK, INC.
STATEMENTS OF INCOME AND EXPENSES
FOR THE YEARS ENDED FEBRUARY 28, 1999 AND 1998
<PAGE>
<TABLE>
<CAPTION>
ATLANTIC SYNDICATION NETWORK, INC.
Statements of Income and Expenses
For the Years Ended February 28,
1999 1998
------------------ ------------------
<C> <C>
<S>
Revenues $ 127,200 $ 24,950
------------------ ------------------
Operating Expenses
Amortization $ 56,065 $ 44,358
Depreciation 7,850 6,105
Interest 22,970 10,629
All Other Costs 157,015 198,599
(Less) Capitalized as Project Development Costs (106,629) (50,000)
------------------ ------------------
Total Operating Expenses 137,271 209,691
------------------ ------------------
Income (Loss) from Operations (10,071) (184,741)
Forgiveness of Debt 9,900 -
(Loss) on Reduction of Investment from Cost to Market - (3,130)
(Loss) on Sale of Investment (620) -
------------------ ------------------
Net (Loss) Before Income Taxes (791) (187,871)
Provision for Income Taxes - -
Net (Loss) $ (791) $ (187,871)
------------------ ------------------
------------------ ------------------
Net (Loss) Per Share of Common Stock $ (0.000) $ (0.017)
------------------ ------------------
------------------ ------------------
Weighted Average Shares Outstanding During the Period 13,082,517 11,267,850
------------------ ------------------
------------------ ------------------
</TABLE>
SEE ACCOMPANYING INDEPENDENT AUDITOR'S REPORT AND NOTES TO THE FINANCIAL
STATEMENT
PAGE 3
<PAGE>
EXHIBIT FS-3
ATLANTIC SYNDICATION NETWORK, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY FOR
THE YEARS ENDED FEBRUARY 28, 1999 AND 1998.
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Statements of Stockholders' Equity
For the Years Ended February 28, 1999 and 1998
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid-In- Accumulated Total
Shares Amount Shares Amount Capital Deficit Equity
-------- -------- ------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance as of February 28, 1997 - $ - 6,730,100 $ 6,730 $ 948,020 (867,862) $ 86,888
Net (Loss) for the year ended
February 28, 1998 (187,871) (187,871)
Sale of unregistered stock 1,037,000 1,037 98,963 100,000
Debt converted to stock 40,000 40 19,960 20,000
Stock for services rendered 5,000,000 5,000 - 5,000
-------- -------- ------------- ------------- ------------- ------------- -----------
Balance as of February 28, 1998 - $ - 12,807,100 $ 12,807 $ 1,066,943 $ (1,055,733) $ 24,017
Net (Loss) for the year ended
February 28, 1999 (791) (791)
Sale of unregistered stock 402,800 403 100,297 100,700
Debt converted to stock 27,600 28 5,372 5,400
Stock for services rendered 429,600 429 25,347 25,776
-------- -------- ------------- ------------- ------------- ------------- -----------
Balance as of February 28, 1999 - $ - 13,667,100 $ 13,667 $ 1,197,959 $ (1,056,524) $ 155,102
-------- -------- ------------- ------------- ------------- ------------- -----------
-------- -------- ------------- ------------- ------------- ------------- -----------
</TABLE>
See Accompanying Independent Auditors Report and Notes to the Financial
Statement
<PAGE>
EXHIBIT FS-4
ATLANTIC SYNDICATION NETWORK, INC.
STATEMENTS OF CASH FLOWS FOR
THE YEARS ENDED FEBRUARY 28, 1999 AND 1998.
<PAGE>
<TABLE>
<CAPTION>
ATLANTIC SYNDICATION NETWORK, INC.
Statements of Cash Flows
For the Years Ended February 28,
CASH FLOWS FROM OPERATING ACTIVITIES 1999 1998
- ------------------------------------------------------------------------ ------------------ ------------------
<S> <C> <C>
Net Income (Loss) $ (791) $ (187,871)
------------------ ------------------
Adjustments to reconcile Net Income to Cash Flows
from Operating Activities
Depreciation and Amortization 63,915 50,463
Decrease in Assets Held For Sale 10,000 14,793
Decrease in Prepaid Expenses 24,000 -
(Decrease) in Accounts Payable (21,516) (19,485)
Increase in Deposit For Project Development 100,000 -
Stock Issued For Services in Lieu of Cash 7,000 5,000
------------------ ------------------
Total Adjustments 183,399 50,771
------------------ ------------------
Net Cash Provided (Used) by Financing Activities 182,608 (137,100)
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------------------------------------------
(Increase) Decrease in Investments 5,620 (5,620)
(Increase) in Property & Equipment (3,000) (19,173)
(Increase) in Other Assets (106,629) (50,000)
------------------ ------------------
Net Cash (Used) by Investing Activities (122,785) (74,793)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------------------------------------------
Increase in Notes Payable 9,439 50,080
Increase (Decrease) Funds Advanced by Shareholder (22,411) 67,112
(Decrease) in Refundable Deposits (4,804) (3,358)
Funds Raised from Stock Issued 100,700 100,000
------------------ ------------------
Net Cash Provided (Used) by Financing Activities 82,924 213,834
------------------ ------------------
Increase in Cash and Cash Equivalents 161,523 1,941
Cash at Beginning of Year 3,971 2,030
------------------ ------------------
Cash at End of Year $ 165,494 $ 3,971
------------------ ------------------
------------------ ------------------
SUPPLEMENTARY CASH FLOW INFORMATION
- ------------------------------------------------------------------------
Interest Paid $ 22,970 $ 10,629
------------------ ------------------
------------------ ------------------
Non-Cash Item:
Total Stock Issued in Lieu of Cash $ 31,176 $ 25,000
------------------ ------------------
------------------ ------------------
</TABLE>
See Accompanying Independent Auditor's Report and Notes to the Financial
Statement
PAGE 5
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28,1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
Atlantic Syndication Network, Inc. (ASNI), prepares its books and
records on the accrual basis for financial reporting and the cash basis
for income taxes. The accompanying financial statements represent the
transactions for the fiscal year ending February 28, 1999 and 1998.
BUSINESS ACTIVITY
The Registrant incorporated September 25, 1978 under the laws of the
State of Nevada, under the name of Casino Consultant's, Inc. On
September 15, 1992, the Registrant was renamed to Atlantic Syndication
Network, Inc. and then immediately renamed to Ad Show Network, Inc. It
was later renamed again to Atlantic Syndication Network, Inc., on May
25, 1995.
The Company concentrates on the development, production, and
distribution of niche- market television programs, ancillary products
and films designed for domestic and international markets.
The Company is authorized to issue up to 50,000,000 shares of common
stock, par value $0.001 and 500,000 shares of preferred stock, par
value $0.01.
ASSETS HELD FOR SALE
In 1994, the Registrant discontinued use of some of its equipment. As
of February 28, 1998, part of the equipment remained unsold, despite
management intention to have it all sold. Consequently, management
wrote down the cost by $10,000 during fiscal year ending February 28,
1999. Management anticipates selling all such equipment within the next
fiscal year ending February 29, 2000.
PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS
Property and equipment are valued at cost. Depreciation is provided by
use of the straight-line method over the estimated useful lives of the
assets. Useful lives of the respective assets are five years. Initial
organization costs and franchise development costs are fully amortized.
Fully depreciated assets are written off the year after they are fully
depreciated or amortized.
Upon the sale or retirement of property and equipment the related cost
and accumulated depreciation are eliminated from the accounts and the
resulting gain or loss is recorded. Repairs and maintenance
expenditures that do not extend the useful lives are included in
expense during the period they are incurred.
Page 6
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28,1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
PROJECTS DEVELOPMENT COSTS
The Registrant determines the cost outlays incurred on project
development costs by assigning all direct costs and a portion of
indirect costs to the projects worked on. It then capitalizes those
costs incurred in projects determined to have an extended useful life
beyond the current year.
Development and production of shows may or may not be used more than
once. This in large measure is because of the technological changes
that continually occur in the communication and media fields.
Consequently, the Company has opted to write off the costs of
developing and producing show materials used by the Company over time
instead of by use. The Company presently amortizes such costs over 5
years on a straight line basis.
The Company evaluates the status of project development costs. If the
Company determines the net book value of product development costs as
capitalized as "other assets"on the balance sheet is worth less than
what is reported on the financial statements it will write the asset
down.
USE OF ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
IMPAIRMENT OF LONG-LIVED ASSETS
It is the Company's policy to periodically evaluate the economic
recover ability of all of its long-lived assets. In accordance with
that policy, when the Company determines that an asset has been
impaired, it recognizes the loss on the basis of the discounted future
cash flows expected from the asset.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The methods and assumptions used to estimate the fair value of each
class of financial instrument are as follows:
PAGE 7
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28,1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Cash and cash equivalents, prepaid media, receivables, notes payable
and accounts payable, refundable deposits, due to stockholder, deferred
income:
The carrying amounts approximate fair value because of the
short maturity of these instruments.
Investments:
Market price of stock (the only investment). Investments are
reduced to market value in the event cost exceeds market. At
February 28, 1999 there is no investment. At February 28, 1998
the investment cost $8,750 while the market value on the stock
exchange for the investment was $5,620. The carrying amount on
the financial statement was reduced to fair value of $5, 620.
Long-term liabilities:
The carrying amounts of the Registrant's borrowing (See note
3) under its short-term, convertible notes and revolving
credit card agreements approximate fair value because the
interest rates are either fixed or vary based on floating
rates identified by reference to market rates. The carrying
amounts and fair values of long-term debt are approximated to
be one and the same at February 28, 1999 and 1998
respectively.
REVENUE RECOGNITION
Revenue is recognized from sales other than long term contracts when a
product is shipped, a show is aired on the media, and services
including consulting are performed. Revenue on long term contracts is
accounted for principally by the percentage of completion, or at the
completion of contractual billing milestones when possible. At February
28, 1999 and 1998 there are no long term contracts requiring revenue
recognition.
INCOME TAXES
The Company has adopted the provisions of statements of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which
incorporates the use of the asset and liability approach of accounting
for income taxes. The asset and liability approach requires the
recognition of deferred tax assets and liability for the expected
future consequences of temporary differences between the financial
reporting basis and tax basis of assets and liabilities.
PAGE 8
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28,1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
STATEMENT OF CASH FLOWS
For purpose of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be
cash equivalents.
NET INCOME (LOSS) PER SHARE
Primary net income or loss per share is computed by dividing net income
or loss by the weighted average number of common shares outstanding.
RECLASSIFICATION
The liabilities and equity as of February 28, 1998 have been reported
in these financial statements in a manner consistent with those
reported as of February 28, 1999 and are not necessarily as they were
reported in the prior audited financial statements.
NOTE 2 - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Property and equipment consisted of the following at February 28,
1999 1998
---------- ----------
<S> <C> <C>
Tools $ 6,000 $ 6,000
Office Equipment 116,277 113,277
Software 58,252 58,252
---------- ----------
Total Property and Equipment 180,529 177,529
(Less) Accumulated Depreciation (157,155) (149,305)
---------- ----------
Total Property and Equipment, Net $ 23,374 $ 28,224
---------- ----------
---------- ----------
</TABLE>
PAGE 9
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28,1999 AND 1998
NOTE 3 - TERM DEBT
<TABLE>
<CAPTION>
Term debt consisted of the following at February 28,
NOTE PAYABLE 1999 1998
<S> ------------- -------------
<C> <C>
Payable to a financial institution, secured by selected
equipment, monthly payment $362 for 51 months,
interest at 21.3%. $10,354 $ 12,081
NOTES PAYABLE
Over the years, the Company has issued unsecured demand notes payable
to trade accounts payable creditors.
The aggregate unpaid balance at February 28 was: 28,515 19,000
CREDIT CARDS
Pledged by personal guarantee of major stockholder 10,485 11,049
CONVERTIBLE NOTES PAYABLE
Under a private placement issue, stock is sold along with convertible
notes (See Note 5). Since these unsecured notes can be converted to
stock, they are reported as
long-term debt. 38,178 41,363
------------- -------------
Total Notes Payable 87,532 83,493
(Less) Current Portion (7,074) (7,830)
------------- -------------
Total Long-Term Debt $ 80,458 $ 75,663
------------- -------------
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
Scheduled future maturities of notes payable at February 28, 1999 are
as follows:
Year Ending
February 28
-----------
<S> <C>
2000 $ 7,074
2001 7,086
2002 12,726
2003 4,652
2004 17,816
2005 & After 38,178
-------
Total $87,532
-------
-------
</TABLE>
PAGE 10
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1999 AND 1998
<TABLE>
<CAPTION>
NOTE 4 - RELATED PARTY TRANSACTIONS 1999 1998
-------------------------- --------- --------
<S> <C> <C>
Monies have been advanced to the Company by the Company's principal
shareholder. All amounts due to stockholder are from short term
borrowings remaining unpaid at February 28, 1999 and 1998. Interest of
$10,305 has been accrued on the outstanding balance of February 28,
1999, computed at 14%. No interest is accrued for February 28, 1998.
The amount advanced at February 28 is: $ 83,915 $106,326
-------- --------
-------- --------
</TABLE>
During the year ended February 28, 1999 the Registrant issued 50,000
shares of stock to the son of the principal shareholder for working in
the production of graphics, design of project and editing. Another
100,000 shares were issued for consulting services to a shareholder who
serves on the Board of Directors. The Registrant's attorney received
200,000 for consulting services. All stock issued was in lieu of cash
payment for services performed.
During the year ended February 28, 1998 the Registrant issued 5,000,000
shares to the principal shareholder for management services and in lieu
of cash payments for services performed.
NOTE 5 - COMMON STOCK
In August 1994, the Company held a private placement offering for 70
investment units. Each unit consists of 3,200 shares of common stock
and one $2,400, 10%, three-year convertible note. Each $2,400 note is
convertible to common shares of Company stock if converted within three
years at the option of the stockholder. Each $2,400 note may be
converted into:
THREE THOUSAND (3,000) shares of common stock within 6 months
from the date of issuance at $.80 and/or
TWO THOUSAND (2,000) shares of common stock within 18 months
from the date of issuance at $1.20 and/or
TWELVE HUNDRED (1,200) shares of common stock within 30 months
from the date of issuance at $2.00 and/or
ONE THOUSAND (1,000) shares of common stock on or within 36
months at $2.40 and/or at the time the note is all due and
payable.
Page 11
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1999 AND 1998
NOTE 5 - COMMON STOCK - CONTINUED
The notes may be repayable in whole or in part (in minimum increments
of $2,400) after 90 days from issuance, at the option of the Company,
at 100% of the principal amount owed together with interest thereon
payable to the date of prepayment.
Nearly all stock authorized to issue pursuant to the August 1994
private placement offering have been sold and issued.
As of February 28, 1999, there are 13,667,100 shares issued and
outstanding. Of this amount, 857,500 shares are free trading whereas
12,809,600 shares have been or still are restricted subject to Rule 144
of the 1933 Securities and Exchange Act.
NOTE 6 - LEASE COMMITMENTS
In July 1997, the Company entered into two equipment leases for
equipment used in producing shows. The Company pays a total of $1,540
monthly for 5 years (to July 2002). At the end of the lease period the
Company can buy the equipment for approximately $3,000.
The Registrant rents production facilities in California and office
space in Nevada. The production facilities lease expired during fiscal
year ending February 28, 1997 and has not been renewed. The Registrant
in contemplating moving from its present production facilities. Both
are rented on a month-to-month basis and are not capitalized leases.
NOTE 7 - DEPOSIT FOR PROJECT DEVELOPMENT
In January 1999, the Registrant received $100,000 as an investment on a
production project. Management believes the committed project will be
completed and ready for marketing by February 28, 2000. The project
entails developing and marketing an infomercial to promote video-tapes
related to drug and alcohol addiction. The Registrant and the investor
in this project have entered into a profit participation agreement that
takes affect after marketing begins. All costs associated with the
development and marketing of this project are reimbursed by the project
before profits are disbursed. Rights to the project remain in the hands
of the Registrant.
Page 12
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1999 AND 1998
NOTE 8 - FORGIVENESS OF DEBT
The Registrant rents production facilities in a building in Hollywood,
California. During the past 3 years this building went through multiple
ownership and management changes as well as building renovations.
During this period, several tenants, including the Registrant, was not
required to pay all of their regular rents. When the current owners
took over, the previous owners forgave unpaid rents due by tenants,
including the Registrant. The Registrant received a total of $9,900
forgives of debt of unpaid rent accrued during the years ending
February 28, 1998 and 1997. Total debt forgiveness as of February 28,
1999 and 1998 are $9,900 and $0, respectively.
NOTE 9 - INCOME TAXES
<TABLE>
<CAPTION>
(Loss) before income taxes at February 28, 1999
and 1998 consisted of:
1999 1998
--------- ---------
<S> <C> <C>
Total $ - $ -
--------- ---------
--------- ---------
The provision for income taxes at February 28,
1999 and 1998 consisted of: 1999 1998
--------- ---------
Current income taxes
Federal $ - $ -
State (Nevada) - -
--------- ---------
Total $ - $ -
--------- ---------
--------- ---------
The provision for income taxes is different from that which would be
obtained by applying the statutory Federal income tax rate to income
(loss) before income taxes. The items causing this difference at
February 28, 1999 and 1998 are:
1999 1998
--------- ---------
Tax expense (benefit) at U.S. statutory rate $ 158,000 $ 157,900
State income taxes, net of Federal benefit (Nevada) - -
Change in valuation allowance (154,700) (151,400)
Accounts payable ( 3,300) ( 6,500)
Accounts receivable - -
--------- ---------
Total $ - $ -
--------- ---------
--------- ---------
</TABLE>
Page 13
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1999 AND 1998
NOTE 9 - INCOME TAXES - CONTINUED
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
February 28, 1999 and 1998 are:
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Deferred tax assets:
Accounts receivable $ - $ -
Net operating loss carryforward 1,053,424 1,052,633
------------ ------------
Total gross deferred tax assets 1,053,424 1,052,633
(Less) valuation allowance (1,031,756) (1,009,449)
------------ ------------
Net deferred tax assets 21,668 43,184
------------ ------------
Deferred tax liabilities:
Accounts payable 21,668 43,184
------------ ------------
Total gross deferred tax liabilities 21,668 43,184
------------ ------------
Net deferred tax $ - $ -
------------ ------------
------------ ------------
</TABLE>
The valuation allowance for deferred tax assets as of February 28, 1999
and 1998 was $1,031,756 and $1,009,449, respectively. The net change
in the total valuation allowance for the years ended February 28, 1999
and 1998 was an increase of $22,307 and an increase of $222,456,
respectively.
There were no cash payments for income taxes in fiscal years 1999 and
1998, respectively.
As of February 28, 1999, the Registrant has available for income tax
purposes approximately $158,000 in federal net operating loss carry
forwards which may be used to offset future taxable income. These loss
carry forwards begin to expire in fiscal year 2008. Should the
Registrant undergo an ownership change as defined in Section 382 of the
Internal Revenue Code, the Registrant's tax net operating loss carry
forwards generated prior to the ownership change will be subject to an
annual limitation which could reduce or defer the utilization of these
losses.
Page 14
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1999 AND 1998
NOTE 10 - FINANCIAL CONDITION
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. The Company had
sustained substantial operating losses in recent years, but the year
ending February 28, 1999 was essentially a break even.
Also, different from the prior years, the Company has a strong cash
position at February 28, 1999 of over $165,000 of which $100,000 is
from a deposit for project development towards production work to do
during fiscal year February 28, 2000.
Also, Stockholders' equity has increased from $24,000 to $155,000.
Management is taking steps to keep the Company reporting and listed as
required by the Securities and Exchange Commission. Management is
seeking additional fundings through revenues and stock issues. In
addition, during March 1999 - subsequent to the year ending February
28, 1999 - two creditors converted $14,670 of long term debt into
29,340 shares of common stock. This effectively reduced the debt of the
Company by $14,670.
Because of the financial results of fiscal year ending February 28,
1999 and subsequent events as described in this footnote, management is
taking necessary steps to ensure the Company remains a going concern.
NOTE 11 - SUBSEQUENT EVENT (UNAUDITED)
On May 4, 1999 the Board of Directors approved a stock warrant plan.
The stock warrant plan provides for two members of the Board of
Directors to receive a total of 325,000 stock warrants giving them the
right to buy 325,000 shares of stock at $ .25 per share. This right to
exercise any or all stock warrants expires February 28, 2009. The total
cost of the stock warrants is $ .001 per warrant, fully paid in
services provided of $325.
Page 15
<PAGE>
EXHIBITS
EXHIBIT NO. DESCRIPTION
6.2 PROFIT PARTICIPATION AGREEMENT
6.3 AGREEMENT WITH PROMOTION PUBLISHING COMPANY.
<PAGE>
EXHIBIT 6.2
PROFIT PARTICIPATION AGREEMENT
<PAGE>
PROFIT PARTICIPATION AGREEMENT
This Agreement ("Agreement") is made and entered into this 17th day of
January, 1999, by and between Atlantic Syndication Network, Inc., referred to
as (ASNI), a Nevada Corporation whose corporate address is 2140 West
Charleston, Suite B, Las Vegas Nv. Zip 89102 and Ramon Bonin ("RBC").
I. FORMATION AND PURPOSE OF THE AGREEMENT.
The parties hereby form a Profit Participation Agreement ("Profit
Participation") for the purpose of developing and producing an infomercial
("Infomercial") to promote the sale of Videotapes related to Drug & Alcohol
Addiction + added value products such as in-home drug tests. The product will
be promoted primarily via television with the infomercial 800 number. RBC has
agreed to provide capital for the ASNI Project(s) which shall be referred to
as "Family Survival Kit".
II. DUTIES OF EACH PARTY SHALL BE AS FOLLOWS:
A. RBC agrees to dispurse to ASNI $100,000. The payment is for securing a
profit position in net profits of the project by participating in cost for
production and other related expenses referred to that are required to bring
the Family Survival Kit infomercial, videotapes and/or products to market.
B. ASNI shall be responsible for the following duties:
(1) ASNI maintains offices and will oversee the project, hire the
necessary personnel including third parties to carry out the purposes of this
Agreement, and these specific costs shall be identified as the responsibility
of the project.
(2) The development, production, distribution, management of the
project(s).
(3) Establish and implement the marketing and sales program for the
project, purchase product to be sold, placement of advertising and
responding to same.
(4) Perform all other duties and services which are reasonably
necessary to accomplish the purposes of this Agreement which include
overseeing and monitoring the fulfillment house for all Project orders
whether from infomercial calls, general advertising, internet or other
outlets.
(5) ASNI shall devote as much time as necessary to see that the
foregoing duties and services are performed; and will maintain accounting and
banking records of the income from the project(s) using GAAP guidelines;
furthermore, maintain and oversee all pertinent records of the project(s).
(6) ASNI agrees to invest additional effort and funds up to $50,000
to complete the development for this project, prepare the marketing and
advertising and launch the project. It is anticipated between the parties
that the project will be in the marketing stage prior to December 31, 1999.
III. PROFITS, LOSSES AND DISTRIBUTIONS.
After deducting the expenses and management fees agreed to any and all Net
Profits of this project(s) shall be allocated and divided between the parties
on a monthly basis per the following:
1. Initially, 80% of the monthly Net Profits received are
distributed to RBC until 100% of RBC's contribution to this
project is returned.
2. The remaining 20% is distributed to ASNI.
ONCE RBC RECEIVES 100% OF THE INITIAL CONTRIBUTION FOR THIS
PROJECT, then
A. 50% shall be distributed to RBC and/or nominee monthly and
B. 50% shall be distributed to ASNI
<PAGE>
ASNI will provide a monthly income and expense summary and prepare an inhouse
unaudited financial statement quarterly for this Project. All monthly
expenses will be available for review in this report and/or the accounting
may be reviewed by the partners with prior notice. Fixed monthly expenses
will accrue and be paid from future income of the Project if sufficient
income is not generated by the project for that month.
The following guideline shall be used for the purpose of computing
profits.
"Profit Sharing" shall equal the gross revenues generated by the "Family
Survival Kit" and received for project sales, either through the infomercial
videotape sales or the added value products to be used to increase videotape
sales, less the following:
i. After the infomercial commences airing, ASNI shall be entitled to
receive pro-rata office and related expense, project advertising and
media, a two-person staff, one for sales and marketing, and an
assistant for customer service to deal with purchase orders and data
processing.
ii. Product purchases, packaging, shipping cost (including duty, Fed X,
freight, insurance premium & guarantee, etc.) plus shipping and
handling that has not been pre-paid by the purchaser.
iii. ASNI shall receive management fees of $10,000 per/mo, plus its
profit sharing percentage generated by the Project. It is understood
and agreed between the parties that the monthly management fee is
payable only from monthly profits of the Project and do not accrue.
If the project generates less than the $10,000 monthly fee due ASNI,
that monthly consulting fee is reduced to only the amount of Net
Profit that is available prior to that months profit distribution.
iv. AFTRA pension/union/welfare contributions owed for infomercial
participants;
v. Infomercial substantiation, additional updates, videotaping or
editing costs if any, insurance premiums for the Project, monthly
accounting and legal costs incurred for the Project;
vi. Fulfillment, house telemarketing setup fees, deposits, expenses,
tape dubbing, traffic to stations, actual fulfillment costs, freight
costs and 800# customization; ASNI shall see that funds received by
the fulfillment house from sales of the product(s) shall be
immediately deposited into the Project Bank Account.
vii. Purchaser refunds, returns, credit card fees, chargebacks and bad
debts;
viii. The books and records shall be closed on the last day of each month
(accounting of income and expenses will be available for review
prior to the 15th of each month) (Project Year end accounting shall be
February 28, which shall be the same as ASNI corporate fiscal year).
ix. Purchaser refunds, returns, credit card fees, chargebacks and bad
debts;
x. Losses from the prior months shall mean the gross revenues during
such months less the expenses and costs listed above.
ASNI and RBC shall create a reserve for Purchaser Product(s) returns. This
reserve amount shall remain in the bank Account and shall be equal to ten
percent (10%) of one months gross income average and based on the last
quarter monthly sales. The reserve shall be adjusted to include product
returns at the end of each quarter.
After the infomercial begins airing and monthly expenses have been deducted
including (A) pro-rata office and staff expenses relative to the project (B)
actual costs for the product and service (C) project fees and expenses as
outlined (D) the monthly management fee due ASNI for the project; then, the
partners will divide the percentage of Profits as outlined herein.
<PAGE>
IV. PROJECT BANK ACCOUNT.
ASNI and RBC will open a Two signature Project Account at First Security Bank
of Nevada for the deposit of all income generated by the Family Survival Kit
Project. This Account will be activated once the Family Survival Kit Project
Infomercial and product sales begin and project income is being generated.
All gross income from the Family Survival Kit will be deposited into this
account and the Account will be exclusively utilized to distribute monthly
(1) Project expense reimbursement including marketing and advertising cost
(2) Monthly management fee to ASNI (3) Return of initial contribution to RBC
and (4) Pro-rata Sharing to RBC and ASNI.
V. MANAGEMENT.
The management under this Agreement, and its operations and business, shall
be the sole responsibility of ASNI. Each Participant will deal with their
own tax issues and indemnify the other from all tax responsibility and/or
liability from the other.
VI. TITLE TO PROPERTY.
The title, Copyright -C- and ownership of all videotape masters of
the project are retained by ASNI.
VII. INSURANCE AND INDEMNIFICATION.
ASNI hereto shall indemnify and hold RBC harmless from any and all damages,
liabilities, losses and claims incurred or suffered by RBC which should arise
out of a breach of this Agreement or negligence or wrongful conduct on the
part of ASNI.
VIII. ARBITRATION.
Any and all disputes arising out of this Agreement between the parties hereto
shall be submitted to binding Arbitration to an Arbitration Association in
Los Angeles County, Ca. Any and all decisions of the arbitrator shall be
final and binding upon the parties.
IX. NOTICES.
Any and all notices which may or are required to be given under this
Agreement shall be in writing and shall be deemed received by the party to
whom it's sent upon the earlier of actual receipt thereof or five (5) business
days after it is deposited in the United States mail, registered or certified
with return receipt requested, postage prepaid and addressed to the other
party of record.
X. ASSIGNMENTS.
Neither party may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the other party.
XI. TERMINATION.
This Agreement shall continue in full force and effect throughout the life of
the marketing and distribution of this Product. It is agreed that RBC shall
receive fifty percentage of net revenues of the Family Survival Kit
intervention videotapes or multimedia CD sales in perpetuity. If the parties
agree to terminate this Agreement, all debts relating to this Project shall
be paid and the remaining funds shall be distributed to the Profit Sharing
Partners based on the percentage breakdown outlined herein.
<PAGE>
XII. ENTIRE AGREEMENT.
This Agreement constitutes the entire understanding and agreement of the
parties hereto regarding the subject matter hereof. This Agreement may not be
changed or amended unless done so by a written instrument executed by both
parties.
It is agreed that the signature approval and acceptance of this agreement
by fax shall be acceptable by each of the parties involved. Both parties
agree to provide the other an original signed hard copy. IN WITNESS WHEREOF,
the parties have executed the "Agreement" as of January 17, 1999.
RAMON BONIN ("RBC") ATLANTIC SYNDICATION NETWORK, INC.
By: /s/ L. RAMON BONIN By: /s/ KENT G. WYATT, SR.
------------------------- ---------------------------------
Ramon Bonin Kent G. Wyatt, Sr., CEO/President
<PAGE>
EXHIBIT 6.3
AGREEMENT WITH PROMOTION PUBLISHING COMPANY.
<PAGE>
AGREEMENT
This AGREEMENT identifies the mutual understanding between Promotion
Publishing hereinafter referred to as Promo and Atlantic Syndication
Network, Inc. hereinafter referred to as ASNI.
The following overviews the business and terms for each party.
ASNI produces niche market television shows targeted for special
interest audiences such as The Stock Show, Masters of the Martial Arts and
Ninjaerobics. ASNI is currently producing other shows such as the
Intervention Show Videotapes. ASNI is planning to sell these tapes through
various media and retail markets. It is understood that ASNI has not
previously marketed in this manner, but believes these projects will benefit
by promoting the videotapes with related books published by Promo.
Promo's business is publishing niche market books and promoting these
books on a mass marketing wholesale and retail basis which includes the
Internet.
Promo agrees to provide ASNI existing books that complement the subject
matter of the television shows or videotapes that ASNI produces on a
wholesale basis. Promo agrees that if Promo is unable to provide specific
books required for a project, Promo will create a joint venture partnership
with ASNI to publish a specific book for that project. ASNI agrees to
participate in the publishing of these books and agrees to promote them on or
with its shows and/or its project videotapes.
ASNI agrees to produce the commercials for books offered for sale by
Promo on its television shows when the books presented by Promo complement
the television shows or videotapes available for sale.
ASNI agrees to provide a 30-second commercial segment on The Stock Show
to Promo. ASNI agrees to provide this segment to Promo at a net advertising
media rate so that Promo may promote their books, present information on
their upcoming books and promote authors that would be of interest to the ASNI
target audience. It is agreed the media rate to be paid by Promo will not
exceed 50% of ASNI's established media rate.
Both parties agree to include in the sale of their product, promotional
literature or flyers identifying the other company and its subject related
products. It is agreed that prior to any specific advertising print
campaigns, each party will present to the other the opportunity to
participate and the necessary requirements for that campaign.
Promo agrees to sell the books wholesale to ASNI for its television
projects and Direct Advertising program under the following terms:
Promo will sell and deliver the product to ASNI in minimum orders to be
established and/or agrees to fulfill orders for ASNI programs through its
shipping and handling department.
<PAGE>
TERMS: 1/3 at time of order 1/3 at delivery 1/3 within 30 days.
If other terms are required, Promo must pre-approve any credit changes prior
to order.
Promo agrees that it will maintain sufficient inventory (to be
established at the beginning of each quarter) to accommodate sales
requirements for any of the projects identified between the parties.
Both parties agree they will not make any representations other than the
accompanying promotional literature associated with each project.
Promo agrees to provide advertising for ASNI in its promotional campaign
by placing the ASNI brochure flyer in co-published books for retail
distribution. ASNI agrees to provide Promo with the written copy for
approval of the flyer prior to printing--then ASNI will have the flyer
printed and provided to Promo. It is agreed that Promo will place the flyer
in its books that are sold through its normal channels and marketing
structure. The flyer is designed to encourage consumers to call the ASNI
800 number to purchase the videos made available about a related subject
matter.
Unless sooner terminated pursuant to any provision hereof, this Agreement
shall have a term of three (3) years from the date hereof; after which it
will be automatically renewed for successive terms of one (1) year each,
unless either party gives the other party written notice of termination at
least six (6) months prior to the end of the initial term or any renewal
term. If such notice is given, this Agreement shall terminate at the end of
such term.
Either party shall have the right to terminate this Agreement by written
notice to the other, should that company be in breach or default with respect
to any term or provision hereof and fails to cure the same within ninety (90)
days notice of said breach or default, or 30 days if the company is adjudged
bankrupt, files or has filed against it any petition under any bankruptcy,
insolvency or similar law, has a receiver appointed for its business or
property, or makes a general assignment for the benefit of its creditors.
Any notice required or given hereunder shall be deemed sufficient if
mailed by registered or certified air mail, first class mail, Federal
Express, DHL, UPS, or Facsimile transmission to the Corporate offices as
listed in this agreement, or delivered by hand to the party to whom such
notice is required or permitted to be given. Any such notice shall be
considered given when received, as evidenced by a receipt (if by mail),
signed and dated by the receiving party.
ALL NOTICES TO PROMOTION PUBLISHING SHALL BE ADDRESSED AS FOLLOWS:
Promotion Publishing Company
3368 GOVENOR DRIVE, SUITE 144 San Diego, Ca 92122
Attn: John Perkins, Pres. Phone: 619-577-2000
ALL NOTICES TO ASNI SHALL BE ADDRESSED AS FOLLOWS:
Atlantic Syndication Network, Inc.
2140 West Charleston, Suite B Las Vegas, Nevada 89102
Attn: Kent G. Wyatt, Sr. Pres. and CEO Phone: 702-388-8800
<PAGE>
Promo hereby grants ASNI the right of first refusal to produce all
audio, videos and C.D.'s for books published by Promo during the term of this
agreement.
The parties agree that their rights may not be assigned in whole or in
part without the prior written consent of the other and any attempted
assignment of any rights, duties or obligations hereunder without the consent
of the other shall be void.
Failure on any occasion by either party to enforce any terms of this
Agreement shall not prevent enforcement on any other occasion.
If suit is commenced to enforce the performance of a party hereto, both
Promo and ASNI now and forever agree, the prevailing party shall be paid
reasonable attorneys' fees and expenses by the other party.
This contract shall be governed in all respects by the laws of the State
of Nevada, U.S.A., excluding any choice of law principles that would cause
the application of the laws of any other jurisdiction.
Entire Agreement: This Agreement constitutes the entire understanding
and agreement of the parties hereto regarding the subject matter hereof.
This Agreement may not be changed or amended unless done so by a written
instrument executed by both parties.
It is agreed that the signature approval and acceptance of this agreement
by fax shall be acceptable by each of the parties involved. Both parties agree
to provide the other an original signed hard copy within 10 days.
It is agreed that the signature approval and acceptance of this
agreement by fax shall be acceptable by each of the parties involved. Both
parties agree to provide the other an original signed hard copy. IN WITNESS
WHEREOF, the parties have executed this "Agreement" as of February 17, 1999.
Atlantic Syndication Network, Inc. Promotion Publishing Company
ASNI Promo
/s/ Kent G. Wyatt, Sr. /s/ John Perkins
- -------------------------------- -----------------------------
Kent G. Wyatt, Sr. John Perkins
President & CEO President
