UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
( Mark One )
_ (X)_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended ______ August 31,2000 _________
OR
______ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition from ______________ to ________________
Commission File Number ___ 0-26383 ___
ATLANTIC SYNDICATION NETWORK, INC.
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(Exact name of Small Business Issuers in Its Charter)
NEVADA 88-0325940
--------------------------------- ----------------
(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)
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ---------------------------------
n/a n/a
NOT APPLICABLE
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act
0f 1934 during the preceding 12 months ( or for such shorter period that
the registrant was reuired to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
__ X __ Yes ____ No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the altest practicable date:
Common Stock, $.001 par value - 15,826,944 as of August 31,2000.
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
INDEX
Item 1. FINANCIAL INFORMATION
PART 1. FINANCIAL STATEMENTS <PAGE>
Independent Auditor Report 3
Accountant's Review Report Balance Sheets 4
as of August 31, 2000
Statements of Operations 5
for the three months ended August 31,2000 and 1999
Statements of Cash Flows 6
for the six months ended August 31,2000 and 1999
Notes to Unaudited Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 13
EXHIBIT INDEX
SIGNATURES
EXHIBITS
1
<PAGE>
ITEM 1. FINANCIAL INFORMATION
As used herein, the term "Company" refers to Atlantic Syndication
Network, Inc. and predecessors unless otherwise indicated. Unaudited,
condensed interim financial statements including a balance sheet for the
Company as of the quarter ended August 31,2000 and statements of operations, and
statements of cash flow for the interim period up to the date of such balance
sheet and the comparable period of the preceeding year, are attached hereto as
pages _5_ through _8_ and are incorporated herein by this reference.
2
<PAGE>
SELLERS & ASSOCIATES P.C.
3785 Harrison Blvd. Suite101
Ogden, Utah 84403
INDEPENDENT AUDITORS REPORT
TO: Board of Directors
ATLANTIC SYNDICATION NETWORK, INC.
Las Vegas, Nevada
We have reviewed the accompanying interim balance sheet of Atlantic
Syndication Network, Inc. as of Aug. 31,2000 and the related interim statements
of operations, stockholders' equity (deficit) and cash flows for the quarter
then ended, in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is the
representation of the management of Atlantic Syndication Network, Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than
an audit in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as whole. Accordingly, we do not express an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles. The financial
statements for the year ended February 29,2000 were audited by us and we
expressed an unqualified opinion on them, with reference to a going concern,
in our report dated June 8,2000. The interim financial statements for the
three months ended August 31, 1999 were not reviewed or compiled by us,
accordingly, we express no assurance on them.
/S/ Sellers & Associates, P.C.
September 26, 2000
Ogden, Utah
3
<PAGE>
PART I - FINANCIAL STATEMENT
Atlantic Syndication Network, Inc.
Unaudited Interim Balance Sheets
For the Six Months Ending
August 31
2000
ASSETS -----------
Current Assets
Cash $ 459,944
Assets held for sale -
--------
Total current assets 459,944
--------
Property and equipment - net 13,170
--------
Net Property and equipment 13,170
--------
Other Assets
Project development costs 384,979
(Accumulated) Amortization and
Project development costs (210,657)
Initial Organzation & Franchise Development Costs -
(Accumulated) Amortization - All Other -
--------
Net - Other Assets 174,322
--------
Total assets $ 647,436
=========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Accounts notes payable $ 14,175
Term Debt - Current Portion 3,057
Refundable deposits 10,000
Note Due to Officers 56,219
Total current liabilities 83,451
--------
Long-term liabilities 21,333
-------
Total liabilities 104,784
=======
Stockholders equity
Preferred stock $.01 par value:Authorized 500,000
shares; Issued and outstanding - none.
Common stock $.001 par value:Authorized 50,000,000;
Issued and outstanding 15,826,944 at 8-31-00 15,827
Additional paid-in capital 2,112,559
Retained earnings (deficit) (1,585,734)
---------
Net stockholders' equity (deficit) (542,652)
--------
Total liabilities and stockholders' equity (deficit) $ 647,436
=========
See accompanying notes. 4
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Unaudited Interim Condensed Statements of Operations
For the Three Months Ended
Aug. 31, Aug. 31,
2000 1999
--------- ---------
Net revenue $ - $ -
Costs and expenses:
Amortization expense 20,967 12,384
Depreciation expense 1,953 1,963
General and administrative expenses 175,854 45,435
(less) Capitalization as project
development costs - (10,001)
-------- ----------
Total operating expenses 198,774 (49,780)
Operating (loss) 198,774 (49,780)
Interest Income 5,439 -
Interest Expense (4,002) -
---------- ---------
Other (expense) income - -
(Loss) before income taxes (197,337) (49,780)
Income tax provision (benefit) - -
---------- ---------
Net (loss) $ (94,428) $(91,249)
Net (loss) per share of common stock $ (0.01) $ (0.00)
---------- ----------
Weighted average shares
outstanding during the period 15,548,111 13,667,100
See accompanying notes. 5
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Unaudited Interim Condensed Statement of Cash Flows
For the Six Months Ended August 31,2000
Aug. 31, Aug. 31,
2000 1999
--------- --------
Net Cash Flow from Operating Activities:
Net Income (loss) $(291,765) $(141,029)
Adjustments to reconcile Net Income to Cash
provided by (used in) Operating Activities:
Depreciation and Amortization 45,840 28,691
Other changes in Operating Assets and Liabilities (19,077)
Stock issued for Services in Lieu of Cash 12,750 6,600
Total adjustments 41,513 35,291
-------- --------
Net Cash provided by Operating Activities (250,252) (105,738)
--------- --------
Cash Flows from Investing Activities:
Property and Equipment (1,516)
Other Assets - (54,843)
--------
Net cash (used) by Investing Activities - (56,843)
--------
Cash Flows from Financing Activities:
Notes Payable (11,706) (14,171)
Due to Stockholders (97,344) (1,000)
Funds raised from Stock Issued 817,171 20,670
-------- -------
Net Cash Provided (used) by Financing Activities 708,121 5,499
-------- -------
Increase (decrease) in Cash and Cash equivalents 457,869 (156,598)
Cash at Beginning of Period 2,075 165,494
------- --------
Cash at End of Period $ 459,944 $ 8,896
======== ========
Supplemental Cash Flow Information
Interest paid $ 7,907 $10,887
======= =======
Non-cash items
Stock Issued in Lieu of Cash $ 3,350 $ 31,853
======= ======
See accompanying notes. 6
<PAGE>
ATLANTIC SYNDICATON NETWORK, INC.
Notes to Unaudited Condensed Financial Statements
Three Month Period Ending August 31,2000
Note 1 - BASIS OF PRESENTATION
The interim financial statements at Aug. 31,2000 and for the three month period
ended Aug. 31,2000 and 1999 are unaudited, but include all adjustments which
management considers necessary for a fair presentation. The February 29,2000
balance sheet was derived from the Company's audited financial statements.
The accompanying unaudited financial statements are for the interim periods
and do not include all disclosures normally provided in annual financial
statements, and should be read in conjunction with the Company's Form 10K-SB
for the year ended February 29,2000. The accompanying unaudited interim
financial statements for the three month periods ended Aug. 31,2000 and 1999
are not necessarily indicative of the results which can be expected for the
entire year.
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 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.
Note 2- INCOME TAXES
The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"), which requires an asset and liability approach to
accounting for income taxes. Under SFAS 109, deferred tax assets or
liabliities are computed on the difference between the financial statement and
income tax bases of assets and liabilities ("temporary differences") using the
enacted marginal tax rate. Deferred income tax expenses or benefits are based
on the changes in the deferred tax asset or liability from period to period.
NOTE 3 - COMMON STOCK
During the quarter ending August 31, 2000, the Company issued 1,826,500 shares
of new stock by private placement. These shares provided the Company $804,671
in cash and $12,690 in services rendered.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
The following information includes forward-looking statements, the realization
of which may be impacted by certain important factors discussed in "Risk
Factors" listed below, including information provided in the Company's Annual
10K-SB
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, third party commercials or commissioned projects and to be known
as a notable provider of niche market television, corporate videos and
infomercials.
Revenues are generated by (1) the sale of advertising and promotions to be
shown during shows produced and aired by the company; (2) companies
who sponsor specific shows because of content.
Other income is generated by: (1) third party consulting services for project
development; script, layout, production, editing and distribution of the
product (2) third party video post production services and (3)C.D.or videotape
sales. Additional revenues may be derived from the sale of related products
advertised during the course of a show that complement and add value to the
original product or videotape being sold on television.
PRODUCTION SCHEDULE INCLUDES:
INTERVENTION SHATTERS ALCOHOL & DRUG ADDICTION"
ASNi has created, developed and is completing its production and videotape
project that focuses on Intervention, a proven path to treatment and recovery
for the disease of alcohol and drug addiction.
The educational videotapes, entitled, "INTERVENTION SHATTERS ALCOHOL & DRUG
ADDICTION", are scheduled for airing and distribution during this fiscal year.
They will be offered for sale via 1 and 2-minute infomercials and commercials
aired on television with an (800) number provided for call-ins. Other outlets
for distribution include magazines and the internet.
This is the first infomercial project for ASNi. It is anticipated revenues
will come from the sale of videotapes to viewers, institutions, and agencies
concerned with drug and alcohol abuse. As an add-on product to the sale, the
company intends to market an in-home drug test to help parents with teenagers
who participate in this behavior. The plan is to make these tests available
with the videotapes at a discount from the retail market price. These in-home
drug tests are becoming popular with parents of teenagers because they are
fast, accurate and easy to use. It provides the opportunity to test
simultaneously for single or multiple drug use including marijuana,
methamphetamines, cocaine, heroin and others at cut off levels consistent with
the National Institute of Drug Abuse. To highlight the home drug test kit
potential, it is noted that sales of in-home drug tests are one of the fastest
growing segments of the pharmacological industry.
THE STOCK SHOW
"The Stock Show" pilot, which was initially released in Southern California,
is now slated to be released as a weekly series. It is an interview and news
format show that introduces public companies to the general public. The need
for small companies to create visibility offers significant business potential
for this weekly series. Publicity is essential for these companies as they
compete for investment dollars with the more established or blue chip
companies. Public or non-public company guests who appear on The Stock Show
benefit by the visibility that television provides while promoting their
company product or services. The nature of questions addressed during
interviews includes those targeted at the company's latest product or services
offered, its key management, company innovations and company goals. Business
news presented includes press releases provided to the general public, current
events that are timely and relevant as reported
to the media.
8
<PAGE>
Masters of the Martial Arts
The Company intends to re-release "Masters of the Martial Arts Starring Sho
Kosugi". This weekly series aired for two years on (ICN) International
Channel Network. The show includes interviews and demonstrations with grand
masters from many different disciplines of the martial arts. The series is
shot on location at different locales in the Orient .The host of the series is
Sho Kosugi, seven-time karate world champion, and star of numerous martial
arts films such as "Black Eagle" with Jean-Claude Van Damme, "Blind Fury" with
Rutgar Hauer, "Pray for Death", "Revenge of the Ninja" and others. The show
is not currently airing and/or generating income but the Company is planning
to restructure this show and release it for syndication during this fiscal
year. The Company also plans to produce and distribute videotapes for sale
that will include many of the select Martial Artists who appear on these
shows.
RECENT SALES OF SECURITIES: The Registrant had the following stock issuances
within the last three month as described below. All such shares were sold by
the officers and directors of the Registrant and no underwriters were
utilized.
With respect to the issuance of all of the common shares listed below, such
issuance were made in reliance on the private placement exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended (the "ACT"), 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, amoung other things,
the following:
1. That he/she had the ability to bear the economic risks of investing in the
shares of the Registrant.
2. That he/she had sufficient knowledge in financial, business, or investment
matters to evaluate the merits and risks of the investment.
3. That he/she had a certain net worth sufficient to meet the suitability
standards of the Registrant.
4. That the Registrant has made availiable to he/she, their counsel and/or
advisors, the opportunity to ask questions and that he/she 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.
9
<PAGE>
Referenced: Stock purchased for cash and/or services.
EFFECTIVE NO. OF
DATE CLASS SHARES CONSIDERTION AMOUNT NAME
------- -------- --------- ------------ ------ -------
5-20-00 common 4,000 service $ 240 R. Nielson
5-25-00 common 5,000 purchase 1,750 E. Omernik
6-1-00 common 2,500 service 150 Martinez
6-1-00 common 10,000 service 600 J. Shadlaus
6-1-00 common 10,000 service 600 D. Dale
6-1-00 common 10,000 service 600 K. Wyatt Sr.
6-1-00 common 10,000 service 600 S. Wyatt
6-2-00 common 50,000 service 3,000 K. Wyatt Jr.
6-2-00 common 100,000 service 6,000 K. Crocker Jr.
6-2-00 common 20,000 purchase 10,000 D. Harjung
6-12-00 common 11,000 purchase 5,500 Holst
6-22-00 common 50,000 purchase 25,000 E. Omernik
6-26-00 common 1,500,000 purchase 750,000 E. Omernik
7-15-00 common 4,000 conversion 2,000 G. Marks
7-15-00 common 5,000 service 300 F. Raimondi
7-17-00 common 10,000 service 600 M. Edwards
7-24-00 common 25,000 purchase 12,500 E. Omernik
As of Aug. 31,2000, there are 15,826,944 shares issued and outstanding. Of
this amount, 900,500 shares are now available on OTCBB, whereas 14,926,444.
shares have been and/or they are currently restricted subject to Rule 144 of
the 1933 Securities and Exchange Act.
RESULTS OF OPERATIONS:
ASNi's focus has been to consumate Registrant's full reporting status with the
SEC, show development and pre-production. Company shows were not being aired
on televison during this period. It is anticipated during fiscal year 2001 and
thereafter, the company's in-house shows and third party productions will
resume and income will be generated by commercials, advertisers and sponsors
of ASNi's shows
Revenue for in-house production is recognized at time of distribution.
Revenue is recognized for outside third party production for commercials, etc.
upon completion of each contract.
ATLANTIC SYNDICATION NETWORK, INC. had no revenues for the three months ended
Aug. 31,2000. During this quarter, the Company incurred $198,774 of operating
expenses. The net operating expenses for the three months ended Aug. 31,2000
increased $148,994 over the three months ended Aug. 31,1999. This was
attributable to (1) An increase in net general and administrative expenses
of $140,420 (2) an increase in amortization expenses of $8,583. There is also
an increase in interest income of $5,439 and an increase in interest expense
of $4,002.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant's cash position at Aug. 31,2000 was $459,944, an increase of
$451,048 from Aug. 31,1999. The decrease was primarily attributed to
the issuance of new stock.
Working capital at Aug. 31, 2000 was a positive $376,493. Liabilities
currently include $56,219 due principal stockholders.
During the last three months June 1 to Aug. 31,2000, the Company converted
$2,000 in outstanding corporate debt into common shares of stock.
Management will continue its effort to convert additional notes and debt into
equity when possible. In addition, an additional $12,690 in services rendered
were paid in stock in lieu of cash.
10
<PAGE>
RISK FACTORS:
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION. This Report contains
statements that constitute "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act, 1934, as amended, and Section 27A
of the Securities Act of 1933, as amended. The words "expect",
"approximately","anticipate", "believe", "plan", "should", "scheduled",
"will", "may", "projected" "benefit" "upcoming" "strategic" "demonstrated"
"quality", "added value" and similar expressions and variations thereof are
intended to identify forward-looking statements. Such statements appear in a
number of places in this filing and include statements regarding the intent,
belief or current expectations of the Company, its directors or officers with
respect to, among other things, (a) trends affecting the financial condition
or results of operations of the Company, (b) the business and growth
strategies of the Company, and (c) the Company's objectives, planned or
expected activities and anticipated financial performance. The stockholders
of the Company are cautioned not to put undue reliance on such forward-looking
statements. Such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and the actual results may
differ materially from those projected in this Report, for the reasons, among
others, discussed in the Section "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Risk Factors". The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date
hereof. Readers should carefully review the "Risk Factors" described in any
and all documents the Company files from time to time with the Securities and
Exchange Commission.
The Company's business is subject to numerous risk factors, not all of which
can be known or anticipated and any one of which could adversely impact the
Company or its financial condition. Some of those risk factors are as
follows:
Failure to License: Renew of Licenses or Production and Broadcast Agreements.
There can be no assurance that any existing programs or programs in production
by the Company will be licensed, relicensed for additional broadcast seasons
or renewed for production or, if so licensed or renewed, that the terms of the
license agreements, production or broadcast agreements will be as favorable to
the Company as the previous, existing or projected agreements.
Nature of the Entertainment Industry: The television, merchandising and
direct-to-video industries are highly speculative and historically have
involved a substantial degree of risk. The success of a television show,
series or video production depends upon unpredictable and changing factors
such as audience acceptance, which may bear little or no correlation to the
Company's production and other costs. Audience acceptance of the Company's
products represents a response not only to the artistic components of the
products, but also to promotion by the distributor, the availability of
alternative forms of entertainment and leisure time activities, the general
economic conditions and public taste and include intangible factors, all of
which change rapidly and connot be predicted with certainity. Therefore,
there is a risk that some or all of the Company's projects will not be
commercially successful, resulting in costs not being recouped or anticipated
profits not being realized.
11
<PAGE>
Competition: The creation, development, production and distribution of
television programming, together with the exploitation of the proprietary
rights related to such programming, is a highly competitive business. The
Company competes with producers, distributors, licensors and merchandisers,
many of whom are larger and have greater financial resources. Although the
number of outlets available to producers has increased with the emergence of
new broadcast stations, the number of time slots available to independent
producers remains limited. Moreover, because license fees in the United
States have dropped substantially recently, companies that do not rely on U.
S. broadcast license fees to finance the production of programming have
achieved a competitive advantage. These companies now serve as an additional
source of competition for the limited slots avail-able to independent
companies. As a result of these factors, the Company will expand it's
creative and distribution effort but cannot make assur-ances that it will be
able to remain competitive. Niche market programs such as Martial Arts that
are currently popular may not sustain their popularity and new programs may
not become popular.Each program (or show) is an individual artistic work, and
consumer reaction will determine its commercial success. Management cannot
assure the stock-holders that it will be able to continue to create
entertaining episodes for the Company's programs or that it will be able to
create new programs that are appealing or saleable to broadcasters.
Dependence upon Key Personnel: Registrant's success depends to a significant
extent upon the expertise and services of Kent Wyatt Sr., the President and
Chief Executive Officer. Although Registrant has agreements with other
independent and key management personnel, the loss of services of Mr. Wyatt
and/or other key personnel could have an adverse effect on the Company
business, results of operations and financial condition.
12
<PAGE>
Part II. OTHER INFORMATION:
Item 1. Legal proceedings - Not applicable
Item 2. Changes in securities
Item 3. Defaults on senior securities - Not applicable
Item 4. Submission of matters to a vote of security holders
- Not applicable
Item 5. Other information - Not applicable
Item 6. (a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Atlantic Syndication Network, Inc.
By:/S/Kent G. Wyatt Sr.
President September 27, 2000
Director
By: /S/ Jim Shadlaus
Treasurer September 27, 2000
Director
13
