UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------------------------------------
FORM 10-KSB
( Mark One )
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
( ) TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended February 29,2000
Commission File number : ______________
ATLANTIC SYNDICATION NETWORK, INC.
---------------------------------------------------------------------------
(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
--------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(702) 388-8800
--------------------------------------------------------------------------
(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
------------------- ------------------------------
n/a n/a
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, Par Value $.001
---------------------------------------------------------------------------
(Title of Class)
<PAGE>
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months ( or for such shorter
period that the registrant was required to file such reports, and (2) has been
subject to such filing requirements for the past 90 days. Yes (x) No ( )
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10KSB
or any amendment to his Form 10-KSB. (x)
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as
of a specified date within the past 60 days.
( See definition of affiliate in Rule 12b-2 of the Exchange Act)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of February 29,2000 the
Company has issued and has outstanding 13,974,444 shares of Common Stock.
<PAGE>
<TABLE>
<CAPTION>
ATLANTIC SYNDICATION NETWORK, INC.
FORM 10-KSB
TABLE OF CONTENTS
NO. TITLE PAGE NO.
<S> <C> <C>
PART I
Item 1. Description of Business...................................
Item 2. Description of Property...................................
Item 3. Legal Proceedings ........................................
Item 4. Submission of Matters to a Vote of Security Holders ......
PART II
Item 5. Market for Common Equity and Related Shareholder Matters..
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................
Item 7. Financial Statements......................................
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.......................
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act ........
Item 10. Executive Compensation....................................
Item 11. Security Ownership of Certain Beneficial Owners and
Management................................................
Item 12. Certain Relationships and Related Transactions............
Item 13. Exhibit List and Reports on Form 8-K .....................
Signatures ..............................................
</TABLE>
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 other documents the Company
files from time to time with the Securities and Exchange Commission, including
the Quarterly Reports on Form 10Q-SB filed or to be filed by the Company in
Calendar years 1999 and 2000 and any Current Reports on Form 8-K filed by the
Company.
<PAGE>
FORM 10-KSB
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 the discontinuation of
operations by the Registrant in Post Offices throughout 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, the Registrant
assigned the kiosk advertising operations to a third party in 1996. 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.
Capitalized liabilities of the Registrant, private placement proceeds,
advances from principal shareholders and profit sharing partnerships have been
used to redirect the Registrant's endeavors in the design, development,
production and distribution of multi-media, television production,
commercials, infomercials and commissioned projects.
1
<PAGE>
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 commissioned projects and to be known as a notable
provider of niche market television, corporate videos and infomercials.
Registrant benefits by using Company-owned state-of-the-art post
production digital editing equipment. The real-time editing and computer
graphic stations have 2D/3D animation capability and conforms to the necessary
technology required for broadcast. The company equipment allows the company to
produce its television shows and videos at a reduced cost compared to
utilizing outside studios.
Registrant has 3 full-time employees and 2 part-time employees. The
company policy is to engage freelance creative personnel and utilize
independent contractors on a project by project basis.
Marketing and Distribution: Once production is complete, the Company policy
is to purchase media on select television stations so that it owns the airtime,
secures its own advertisers, and receives 100% of the advertising income.
The sale of programming in this manner provides more control and in many
situations the advertisers equally benefit because they're able to better
control the time, day, and targeted audience of their commercials. With the
specific types of programming, advertisers are also willing to pay more for
their commercials to be broadcast to that specific target audience. The Company
also participates and also enters into a barter or no-license fee arrangement
with the broadcast stations so that it can share in the income generated by the
program from the sale of advertising created by the station. Another option is
for the Company to directly license its programming to cable, network, or
independent stations. Throughout the world, there are emerging markets and the
Company will have the opportunity to purchase, barter, sell outright or
license its programming to many of these new television stations, cable
channels, and distribution outlets.
After shows have aired they have the potential of retaining a residual
value for generating additional and future income. The Company-owned projects
are copyright protected and available for distribution via satellite, cable,
and broadcast release. Completed shows and series represent a long-term asset
and become inventory for the Registrant's video library.
Library: The Company policy has been to retain the proprietary rights
associated with the programming in its library. Unless the rights are sold
and/or granted to licensees, these rights are generally held in perpetuity.
The Company intends to add products to its video library by continuing to
produce quality programming as well as purchase completed programming to
distribute to television, cable, and the direct-to-video market. A library
that includes proprietary programming can be licensed, re-licensed and
distributed over a period of time and provide a long-term revenue stream.
Pursue Co-Production Partnerships: The Company intends to pursue and
evaluate potential business opportunities with co-financing partners for
various projects, with the goal that risks may be shared. The benefits will
include financial, complementary production skills and domestic or foreign
distribution for Registrant's projects.
Internet and Alternative Distribution: The Company is exploring ways to
benefit by the Internet and other alternative distribution for its
infomercials, corporate videos and television programs. The Company has
secured www.TheStockShow.comm Website and is negotiating to secure a strategic
partnership in order to build and expand the concept and distribution of
client corporate videos and it's scheduled weekly television show.
2
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY.
The Registrant maintains its corporate and production offices at 2140
West Charleston, Suite B in Las Vegas, Nevada. The Registrant moved its
production facilities from Hollywood, California to Las Vegas, Nevada during
the fiscal year. The Company intends to expand its offices and production
facilities during this fiscal year.
ITEM 3 LEGAL PROCEEDINGS
The Registrant is not involved in any legal proceedings.
ITEM 4 Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the company's stockholders during
the fourth quarter of the fiscal year ended February 29, 2000.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS.
(a) MARKET INFORMATION: The Registrant's common stock is quoted in the
NASD Electronic Quotation Service under the symbol ASNi. The Registrant's
common stock price at close of business on February 29,2000 was $.25 per
share.
PRICE RANGE: The following table 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.
High Low
Fiscal Yr Ending
Feb 28, 1999 ______ _______
First Quarter .25 .125
Second Quarter .25 .125
Third Quarter .25 .125
Fourth Quarter .25 .125
Fiscal Yr Ending
Feb 29, 2000
First Quarter .25 .01
Second Quarter .25 .01
Third Quarter .25 .01
Fourth Quarter .25 .125
3
<PAGE>
HOLDERS: The Registrant has approximately 151 common stock
shareholders. This excludes the number of beneficial owners whose shares are
held in brokerage accounts. The company believes that the number of
beneficial holders is in excess of this amount.
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.
(b) RECENT SALES OF SECURITIES: The Registrant had the following stock
issuances within the last fiscal year as described below. All such shares were
sold by the officers and directors of the Registrant and no underwriters were
utilized.
FISCAL YEAR ENDING FEB 29,2000
March 1, 1999 to February 29,2000
<TABLE>
DATE CLASS # OF SHARES AMOUNT Per Share CONSIDERATION NAME
<S> <C> <C> <C> <C> <C>
3/1/99 Common 17,340 $ 8,670 $.50 Debt Conversion Don Dale
3/15/99 Common 12,000 6,000 .50 Debt Conversion James Shadlaus
4/9/99 Common 100,000 6,000 .06 Services Rendered Carmine Bua
5/1/99 Common 10,000 600 .06 Services Rendered Frank Raimondi
8/30/99 Common 21,167 10,583 .50 Debt Conversion Krantz Trust
8/30/99 Common 24,000 6,000 .25 Purchase Krantz Trust
9/8/99 Common 11,780 5,890 .50 Debt Conversion Ruby Trice
9/8/99 Common 3,538 1,769 .50 Debt Conversion David Harjung
9/8/99 Common 3,519 1,759 .50 Debt Conversion David Harjung
12/13/99 Common 10,000 600 .06 Services Rendered Don Helmer
12/13/99 Common 25,000 1,500 .06 Services Rendered Ken Crocker, Jr.
1/7/00 Common 10,000 5,000 .50 Purchase Ruby Trice
1/7/00 Common 22,000 11,000 .50 Purchase Chris Holtz
2/8/00 Common 2,000 1,000 .50 Purchase Charles Damaske
2/9/00 Common 10,000 5,000 .50 Purchase Dan Stagnoli
2/10/00 Common 15,000 7,500 .50 Purchase Robert Sheets
2/24/00 Common 10,000 5,000 .50 Purchase Jeff Hushaw
</TABLE>
<TABLE>
EXEMPTIONS FROM REGISTRATION:
With respect to the issuance of all of the common shares listed at Item 5(b),
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 505 of the Act ("Rule 505") 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.
4
<PAGE>
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.
ITEM 6 Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Registrant develops, produces, and distributes entertaining,
educational, and informational television programming. The Company endeavors
to present programming on network, cable and public television as well as the
direct-to-video market.
Production Schedule includes:
Masters of the Martial Arts
"Masters of the Martial Arts Starring Sho Kosugi" is a series that involves
interviews and demonstrations on location at different locales in the Orient
with grand masters in different disciplines of the martial arts. 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. This series aired for two years on (ICN) International Channel
Network. The show is not currently airing or generating income but the
Company is planning to restructure this show for airing and syndication during
this fiscal year. The Company also plans to produce and distribute videotapes
for sale that will include various Martial Artists who appear on these shows.
Ninjaerobics (TM).
An outgrowth of the interest in martial arts has been the development of
exercise classes which focus on martial art techniques and self defense.
ASNi, recognizing this opportunity, designed and developed "Ninjaerobics", a
series of exercise tapes that combines aerobics and self-defense. Several of
these shows were produced but as of this date the company has not secured a
sponsor or joint venture partnership for this series. The Company believes
that Mr. Kosugi's worldwide fame as The Ninja will provide the added impetus
for ASNi to market this videotape series through select retail and video
outlets, television infomercials and the Internet.
THE STOCK SHOW (TM)
"The Stock Show" 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 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 that are targeted at the
company's latest product or services offered, its key management, company
innovations and company goals. The show does not promote any particular
company or stock, does not offer investment advice and specifically avoids
discussing the guest company stock market performance and/or its offerings.
5
<PAGE>
Business news presented includes press releases provided to the general public,
current events that are timely and relevant as reported in business magazines
such as Wall Street Journal, Forbes, and others.
Intervention Shatters alcohol and drug Addiction
Recognizing the importance and benefit of reaching families in crisis due to
alcohol and drug addiction, ASNi created, developed and is completing its
production and videotape project focusing 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 currently in post-production and 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.
It is anticipated that revenues will come from the sale of videotapes to
viewers, institutions, and agencies concerned with drug and alcohol abuse. The
company intends to make in-home drug tests available with the videotapes at a
discount from the retail market price. These in-home drug tests are becoming
more popular with parents of teenagers and they are fast, accurate and easy to
use. It provides the opportunity to test simultaneously for single or multiple
drug use of marijuana, methamphetamines, cocaine, heroin and others at cut off
levels consistent with the National Institute of Drug Abuse.
Registrant will allocate 2.5% of the net earnings from the "Intervention"
project to either "The Angel Heart Foundation" or another drug education program
to be selected.
ASNi intends to purchase product from a manufacturer/wholesaler and supplier of
rapid diagnostic test products used by professional clinicians as well as sold
over-the-counter to the consumer market. ASNi will place individual purchase
orders with the supplier at the time it begins marketing the drug educational
videotapes. 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.
"Intervention Shatters Alcohol & Drug Addiction" was developed, videotaped and
scheduled to air in 1999 but was postponed due to production problems and
setbacks. During this period the company was in the process of moving its
production facility to Las Vegas, Nevada. The production problems have been
identified and are being corrected so that post production can be completed and
the videotapes can be released to the public market. It is anticipated that
the completion, airing and distribution of these videotapes will take place
during this fiscal year.
REVENUES FROM OPERATIONS CAN BE DERIVED FROM:
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.
Secondary Income is generated by: (1) third party consulting services
pertaining to project development; script, layout, production, editing and
distribution of the product (2) third party video post production services and
(3) 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. This may
include printed material, books, (Reference Exhibit 10.2) audiotapes and
seminars.
It is anticipated Registrant will derive revenues from advertisers and
sponsors upon airing of existing shows, the various shows in production and
the videotape series "Intervention Shatters Alcohol & Drug Addiction".
6
<PAGE>
Revenue for in-house production is recognized at time of distribution.
Revenue is recognized for outside third party production as work is completed.
RESULTS OF OPERATION.
During fiscal year-ending February 29,2000, the loss of $236,802 is
compared to February 28,1999 fiscal year-end loss of ($791). During this
period, existing projects and shows were in post production. Revenues for
2000 and 1999 came from the sale of production for Registrant's shows and third
party production services. Income was $25,000 and $127,200 respectively.
ASNi's focus for 2000 was on show development and company shows were not
being aired on televison. Third party income from outside contracts was the
only source of revenue during this period. It is anticipated that during
fiscal year 2001 and thereafter, the company's in-house show productions will
resume, therefore, once these shows are airing, the primary source of income
will be advertisers and sponsors of ASNi's shows.
The Company's total operating expenses including general and
administrative costs, other costs including interest, rent, lease payments,
contract labor, entertainment, and miscellaneous reflect operations in 2000 and
1999. The operating costs include non-cash items, which comprise of 30%
and 47% of the total costs respectively. Each year a portion of operating
expenses has been capitalized as project development costs. For the fiscal
years of 2000 and 1999, the amounts capitalized were $59,865 and $106,629
respectively.
The Company's shows and developed projects are the principal assets of
the Registrant. By the end of fiscal year ( February 29,2000) the Company
had produced and aired "Masters of the Martial Arts" a weekly series that
aired for two years on ICN ( International Channel Network). The Ninjaerobics
show pilot and The Stock Show have also been developed, produced and aired
regionally. The Company has also developed a show called The Franchise
Connection. These shows are currently not airing or generating income.
The Company has sustained operations with limited revenues during a period
that's been devoted primarily to design, development, and packaging of its
shows. The Company has created necessary brochures, marketing tools, and
developed advertising campaigns for its upcoming infomercial "Intervention" and
"The Stock Show". Management has developed relationships with various media
buyers and public relations firms to distribute its shows and has secured
vendors to supply various products to be used as added value in the marketing
of its infomercials, television shows and videotapes.
During the fiscal year ending February 29,2000, management chose to
allocate the necessary time and resources to comply with the ( SEC ) Securities
and Exchange Commission 10SB/12g and NASD requirements for the Registrant to
become qualified for full reporting status. The company has completed the
mandatory requirements and it's anticipated that the Registrant will be listed
on the NASDBB during the second quarter of this fiscal year.
There was no Federal Tax expense for the year ended February 29,2000.
The Registrant has a tax loss benefit to carry-forward of $1,293,000 which
is available to offset future tax liabilities.
7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Registrant's cash position at February 29,2000 was $2,075, a
decrease of $163,419 from February 28,1999. The decrease was primarily
attributed to operating expenses of $202,283, interest payment of $17,124 and
debt reduction of $14,360.
Working capital at February 29,2000 was a negative ($201,483) .
However, the current liabilities included $153,563 due the principal
stockholder. Although this is currently due, no demand has been made upon the
company for payment.
Registrant has converted $34,671 of debt into 69,344 common shares
of stock at a average price of $.50 during the fiscal year-ending February
29,2000. It is the intent of the Company to continue its effort to convert
debt into equity when possible.
RISK FACTORS
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 a follows:
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, general economic conditions and
public taste generally, and include other intangible factors, all of which
change rapidly and cannot be predicted with certainty. Therefore, there is a
substantial 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.
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. We
compete with producers, distributors, licensors and merchandisers, many of whom
are larger and have greater financial resources than we do. Although the
number of outlets available to producers has increased with the emergence of
new broadcasters, 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 available to independent companies. As a
result of these factors, the Company cannot make assurances that we will be
able to remain competitive.
Failure to License: Renew Licenses or Production Agreements. There can be no
assurance that any existing programs or programs in production by the Company
will be licensed, re-licensed for additional broadcast seasons or renewed for
production or, if so re-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.
8
<PAGE>
The Company's current programs may not sustain their popularity and the new
programs may not become popular. Each program (or show) is an individual
artistic work, and consumer reaction will determine its commercial success.
The Company cannot assure stockholders that we will be able to continue to
create entertaining episodes for its existing programs or that it will be able
to create new programs that are appealing for broadcasting.
Dependence upon Key Personnel: Registrant's success depends to a significant
extent upon the expertise and services of Kent Wyatt, our President and Chief
Executive Officer. Although the Registrant has agreements with other key
management personnel. the loss of services of Mr. Wyatt and/or other key
management personnel could have an adverse effect on the Company business,
results of operations and financial condition. Registrant does not currently
carry "key man" life insurance policies on any of the Company executives.
9
<PAGE>
ITEM 7 Financial Statements
A S N I
ATLANTIC SYNDICATION NETWORK, INC.
Audited Financial Statements
February 29, 2000 and February 28, 1999
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
TABLE OF CONTENTS
FEBRUARY 29, 2000
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . Page FS 1
FINANCIAL STATEMENTS:
Balance Sheets . . . . . . . . . . . . . . . . . Page FS 2
Statements of Operations . . . .. . . . . . . . Page FS 3
Statements of Stockholders' Equity . . . . . . . Page FS 4
Statements of Cash Flows . . . . . . . . . . . . Page FS 5
NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . Page FS 6
<PAGE>
Independent Auditors' Report
To: Board of Directors
ATLANTIC SYNDICATION NETWORK, INC.
Las Vegas, Nevada
We have audited the accompanying balance sheets of ATLANTIC SYNDICATION
NETWORK, INC. (a Nevada corporation), as of February 29, 2000 and February
28, 1999 and the related statements of operations, stockholders' equity, and
cash flows for each of the two 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 29, 2000 and February 28, 1999
and the results of its operations and cash flows for the years then ended, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As disclosed in the financial
statements and notes to the financial statements, the Company has incurred
losses and its current liabilities exceed its current assets. These
conditions raise doubt about the Company's ability to continue as a going
concern. Management's plans regarding these matters are described in the
notes to the financial statements. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Sellers & Associates, P.C.
June 8, 2000
Ogden, Utah
FS 1
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Balance Sheets
Years Ending February 28,
A S S E T S
2000 1999
----------- -----------
Current Assets
Cash $ 2,075 165,494
Assets Held For Sale - 20,000
------------ -----------
Total Current Assets 2,075 185,494
------------ ------------
Property and Equipment, Net 17,076 23,374
------------ ------------
Net Property and Equipment 17,076 23,374
------------ ------------
Other Assets
Project Development
Cost 384,979 346,371
(Accumulated) Amortization
Project Development Costs (168,723) (97,022)
Initial Organization &
Franchise Development
Costs - 205,098
(Accumulated) Amortization
All Other - (205,098)
------------ ------------
Net Other Assets 216,256 249,349
------------ ------------
$ 235,407 $ 458,217
------------ ------------
Liability & Stockholder's Equity
Current Liabilities
Accounts Payable $ 30,848 21,668
Term Debt - Current Portion 9,147 7,074
Refundable Deposits 10,000 10,000
Note Due to Stockholder 108,563 83,915
Notes Due to Officers 45,000 -
Deposit For Project
Development - 100,000
------------ ------------
Total Current Liabilities 203,558 222,657
------------ ------------
Long-Term Liabilities 29,353 80,458
------------ ------------
Total Liabilities 232,911 303,115
------------ ------------
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 13,974,444
shares at 2-29-00 and 13,667,100
at 2-28-99 13,974 13,667
Additional Paid-In Capital 1,282,491 1,198,602
Retained Earnings (Deficit) (1,293,969) (1,057,167)
------------ ------------
Net Stockholders' Equity $2,496 155,102
------------ ------------
Total Liabilities and
Stockholders' Equity $ 235,407 $ 458,217
========== ==========
See Accompanying Independent Auditor's Report and Notes
to the Financial Statement
FS 2
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Statement of Operations
For the Years Ended February 28,
2000 1999
------------------ -----------------
Revenues
25,000 $ 127,200
------------------ ------------------
Operating Expenses
Amortization $ 71,701 56,065
Depreciation 7,814 7,850
Interest 17,124 22,970
All Other Costs 225,028 157,015
(Less) Capitalized As
Project Development Costs (59,865) (106,629)
------------------ ------------------
Total Operating Expenses 261,802 137,271
------------------ ------------------
Income (Loss) from Operations (236,802)
Forgiveness of Debt -
(Loss) on Sale of Investment - (620)
------------------ ---------------
Net (Loss) Before Income Taxes (236,802) (791)
Provision for Income Taxes - -
Net (Loss) $ (236,802) (791)
========= ======
Net (Loss) Per Share of
Common Stock $ (0.02) (0.00)
======== =========
Weighted Average Shares
Outstanding During the Period 13,318,115 13,138,308
=========== ===========
SEE ACCOMPANYING INDEPENDENT AUDITOR'S REPORT AND NOTES TO THE FINANCIAL
STATEMENT
FS 3
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Statements of Stockholders' Equity
For the Years Ended Feb 29,2000 and Feb 28, 1999
Additional
Preferred Stock Common Stock Paid-In- Accumulated Total
Shares Amount Shares Amount Capital Deficit Equity
-----------------------------------------------------------------
Balance as of
Feb. 28, 1998 - $ - 12,813,100 $12,813 $1,067,580 $(1,056,376) $24,017
Net (Loss) for
the year ended
Feb. 28, 1999 (791) (791)
Sale of
unregistered
stock 402,800 403 100,297 100,700
Debt converted to stock 21,800 22 5,378 5,400
Stock for services
rendered 429,600 429 25,347 25,776
----------------------------------------------------------------
Balance as of
Feb. 28, 1999 - $ -13,667,100 $13,667 $1,198,602 $(1,057,167) $155,102
Net (Loss) for the
year ended
Feb. 29,2000 (236,802)(236,802)
Stock Warrants issued
for service rendered $325 325
Sale of
unregistered
stock 93,000 93 40,407 40,500
Debt converted
to stock 69,344 69 34,602 34,671
Stock for
services
rendered 145,000 145 8,555 8,700
----------------------------------------------------------------
Balance as of
Feb. 29, 2000 - - 13,974,444 $13,974 $1,282,491 $(1,293,969) $2,496
-----------------------------------------------------------------
See Accompanying Independent Auditors Report and Notes to the Financial
Statement
FS 4
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Statements of Cash Flows
For the Years Ended February 28,
CASH FLOWS FROM OPERATING ACTIVITIES 2000 1999
------------------------------------ ------ -------
Net Income (Loss) $(236,802) (791)
----------- -----------
Adjustments to reconcile Net Income to Cash Flows
from Operating Activities
Depreciation 7,814 7,850
Amortization 71,701 56,065
Stock issued for services in lieu of cash 8,700 7,000
Decrease in Assets Held For Sale 20,000 10,000
Decrease in Prepaid Expenses - 24,000
Increase(Decrease) in Accounts Payable 9,180 (21,516)
Increase(Decrease) in Deposit For Project
Development (100,000) 100,000
-------- ----------
Total Adjustments 17,395 183,399
------------ ---------
Net Cash Provided (Used)
by Financing Activities (219,407) 182,608
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
(Increase) Decrease in Investments - 5,620
(Increase) in Property & Equipment (1,516) (3,000)
(Increase) in Other Assets (38,609) (106,629)
------------- -----------
Net Cash (Used) by Investing Activities (40,125) (122,785)
------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
-------------------------------------
Increase in Notes Payable (14,360) 9,439
Increase (Decrease) Funds
Advanced by Shareholder 69,648 (22,411)
(Decrease) in Refundable Deposits - (4,804)
Funds Raised from Stock Issued 40,500 100,700
Funds Raised from Stock Warrants Issued 325 -
------------ ----------
Net Cash Provided (Used)
by Financing Activities 96,113 82,924
----------- ---------
Increase(Decrease) in Cash & Cash Equivalents (163,419) 161,523
Cash at Beginning of Year 165,494 3,971
Cash at End of Year 2,075 165,494
------------ ----------
SUPPLEMENTARY CASH FLOW INFORMATION
Interest Paid 17,124 22,970
Non-cash Items:
Debt converted to stock 34,671 5,400
Stock issued for services 8,700 31,176
See accompanying Independent Auditor's report and
Notes to the Financial Statement
FS 5
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
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 29, 2000 and February 28,
1999.
Business Activity
The Company 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 Company was renamed to A.S. 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, commercials, infomercials
and ancillary products 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 Company discontinued use of some of its equipment. As of
February 28, 1999, part of the equipment remained unsold, despite management
intention to have it all sold. It was not sold during fiscal year ending
February 29, 2000. Consequently, management wrote off the remaining value of
assets held for sale, or $20,000.
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.
FS 6
<PAGE>
NOTE 1 - Summary of Significant Accounting Policies - Continued
Projects Development Costs
The Company 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 changes in television
programming and audience interest as well as technological changes that 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>
NOTE 1 - Summary of Significant Accounting Policies - Continued
Cash and cash equivalents, 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.
Long-term liabilities:
The carrying amounts of the Company's borrowing (See note 3) under
its short and long-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 29, 2000 and February 28, 1999 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 29, 2000 and
February 28, 1999 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>
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
Basic net income or loss per share is computed by dividing net income or
loss by the weighted average number of common shares outstanding.
NOTE 2 - Property and Equipment
Property and equipment consisted of the following at,
February 29, February 28,
2000 1999
--------- ---------
Tools $ - $ 6,000
Equipment 37,980 116,277
Software 923 58,252
-------- -------
Total Property and Equipment 38,903 180,529
(Less) Accumulated Depreciation ( 21,827) (157,155)
------------ ----------
Total Property and Equipment, Net $ 17,076 $23,374
=========== ========
<PAGE>
NOTE 3 - Term Debt
Term debt consisted of the following at,
February 29, February 28,
2000 1999
Note Payable ------------ ----------
Payable to a financial
institution, secured by selected
equipment, monthly payment
$362 for 39 months,
interest at 21.3%. $ 8,187 $ 10,354
Notes Payable
Over the years, the Company has
issued unsecured demand
notes payable to trade accounts
payable creditors.
The aggregate unpaid balance is: 12,421 28,515
Credit Cards
Pledged by personal guarantee of
major stockholder 405 10,485
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. 17,487 38,178
-------- --------
Total Notes Payable 38,500 87,532
(Less) Current Portion ( 9,147) ( 7,074)
--------- ----------
Total Long-Term Debt $ 29,353 $ 80,458
======== =========
Scheduled future maturities of notes payable at
February 29, 2000 are as follows:
Year Ending
Last Day of February,
-----------------------------
2001 $ 9,147
2002 3,833
2003 2,033
2004 6,000
2005 -
2006 & After 17,487
-------
Total $38,500
========
<PAGE>
NOTE 4 - Related Party Transactions February 29, February 28,
------------------------- 2000 1999
-------- ---------
Monies have been advanced to the Company
by the Company's principal shareholder.
Amounts due to stockholder are from short-term
borrowings remaining unpaid. Interest of $11,632
has been accrued at 12% on the outstanding balance
at February 29, 2000, and $10,305 at February 28,
1999 computed at 14%. The amount advanced at
the last day of February is: $108,563 $ 83,915
During the year ended February 29, 2000, the two
principal officers, who are also shareholders,
received $75,000 in combined compensation. Of the
$75,000 paid in compensation, $30,000 was paid
in cash and $45,000 was paid in notes payable
dated February 29, 2000. The amounts bear
interest at 10% and are due and payable on or
before February 28, 2001. 45,000 -
-------- -------
Total due to principal shareholders $153,563 $ 83,915
======== =======
During the year ended February 28, 1999 the Company issued 50,000 shares of
stock to the son of the principal shareholder for digital editing and
production of special effects. Another 100,000 shares was issued for
consulting services to an officer and shareholder who serves on the Board of
Directors. The Company's attorney received 200,000 for legal consulting
services. All stock issued was in lieu of cash payment 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
<PAGE>
NOTE 5 - Common Stock - Continued
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.
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
repayment.
Nearly all notes issued for the August 1994 private placement offering
have been converted to common stock.
As of February 29, 2000, there are 13,974,444 shares issued and
outstanding. Of this amount, 857,500 shares are free trading whereas
13,116,944 shares have been or still are restricted subject to Rule 144
of the 1933 Securities and Exchange Act.
On May 4, 1999 the Board of Directors approved a stock warrant plan.
The stock warrant plan provides for two members of the then 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, which is fully paid in
services provided of $325 during fiscal year ending February 29, 2000.
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 lease expense for each year
ending the last day of February 2000 and 1999 is $18,480.
The Company rents facilities in Nevada on a month-to-month basis and is
not a capitalized lease.
<PAGE>
NOTE 7 - Deposit For Project Development
----------------------------------------
In January 1999, the Company received $100,000 as a deposit for a
project development from an investor. The project entails developing and
marketing an infomercial to promote video-tapes related to drug and alcohol
addiction. The Company 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 Company.
The company and the investor entered into an agreement whereby the
investor was allowed to take $25,000 out of the $100,000 and apply it as
payment in full on an advertising project the Company did for the investor
during the year ending February 29, 2000. As of February 29, 2000, the net
investment of $75,000 has been applied against the cost in the project leaving
the Company with a net investment in the project of approximately $99,000.
Management believes the committed project will be completed and ready for
marketing during the fiscal year ending February 28, 2001.
NOTE 8 - Forgiveness of Debt
----------------------------
The Company rented production facilities in a building in Hollywood,
California. During 1996 to 1999 the building went through multiple ownership
and management changes as well as building renovations. During that period,
several tenants, including the Company, were not required to pay all of their
regular rents. This is because when the last owners took over, the previous
owners forgave unpaid rents due by the tenants, including the Company. The
Company received a total of $9,900 forgiveness of debt of unpaid rent accrued
during the years ending February 28, 1998 and 1997. Total debt forgiveness as
of February 29, 2000 and February 28, 1999 are $0 and $9,900 respectively.
NOTE 9 - Income Taxes
--------------------- February 29, February 28,
(Loss) before income taxes consisted of: 2000 1999
----------- ---------
Total $ (236, 802) $ (791)
=========== ==========
The provision for income taxes consisted of:
Current income taxes
Federal $ - $ -
State (Nevada) - -
-------- ---------
Total $ - $ -
=========== =========
<PAGE>
NOTE 9 - Income Taxes - Continued
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 are:
February 29, February 28,
2000 1999
----------- ------------
Tax expense (benefit) at U.S. statutory rate $ 193,000 $ 158,000
State income taxes, net of
Federal benefit (Nevada) - -
Valuation allowance (181,700) (154,700)
Accounts payable ( 4,600) ( 3,300)
Note payable to stockholders for compensation ( 6,700) -
------------ ----------
Total $ - $ -
============= ============
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at:
February 29, February 28,
2000 1999
---------------- -----------
Deferred tax assets:
Net operating loss carryforward $1,293,488 $1,054,067
---------- ----------
Total gross deferred tax assets: 1,293,488 1,054,067
(Less) valuation allowance (1,262,640) (1,032,399)
---------- ------------
Net deferred tax assets 30,848 21,668
--------- ---------
Deferred tax liabilities:
Accounts payable 30,848 21,668
Total gross deferred tax liabilities 30,848 21,668
--------- --------
Net deferred tax $ - $ -
============ =========
<PAGE>
NOTE 9 - Income Taxes - Continued
There were no payments made for income taxes in fiscal years ending the
last day of February, 2000 and 1999 respectively.
As of February 29, 2000, the Company has available for income tax
purposes approximately $1,293,000 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 Company undergo an ownership
change as defined in Section 382 of the Internal Revenue Code, the Company's
tax net operating loss carry forwards generated prior to the ownership change
will be subject to an annual limitation which could reduce, eliminate, or
defer the utilization of these losses.
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 sustained operating losses in
the year ending February 29, 2000 and its current liabilities exceed its
current assets. These factors create an uncertainty about the Company's
ability to continue as a going concern.
<PAGE>
ITEM 8 Changes in and disagreements with accountants on Accounting and
Financial Disclosure:
The Registrant's independent accountant has not resigned, declined to
stand for re-election nor was he dismissed. The principal accountant's report
on the financial statements for the past two years contains no adverse opinion
or disclaimer of opinion. nor were they 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.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:
COMPLIANCE With Section 16(a) of the Exchange Act
NAME AGE POSITION/OFFICE TERM SERVED SINCE
Kent G. Wyatt Sr. 60 Director, President, CEO 1 yr. 9/92
Sarah E. Wyatt 60 Director, Corporate Secretary 1 yr. 9/92
James Shadlaus 50 Director, Treasurer 1 yr. 5/95
Don B. Dale 58 Director 1 yr. 5/99
Ken Crocker 30 Vice President, Marketing 1 Yr. 11/99
Ramon Bonin 61 Profit Participation Partner n/a n/a
KENT G. WYATT, SR. - Mr. Wyatt brings over 25 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 is committed to expanding Registrant operations and its on-line
distribution of Registrant developed shows in a cost-effective manner. His
vision is for Registrant to become a recognized participant in production of
quality television programming. During the late 1970's to mid 1980's Mr. Wyatt
successfully created, sold and managed a nationwide chain of several hundred
decorating dealerships under the name of Centurion Design Wall Printing. He
sold the company in 1985. He has maintained his California real estate brokers
license since 1968, participating as an industrial/commercial broker and
developer of commercial property. He attended Colorado University where he
majored in business administration.
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 including Registrant in the
area of financing, mergers, and stock or bond financing.
<PAGE>
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 co-producer and senior writer of the
Intervention Show videotapes. She is co-producer of the show, "Masters of the
Martial Arts starring Sho Kosugi" in addition to writing and developing the
narration for the weekly series. She supervised all commercial advertising
production for Ad Show Network, the predecessor to ASNi. She owned and
operated a wholesale art business for the design trade, owned and managed
commercial properties for many years and maintained a California real estate
license for over 20 years. She has a degree in French from The Union Institute.
Kenneth W. Crocker, Jr.- Mr. Crocker is a graduated with a Bachelor of Science
from Lehigh University.
His business career began in 1993 with American Family Portraits and in 1994 he
was promoted to become the National Sales Manager. Since that time, he worked
as an independent contractor with various sales and marketing firms including
Gateway Consulting. He is an energetic and talented member of the Atlantic
Team. His responsibility includes overseeing marketing, public and investor
relations. Once The Stock Show is in place, Mr. Crocker will open a satellite
office on the east coast and function as "Segment Producer" for the show. His
responsibility will then include the selection of companies and executives to
appear on the upcoming scheduled weekly show.
DON B. DALE - Mr. Dale has 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 $130 million dollars in
footings and premier bank status in 4 years. Mr. Dale was a registered member
of NASD in the early 1990's and retired from financial and business
consulting in 1996. Mr. Dale graduated from the University of Kansas
and holds a Masters in Business Administration from Long Beach State
University. Mr. Dale assists several non-profit entities including United
States Internet Genealogical Society and PARTS, a teenage drug abuse program.
RAMON BONIN - Mr. Bonin, president of Dynamic Builders, is nationally regarded
for his expertise and skill in real estate development and is widely acclaimed
as one of the largest industrial real estate builders and developers in Los
Angeles, California. Mr. Bonin shares with the principals of ASNI a mutual
desire to contribute to the education of families faced with the disease of
alcohol and drug addiction. He is a corporate client and participates as the
investor and profit sharing partner in the "Intervention Shatters Alcohol and
Drug Addiction".
<PAGE>
ITEM 10 EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE LONG TERM
Annual Compensation Awards Payouts
Names-Principal Year Compensation Bonus Other Restricted Options LTIP Note
Compensation interest
Position Payable Stock Award SARs(Layouts($) Paid
<S> <C> <C> <C> <C> <C> <C> <C> <C>
KENT G.WYATT 2000 $30,000 N/A $30,000 N/A N/A N/A $11,632
CEO/Pres.
1999 N/A N/A $10,000 N/A N/A N/A $10,305
SARAH E WYATT 2000 N/A N/A $15,000 N/A N/A N/A N/A
Corporate
Secretary 1999 N/A N/A N/A N/A N/A N/A N/A
</TABLE>
Employment Contracts: There are no employment contracts in place.
Additional compensation paid to Kent Wyatt is interest payments made to him for
monies advanced to the Registrant. This payment for fiscal year-end February
28, 1998 and 1999 was $10,305 and $11,632, respectively.
As of February 29, 1999, Registrant's debt to this principal stockholder was
$83,915 and at year-end February 28, 1999 the debt had been increased to
$108,563.
Management non-employee compensation of $120,000 for President Kent Wyatt and
$60,000 for Corporate Secretary Sarah Wyatt was approved by the Board of
Directors as of May 4, 1999. President Kent Wyatt received $30,000 compensation
during the first nine month period and waived the additional compensation due.
The Corporate Secretary Sarah Wyatt received $0 and waived all compensation for
the first nine month period of the fiscal year. Each party agreed to accept a
promissory note for compensation due for the last quarter of the fiscal year.
The note payable to Kent Wyatt is $30,000 (all due within one year at 10%
interest). The note payable to Sarah Wyatt is $15,000. (all due within one year
at 10% interest)
Options/Stock Appreciation Rights - There are stock options or stock
appreciation rights currently effective. Reference Exhibit 10a and 10b
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. Warrants were granted for services rendered, for director services and
commitments to advise the Registrant. (Warrant plan filed as an exhibit to
Registrant's current 10SB filing with the SEC).
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information as to the shares of common
stock owned as of February 29,2000.
1. Each person who beneficially owns, so far as the Registrant has been
able to ascertain, more than 5% of the 13,974,444 outstanding shares of the
Registrant.
2. Each director.
3. Each of the officers named in the summary compensation table.
4. All of the directors and officers as a group unless otherwise
indicated in the footnotes below are subject to community property laws where
applicable, the persons as to whom information is given has sole investment
power over the shares of common stock.
<TABLE>
<CAPTION>
TITLE OF PRINCIPAL AND/OR AMOUNT AND NATURE OF PERCENT
CLASS BENEFICIAL OWNER BENEFICIAL OWNER OF CLASS (7)
<S> <C> <C> <C>
Common Kent G. Wyatt 7,599,500 (1) 54.4%
Common Sarah E. Wyatt 1,505,000 (1) 10.7%
Common James Shadlaus 212,000 (2) 1.5%
Common Bill Madon 1,050,000 (3) 7.5%
Common Ramon Bonin 600,000 (4) 4.3%
Common Don B.Dale 22,340 (5) LESS THAN .1%
Common Kenneth Crocker Jr. 25,000 (6) LESS THAN .1%
</TABLE>
-------------------------
(1) Kent Wyatt is President/CEO and beneficial owner of the common shares
listed including 450,000 shares held in joint tenancy with his wife, and
corporate secretary,Sarah Wyatt. Mr. Wyatt is also trustee for Kent Wyatt Jr.
and Lisa Wyatt and 400,000 common shares held in trust on their behalf.
(2) James Shadlaus is Director, Treasurer and beneficial owner of 212,000
shares at fiscal year-end. He was granted warrants which entitle him to
purchase up to 100,000 shares of stock in the Registrant. Warrants were
purchased at $.001 per share valuation and must be exercised in whole or part
at $.25 per share by February 28, 2009.
(3) Bill Madon is beneficial owner of 1,050,000 shares at fiscal year end. He
has no relationship with the Registrant other than as a shareholder.
(4) Ramon Bonin is beneficial owner of 600,000 shares at fiscal year end. He
is an investor in a profit participation agreement with the Registrant in its
"Intervention Shatters Alcohol & DRUG Addiction" Videotapes.
(5) Don Dale is beneficial owner of 22,340 shares at fiscal year-end. He was
elected to the Board of Directors on May 4, 1999. As a Director he was granted
warrants which entitle him to purchase up to 225,000 shares of stock in the
Registrant. Warrants were purchased at $.001 per share valuation and must be
exercised in whole or part at $.25 per share by February 28, 2009.
<PAGE>
(6) Kenneth Crocker Jr. is Vice President of Marketing and owner of 25,000
common shares of stock.
(7) Percentages based on 13,974,444 shares outstanding
ITEM 12. CERTAIN RELATIONSHIPS and RELATED TRANSACTIONS
There have been no material transactions in the past two years or proposed
transactions to which the Company has been or proposes to be a party in which
any officer, director, nominee for officer or director, or security holder of
more than 5% of the Company's outstanding securities is involved.
ITEM 13. EXHIBIT LIST
Exhibit No. Description
27. Financial Data Schedule
FORM 8-K REPORTS FILED: None
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Atlantic Syndication Network, Inc.
Dated June 14,2000 By: /s/ KENT G. WYATT, SR.
-----------------------
Kent G. Wyatt, Sr.
President and Chief Executive
Officer
/s/ James Shadlaus
----------------------
James Shadlaus
Treasurer
