SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended _________November 30,1999___________
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.
(Exact name of registrant as specified in its charter)
NEVADA 88-0325940
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2140 West Charleston, Suite B, Las Vegas, Nevada 89102
(Address of principal executive offices) (Zip Code)
(702) 388-8800
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former 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 of
1934 during the preceding 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
___X___ Yes _______ No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
Common Stock, $.001 par value - 13,870,444 shares as of November 30, 1999
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Index
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)
as of November, 1999 and February 28,1999 3
Condensed Consolidated Statements of Operations
(Unaudited) for the three months ended November 30, 1999 and 1998 4
Condensed Consolidated Statements of Operations
(Unaudited) for the nine months ended November 30, 1999, and 1998 4
Condensed Consolidated Cash Flows (Unaudited)
for the nine months ended November 30, 1999 and 1998 5
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION 10
Item .
SIGNATURE 10
INDEX TO EXHIBITS
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ATLANTIC SYNDICATION NETWORK, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
November 30, February 28,
1999 1999
ASSETS
Current assets
Cash $ 6,883 $ 165,494
Assets held for sale 20,000 20,000
------- -------
Total current assets 26,883 185,494
------- -------
Property and equipment, net 19,002 23,374
------ ------
Property and equipment, net 19,002 23,374
------ -------
Other assets
Project development costs 401,214 346,371
Amortization project development costs (134,173) (97,022)
Organizational and franchise development
costs 205,098 205,098
Amortization organizational and franchise
development costs (205,098) (205,098)
-------- ---------
Net other assets 267,041 249,349
-------- -------
Total assets $ 312,926 $ 458,217
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 21,668 $ 21,668
Notes payable (current portion) 7,074 7,074
Refundable deposits 10,000 10,000
Due to stockholder 103,215 83,915
Deposit for project development 75,000 100,000
-------- -------
Total current liabilities 216,957 222,657
------ ------
Long-term liabilities
Long-term debt (net of current portion) 46,086 80,458
-------- -------
Long-term liabilities 46,086 80,458
-------- -------
Total liabilities 263,043 303,115
Stockholders' equity
Preferred stock, $.01 par value: Authorized shares -
500,000; Issued and outstanding - none.
Common stock, $.001 par value:
Authorized shares- 50,000,000;
Issued and outstanding shares -
13,870,444 at November 30, 1999
and 13,667,100 at February 28,1999,
respectively 13,870 13,667
Additional paid-in capital 1,245,670 1,198,602
Retained earnings (deficit) (1,057,167) (1,057,167)
Net income (loss) (152,489) -
---------- ----------
Net stockholders' equity 49,884 155,102
---------- ----------
Total liabilities and stockholders' equity $ 312,926 $ 458,217
========== =========
See accompanying notes
3
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Condensed Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended November 30, Nine months ended November 30
<S> <C> <C> <C> <C>
1999 1998 1999 1998
Net revenue $ 25,000 $ - $ 25,000 $ -
Costs and expenses:
Amortization expense 12,384 14,016 37,151 42,048
Depreciation expense 1,963 1,963 5,887 5,889
General and administrative expenses 22,113 34,543 178,407 94,209
(Less) Capitalization as project development cost - (23,458) (54,843) (63,977)
-------- -------- -------- ---------
Total operating expenses 36,499 27,064 166,602 78,169
--------- --------- --------- ----------
Operating (loss) (11,459) (27,064) (141,602) (78,169)
Interest income - - - -
Interest expense - (5,053) (10,887) (13,782)
Other (expense) income - - - -
------- ------ ------- -------
(Loss) before income taxes (11,459) (32,117) (152,489) (91,951)
Income tax provision (benefit) - - - -
-------- ------- ---------- -------
Net (loss) $ (11,459) $ (32,117) $(152,489) $(91,951)
======== =======
Net (loss) per share of common stock $ (0.001) $ (0.003) $ (0.011) $ (0.007)
======== ======= --------- -----------
Weighted average shares outstanding during the period 13,667,100 12,807,100 13,667,100 12,807,100
--------- --------- ========== =========-
</TABLE>
See Accompanying Notes
4
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended Nov. 30,
1999 1998
---------- ---------
Net cash flow from operating activities:
Net income (loss) (152,489) (91,951)
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation and amortization 43,038 47,937
Other changes in operating assets and liabilities
Deposit for Project Development (25,000)
Stock issued for services in lieu of cash 6,600 -
---------- ---------
Total adjustments 24,638 47,937
---------- ---------
Net cash provided by operating activities (127,851) (44,014)
---------- ---------
Cash flows from investing activities:
Property and equipment (1,516) -
Other Assets (54,843) (63,977)
---------- ---------
Net cash (used) by investing activities (56,359) (63,977)
---------- ---------
Cash flows from financing activities:
Notes payable (14,371) 9,439
Due to Stockholders 19,300
Funds raised from stock issued 20,670 100,700
---------- ---------
Net cash (used) by financing activities 25,599 110,139
---------- --------
Increase (decrease) in cash and cash equivalents (158,611) 2,148
Cash at beginning of year 165,494 3,971
---------- ---------
Cash at end of year 6,883 6,119
======== =========
Supplemental cash flow information
Interest paid 10,887 13,782
======== =========
Non-cash items
Stock issued in lieu of cash 41,271 5,000
======== =========
See Accompanying Notes
5
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
November 30, 1999
Note (A) - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
include the accounts of Atlantic Syndication Network, Inc. ('ASNI' or 'the
Company'), and have been prepared in accordance with generally accepted
accounting principles for interim financial information, and with the
instructions to form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three month
and nine month period ended November 30, 1999 are not necessarily indicative of
the results that may be expected for the year ending February 28, 2000. These
financial statements should be read in conjunction with the consolidated
financial statements and footnotes thereto included in the Company's Form
10-SB Filing for the period ended May 31, 1999.
Note (B) - Fiscal Year
The Company's fiscal year ends on February 28 each year. The Company has
presented its fiscal quarters as ending on May 31, August 31, November 30 and
February 28.
Note (C) - Property and Equipment
Property and equipment consisted of the following at:
November 30, 1999 February 28,1999
(In Thousands) (In Thousands)
Tools $ 6 $ 6
Office equipment 117 116
Software 59 58
Total property and equipment 181 180
(Less) accumulated depreciation (162) (157)
Total property and equipment, net 19 23
Note (D) - Term Debt
Term debt consisted of the following at:
November 30, 1999 February 28,1999
(In Thousands) (In Thousands)
Note payable
- -------------
Payable to a financial institution, secured by
Selected equipment, monthly payment $362
For 51 months, interest at 21.3%. $ 10 $ 10
Notes payable
Over the years, the Company has
issued unsecured Demand notes
payable to trade accounts payable
Creditors. The unpaid balance at
May 31, and February 28, 1999,
respectfully was: 15 29
Note (D) - Term Debt - continued
Credit cards
Pledged by personal guarantee
of major stockholder: 10 10
Convertible notes payable
Under a private placement issue,
stock is sold along With convertible
notes (See Note F). Since these
Unsecured notes can be converted to
stock, they are Reported as long-term
debt: 18 38
-------- -------
Total notes payable 53 87
(Less) current portion (7) (7)
--------- --------
Total long-term debt $ 46 $ 80
Note (E) - Related Party Transactions
There were no related party transaction during the three months ended
November 30, 1999.
Note (F) - 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 $0.80 and/or
Two thousand (2,000) shares of common stock within 18 months from the
date of issuance at $1.20 and/or
Twelve hundred (1.200) shares of common stock within 30 months from
the date of issuance at $2.00 and/or
One thousand (1,000) shares of common stock on or within 36 months at
$2.40 and/or at the time the note is 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
prepayment.
As of November 30, 1999, there are 13,870,444 shares issued and
outstanding. Of this amount, 857,500 shares are free trading whereas 13,012,944
shares have been or still are restricted subject to Rule 144 of the 1933
Securities and Exchange Act.
b) Stock Transactions for the Period
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, among other things, the
following:
Note (G) - Deposit for Project Development
In January 1999, the Registrant received $100,000 from an investor,
which was an investment on the 'Intervention' videotape project. $25,000 of
that amount was reclassified for production and consulting fees for services
rendered to the investor in November 1999. After reclassification of the
$25,000 the investor's project investment is $75,000. Management believes the
'Intervention' project will be completed and ready for marketing by February 28,
2000. The project entails developing and marketing an infomercial to promote
7
<PAGE>
Note (G) - Deposit for Project Development - continued
video tapes related to drug and alcohol addiction. The Registrant and the
investor in this project have entered into a Profit Participation Agreement
that takes affect after the marketing begins. All costs associated with the
development and marketing of this project are reimbursed by the project before
profits are disbursed. Rights to the project remain in the hands of the
Registrant.
Note (H) - Subsequent Events (Unaudited)
The Registrant is preparing a private placement memorandum under Regulation 'D'
Rule 505 for the purpose of raising $750,000 in exchange for 1,500,000 shares
of common stock, $.50 per share value. The proceeds from this offering will be
used for operations, including additional staff for marketing, sales and
production of television shows, product acquistion and development , production
of direct response commercials and infomercials, purchasing of media and
television time for airing of ASNI shows and infomercials, product order-taking
and fulfillment of orders.
The Y2K situation has had no impact on ASNI's systems or daily operations at
this time.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following information includes forward-looking statements, the
realization of which may be impacted by certain important factors discussed in
'Risk Factors,' below, and the other information in this Form 10-Q.
Overview
The Registrant develops, produces and distributes entertaining,
educational and informational television programming. The Company endeavors to
present its programming on network, cable and public television.
The Company derives its revenues from the sale of advertising and
promotion during the shows the Company produces and from companies, who sponsor
these shows.
The Company also derives revenue by providing outside production and
consulting services in the development, design, and layout of their videotape
projects. This includes research and writing of scripts prior to actual
production, editing and post production which clients use either privately
or for airing on television.
At present, the Company has several projects in production, 'The Stock Show'
and 'Intervention'. Management has targeted the fourth quarter of this fiscal
year or the first quarter on next fiscal year to market these projects.
Results of Operations
Atlantic Syndication Network, Inc. had $25,000 in revenues for the nine
months ended, November 30, 1999 for production services as agreed upon for
services performed. During this period, the Company incurred $178,000 of
operating expenses. Due to the nature of these operating expenses,$55,000 of
operating expenses were capitalized as project development costs; to be
amortized over the useful life of the project. The net operating expenses for
the 9 mos. ended November 30, 1999 increased $88,000 over the 9 mos. ended
November 30, 1998. This increase was attributable to 3 major reasons (i)
increased professional fees due to the Company's change in filing status; (ii)
costs related to moving the production facilities to Las Vegas, Nevada; (iii)
activities related to the development of the Drug Intervention Project.
In the third quarter of 1999, Atlantic Syndication Network Inc. has
relocated its production facility from southern California to Las Vegas, Nevada.
In August 1999, the Company's Form 10SB went into effect by law, making
the Corporation a fully reporting Company.
Liquidity and Capital Resources
ASNI's cash position at November 30, 1999 was $6,883, a decrease of
$2,013 from Aug. 31, 1999. The decrease was primarily attributed to operating
expenses of $36,499 for the three months which were offset by revenues of
$25,000 (reference Exhibit 10 of this Form 10QSB - Contract for Services and
Offset Agreement to the Profit Participation Agreement dated Sept. 14, 1999)
for the same period and $9,400 of additional paid-in capital being raised.
Working capital at Nov. 30, 1999 was a negative ($190,514). Current
liabilities includes $103,215 due to the principal stockholders. Although this
is currently due, no demand has been made upon the Company. Also included in the
current liabilities is a non-refundable deposit for project development
(refer to Profit Participation Agreement dated Jan. 17, 1999- reference
10SB/A4 exhibit 10.2) of $75,000. The remaining working capital is negative
($18,299). Management is presently raising funds to increase working capital by
selling assets, generating revenue, and issuing additional stock for capital
as outlined in the private placement exemptions provided by section 4(2) of the
Securities Act of 1933, as amended (the 'Act'), SEC Reg. D, Rule 505 of the Act,
and Nevada Revised Statutes Section 78.211, 78.215, 73.3784, 78.3785 and 78.3791
(collectively, the 'Nevada Statutes') in order to increase its liquidity and
working capital reserves.
Risk Factors
Important Factors Related to Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB may contain forward-looking
statements that are based on current expectations and involve a number of risks
and uncertainties. All information herein, which is not historic, and any
inference from historic information concerning future periods, is a
forward-looking statement.
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 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 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.
Dependence on Key Employees. The Company is highly dependent on its
Chief Executive Officer, Kent G. Wyatt, Sr., and each of the other principal
members of its management team, the loss of whose services could have a
material adverse effect upon the business and financial condition of the
9
<PAGE>
Risk Factors - continued
Company, as well as the ability of the Company to achieve its objectives. The
Company is also dependent on other key personnel, and on its ability to
continue to attract, retain and motivate highly skilled personnel. The
competition for such employees is intense, and there can be no assurance that
the Company will be successful in attracting, retaining or motivating key
personnel or that personnel cost increases will not have an adverse effect on
the Company's net income or results of operation.
Part II. OTHER INFORMATION
Item 1. Legal proceedings - Not applicable
Item 2. Changes in securities
Stock Transactions for the Period
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, among other things, the
following:
1. That he had the ability to bear the economic risks of investing in the
shares of the Registrant.
2. That he had sufficient knowledge in financial, business, or investment
matters to evaluate the merits and risks of the investment.
3. That he had a certain net worth sufficient to meet the suitability
standards of the Registrant.
4. That the Registrant has made available to him, his counsel and his
advisors, the opportunity to ask questions and that he has been given access to
any information, documents, financial statements, books and records relative to
the Registrant and an investment in the shares of the Registrant.
Debt converted to Stock
TITLE SHARE AMOUNT NAME
Common 11,780 Trice
Common 7,057 Harjung
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: Contract for Services and Offset Agreement to the
Profit Participation Agreement dated Sept. 14, 1999
(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. (Registrant)
November 17,1999 /s/ Kent G. Wyatt, Sr.
Kent G. Wyatt, Sr.
President and Chief Executive Officer
/s/ James Shadlaus
James Shadlaus
Treasurer
10
<PAGE>
CONTRACT FOR SERVICES
AND
OFFSET AGREEMENT
TO THE
PROFIT PARTICIPATION AGREEMENT
This agreeement is dated September 14, 1999 between Atlantic Syndication
Network, Inc. (ASNI) and Ramon Bonin (RBC).
RECITALS
1. ASNI agrees to provide contract services for RBC for consulting and
production of RBC's Dynamic Builders commercial for $25,000.
2. RBC has previously invested $100,000 as described in that certain Profit
Participation Agreement ("Profit Participation Agreement") dated January 17,
1999. It is understood that ASNI's projection of when the revenues were
anticipated to begin has been delayed. In consideration for the indefinite time
it may take to finish getting the project up and running, this additional
consideration to RBC is agreed to between the parties.
The parties hereby agree to the following:
(1) The services shall be completed by Nov. 19, 1999
(2) The $25,000 payment for these services shall be paid to ASNI by ASNI
reducing the $100,000 investment made by RBC in the referenced
Profit Participation Agreement to the amount of $75,000.
(3) It is agreed that all other terms and conditions of the Profit
Participation Agreement shall remain in full force and effect,
including ASNI shall receive the $10,000 per month for management
fees when the project is up and running.
ASNI
/s/ Kent G. Wyatt, Sr.
- ------------------------
Kent G. Wyatt, Sr.
President
RBC
/s/ Ramon Bonin
- -------------------
Ramon Bonin
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-2000
<PERIOD-START> MAR-01-1999
<PERIOD-END> NOV-30-1999
<CASH> 6,883
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 20,000
<CURRENT-ASSETS> 26,883
<PP&E> 181,002
<DEPRECIATION> 162,000
<TOTAL-ASSETS> 312,926
<CURRENT-LIABILITIES> 216,957
<BONDS> 46,086
0
0
<COMMON> 13,870
<OTHER-SE> 36,014
<TOTAL-LIABILITY-AND-EQUITY> 312,926
<SALES> 25,000
<TOTAL-REVENUES> 25,000
<CGS> 0
<TOTAL-COSTS> 123,564
<OTHER-EXPENSES> 43,038
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,887
<INCOME-PRETAX> (152,489)
<INCOME-TAX> 0
<INCOME-CONTINUING> (152,489)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (152,489)
<EPS-BASIC> .011
<EPS-DILUTED> .011
</TABLE>
