UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
( Mark One )
_ (X)_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended ______ November 30,2000 _________
OR
______ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition from ______________ to ________________
Commission File Number ___ 0-26383 ___
ATLANTIC SYNDICATION NETWORK, INC.
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(Exact name of Small Business Issuers in Its Charter)
NEVADA 88-0325940
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2140 West Charleston, Suite B, Las Vegas, Nevada 89102
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(Address of principal executive offices) (Zip code)
(702) 388-8800
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(Issuer's Telephone Number)
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ---------------------------------
n/a n/a
NOT APPLICABLE
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act
0f 1934 during the preceding 12 months ( or for such shorter period that
the registrant was reuired to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
__ X __ Yes ____ No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the altest practicable date:
Common Stock, $.001 par value - 15,826,944 as of November 30,2000.
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
INDEX
Item 1. FINANCIAL INFORMATION
PART 1. FINANCIAL STATEMENTS <PAGE>
Independent Auditor Report 3
Accountant's Review Report Balance Sheets 4
as of November 30, 2000
Statements of Operations 5
for the three months ended November 30, 2000 and 1999
Statements of Cash Flows 6
for the Nine months ended November,2000 and 1999
Notes to Unaudited Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 13
EXHIBIT INDEX
SIGNATURES
EXHIBITS
1
<PAGE>
ITEM 1. FINANCIAL INFORMATION
As used herein, the term "Company" refers to Atlantic Syndication
Network, Inc. and predecessors unless otherwise indicated. Unaudited,
condensed interim financial statements including a balance sheet for the
Company as of the quarter ended November 30,2000 and statements of operations,
and statements of cash flow for the interim period up to the date of such
balance sheet and the comparable period of the preceeding year, are attached
hereto as pages _5_ through _8_ and are incorporated herein by this reference.
2
<PAGE>
SELLERS & ASSOCIATES P.C.
3785 Harrison Blvd. Suite101
Ogden, Utah 84403
INDEPENDENT AUDITORS REPORT
TO: Board of Directors
ATLANTIC SYNDICATION NETWORK, INC.
Las Vegas, Nevada
We have reviewed the accompanying interim balance sheet of Atlantic
Syndication Network, Inc. as of November 30, 2000 and the related interim
statements of operations, stockholders' equity (deficit) and cash flows for the
quarter then ended, in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is the
representation of the management of Atlantic Syndication Network, Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than
an audit in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as whole. Accordingly, we do not express an opinion.
Based on our review as described here, we are not aware of any material
modifications that should be made to the accompanying financial statements in
order for them to be in conformity with generally accepted accounting
principles.
The financial statements for the year ended February 29,2000 were audited by us
and we expressed an unqualified opinion on them, with reference to a going
concern, in our report dated June 8,2000. The interim financial statements for
the interim period ended November 30, 1999 were not reviewed or compiled by us,
accordingly, we express no assurance on them.
/S/ Sellers & Associates, P.C.
December 11, 2000
Ogden, Utah
3
<PAGE>
PART I - FINANCIAL STATEMENT
ATLANTIC SYNDICATION NETWORK, INC.
Unaudited Interim Balance Sheet
For The Nine Months Ending,
November 30,
2000
A S S E T S -------------
Current Assets
Cash $ 239,722
Assets Held For Sale -
Loan To Minority Stockholder 50,000
--------
Total Current Assets 289,722
Property and Equipment, Net 17,640
-------
Net Property and Equipment 17,640
Other Assets
Project Development Costs 396,299
(Accumulated) Amortization-Project Development Costs (231,624)
Initial Organization & Franchise Development Costs -
(Accumulated) Amortization - All Other -
--------
Net Other Assets 64,675
=========
$ 472,037
L I A B I L I T I E S A N D S T O C K H O L D E R S ' E Q U I T Y
Current Liabilities
Accounts and Notes Payable $ 14,001
Term Debt - Current Portion 3,057
Refundable Deposits 10,000
Notes Due To Officers 6,469
---------
Total Current Liabilities 33,527
------
Long-Term Liabilities 17,976
=======
Total Liabilities 51,503
Stockholders' Equity (Deficit)
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
15,826,944 shares at 11-30-00 15,827
Additional Paid-In Capital 2,112,559
Retained Earnings (Deficit) (1,707,852)
----------
Net Stockholders' Equity (Deficit) 420,534
==========
Total Liabilities and Stockholders' Equity (Deficit) $ 472,037
See accompanying notes. 4
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Unaudited Interim Condensed Statements of Operations
For the Three Months Ended
November 30, November 30,
2000 1999
------------ -----------
Net Revenue$ - $25,000
Costs and Expenses:
Amortization Expense 20,967 12,384
Depreciation Expense 1,953 1,963
General and Administrative Expenses 115,264 22,113
(Less) Capitalization as
Project Development Costs (11,320) -
-------- ------
Total Operating Expenses 126,864 36,499
--------- -------
Operating (Loss) (126,864) (11,459)
Interest Income 4,882 -
Interest Expense (136) -
(Loss) Before Income Taxes (122,118) (11,459)
--------- --------
Income Tax Provision (Benefit) - -
--------- ---------
Net (Loss) $ (122,118) $ (11,459)
--------- ----------
Net (Loss) Per Share of Common Stock $ (0.01) $ (0.00)
---------- --------
Weighted Average Shares Outstanding
During the Period 15,826,944 13,667,100
---------- ----------
See accompanying notes. 5
<PAGE>
ATLANTIC SYNDICATION NETWORK, INC.
Unaudited Interim Condensed Statement of Cash Flows
For the Nine Months Ended November 30,2000
ATLANTIC SYNDICATION NETWORK, INC.
Unaudited Interim Condensed Statements of Cash Flows
For the Nine Months Ending,
November 30, November 30,
2000 1999
---------- ---------
Net Cash Flow From Operating Activities:
Net Income (Loss) $(413,883) $(152,489)
--------- --------
Adjustments to Reconcile Net Income
to Cash Provided by (Used In)
operating activities:
Depreciation and amortization 68,760 43,038
Other Changes in Operating Assets
and Liabilities (23,672) -
Stock Issued for Services in Lieu
of Cash 12,750 -
Stock Issued for Debt in Lieu of Cash 2,000 6,600
Deposit for Project Development - (25,000)
-------- ---------
Total Adjustments 59,838 24,638
-------- -------
Net Cash Provided (Used) by Operating Activities (354,045) (127,851)
-------- --------
Cash Flows From Investing Activities:
Property and Equipment (6,423) (1,516)
Other Assets (11,320) (54,843)
------- -------
Net Cash Provided (Used) by Investing Activities (17,743) (56,359)
------- -------
Cash Flows From Financing Activities:
Notes Payable (10,642) (14,371)
Due to Minority Stockholders (50,000) -
Due to Stockholders - Officers (147,094) 19,300
Funds Raised From Stock Issued 817,171 20,670
-------- -------
Net Cash Provided (Used) by Financing Activities 609,435 25,599
Increase (Decrease) in Cash and Cash Equivalents 237,647 (158,611)
Cash at Beginning of Period 2,075 165,494
-------- -------
Cash at End of Period $ 239,722 $ 6,883
========= =======
Supplemental Cash Flow Information
Cash Item
Interest Paid $ 8,043 $ 10,887
======== ========
Non-Cash Item
Stock Issued in Lieu of Cash $14,750 $41,271
======== =======
See accompanying notes. 6
<PAGE>
ATLANTIC SYNDICATON NETWORK, INC.
ATLANTIC SYNDICATION NETWORK, INC.
NOTES TO UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
NOTE 1 - BASIS OF PRESENTATION
The unaudited interim condensed financial statements at November 30, 2000
and for the three and nine month periods ended November 30, 2000 and 1999
are unaudited, but include all adjustments which management considers
necessary for a fair presentation. The February 29, 2000 balance sheet
was derived from the Company's audited financial statements.
The accompanying unaudited condensed financial statements are for the
interim periods and do not include all disclosures normally provided in
annual financial statements, and should be read in conjunction with the
Company's Form 10-KSB for the year ended February 29, 2000. The
accompanying unaudited interim condensed financial statements for the
three and nine month periods ended November 30, 2000 and 1999 are not
necessarily indicative of the results which can be expected for the entire
year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Note 2- INCOME TAXES
The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"), which requires an asset and liability approach to
accounting for income taxes. Under SFAS 109, deferred tax assets or
liabliities are computed on the difference between the financial statement and
income tax bases of assets and liabilities ("temporary differences") using the
enacted marginal tax rate. Deferred income tax expenses or benefits are based
on the changes in the deferred tax asset or liability from period to period.
NOTE 3 - COMMON STOCK
During the quarter ending November 30,2000,the Company issued no stock.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
The following information includes forward-looking statements, the realization
of which may be impacted by certain important factors discussed in "Risk
Factors" listed below, including information provided in the Company's Annual
10K-SB
Registrant concentrates on the development, production, and distribution of
television programs and specific projects created for domestic and
international markets. The goal is to produce powerful,effective television
programming, third party commercials or commissioned projects and to be known
as a notable provider of niche market television, corporate videos and
infomercials.
Revenues are generated by (1) the sale of advertising and promotions to be
shown during shows produced and aired by the company; (2) companies
who sponsor specific shows because of content.
Other income is generated by: (1) third party consulting services for project
development; script, layout, production, editing and distribution of the
product (2) third party video post production services and (3)C.D.or videotape
sales. Additional revenues may be derived from the sale of related products
advertised during the course of a show that complement and add value to the
original product or videotape being sold on television.
PRODUCTION SCHEDULE INCLUDES:
INTERVENTION SHATTERS ALCOHOL & DRUG ADDICTION"
ASNi has created, developed and is completing its production and videotape
project that focuses on Intervention, a proven path to treatment and recovery
for the disease of alcohol and drug addiction.
The educational videotapes, entitled, "INTERVENTION SHATTERS ALCOHOL & DRUG
ADDICTION", are scheduled for airing and distribution during this fiscal year.
They will be offered for sale via 1 and 2-minute infomercials and commercials
aired on television with an (800) number provided for call-ins. Other outlets
for distribution include magazines and the internet.
This is the first infomercial project for ASNi. It is anticipated revenues
will come from the sale of videotapes to viewers, institutions, and agencies
concerned with drug and alcohol abuse. As an add-on product to the sale, the
company intends to market an in-home drug test to help parents with teenagers
who participate in this behavior. The plan is to make these tests available
with the videotapes at a discount from the retail market price. These in-home
drug tests are becoming popular with parents of teenagers because they are
fast, accurate and easy to use. It provides the opportunity to test
simultaneously for single or multiple drug use including marijuana,
methamphetamines, cocaine, heroin and others at cut off levels consistent with
the National Institute of Drug Abuse. To highlight the home drug test kit
potential, it is noted that sales of in-home drug tests are one of the fastest
growing segments of the pharmacological industry.
THE STOCK SHOW
"The Stock Show" pilot, which was initially released in Southern California,
is now slated to be released as a weekly series. It is an interview and news
format show that introduces public companies to the general public. The need
for small companies to create visibility offers significant business potential
for this weekly series. Publicity is essential for these companies as they
compete for investment dollars with the more established or blue chip
companies. Public or non-public company guests who appear on The Stock Show
benefit by the visibility that television provides while promoting their
company product or services. The nature of questions addressed during
interviews includes those targeted at the company's latest product or services
offered, its key management, company innovations and company goals. Business
news presented includes press releases provided to the general public, current
events that are timely and relevant as reported
to the media.
8
<PAGE>
Masters of the Martial Arts
The Company intends to re-release "Masters of the Martial Arts Starring Sho
Kosugi". This weekly series aired for two years on (ICN) International
Channel Network. The show includes interviews and demonstrations with grand
masters from many different disciplines of the martial arts. The series is
shot on location at different locales in the Orient .The host of the series is
Sho Kosugi, seven-time karate world champion, and star of numerous martial
arts films such as "Black Eagle" with Jean-Claude Van Damme, "Blind Fury" with
Rutgar Hauer, "Pray for Death", "Revenge of the Ninja" and others. The show
is not currently airing and/or generating income but the Company is planning
to restructure this show and release it for syndication during this fiscal
year. The Company also plans to produce and distribute videotapes for sale
that will include many of the select Martial Artists who appear on these
shows.
RECENT SALES OF SECURITIES: The Registrant has had no stock issuances
within the last three months.
As of Nov. 30, 2000, there are 15,826,944 shares issued and outstanding. Of
this amount, 900,500 shares are now available on OTCBB, whereas 14,926,444.
shares have been and/or they are currently restricted subject to Rule 144 of
the 1933 Securities and Exchange Act.
RESULTS OF OPERATIONS:
ASNi's focus has been to: 1) Set up corporate offices and production facilities
2) Formulate marketing and air-time schedules for upcoming shows 3)Recruit
additional staff and independent contractors 4)Selection and purchase of
additional studio equipment.
ASNi is currently renting corporate facilities on a month to month basis and is
negotiating a long-term lease for the property which will include offices and
a state-of-the-art studio.
Company shows were not aired on television during this period. It is
anticipated during fiscal year 2001 and thereafter, the company's in-house
shows and third party productions will resume and income will be generated by
commercials, advertisers and sponsors of ASNi's shows.
Revenue for in-house production is recognized at time of distribution.
Revenue is recognized for outside third party production for commercials, etc.
upon completion of each contract.
ATLANTIC SYNDICATION NETWORK, INC. had no revenues for the three or nine
months ended Nov. 30,2000. During this period, the Company incurred operating
expenses of $126,864 and $416,161 for the three and nine months respectively.
The net operating expenses for the three and nine months ended Nov. 30, 2000
increased $90,365 and $249,559 respectively over the three and nine months
ended Nov. 30, 1999. These increases were attributable to (1) an increase in
net general and administrative expenses of $81,831 and $223,837 respectively,
(2) an increase of amortization expense of $8,583 and $25,750 respectively.
There is also an increase in interest income of $4,882 and $10,321 respectively
and an increase of interest expense of $136 for the three months ended and a
reduction of interese expense of $2,844 for the nine month period respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant's cash position at Nov. 30,2000 was $289,722, an increase of
approximately $280,000 from Nov. 30,1999. The increase was primarily
attributed to the issuance of new stock.
Working capital at Nov. 30, 2000 was a positive $256,195. Liabilities
currently include $6,469 due principal stockholders.
10
<PAGE>
RISK FACTORS:
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION. This Report contains
statements that constitute "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act, 1934, as amended, and Section 27A
of the Securities Act of 1933, as amended. The words "expect",
"approximately","anticipate", "believe", "plan", "should", "scheduled",
"will", "may", "projected" "benefit" "upcoming" "strategic" "demonstrated"
"quality", "added value" and similar expressions and variations thereof are
intended to identify forward-looking statements. Such statements appear in a
number of places in this filing and include statements regarding the intent,
belief or current expectations of the Company, its directors or officers with
respect to, among other things, (a) trends affecting the financial condition
or results of operations of the Company, (b) the business and growth
strategies of the Company, and (c) the Company's objectives, planned or
expected activities and anticipated financial performance. The stockholders
of the Company are cautioned not to put undue reliance on such forward-looking
statements. Such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and the actual results may
differ materially from those projected in this Report, for the reasons, among
others, discussed in the Section "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Risk Factors". The
Company undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date
hereof. Readers should carefully review the "Risk Factors" described in any
and all documents the Company files from time to time with the Securities and
Exchange Commission.
The Company's business is subject to numerous risk factors, not all of which
can be known or anticipated and any one of which could adversely impact the
Company or its financial condition. Some of those risk factors are as
follows:
Failure to License: Renew of Licenses or Production and Broadcast Agreements.
There can be no assurance that any existing programs or programs in production
by the Company will be licensed, relicensed for additional broadcast seasons
or renewed for production or, if so licensed or renewed, that the terms of the
license agreements, production or broadcast agreements will be as favorable to
the Company as the previous, existing or projected agreements.
Nature of the Entertainment Industry: The television, merchandising and
direct-to-video industries are highly speculative and historically have
involved a substantial degree of risk. The success of a television show,
series or video production depends upon unpredictable and changing factors
such as audience acceptance, which may bear little or no correlation to the
Company's production and other costs. Audience acceptance of the Company's
products represents a response not only to the artistic components of the
products, but also to promotion by the distributor, the availability of
alternative forms of entertainment and leisure time activities, the general
economic conditions and public taste and include intangible factors, all of
which change rapidly and connot be predicted with certainity. Therefore,
there is a risk that some or all of the Company's projects will not be
commercially successful, resulting in costs not being recouped or anticipated
profits not being realized.
11
<PAGE>
Competition: The creation, development, production and distribution of
television programming, together with the exploitation of the proprietary
rights related to such programming, is a highly competitive business. The
Company competes with producers, distributors, licensors and merchandisers,
many of whom are larger and have greater financial resources. Although the
number of outlets available to producers has increased with the emergence of
new broadcast stations, the number of time slots available to independent
producers remains limited. Moreover, because license fees in the United
States have dropped substantially recently, companies that do not rely on U.
S. broadcast license fees to finance the production of programming have
achieved a competitive advantage. These companies now serve as an additional
source of competition for the limited slots avail-able to independent
companies. As a result of these factors, the Company will expand it's
creative and distribution effort but cannot make assur-ances that it will be
able to remain competitive. Niche market programs such as Martial Arts that
are currently popular may not sustain their popularity and new programs may
not become popular.Each program (or show) is an individual artistic work, and
consumer reaction will determine its commercial success. Management cannot
assure the stock-holders that it will be able to continue to create
entertaining episodes for the Company's programs or that it will be able to
create new programs that are appealing or saleable to broadcasters.
Dependence upon Key Personnel: Registrant's success depends to a significant
extent upon the expertise and services of Kent Wyatt Sr., the President and
Chief Executive Officer. Although Registrant has agreements with other
independent and key management personnel, the loss of services of Mr. Wyatt
and/or other key personnel could have an adverse effect on the Company
business, results of operations and financial condition.
12
<PAGE>
Part II. OTHER INFORMATION:
Item 1. Legal proceedings - Not applicable
Item 2. Changes in securities
Item 3. Defaults on senior securities - Not applicable
Item 4. Submission of matters to a vote of security holders
- Not applicable
Item 5. Other information - Not applicable
Item 6. (a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Atlantic Syndication Network, Inc.
By:/S/Kent G. Wyatt Sr.
President January 15, 2001
Director
By: /S/ Jim Shadlaus
Treasurer January 15, 2001
Director
13
