SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
COMMISSION FILE NUMBER: 0-27229
AUTEO MEDIA, INC. fka
FLINTROCK FINANCIAL SERVICES, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-0409163
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(STATE OF ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
22125 17th Avenue S.E., Suite 105
Bothell, WA 98021
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(425) 415-1694
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
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 AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X
THERE ARE 12,600,000 SHARES OF COMMON STOCK OUTSTANDING AS OF JUNE 30, 2000.
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TABLE OF CONTENTS
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Page
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PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Condensed Balance Sheets at June 30, 2000
(unaudited) and December 31, 1999 1
Consolidated Condensed Statements of Operations for the
three and six months ended June 30, 2000 and 1999
(unaudited) 2
Consolidated Condensed Statements of Cash Flows for the
three and six months ended June 30, 2000 and 1999
(unaudited) 3
Notes to Consolidated Condensed Financial Statements 4
Item 2 Management's Discussion of Operations and
Financial Condition 6
PART II OTHER INFORMATION
Item 6 Exhibits 7
SIGNATURES 9
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited financial statements for the quarter ended June 30,
2000, prepared by management, and expressed in U.S. Dollars, are as
follows:
<TABLE>
<CAPTION>
Auteo Media, Inc.
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
June 30,
2000 December 31,
(unaudited) 1999
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<S> <C> <C>
CURRENT ASSETS
Cash $ 113,572 $ 11,008
Accounts receivable - net 83,447 48,596
Inventories 1,500 9,000
Prepaid expenses - 500
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Total current assets 198,519 69,104
EQUIPMENT AND FURNITURE - net 105,089 58,072
OTHER ASSETS - net 39,526 43,836
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$ 343,134 $171,012
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 49,074 $ 45,693
Accrued liabilities 37,370 12,430
Shareholder note payable - 84,134
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Total current liabilities 86,444 142,257
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY
Common stock authorized, 25,000,000 shares $.001 par value 12,600 10,500
Additional contributed (distributed) capital (716,821) 38,201
Stock subscriptions 1,150,000 -
Accumulated deficit (189,089) (19,946)
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Total stockholders' equity 256,690 28,755
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$ 343,134 $171,012
========= ========
The accompanying notes are an integral part of these statements.
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<TABLE>
<CAPTION>
Auteo Media, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------------- ------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net revenues $ 224,855 $ 155,228 $ 436,715 $ 287,015
Cost of revenues 36,438 4,435 52,732 16,655
--------- --------- --------- ---------
Gross profit 188,417 150,793 383,983 270,360
Operating expenses
Selling, general and administrative 305,100 68,402 516,900 152,798
Depreciation and amortization 25,940 10,090 37,616 20,026
--------- --------- --------- ---------
331,040 78,492 554,516 172,824
--------- --------- --------- ---------
Operating (loss) earnings (142,623) 72,301 (170,533) 97,536
Other income (expense)
Interest expense - (1,842) (965) (3,365)
Other 286 - 2,355 -
--------- --------- --------- ---------
286 (1,842) 1,390 (3,365)
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NET (LOSS) EARNINGS $(142,337) $ 70,459 $(169,143) $ 94,171
========= ========= ========= ========
Net (loss) earnings per share $ (0.011) $ 0.007 $ (0.014) $ 0.009
========= ========= ========= ========
Net (loss) earnings per share assuming dilution $ (0.011) $ 0.007 $ (0.014) $ 0.009
========= ========= ========= ========
The accompanying notes are an integral part of these statements.
</TABLE>
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<TABLE>
<CAPTION>
Auteo Media, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
Six months ended
Increase (Decrease) in Cash June 30,
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2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net (loss) earnings $ (169,143) $ 94,171
Adjustments to reconcile net (loss) earnings to net
cash provided by (used in) operating activities
Depreciation and amortization 37,616 20,026
Gain on sale of equipment (1,419) -
Changes in assets and liabilities
Accounts receivable (34,851) (21,699)
Inventories 7,500 -
Prepaid expenses and other assets (8,505) -
Accounts payable 3,381 8,735
Accrued liabilities 24,940 (15,314)
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Net cash (used in) provided by operating activities (140,481) 85,919
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Cash flows from investing activities:
Purchase of equipment (73,916) (15,950)
Proceeds from sale of equipment 4,017 -
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Net cash used in investing activities (69,899) (15,950)
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Cash flows from financing activities:
Payments on shareholder note payable (2,056) (5,697)
Proceeds from common stock subscribed 1,150,000 -
Distributions to shareholder (835,000) (56,273)
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Net cash provided by (used in) financing activities 312,944 (61,970)
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Net increase in cash 102,564 7,999
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Cash at beginning of period 11,008 30,854
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Cash at end of period $ 113,572 $ 38,853
========== ========
Non cash investing and financing activities:
Issuance of common stock for TYSA common stock $ 2,100
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Distribution of common stock to TYSA shareholder $ (2,100)
==========
Additional contributed capital through forgiveness of
shareholder note payable $ 82,078
==========
The accompanying notes are an integral part of these statements.
</TABLE>
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AUTEO MEDIA, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1. FINANCIAL STATEMENTS
The unaudited consolidated condensed financial statements of Auteo Media, Inc.
fka Flintrock Financial Services, Inc. (the Company) have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the entire fiscal year ending
December 31, 2000. The accompanying unaudited consolidated condensed financial
statements and related notes should be read in conjunction with the audited
financial statements and the Form 10-KSB of the Company, for its fiscal year
ended December 31, 1999 and with the form 8K dated May 9th, 2000 that includes
the audited financial statements.
NOTE 2. STOCK DIVIDEND
On January 20, 2000, the Company declared a dividend of 4 shares of common stock
for each 1 share held by the shareholders of record as January 19, 2000. Shares
totaling 8,400,000 were distributed to the shareholders on January 21, 2000. The
par value of the common stock remained the same. All per share earnings and
references to common stock have been retroactively restated to reflect the
increase in common shares outstanding.
NOTE 3. NET (LOSS) EARNINGS PER SHARE
Basic (loss) earnings per share are based on the weighted average number of
shares outstanding during each quarter. The weighted average shares for
computing the Company's basic (loss) earnings per share were 12,600,000 and
10,500,000 for the three months ended June 30, 2000 and 1999, respectively, and
11,896,154 and 10,500,000 for the six months ended June 30, 2000 and 1999,
respectively. The Company did not have any dilutive common stock equivalents as
of June 30, 2000 and 1999, respectively.
NOTE 4. ACQUISTION
On February 29, 2000, the Company entered into an agreement with TYSA
Corporation (TYSA) whereby the Company purchased 82.5% of the outstanding common
stock of TYSA for cash consideration of $835,000 and 2,100,000 shares of the
Company's common stock. In conjunction with the acquisition, the majority
shareholders of TYSA were appointed to the Board of Directors and assumed
control of the operations of the resulting company, Auteo Media, Inc. This
transaction resulted in TYSA being the accounting acquirer in the transaction.
The acquisition has been accounted for as a reverse acquisition whereby the
historical financial statements of TYSA become those of Auteo Media, Inc.
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NOTE 5. ABSTRACT MERGER
On April 21, 2000, the Company entered into a revised Letter of Intent (original
agreement dated April 3, 2000) with Abstract Enterprises Corp. (AEC) whereby AEC
would merge with the Company based on a share exchange between the AEC
Shareholders and the Company. The agreement calls for the AEC Shareholders to
exchange four common shares of AEC for every one share of Auteo Media's common
shares. A condition of the agreement calls for the completion of financing by
the Company of not less than $3 million on or before September 30, 2000 and is
subject to due diligence.
NOTE 6. STOCK SUBSCRIPTIONS
As of June 30, 2000, the Company has raised $1,150,000 through an offering of
its common stock. Each Unit consists of one share of common stock and one
warrant to purchase one share of common stock for $8 per share for a period of
one year. A majority of the monies received were used to purchase the common
stock of TYSA. The offering is still in process; therefore, the Company has not
issued the shares as of June 30, 2000. The Company has recorded stock
subscriptions totaling $1,150,000 as of June 30, 2000.
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ITEM 2. MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL CONDITION
ACQUISITION AND MERGER
On April 3, 2000, Auteo Media, Inc. signed a Letter of Intent with Abstract
Enterprises, Corp. (AEC) and a second Arrangement Agreement dated April 21,
2000. These Agreements call for a share exchange agreement whereby Auteo Media,
Inc. merges with AEC, resulting in Auteo Media's operating subsidiary, TYSA
Corporation (TYSA), being wholly owned by Auteo Media, Inc. AEC's assets consist
primarily of its ownership interest of five percent in TYSA and its option to
purchase an additional twelve percent. Completion of this share exchange
agreement is contingent upon an acceptable due diligence review of AEC and the
successful completion of Auteo Media's ongoing three million dollar common stock
offering.
RESULTS OF OPERATIONS
Auteo Media, Inc. (the Company) provides internet services and point-of-purchase
window labels to new and used car dealerships in Washington and California, USA.
The Company also owns and has in development multiple Internet sites, in
particular, www.autoloco.com, www.pocketauto.com and www.bidthatcar.com.
REVENUES
Revenues increased to $436,715 from $287,015 for the six months ended June 30,
2000 and 1999, respectively, and increased to $224,855 from $155,228 for the
three months ended June 30, 2000 and 1999, respectively. This represents an
increase of $149,700 or 52% for the six months ended and $69,627 or 45% for the
three months ended. This growth can be attributed to market penetration in
Washington, new operations in California and adoption of the Company's digital
photo services by its customers.
GROSS PROFIT
Gross profit increased to $383,983 from $270,360 for the six months ended June
30, 2000 and 1999, respectively, and increased to $188,417 from $150,793 for the
three months ended June 30, 2000 and 1999, respectively. This represents an
increase of $113,623 or 42% for the six months ended and $37,624 or 25% for the
three months ended. This increase is attributed to the increase in sales.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses increased to $516,900 from $152,798
for the six months ended June 30, 2000 and 1999, respectively, and increased to
$305,100 from $68,402 for the three months ended June 30, 2000 and 1999,
respectively. This represents an increase of $364,102 or 238% for the six months
ended and $236,698 or 346% for the three months ended. This increase can be
attributed to increased costs associated with the acquisition of TYSA, entering
into an new lease agreement for corporate office space, increased accounting,
legal and other consulting fees, and additional labor costs to handle the
increased demand for the Company's products and services in existing and new
areas.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expenses increased to $37,616 from $20,026 for the
six months ended June 30, 2000 and 1999, respectively, and increased to $25,940
from $10,090 for the three months ended June 30, 2000 and 1999, respectively.
This represents an increase of $17,590 or 88% for the six months ended and
$15,850 or 157% for the three months ended. This increase can be attributed to
the addition of equipment to support the Company's growth and accelerated
depreciation taken on certain equipment during the six months ended June 30,
2000.
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NET EARNINGS
Net earnings decreased from $94,171 for the six months ended June 30, 1999 to a
net loss of $169,143 for the six months ended June 30, 2000. Net earnings also
decreased from $70,459 for the three months ended June 30, 1999 to a net loss of
$142,337 for the three months ended June 30, 2000. The decrease in earnings is
the result of the Company concentrating on expanding its business and improving
services.
RESEARCH AND DEVELOPMENT
The Company completed work on its new web site www.auteo.com and its branding
strategy. It greatly furthered its development of placing automotive content and
customer emails onto the new Internet ready, cellular phone platform. The
Company is working toward expansion of its regional website presence into
automotive websites offering new and used car buying services on a national
basis.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 2000, the Company generated negative cash
flow from operations of $140,481 compared to positive cash generated from
operations of $85,919 for the six months ended June 30, 1999. The net cash used
in operating activities was primarily attributed to increased costs related to
the expanding of the business as noted in the results of operations. Net cash
used in investing activities for the six months ended June 30, increased from
$15,950 in 1999 to $69,899 in 2000. The increase is attributed to the Company
purchasing additional equipment to support its growth. Net cash provided by
financing activities increased to $312,944 for the six months ended June 30,
2000 compared to net cash used of $61,970 for the six months ended June 30,
1999. The Company commenced a private placement of its common stock for $6.00
per unit during the first quarter of 2000, which resulted in receipt of $950,000
for stock subscriptions. Subsequent to March 31, 2000, the Company received
additional subscriptions of $200,000, together with a commitment for a further
and final subscription of $200,000 for a total financing of $1,350,000. Current
market conditions have made additional subscriptions difficult, resulting in
under capitalization of the Company. Without such financing current and expanded
operations of the Company are at increased risk. The Company expects to support
ongoing operations with cash received from increased sales and from additional
financing.
ACCOUNTING
On May 8, 2000, Auteo Media, Inc. dismissed its previous auditor, Barry Freedman
PC due to increased revenue growth and expanded operations of the Company. The
Company elected to utilize a National accounting firm to perform its audit. On
May 8, 2000, the Company engaged Grant Thornton LLP to be is independent
certified public accountants.
LEASE AND LEASEHOLD IMPROVEMENTS
On April 15, 2000, Auteo Media, Inc. entered into a Lease Agreement with
Teachers Insurance & Annuity Association of America, Inc. Terms of the Lease are
for a period of five years at a monthly rate of $6,508 for years one and two,
increasing approximately 10% thereafter. The premises are for 5,446 square feet
of which approximately 500 is warehouse space. The space is required to house
development, administrative and marketing personnel.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) All required exhibits, including the Company's Articles of Incorporation and
Bylaws are attached to the
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Company's Form 10-KSB, filed on August 15th, 2000. All previously filed exhi-
bits are incorporated herein by reference.
b) Reports on Form 8-K: Items reported from Form 8-K during the quarter ended
July 31, 2000 are as follows;
May 9, 2000, Reported Item 4: Changes in Registrant's Certifying Accountants
May 9, 2000, Reported Item 7: Financial Statements and Exhibits.
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SIGNATURES
Pursuant to the requirements of Section 13 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.
Dated this 11th day of August, 2000.
AUTEO MEDIA, INC.
By: /s/ STEVE VAN LEEUWEN
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Steve Van Leeuwen
President
Dated: August xx, 2000
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EXHIBITS
Exhibit
Number Description
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10.1 Lease
10.2 Merger Proposal
10.3 Arrangement Agreement
16 Letter re: Change of Certifying Accountant
27 Financial Data Schedule
