U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2000
Commission File No.: 000-27481
USA DIGITAL, INC.
(Name of small business issuer in its charter)
NEVADA 59-3560920
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 WEST LUCERNE CIRCLE, SUITE 600
ORLANDO, FL 32801
(Address of principal executive offices)
(813) 221-8373
(Issuer's Telephone Number)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $.001 PAR VALUE
(Title of Class)
Check whether the issuer (1) has 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
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. USA Digital, Inc. had
10,190,070 shares outstanding as of August 15, 2000.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
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TABLE OF CONTENTS
<TABLE>
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PAGE
<S> <C>
PART I. Financial Information 1
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation 9
PART II.
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
ii
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PART I
ITEM 1. FINANCIAL STATEMENTS
USA DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
PART I
ITEM 1. FINANCIAL STATEMENTS
ASSETS
June 30, 2000
(Unaudited) March 31, 2000
------------- --------------
CURRENT ASSETS
Cash $ 199,222 $ 856,445
Accounts receivable, net of allowance of
$125,000 and $125,000, respectively 369,120 214,917
Inventories, net 134,851 46,486
Employee receivables 55,377 35,967
Prepaids and other current assets 130,045 7,125
---------- ----------
Total Current Assets 888,615 1,160,940
---------- ----------
PROPERTY AND EQUIPMENT - NET 1,483,692 1,404,660
---------- ----------
OTHER ASSETS
Intangible assets, net 2,285,363 987,482
Deposits and other non-current assets 126,210 76,375
---------- ----------
Total Other Assets 2,411,573 1,063,857
---------- ----------
TOTAL ASSETS $4,783,880 $3,629,457
========== ==========
See accompanying notes to consolidated financial statements.
1
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USA DIGITAL, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, 2000 March 31, 2000
(Unaudited) (Audited)
-------------- --------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 459,311 $ 365,423
Capitalized lease obligation-current 170,177 165,313
Notes payable - current 89,574 8,500
Employee payable 49,107 50,173
----------- -----------
Total Current Liabilities 768,169 589,409
----------- -----------
NON-CURRENT LIABILITIES
Capitalized lease obligation 826,576 831,440
Notes payable, loans and other non-current liabilities 84,264 113,778
Unearned revenue 42,781 167,781
----------- -----------
Total Non-Current Liabilities 953,621 1,112,999
----------- -----------
Total Liabilities 1,721,790 1,702,408
----------- -----------
CONVERTIBLE REDEEMABLE PREFERRED STOCK
Preferred stock-Class B, series 1 and 2, redeemable at $4.00
per share, $0.001 par value, 90,000 shares authorized, issued
and outstanding 310,000 303,750
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock-Class A, $.001 par value, 5,000,000 shares
authorized, none issued and outstanding -- --
Preferred stock-Class B, $001 par value, 4,910,000 shares
authorized, none issued and outstanding -- --
Common stock, $0.001 par value, 50,000,000 shares
authorized, 9,700,070 and 7,928,000 shares issued and
outstanding, respectively 9,700 7,928
Additional paid-in capital 5,271,315 3,786,567
Deferred consulting expense (105,412) (127,111)
Accumulated deficit (2,423,513) (2,044,085)
----------- -----------
Total Stockholders' Equity 2,752,090 1,623,299
----------- -----------
TOTAL LIABILITIES, REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY $ 4,783,880 $ 3,629,457
=========== ===========
</TABLE>
See accompanhing notes to consolidated financial statements.
2
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USA DIGITAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
REVENUES $ 1,295,260 $ --
COST AND EXPENSES:
Cost of equipment sales and direct wages 661,522 --
Network operating expenses 922,074 208,708
Depreciation and amortization 91,543 --
Interest expense (income) (6,701) 21
----------- -----------
1,668,438 208,729
----------- -----------
NET LOSS $ (373,178) $ (208,729)
=========== =-=========
Reconciliation of net loss to net loss
applicable to common stockholders:
Net loss $ (373,178) $ (208,729)
Preferred stock accretions (6,250) --
----------- -----------
Net loss applicable to common shareholders $ (379,428) $ (208,729)
=========== ===========
Net loss per common share - basic and diluted $ (0.04) $ (0.08)
=========== ===========
Weighted average common shares outstanding
- basic and diluted 9,394,620 2,665,556
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
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USA DIGITAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(373,178) $(208,729)
Adjustments to reconcile net loss to net cash (used in)
operating activities:
Depreciation and amortization 91,543 (64)
Allowance for bad debts 2,743 --
Stock based compensation and consulting 51,199 48,359
Changes in assets and liabilities
(Increase) decrease in:
Accounts and employees receivables (250,802) --
Inventories (159,916) --
Other current and non-current assets (181,342) 30,000
Increase (decrease) in:
Accounts payable and accrued expenses 194,449 27,892
Deferred revenue (125,000) --
Due to related parties 80,694 --
--------- ---------
Net cash (used in) operating activities (669,610) (102,542)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (54,510) (553)
Acquisition of note receivable -- (20,000)
Cash acquired 15,337 --
Loan disbursements -- (10,732)
--------- ---------
Net cash (used in) investing activities (39,173) (31,285)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan 51,560 75,000
Repayment of loans -- (2,500)
--------- ---------
Net cash provided by financing activities 51,560 72,500
--------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
4
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Three Months Ended
June 30, 2000 June 30, 1999
------------- -------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (657,223) (61,327)
CASH AND CASH EQUIVALENTS - BEGINNING OF
PERIOD 856,445 65,003
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 199,222 $ 3,676
========= =========
Cash paid during the year for:
Interest $ 2,721 $ 21
========= =========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
During April 2000, the Company acquired Communication Systems, Inc. and
International Business Telephone Systems (IBTS) in exchange for USA Digital,
Inc. common stock. The purchase price, based on the fair value of the common
stock issued in these transactions, was $1,015,940 for Communications Systems,
Inc. and $398,660 for IBTS.
During the three months ended June 30, 2000 an officer of a subsidiary refunded
50,000 shares to the Company while renegotiating his employment arrangement. The
Company charged the $50 par value to common stock and increased the additional
paid-in capital by $50.
Accretion of $6,250 in preferred stock was charged to the accumulated deficit
for the three months ended June 30, 2000.
Certain stock options were exercised in a net transaction where no proceeds were
received by the Company. (See Note 2)
See accompanying notes to consolidated financial statements.
5
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USA DIGITAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
and the rules and regulations of the Securities and Exchange Commission
for interim financial information. Accordingly, they do not include all
the information necessary for a comprehensive presentation of financial
position and results of operations.
It is management's opinion, however that all material adjustments
(consisting of normal recurring adjustments) have been made which are
necessary for a fair financial statements presentation. The results for
the interim period are not necessarily indicative of the results to be
expected for the year.
For further information, refer to the financial statements and
footnotes for the year ended March 31, 2000 included in the Company's
Form 10-KSB.
NOTE 2 STOCK ISSUANCES
During April 2000, the Company issued 158,000 and 62,000 shares of its
common stock for the acquisition of Communication Systems, Inc. and
International Business Telephone Systems, respectively (see Note 3).
During June 2000, two consultants and one officer (the "recipients") of
the Company exercised a total of 1,875,000 stock options in a net stock
transaction whereby the recipients did not pay cash but gave the
Company stock having a fair market value equal to the exercise price.
The recipients were issued a net total of 1,599,070 shares of the
Company's common stock, which was recorded by the Company as common
stock at par with an offsetting charge to additional paid-in capital.
NOTE 3 ACQUISITION OF SUBSIDIARIES
During April 2000, the Company acquired 100% of the issued and
outstanding stock of Communication Systems, Inc. (ComSys), an
interconnection company, in exchange for 158,000 shares of the
Company's common stock and a quantity of contingent shares valued at
$50,000 and $100,000. The contingent shares are based upon the average
closing price of such shares during the ten (10) trading days
proceeding March 31, 2001 and March 31, 2002, respectively. The
issuance of the contingent shares is based on the subsidiary meeting
certain future revenue and net income performance criteria as
stipulated in the stock purchase agreement.
The acquisition was accounted for under the purchase method of
accounting, and accordingly the results of operations of ComSys are
included in the accompanying consolidated financial statements from
April 1, 2000, the effective date.
The purchase price of $1,015,940 was determined based on the average
quoted trading price of the Company's common stock during the
acquisition period resulting in an
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USA DIGITAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
allocation of the excess of the fair market value over book value of
the assets acquired to fixed assets in the amount of $61,026, customer
list in the amount of $492,507 and goodwill in the amount of $492,507.
The allocation is preliminary. The customer list and goodwill are
amortized over 5 and 15 years, respectively, resulting in $24,463 and
$8,159 of amortization, respectively, for the three months ended June
30, 2000.
The following unaudited information reflects the fair market values of
the assets acquired and the liabilities assumed:
Cash $ 2,844
Accounts receivable 57,953
Inventory 67,972
Other current assets 5,187
Property and equipment 67,000
Customer list 492,507
Goodwill 492,507
Other assets 2,000
Accounts payable, accrued and other
liabilities (68,451)
Current debt (103,579)
----------
$1,015,940
==========
During April 2000, the Company acquired International Business
Telephone Systems ("IBTS") in exchange for 62,000 common shares and
contingent shares of 15,000 based on the subsidiary meeting certain
future revenue and net income performance criteria and the Company
meeting certain minimum closing stock prices. The acquisition was
accounted for under the purchase method of accounting and accordingly
the results of operations of IBTS are included in the accompanying
consolidated financial statements from April 1, 2000, the effective
date. The purchase price of $398,660 was determined based upon the
average trading price of the Company's common stock during the
acquisition period resulting in an allocation of the excess of the fair
market value over the book value of the assets acquired to the customer
list in the amount of $187,492 and goodwill in the amount of $187,493.
The customer list and goodwill are amortized over 5 and 15 years,
respectively resulting in $9,375 and $3,125 of amortization,
respectively, for the three months ended June 30, 2000. The allocation
is preliminary.
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USA DIGITAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
The following unaudited information reflects the fair market values of
the assets acquired and the liabilities assumed:
Cash $ 12,494
Accounts receivable 16,493
Inventory 3,579
Customer list 187,492
Goodwill 187,493
Other assets 1,401
Accounts payable and other (10,292)
---------
$ 398,660
=========
The table below reflects unaudited pro forma combined results of the
Company as if the acquisitions had taken place on April 1, 1999:
Three Months Ended June 30
2000 1999
---------- ---------
Revenues $1,295,260 $ 280,082
Costs and expenses 1,668,438 490,480
---------- ---------
Net loss $ (373,178) $(210,398)
Net loss per share - basic and diluted $ (0.04) $ (0.07)
NOTE 4 SEGMENT INFORMATION
The table below summarizes the Company's segment data related to the
integrated communications services and information integration services
segment for the three months ended June 30, 2000. During 1999, the
Company was in the development stage without identifiable segments.
Three Months Ended June 30, 2000
----------------------------------------
Communications Integrated Consolidated
Services Services Total
-------------- ---------- ------------
Revenues from external
customers $ 885,107 $410,153 $1,295,260
Net income (loss) (374,609) 1,431 (373,178)
------------------------------------------------------------------
Total assets $4,468,718 $315,162 $4,783,880
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following discussion and analysis should be read in conjunction
with the financial statements and related notes included elsewhere in this Form
10-QSB. The Company may from time to time make written or oral "forward-looking
statements." These forward-looking statements may be contained in this Form
10-QSB filing with the Securities and Exchange Commission the ("SEC") in other
filings with the SEC, and in other communications by the Company, which are made
in good faith pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. The words "may", "could", "should", "would",
"believe", "anticipate", "estimate", "expect", "intend", "plan", and similar
expressions are intended to identify forward-looking statements.
Forward-looking statements include statements with respect to the
Company's beliefs, plans, objectives, goals, expectation, anticipations,
estimates and intentions, that are subject to significant risks and
uncertainties. The following factors, many of which are subject to change based
on various other factors beyond the Company's control, and other factors
discussed in this Form 10-QSB, as well as other factors identified in the
Company's filings with the SEC and those presented elsewhere by management from
time to time, could cause its financial performance to differ materially from
the plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements:
o the strength of the United States economy in general and the strength
of the local economies in which the Company conducts operations;
o the timely development of and acceptance of new products and services
and the perceived overall value of these products and services by
users, including the features, pricing and quality compared to
competitors' products and services;
o the willingness of users to substitute competitors' products and
services for the Company's products and services;
o the Company's success in gaining regulatory approval of their products
and services, when required;
o the impact of technological changes;
o acquisitions; and
o the Company's success at managing the risks involved in their business.
The list of important factors is not exclusive. The Company does not
undertake to update any forward-looking statement, whether written or oral, that
may be made from time to time by or on behalf of the Company.
GENERAL
The Company is building a highly integrated, facility-based convergent
communications company that will address the rapidly expanding communication
demands of small to medium size businesses. The Company currently provides
telecommunications and computer equipment sales and service through its wholly
owned subsidiaries, Telephone Engineering and Maintenance, Inc.
9
<PAGE>
("TEAM"), Comsys, Inc. ("Comsys"), and International Business Telephone Systems,
Inc. ("IBTS"), which have been marketing their products and services for 14, 19,
and 18 years, respectively. The Company also offers computer hardware and
software, network integration technology and engineering products and services
for small and medium size businesses through its wholly owned subsidiary, DSA
Computers, Inc. ("DSA"), which has been selling these products and services
since 1991. In addition, the Company currently provides a full line of Internet
services, including Dial up Internet access service to the business and
residential customers, Web page production and hosting, Web page design, and
Interactive Web-based business services, database management, broadcast audio
and video applications and Internet marketing, through its wholly owned
subsidiary Syncom, Inc. (doing business as "GatorNet"), an Internet service
provider with over 1,500 subscribers.
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2000 AND MARCH 31, 2000
Total assets increased $1.2 million to $4.8 million at June 30, 2000
from March 31, 2000. The increase is primarily attributable to acquisitions
completed during the quarter. More specifically, during April 2000, the Company
acquired 100% of the issued and outstanding stock of ComSys, an interconnection
company, in exchange for 158,000 shares of the Company's common stock and a
quantity of contingent shares valued at $50,000 and $100,000. The contingent
shares are based upon the average closing price of such shares during the ten
(10) trading days proceeding March 31, 2001 and March 31, 2002, respectively.
The issuance of the contingent shares is based on the subsidiary meeting certain
future revenue and net income performance criteria as stipulated in the stock
purchase agreement. In addition, during April 2000, the Company acquired IBTS in
exchange for 62,000 common shares and contingent shares of 15,000 based on the
subsidiary meeting certain future revenue and net income performance criteria
and the Company meeting certain minimum closing stock prices. Comsys has served
the Gainesville, Florida market for 19 years, while IBTS has served the Ft.
Lauderdale, Florida market for 18 years. Both Comsys and IBTS provide PBX
systems, electronic key systems, call technology servers, voice mail systems,
automatic call distributors and network and computer wiring.
The Company's cash and cash equivalents decreased by approximately
$657,000 during the quarter ended June 30, 2000. This decrease was primarily
attributable to costs associated with the acquisitions of Comsys and IBTS and an
increase in inventories, and additional deposits required for the Company to
expand its network infrastructure. In addition, the Company's property and
equipment increased by approximately $80,000, and its intangible assets, which
are comprised mostly of customer lists and goodwill, increased by approximately
$1.3 million as a result of the acquisitions.
Total liabilities increased by $19,382 to approximately $2.0 million at
June 30, 2000 from March 31, 2000. Accounts payable and accrued expenses
increased by approximately $85,000 over the previous quarter. Notes
payable-current increased by approximately $80,000, due primarily to the notes
acquired as a result of the acquisition of ComSys. Unearned revenue decreased by
approximately $125,000, as the Company provided the services for which it had
received prepaid revenues.
10
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RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2000 AND JUNE 30, 1999
The Company incurred a net loss of $373,178 or $0.04 per share, for the
quarter ended June 30, 2000, as compared to a loss of $208,729 or $0.08 per
share for the quarter ended June 30, 1999.
For the quarter ended June 30, 2000, the Company generated $1.3 million
in total revenues. The Company did not generate any revenues in the
corresponding period of 1999, in which the Company was still in its
developmental stage. Of these revenues, $885,107 was generated by the integrated
communications services segment of the Company's operations, which includes
Internet products and services offered by Syncom, Inc. (doing business as
"Gator.net") and the communications equipment products and services offered by
TEAM, Comsys and IBTS. Net loss for the integrated communications services
segment for the quarter was approximately $374,609.
During the quarter ended June 30, 2000, the parent company (on an
unconsolidated basis) did not generate revenues, as its network infrastructure
was not yet operational. Consequently, the parent company sustained a $396,305
net loss for the quarter. The net loss for the parent company was comprised
primarily of salaries and wages, professional fees, and computer consulting
fees, incurred to develop the telephone and Internet infrastructure of the
Company.
The Company will begin offering a full line of local, long distance
telephone services, expanded Internet services, and wireless solutions within
the next 90 days. In this regard, the Company has entered into an agreement with
Lucent Technologies, Inc. for the purchase of $25 million of network equipment
over a three-year period. Financing for this equipment is being provided by
Gallant Capital and Finance, LLC, pursuant to an agreement which provides up to
$30 million in financing. The Company took delivery of Lucent's initial
equipment order on July 1, 2000. Additionally, the company has leased from
Siemens one Digital Central Office Long Distance Switch, which is installed at
the Company's Orlando, Florida office. The Company is currently testing the
equipment. Once the testing has been completed and these switches are
operational, the company will be able to provide all of the above products to
its customers in the Orlando, Tampa, Gainesville, and Miami markets of Florida.
In addition, the Company has recently entered into interconnection
agreements with GTE Corp. (covering the 37 states in which GTE operates,
including five of the nine states of the Company's initial network rollout
plan), Southwestern Bell Telephone Co. (covering their 13-state region, which
includes Wisconsin, Texas, Oklahoma, Ohio, Nevada, Missouri, Michigan, Kansas,
Indiana, Illinois, Connecticut, California, Arkansas) and Bell Atlantic
Corporation (covering New York, New Jersey, Delaware, and Washington, DC).
Agreements for the remaining 10 states in the Bell Atlantic region should be
completed in the near future. With the recent merger of Bell Atlantic and GTE
forming Verizon Communications, USA Digital now has agreements covering the vast
majority of Verizon's U.S. locations. The addition of these agreements to the
company's previously signed agreements with BellSouth and Sprint gives USA
Digital interconnection agreements covering the vast majority of the United
States and sets the stage for the Company's future expansion plans. It also will
allow the Company to take advantage of acquisition opportunities that are
outside of its initial network footprint.
11
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Further, once the switches are operational, the Company will have an
additional revenue source by providing Internet services to companies who are
providing Internet service, web hosting and local and long distance service, but
which require access to local telephone company connections. The Company has
developed a plan designed to enable it to expand and to provide all of these
services to the remaining eight states in the BellSouth region within the next
30 months.
The information integration services segment of the Company's
operations generated revenues of $410,153 for the quarter. This segment includes
the network and computer hardware and software, wiring, systems integration
services, consulting, fire wall installation, local area network ("LAN") and
wide area network ("WAN") implementation and maintenance and management of those
products offered by DSA Computers, Inc., a wholly-owned subsidiary of the
Company. Net income for the quarter that ended June 30, 2000 for the information
integration services segment was approximately $1,400.
The Company's total operating expenses increased approximately $1.5
million to $1.7 million for the quarter ended June 30, 2000 compared to the
quarter ended June 30, 1999. This increase in expenses is attributed to
increases in the cost of equipment sales and direct wages and network operating
expenses, reflecting operational costs and professional fees incurred to support
the newly acquired companies.
LIQUIDITY AND CAPITAL RESOURCES
The Company's strategy is to acquire established Internet service
providers, computer/ network integrators, telephone interconnect companies, and
switchless resellers mostly in exchange for stock in USA Digital. As such, the
Company does not anticipate requiring large sums of money to consummate its
anticipated acquisitions. However, the Company does anticipate incurring
expenses relating to the completion of future acquisitions, required deposits,
and completing its network infrastructure. To that end, the Company has received
a firm commitment on a $30.0 million line of credit of which $24.0 million is
committed to the purchase of Lucent Technologies equipment and the remaining
$6.0 million may be used for general corporate and working capital purposes.
Additionally, the Company is currently in the process of raising additional
capital in a private placement of its common stock. The Company believes that
its line of credit and the funds raised in the private placement, together with
operating revenues, will be sufficient to fund its working capital needs for the
next 24 months.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any pending legal proceedings other than
routine legal proceedings occurring in the ordinary course of business. Such
routine legal proceedings in the aggregate are believed by management to be
immaterial to the Company's financial condition and results of operations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27.1 Financial Data Schedule
(b) Report on Form 8-K
None
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
USA DIGITAL, INC.
By: /s/ Peter J. Lyons
-------------------------------------------
Peter J. Lyons, Chief Executive Officer and
a Director (principal executive officer)
/s/ Mark D. Cobb
-------------------------------------------
Mark D. Cobb, President, Chief Operating
Officer and a Director
(principal accounting officer)
Date: August 18, 2000
14
