FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For Quarterly Period Ended September 30, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission File No. 000-29897
WORLD AM COMUNICATIONS, INC.
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Florida 59-3253968
------------------------------ ---------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
1400 W. 122nd Ave, Suite 104, Westminster, CO 80234
---------------------------------------------------
(Address of principal executive offices, including zip code)
(303) 452 -0022
--------------------------------------------------
(Registrant's telephone number, including area code)
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 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 the filing
requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether Registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15 (d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.
Yes No NOT APPLICABLE X
----- ----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Number of Shares Outstanding
Title of Each Class at September 30, 2000
------------------- ----------------------------
Common stock 64,638,299
0.0001 Par Value
<PAGE>
WORLD AM COMMUNICATIONS, INC.
Index
-----
PART I FINANCIAL INFORMATION PAGE NO.
------ --------------------- --------
Item 1 Financial Statements reviewed by
------
Michael Johnson & Co, LLC, Certified
Public Accountants:
Accountant's Review Report 1
Balance Sheets
September 30, 2000 and December 31, 1999 2
Statements of Operations
Three and Nine Months Ended
September 30, 2000 and 1999 3
Statement of Changes in Stockholders' Deficit
September 30, 2000 and December 31, 1999 4
Statements of Cash Flows
Nine Months Ended
September 30, 2000 and 1999 5
Notes to Financial Statements 6
Item 2 Management's Discussion and Analysis
of Financial Condition and Results
of Operations 7-8
PART II OTHER INFORMATION
Item 1 LEGAL PROCEEDINGS 9
------
Item 2 CHANGES IN SECURITIES 9
------
Item 3 DEFAULTS UPON SENIOR SECURITIES 9
------
Item 4 SUBMISSION OF MATTERS TO VOTE OF
------
SECURITY HOLDERS 9
Item 5 OTHER INFORMATION 9
------
Item 6 EXHIBITS AND REPORT ON FORM 8K 9
------
SIGNATURES 10
<PAGE>
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors
World-Am Communications, Inc.
Westminster, Colorado
We have reviewed the accompanying balance sheet of World-Am Communications, Inc.
as of September 30, 2000, and the related statements of operations for the nine
month period ended September 30, 2000 and the three month period ended September
30, 2000 and 1999, and the cash flows for the nine months ended September 30,
2000, included in the accompanying Securities and Exchange Commission Form 10-Q
for the period ended September 30, 2000. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements as a whole.
Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 1999, and the related statements
of operations, stockholders' equity and cash flows for the year then ended (not
presented herein). In our report dated May 10, 2000, we expressed an unqualified
opinion on those financial statements. In our opinion, the information set forth
in the accompanying balance sheet as of September 30, 2000 is fairly stated in
all material respects in relation to the balance sheet from which it has been
derived.
MICHAEL JOHNSON & CO., LLC
Denver, Colorado
October 31, 2000
1
<PAGE>
WORLD AM COMMUNICATIONS, INC.
Balance Sheets
(Unaudited)
September 30, December 31,
2000 1999
------------- ------------
ASSETS:
Current Assets:
Cash $ 7,942 $ --
Accounts receivable 18,974 --
Inventory 13,137 --
----------- -----------
Total Current Assets 40,053 --
----------- -----------
Propery and Equipment:
Office equipment 20,638 --
Computers 5,061 --
----------- -----------
Property and Equipment, net 25,699 --
----------- -----------
Other Assets:
Organization costs - net 787 577
Goodwill 10,000 10,000
----------- -----------
Total Other Assets 10,787 10,577
----------- -----------
TOTAL ASSETS $ 76,539 $ 10,577
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT:
Current Liabilities:
Accounts payable $ 471,753 $ 421,301
Taxes payable 72,744 37,044
Accrued expenses 6,500 6,500
Note payable 60,251 --
----------- -----------
Total Current Liabilities 611,248 464,845
----------- -----------
Stockholders' Deficit:
Preferred stock, $.0001 par value,
80,000,000 shares authorized,
none issued and outstanding -- --
Common stock, $.0001 par value,
125,000,000 shares authorized,
64,638,299 and 28,557,050,
issured and outstanding
at September 30, 2000 and
December 1, 1999, respectively 6,464 2,856
Share subscription receivable (950) --
Additional paid-in capital 1,377,343 1,041,585
Retained deficit (1,917,566) (1,498,709)
----------- -----------
Total Stockholders' Deficit (534,709) (454,268)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 76,539 $ 10,577
=========== ===========
See accountant's review report.
2
<PAGE>
<TABLE>
<CAPTION>
WORLD AM COMMUNICATIONS, INC.
Statement of Operations
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
---------------------------------- ----------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES: $ 5,367 $ -- $ 36,092 $ --
------------ ------------ ------------ ------------
COST OF GOODS SOLD 539 -- 12,691 --
------------ ------------ ------------ ------------
GROSS PROFIT 4,828 -- 23,401 --
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Sales and Marketing -- -- 8,831 --
General and Administrative 314,499 70,342 430,498 154,571
------------ ------------ ------------ ------------
Total Operating Expenses 314,499 70,342 439,329 154,571
------------ ------------ ------------ ------------
Net Loss from Operations (309,671) (70,342) (415,928) (154,571)
------------ ------------ ------------ ------------
OTHER INCOME/EXPENSES
Other income -- -- -- --
Other expenses (495) -- (2,929) --
------------ ------------ ------------ ------------
(495) -- (2,929) --
------------ ------------ ------------
NET (LOSS) $ (310,166) $ (70,342) $ (418,857) $ (154,571)
============ ============ ============ ============
Weighted average number of
shares outstanding 61,950,799 28,557,050 53,716,077 28,557,050
============ ============ ============ ============
Net Loss Per Share $ (0.001) $ (0.002) $ (0.003) $ (0.005)
============ ============ ============ ============
See accountant's review report.
3
<PAGE>
WORLD AM COMMUNICATONS, INC.
Statement of Changes in Stockholders' Deficit
(Unaudited)
Common Stock Additional Stock
------------------------- Paid-In Subscription Accumulated
Shares Amount Capitial Receivable Deficit Totals
----------- ----------- ----------- ------------ ----------- ----------
Balance - June 30, 1998 28,557,050 $ 2,856 $ 1,041,585 $ -- $(1,276,784) $ (232,343)
Net loss for year -- -- -- -- (84,229) (84,229)
----------- ----------- ----------- ----------- ----------- -----------
Balance - June 30, 1999 28,557,050 2,856 1,041,585 -- (1,361,013) (316,572)
----------- ----------- ----------- ----------- ----------- -----------
Net loss for six month period ended -- -- -- -- (137,696) (137,696)
----------- ----------- ----------- ----------- ----------- -----------
Balance - December 31, 1999 28,557,050 2,856 1,041,585 -- (1,498,709) (454,268)
----------- ----------- ----------- ----------- ----------- -----------
Stock issuance for subsidiary 28,726,250 2,873 (11,447) (950) -- (9,524)
Issuance of stock for cash 2,673,750 267 105,733 106,000
Issuance of stock for services 649,999 65 65
Issuance of stock for services 4,031,250 403 241,472 241,875
Net loss for six month period -- -- -- -- (418,857) (418,857)
----------- ----------- ----------- ----------- ----------- -----------
Balance - September 30, 2000 64,638,299 $ 6,464 $ 1,377,343 $ (950) $(1,917,566) $ (534,709)
----------- ----------- ----------- ----------- ----------- -----------
See accountant's review report.
4
<PAGE>
WORLD AM COMMUNICATIONS, INC.
Statement of Cash Flows
Indirect Method
(Unaudited)
Nine Months
Ended
September 30,
----------------------------------
2000 1999
--------- ---------
Cash Flows From Operating Activities:
Net (Loss) $(418,857) $(154,571)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization -- 577
Stock issued for services 241,940
Changes in assets and liabilities:
(Increase) in accounts receivable (18,974) --
(Increase) in inventory (13,137) --
Increase in accounts payable 50,452 153,472
Increase in payroll liabilities 35,700 --
(Decrease) in accrued expenses -- 522
--------- ---------
295,981 154,571
--------- ---------
Net Cash Used in Operating Activities (122,876) --
--------- ---------
Cash Flow From Investing Activities:
Purchase of equipment (25,699) --
--------- ---------
Net Cash Provided By Investing Activites (25,699) --
--------- ---------
Cash Flow From Financing Activities:
Proceeds from issuance of common stock 106,000
Proceeds from notes payable 50,517 --
--------- ---------
Net Cash Provided By Financing Activites 156,517 --
--------- ---------
Increase in Cash 7,942 --
Cash and Cash Equivalents - Beginning of period -- --
--------- ---------
Cash and Cash Equivalents - End of period $ 7,942 $ --
========= =========
Supplemental Cash Flow Information:
Interest paid $ --
=========
Taxes paid $ --
=========
See accountant's review report
5
</TABLE>
<PAGE>
World-Am Communications, Inc.
Notes to Financial Statements
1 - Presentation of Interim Information
In the opinion of the management of World-Am Communications, Inc., the
accompanying unaudited financial statements include all normal
adjustments considered necessary to present fairly the financial
position as of Septembeer 30, 2000, and the results of operations for
the three months and ninr months ended September 30, 2000 and 1999,
and cash flows for the nine months ended September 30, 2000. Interim
results are not necessarily indicative of results for a full year.
The financial statements and notes are presented as permitted by Form
10-Q, and do not contain certain information included in the Company's
audited financial statements and notes for the fiscal year ended
December 31, 1999.
6
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------- RESULTS OF OPERATIONS.
The business of the Company is carried on at this time through its wholly
owned subsidiary, Isotec, Inc., the acquisition of which was finalized in
February 2000. Isotec is a designer, developer and manufacturer of Automated
Passage Control, security and surveillance devices, including inter-locked
weapons detection and access control portals, and "Transparent" security and
surveillance products using computer integrated video, currently under
development and beam technology products for traffic control and access. Future
acquisitions and Joint Ventures have been completed or are planned to support
and expand both the Access Control and Transparent Security markets.
OVERVIEW
--------
During the third quarter of this year the Company continued its efforts to
secure needed funding to sustain and expand its operations, continue its
development efforts, and augment its distribution network. The success of these
efforts is evidenced by the following announcements summarized below;
In late August, R.L. McBride and Associates assumed responsibility for the
Public Relations and Investor Relations tasks for the Company in return for
restricted stock. Personnel from the firm have recently completed the
restructuring of the Company's web site which may be accessed at www. isotecinc.
Com.
In addition, it was announced in early September that Rich McBride, CEO of
SeaView Video Technology Inc., would soon file a Form 3 and take a major
personal position in the Company. The announcement further contained the
commitment on Mr. McBride's part, to provide an additional $500,000 for
operations and marketing, a portion of which has now been received.
The Company, while still requiring long term operating and development
funds, has developed a low cost turnstile portal with optical controls for the
foreign and retail markets, optical (beam) passage control products, i.e.,
Traffic Counters, Directional Monitor, Anti-tailgating Monitor and Interlock
Controls (under development), the first of which (traffic monitors) has been
delivered to Ventura County, CA, courthouse. As reported in the previous 10Q,
expected contracts for portals employing these new devices have now been
received from the U.S. Navy, SPAWARS, and the Federal Reserve Bank in Phoenix.
Both contracts have the potential for dissemination of these custom designed
products throughout their respective facilities in the U.S. and internationally
(Navy).
Also included in the past report was notification that a Letter of Intent
had been signed with Atesa, a Honduran security company, to distribute Isotec's
products in Central America and manufacture portal structures in Honduras.
Negotiations are currently in process as this report is being written.
7
<PAGE>
World Am's efforts during this period include the expansion of Isotec's
dealer/distributor network with the addition of SeaView as a dealer; signing of
a Teaming Agreement with New Technology Management, Inc., a government systems
integrator, and inclusion of Isotec products in their GSA schedule; discussions
with a major national security corporation (systems integrator) for a similar
teaming agreement; signed Letter of Intent with A&J Police of NY and their
partner, DAI Alarms of Mexico to enter into agreements as dealers/distributors
of Isotec equipment and the manufacture of Isotec portals in Mexico, and; the
signing of a joint venture with Quo Vadis International, an international
security consultant.
The Company is also in current discussions with two private Hi-tech
companies for joint venture agreements and/or merger into World Am
Communications, as well as two other companies regarding Isotec dealerships.
In summary, the Company is pro-actively seeking avenues to acquire the
necessary funding for expansion and development and through its efforts, and
that of its financial consultants, is striving to strengthen the Company and its
stock position. As stated before, opportunities exist for the Company to become
a major factor in the new field of "Transparent" security, and the personnel
associated, are committed to achieving that position.
8
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
Not Applicable
ITEM 2. CHANGES IN SECURITIES
---------------------
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not Applicable
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
--------------------------------------------------
Not Applicable
ITEM 5. OTHER INFORMATION
-----------------
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K
-------------------------------
Exhibit 27 Financial Data Schedule
9
<PAGE>
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WORLD AM COMMUNICATIONS, INC.
(Registrant)
Dated: November 13, 2000 By: /s/ James H, Alexander
------------------------------------
James H. Alexander, President & CEO
10
