SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
September 30, 1998 0-13338
INFOAMERICA, INC.
2600 Canton Court, Suite G
Fort Collins, Colorado 80525
Telephone: (970) 221-5599
Colorado 84-0853869
---------------------- ------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
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.
Yes [X] No [ ]
As of September 30, 1998, Registrant had 5,216,410 shares of its $0.025 par
value common stock issued and outstanding.
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<TABLE>
<CAPTION>
BALANCE SHEET
ASSETS
September 30, 1998
Unaudited Audited
9/30/98 12/31/97
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<S> <C> <C>
Current assets:
Cash ................................................. $ 34,327 $ 50,255
Accounts receivable:
Trade, net of allowance for
doubtful accounts of $-0- ..................... 90,609 38,632
----------- -----------
Total current assets .......................... 124,936 88,887
Property and equipment, at cost:
Furniture and fixtures ............................... 35,344 35,344
Vehicles ............................................. 52,170 52,170
Computer equipment ................................... 75,662 75,662
----------- -----------
163,176 163,176
Less accumulated depreciation .................... 95,434 87,635
----------- -----------
Net property and equipment .................... 67,741 75,541
Other assets:
Deposits ............................................. 1,598 1,598
----------- -----------
Total Assets ......................................... $ 194,275 $ 166,026
=========== ===========
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<PAGE>
<CAPTION>
INFOAMERICA, INC.
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
September 30, 1998
9/30/98 12/31/97
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<S> <C> <C>
Current liabilities:
Accounts payable ..................................... $ 5,717 $ 10,019
Accrued salaries and payroll taxes ................... -- 4,387
Accrued interest ..................................... 56,548 52,924
Accrued profit sharing plan
contribution ..................................... 14,543 14,542
Customer deposits .................................... 40,000 40,000
Accrued bonuses and expenses due
officers ......................................... 50,080 63,925
Advances Payable to Officers ......................... 11,979 11,979
Current Portion of Notes Payable ..................... -- 6,972
Convertible notes payable ............................ -- 15,000
Deferred revenue ..................................... 15,000 15,000
----------- -----------
Total current liabilities ..................... 193,868 234,748
Long-term liabilities:
Convertible notes payable - officers ................. -- 50,000
Notes Payable-Vehicles ............................... 33,709 31,838
----------- -----------
Total Long Term Liabilities .............................. 33,709 81,838
Stockholders' equity (deficit):
Preferred stock, $1 par value;
5,000,000 shares authorized,
none issued ................................... -- --
Common stock, $.025 par value;
900,000,000 shares authorized,
5,216,410 shares issued ....................... 128,623 83,356
Additional paid-in capital ....................... 2,005,772 1,977,228
Accumulated deficit .............................. (2,167,698) (2,211,144)
----------- -----------
Total stockholders' equity (deficit) .......... (33,301) (150,560)
----------- -----------
Total Liabilities & Stockholder Equity ........... $ 194,275 $ 166,026
=========== ===========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
INFOAMERICA, INC.
STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
For the Qtr. For the Qtr. For the 9 For the 9
Ended Ended Mos. Ended Mos. Ended
9/30/98 9/30/97 9/30/98 9/30/97
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Software Income ................ $ 115,971 124,193 344,546 282,760
Interest ....................... 1,240 186 1,240 440
Miscellaneous .................. 1,800 7,670 19,894 114,020
-------- --------- --------- ---------
TOTAL INCOME ........... $ 119,011 $ 132,049 $ 365,681 $ 397,221
======== ========= ========= =========
Expenses
Sales Promotion
& Advertising .......... -- 721 -- 4,215
General & Admin ............... 106,499 100,433 322,235 346,033
-------- --------- --------- ---------
TOTAL EXPENSES.......... $ 106,499 $ 101,154 $ 322,235 $ 350,248
-------- --------- --------- ---------
Net Income (Loss) .............. $ 12,512 $ 30,895 $ 43,446 $ 46,973
======== ========= ========= =========
Net Income (Loss)
Per Share .............. $ .003 $ .009 $ .012 $ .013
======== ========= ========= =========
Weighted Avg. Shares ........... 3,660,000 3,660,000 3,660,000 3,660,000
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
INFOAMERICA, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the 9 months ended September 30, 1998
(Unaudited)
Common Stock Additional
---------------------- Paid-In Accumulated
Shares Amount Capital Deficit
------ ------ ---------- -----------
<S> <C> <C> <C> <C>
Balance, December 31,
1997 ....................... 3,405,731 $ 83,356 $ 1,977,228 ($2,211,144)
Common Stock issued
as compensation to employees
and consultants at $.038 and $.025
per share ...................... 1,810,679 $ 45,267 $ 15,120
Profit for the 9
months ended
September 30, 1998 ......... $ 43,446
---------- --------- --------- ----------
Balances,
September 30, 1998 .......... 5,216,410 $ 128,623 $ 2,005,772 $(2,167,698)
========== ========= ========= ==========
</TABLE>
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<TABLE>
<CAPTION>
INFOAMERICA, INC.
STATEMENT OF CASH FLOWS
For the 9 months ended September 30, 1998 and 1997
(Unaudited)
1997 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) .......................................... $ 46,973 $ 43,446
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operations:
Common stock issued for services ........................... -- --
Depreciation and amortization ............................ -- 7,799
(Increase) decrease in trade accounts
receivable ............................................ 66,944 (51,977)
(Increase) decrease in other current assets ................ -- --
Increase (decrease) in accounts payable .................... (12,683) (4,302)
Decrease in salaries payable ............................... (569) (13,845)
Increase (decrease) in accrued liabilities ................. (11,466) 8,049
Decrease in customer deposits .............................. (82,250) --
-------- --------
Total Adjustments .............................................. (40,024) (54,276)
-------- --------
Net Cash Provided by (Used in) Operations ............. 6,949 (10,830)
Cash flows from investing activities:
Proceeds from sale of fixed assets ......................... -- --
Purchases of property and equipment ........................ (2,293) --
-------- --------
Net Cash Used in Investing Activities ................. (2,293) --
Cash flows from financing activities:
Payments on notes payable .................................. -- (5,101)
-------- --------
Net Cash Used in Financing Activities ................. -- (5,101)
-------- --------
Net Decrease in Cash ........................................... 4,656 (15,928)
Cash Balance at Beginning of Period ............................ 34,201 50,255
-------- --------
Cash Balance at End of Period .................................. $ 38,858 $ 34,327
</TABLE>
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INFOAMERICA, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 1998
1. Basis of Presentation
The balance sheet at September 30, 1998, and the statements of operations
and cash flows for the nine months ended September 30, 1998 and 1997, have been
prepared by the Company without audit. In the opinion of management the
accompanying unaudited financial statements contain all adjustments (consisting
of only normal recurring accruals) necessary for a fair presentation of the
financial position as of September 30, 1998, and the results of operations and
cash flows for the periods ended September 30, 1998 and 1997.
The financial statements have been prepared on a going concern basis which
contemplates the realization of assets and liquidation of liabilities in the
ordinary course of business. As shown in the accompanying financial statements,
the Company has incurred significant recurring losses and at September 30, 1998,
the Company has a working capital deficit of $68,932 and a stockholders' deficit
of $33,301.
The Company has pursued the fast food industry during 1998 in an effort to
establish pilot programs with major chain accounts for the Company's order entry
software. The Company intends to attempt to secure consulting contracts with
current as well as new customers. Although the Company is hopeful these cost
cutting and revenue generating strategies will be successful, there is no
assurance that sufficient cash flows will be generated to fund current
operations. (See Note 4 below)
The financial statements do not include any adjustments that might be
necessary should the Company be unable to continue as a going concern.
2. Income Taxes
No provision for income taxes is required at September 30, 1998 and 1997
because, in management's opinion, the effective tax rate for the year will be
zero.
3. Net Income (Loss) per Share
Net income (loss) per share is based on the weighted average number of
shares of common stock outstanding during the nine month period ended September
30, 1998 and 1997.
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4. Subsequent Event
The Company anticipates that it will enter into a contract to acquire three
privately held corporations which together own and operate a small cable
television business in Tehachapi, California. The Company believes this cable
business has a value in excess of $2.0 million. In connection with the
anticipated transaction, the Company would issue securities equivalent to
approximately 80% of the Company's voting common stock. Following the
transaction, the Company would assume operation of the cable television
business. Upon completion of the transaction, which would be expected during the
fourth quarter, the present officers and directors would be replaced by
management of the acquired corporations. At the time of completion of the
transaction, the Company would sell the assets utilized by the Company to its
present management in consideration of cancellation of obligations owed to such
persons, surrender of securities owned and termination of long term employment
contracts and options. There is no assurance such a transaction will be
completed as anticipated.
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<PAGE>
I. CHANGES IN FINANCIAL CONDITION
Working Capital improved during the first nine months of 1998 due to the
nominal profit performance. It is anticipated that the Company's financial
condition will remain the same during the balance of 1998 if new fast food
contracts are realized. If revenues do not materialize as expected, the Company
will seek investment capital and/or consulting contracts to sustain operations.
There is no assurance the Company will be successful in securing such investment
capital or consulting contracts.
The Company is actively seeking a company in order to complete a reverse
merger. The goal of this merger is to add value to the Company's common stock
and create value for the shareholders.
II. RESULTS OF OPERATIONS
Revenues:
Year-to-date 1998 vs. 1997: 1998 YTD results declined 8% from 1997
levels as 1997 nine month results included payment for a major consulting
project started in 1995.
Expenses:
Year-to-Date 1998 vs. 1997: 1998 year-to-date expenses decreased 8%
from 1997 levels due primarily to decreased use of outside consulting services.
Income:
Year-to-Date 1998 vs. 1997: 1998 year-to-date profit decreased $3,527
from 1997 levels as expenses did not decline as rapidly as revenues.
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<PAGE>
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8K
A. Exhibits -- 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.
INFOAMERICA, INC.
Date: November __, 1998 /s/ Paul F. Knight
------------------------------
Paul F. Knight, President and
Chief Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 34,327
<SECURITIES> 0
<RECEIVABLES> 90,609
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 124,936
<PP&E> 163,176
<DEPRECIATION> 95,434
<TOTAL-ASSETS> 194,275
<CURRENT-LIABILITIES> 193,868
<BONDS> 0
0
0
<COMMON> 128,623
<OTHER-SE> (161,926)
<TOTAL-LIABILITY-AND-EQUITY> 194,275
<SALES> 0
<TOTAL-REVENUES> 365,681
<CGS> 0
<TOTAL-COSTS> 322,235
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 43,446
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,446
<EPS-PRIMARY> .012
<EPS-DILUTED> .012
</TABLE>
