FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year ended December 31, 1998
Commission File Number 0-13338
INFOAMERICA, INC.
Colorado 84-0853869
--------------------- ------------------
(State or other juris- (IRS Employer
diction of incorpora- Identification No.)
tion or organization)
2600 Canton Court
Suite G
Fort Collins, Colorado 80525
----------------------------
(970) 221-5599
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
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 and, (2) has been subject to such filing requirements
for the past 90 days. YES [X] NO [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.[X]
Issuer's revenues for fiscal year 1998 were $504,825. The aggregate market value
of the Registrant's voting stock held as of December 31, 1998 by nonaffiliates
of the Registrant was $0.00.
As of March 24, 1999, Registrant had 5,214,521 shares of its $0.025 par value
common stock issued and outstanding.
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PART I
ITEM 1. BUSINESS
(a) General Development of Business. InfoAmerica, Inc. ("Company") was
incorporated under the laws of the state of Colorado on June 9, 1981. The
Company operated as a Colorado general partnership from October, 1980 until its
incorporation.
Prior to 1986, the Company provided a unique advertising medium targeted at
travelers, tourists and conventioneers. From 1986 to 1989 the Company focused
almost exclusively on the financial institution marketplace and made its
software compatible with hardware available from major automated teller machine
(ATM) vendors. Since 1990, the Company has devoted part of its resources to
software consulting and the balance to the development and marketing of a
product for the fast-food industry.
During 1998, the Company actively pursued merger opportunities as a method
to provide liquidity to shareholders. Based on events during the second half of
1998, 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 issu 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
first quarter of 1999, 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.
(b) Financial Information About Industry Segments. Since inception the
Company's revenues, operating profits and losses and identifiable assets have
been attributable to one industry segment-the production, marketing, consulting
and operation of touch screen, interactive video information systems and
software.
(c) Narrative Description of Business. The Company's primary business has
been consulting to the fast food industry and licensing of software to operate
touch sensitive computer systems targeted for the fast food industry.
(i) Product, Marketing and Sales.
Product
General. The current version of the Company's DOS based software has been
designated as Touchware-5.0. The Touchware-5.0 software activates a Point of
Sale (POS) terminal for use by either a clerk or a customer when a user touches
the video monitor. Once a touch is made, the video monitor displays several
options the user can select from, called a "menu". Using a menu type approach,
the user can view and select from a series of displays on the monitor. This
allows users to move quickly from general categories to the specific information
being sought. This process, from general to specific, is accomplished by a
series of well organized menus controlled by the Touchware-5.0 software. The
Touchware-5.0 software permits a user to have easy access to computer-based
information as well as place orders in a retail environment. The Company
believes that its software, coupled with touch screen, color graphics based
hardware, is simple to use and is considered "user friendly".
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Benefits of the System. The Company believes that its software executing on
a POS or Customer Activated Terminal (CAT) allows fast food clerks and customers
to place their orders more accurately and faster compared to more traditional
ordering methods. Additionally, with increases in the minimum wage, employee
health care costs and difficulty in hiring qualified personnel, fast-food
operators are searching for methods to improve the productivity of an
increasingly expensive labor supply.
CATs, in particular, seem to offer the benefit of handling the same or more
customers without adding additional labor. Also, the CAT has provided the
following benefits to fast-food operators: 1) improved customer satisfaction,
and 2) perceived faster speed of service.
Marketing and Sales
The Company developed the Touchware-5.0 software product to satisfy the
needs of the fast-food industry. The Company has been marketing products
directly to major chain fast food accounts. The Company's continued success will
depend on its ability to market the Touchware-5.0 software to the fast-food
industry. As of December 31, 1998, the Company has installations and pilots in
progress within the fast-food industry. There is no assurance that the Company
will be successful with its fast food product.
Additionally, the Company has not had the financial resources required to
either develop and/or port the Touchware-5.0 product to the Windows operating
system from DOS. The inability to offer a Windows product is beginning to have a
significantly negative impact on the Company's sales and marketing efforts as
well as the ability to attract talented software engineers. Without development
of a Windows based product, the Company's future is uncertain.
Exclusive Licensees.
Not applicable
Other Marketing Arrangements.
(i) Status of Product. As of December 31, 1998, the Company continues
to enhance the Touchware-5.0 software product for the fast-food industry.
(ii) Raw Materials. Not applicable.
(iii) Patents, Trademarks and Licenses. The Company received a patent
on a unique feature of its Touchware 5.0 software technology during 1998. The
Company has registered its trade names and service mark with the U.S. Patent and
Trademark Office. The Company has received copyrights on its Touchware-200 and
300 software products from the U.S. Copyright Office.
(iv) Seasonality. The Company's business is not seasonal in nature.
(v) Working Capital Items. The nature of the Company's business does
not require that it carry significant amounts of inventory or that it be
prepared to meet rapid delivery requirements of customers or that it provide
extended payment terms to customers; and, therefore, such considerations do not
mandate that the Company maintain a significant working capital position.
(vi) Customer Dependence. In 1998, the Company received 95% of its
total revenue from three customers.
(vii) Backlog of Orders. The Company has no backlog of orders.
(viii) Government Contracts. No portion of the business of the Company
is subject to renegotiation of profits or termination of contracts or
subcontracts at the election of the government.
(ix) Competition. Many companies compete in the POS business although
few compete in the CAT business. The Company expects that a number of
competitors will be entering the CAT business in the next several years. Most of
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the competitors have much greater financial, marketing and technical resources
than the Company. Other CAT competitors are expected to enter the business and
compete directly with the Company as the potential size of the fast-food
customer activated terminal market is realized. The business of the Company is
relatively easy to enter with few barriers to entry. Although the Company
considers that its CAT software operates the computer system more efficiently
than software otherwise presently available, there is generally available other
software which permits operation of computers using touch sensitive video
screens. Therefore, it is probable that other companies will enter the business.
The Company's ability to compete effectively against new entrants will
depend on its ability to capitalize on its experience, current reputation,
existing software and customer base. It is imperative that the Company develop a
Windows based version of its Touchware-5.0 software to remain competitive in the
market.
(xi) Research and Development. Product enhancements were created in
response to customer requests and are not classified as Research and
Development.
(xii) Environmental Regulations. Since its inception, the Company has
not made any material capital expenditures for environmental control facilities
and the Company does not expect to make any such expenditures during the current
or forthcoming fiscal year.
(xiii) Employees. On December 31, 1998, the Company employed three
persons on a full-time basis including its two corporate officers. The Company
also utilizes, on a part-time basis, approximately 10 technical and management
consultants who work with the Company on an as needed basis.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales. Approximately 51% of the Company's revenues are derived from software
licenses and support fees generated by companies conducting business in foreign
countries.
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
second quarter of 1999, 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.
ITEM 2. PROPERTIES
Since September 1985, the Company has leased approximately 2,000 square
feet of office space in Fort Collins, Colorado under a lease that expires
November 1, 1999. The current monthly lease payment is $1,616.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Market Information. On March 15, 1985 the Company completed a public
offering of 160,000,000 shares of its common stock (on a reverse split basis,
the shares offered were 640,000). The common stock has not traded since 1987 as
there are no market makers for the shares.
(b) Holders. As of December 31, 1998, the Company had approximately 982
shareholders of record.
(c) Dividends. The Company has not declared cash dividends on its common
stock since its inception. The Company does not anticipate paying dividends in
the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
The following is selected financial information concerning the Company.
This information should be read in conjunction with the financial statements
appearing elsewhere herein.
Year Ended December 31,
------------------------------------
1998 1997 1996
---- ---- ----
Revenues ....................... $ 504,825 $ 495,602 $ 732,345
Income(loss) ................... 37,665 (1,997) 31,305
Income (loss)
per common share .............. .01 * .01
Total assets ................... 237,334 $ 166,026 $ 159,208
Long-term
obligations .................... $ 24,313 $ 81,838 $ 50,000
Working capital
(deficit) ............. $ (86,104) $(145,861) $(130,052)
* Less than $.01 per share.
Liquidity and Capital Resources.
General.
In 1990, the Company began developing a software product specifically
targeted for the fast-food industry. The Company's financial success in 1999 and
beyond will depend on its ability to continue development of this product,
Touchware-5.0, and customer acceptance.
During 1996, the Company began development work on a new product for a
major fast food chain. The arrangement with this customer involves a combination
of development and licensing fees. The development fees from this customer
allowed the Company to operate during 1996 and 1997 and license fees coupled
with support fees were critical to the Company's stability during 1998.
The Company is continuing to pursue other chain business. There is no
assurance that the Company will be successful in negotiating additional chain
agreements in order to sustain operations after the conclusion of this
development work.
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During 1992 and 1993, the Company raised $15,000 in the form of long term
convertible debt to help finance operations. The lenders loaned the Company a
total of $15,000 in return for the right to either (a) convert the debt into
63,000 shares of the Company's outstanding common stock (which number of shares
shall be increased by an amount equal to 1% of all the Company shares purchased
by officers or directors of the Company by exercising existing stock options
before conversion of the Note) or (b) convert the debt into 31,500 shares of the
Company's outstanding common stock (which number of shares shall be increased by
an amount equal to 1% of all the Company shares purchased by officers or
directors of the Company by exercising existing stock options before conversion
of the Note) and receive $25,000 in cash. During 1998, the lenders agreed to
convert the long term debt into 63,000 shares of the Company's common stock.
Although the Company is hopeful that fund raising/revenue generating strategies
will be successful, there is no assurance that success will be achieved.
In September 1996 the Company entered into a two year consulting agreement
with a nonaffiliated entity. Under the agreement the consultant was to provide
advice and assistance to the Company in connection with identifying, qualifying
and negotiating with candidates for a merger with the Company for the purpose of
restructuring the Company's capitalization, initiating and expanding public
trading and improving shareholder liquidity with the goal of assisting the
Company to raise shareholder values. As compensation to the advisor, the Company
was to issue options to purchase up to 300,000 shares of the Company's common
stock at various prices, and warrants to purchase up to 1% of the outstanding
common stock. The Company also agreed to pay cash transaction advisory fees and
to reimburse the consultant for certain expenses. The Company's obligation to
the consultant was intended to be subject to completion of acceptable
transactions. The consultant brought one potential acquisition or merger
candidate to the attention of the Company which the Company and the consultant
concluded would be unacceptable. The consultant did not provide additional
advisory services to the Company and the Company considers that obligations of
the Company under the agreement have terminated due to nonperformance by the
consultant. Certain ambiguities in the agreement could be subject to other
interpretation, although the Company would vigorously contest any assertion by
the consultant that compensation is owed under the agreement.
1998 Review
During 1998, the Company continued to devote its efforts to developing and
piloting its POS and CAT products for the fast food industry. One customer began
a small rollout of the Company's POS product resulting in license and support
fees. The Company's working capital position should be stable during 1999
resulting primarily from ongoing product development and support contracts and
to a lesser degree license fees.
During 1998, the Company actively pursued merger opportunities as a method
to provide liquidity to shareholders. Based on the events during the second half
of 1998, 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
first quarter of 1999, 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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1997 Review
During 1997, the Company devoted its efforts to developing and piloting its
POS and CAT products for the fast food industry.
Capital Resources. As of December 31, 1998, the Company had no capital
commitments.
Results of Operations
1998 Compared to 1997
Revenues. Total revenues of $504,825 for 1998 were essentially flat with
1997 reflecting the same basic strategy of offering consulting services and
limited development of product for fast food customers.
Expenses. Total expenses including interest decreased 6% from 1997 levels
due to the reduction in employees.
1997 Compared to 1996
Revenues. Total revenues of $495,602 for 1997 decreased 32% from 1996
levels due exclusively to a major development contract with a major fast food
company that was 70% completed in 1996. This development contract was totally
completed by the end of 1997.
Expenses. Total expenses including interest decreased 29% from 1996 levels
due to the reduction of outside consulting services needed to complete the
development project described above.
Year 2000 Compliance
As of December 31, 1998, the Company was in the process of upgrading its
proprietary Touchware 5.0 software package to be year 2000 compliant and
reviewing Y2K issues affecting its business. It is anticipated that all
customers will be upgraded to the new Y2K version of the Company's software by
June, 1999. Costs associated with completing this Y2K upgrade are expected not
to exceed $20,000. This has been an important development project as one of the
Company's largest customers has made it a requirement that Touchware 5.0
software product be Y2K compliant by June 30, 1999. At the present time, this
development effort is proceeding as planned and the Company's anticipates
successfully completing the conversion to Y2K compliance by June 30, 1999. We
have employed outside consultants to assist in this compliance process and none
of these experts believe there will be any problem complying with Y2K
specifications. The Company's internal systems are totally manual and will not
be impacted by Y2K computer software problems. The Company does not anticipate
that Y2K readiness of the computer systems of its suppliers or customers will
affect the Company's business; however, like all businesses, and particularly
businesses in the technology sector, the Company can give no assurances that it
will not be adversely affected by Y2K problems of others.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the Financial Statements attached to and made a part of this report.
ITEM 8. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Identification of Directors.
The name, position with the Company and the age of each officer and
director, and the period during which each officer and director has served are
as follows:
Director
Name and Position Age Since
- ----------------- --- --------
Paul F. Knight 51 1981
(President, Treasurer and
Director)
Larry J. Salmen 51 1981
(Vice President, Secretary
and a Director)
Michael J. Scanlan 58 1984
(Director)
The executive officers of the Company are elected at the first meeting of
the Company's Board of Directors held after each shareholder meeting. Each
executive officer holds office until his successor is duly elected and
qualified, until his resignation or until he is removed in the manner provided
by the Company's Bylaws. The term of office of each director expires at the next
annual meeting of shareholders.
The following is a brief account of the business experience during the past
five years of each director and executive officer:
Principal Occupation
Name During the Last Five Years
- ---- --------------------------
Paul F. Knight Chairman of the Board and Treasurer of the
Company since July 1986; President, Chief
Executive Officer and a director of the
Company since 1981.
Larry J. Salmen Vice President and Secretary of the Company
since 1982; Director of the Company since
1981.
Michael J. Scanlan President and Chief Executive Officer of
SCANSCO Management Company, Inc. which acts
as a parttime Chief Executive Officer and/or
Chief Financial Officer for small entities,
since March 1991; Independent consultant as
Scanlan & Associates from October 1990 to
February 1991. Director, and Executive
Officer of Data National, Inc., a consulting
firm from March 23, 1987 to October, 1990.
Owner of Scanlan and Associates, a management
consulting and accounting service firm, since
July 1981; Executive officer of The Rockies
Fund, Inc., a publicly held venture capital
company, from August 1983 to March 1990;
Director of TEAM Marketing Group, Inc.,
Director of First Denver Mortgage Company and
a Director of Newport Associates.
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ITEM 10. EXECUTIVE COMPENSATION
The following table shows all compensation paid by the Company during the
fiscal years ended December 31, 1998, 1997 and 1996 to all executive officers:
SUMMARY COMPENSATION TABLE
NAME AND YEAR SALARY BONUS ($) RESTRICTED OPTIONS
PRINCIPAL ($) STOCK SARs(#)
POSITION AWARDS ($)
- --------- ---- --------- -------- ---------- -------
Paul 1998 $92,400(3) -- -- --
1997 $90,363(1) -- -- --
CEO 1996 $84,061(2) -- -- --
Larry 1998 $91,200(6) -- -- --
Salmen 1997 $90,061(4) -- -- --
COO 1996 $85,982(5) -- -- --
(1) All salaries were cash compensation except for $8,400 that was unpaid
as of December 31, 1997.
(2) All salaries were cash compensation except for $6,336 that was unpaid
as of December 31, 1996.
(3) All salaries were cash compensation except for $11,600 that was unpaid
as of December 31, 1998 and $13,072 that was paid in advance during 1997.
(4) All salaries were cash compensation except for $19,944 that was unpaid
as of December 31, 1997.
(5) All salaries were cash compensation except for $422 that was unpaid as
of December 31, 1996.
(6) All salaries were cash compensation except for $22,100 that was unpaid
as of December 31, 1998 and $11,544 that was paid in advance during 1997.
Compensation Pursuant to Plans.
In addition to the 1984 Incentive Stock Option Plan described below under
Section (b)(4), the Company also has a 401K plan that was instituted in 1989.
The basic elements of the Company's 401K plan are outlined below:
1. Employee contributions are voluntary and participants may make
discretionary nontax-deductible contributions.
2. Employee participants may not make discretionary non deductible
contributions.
3. The Company's contribution will be allocated among all eligible
employees who are employed at the end of the Plan Year provided that the
employee has completed 1,000 hours of service during the Plan Year. The employer
shall also make a contribution for each participant who separated from
employment during the Plan Year as a result of retirement, disability, death or
termination upon completion of 1,000 hours of service. In the case of a top
heavy Plan Year, the employer will make a contribution to all participants who
are employed on the last day of the Plan Year regardless of the amount of hours
worked.
4. The employee may make personal salary reduction contributions to the
plan in any amount up to 15% of annual compensation.
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Options
Although no formal plan exists, the Company has in the past and may in the
future make grants of common stock to qualified employees as additional and
incentive compensation. During 1991, the Company granted non-qualified options
to the Company's officers and directors. To date, none of the options have been
exercised. The following table presents further information concerning these
options:
Grant Expiration
Shares Price Date Date
------ ----- ----- -----------
Mr. Knight 100,000 .13 10/1/91 September 30, 1999
Mr. Knight 100,000 .15 10/1/91 September 30, 2000
Mr. Salmen 100,000 .13 10/1/91 September 30, 1999
Mr. Salmen 100,000 .15 10/1/91 September 30, 2000
Mr Scanlan 20,000 .13 10/1/91 September 30, 1999
Mr Scanlan 20,000 .15 10/1/91 September 30, 2000
During 1996, the Company issued 191,500 shares to five employees not
including executive officers. These shares were to vest over a three to four
year period based on the employee's continued employment with the Company.
During 1997, 137,250 of the 191,500 shares were returned to the Company's
treasury due to employees leaving the Company prior to the vesting requirements
being satisfied. An additional 2,500 shares were returned to the Company's
treasury during 1998.
Incentive Stock Option Plan.
The Company grants options to key employees, including officers of the
company (excluding any person who serves only as a director), pursuant to its
1984 Incentive Stock Option Plan. The plan was designed to comply with Section
422A of the Internal Revenue Code of 1954 as amended by the Economic Recovery
Tax Act of 1981. The plan authorizes the granting of options to purchase up to
64,000 shares of the Company's $.025 par value common stock.
The plan is administered by the Compensation Committee of the Board of
Directors which may be composed of shareholders, chosen by the directors, who
are not, and have not been during the past 12 months, employed by the Company.
The Compensation Committee consists of Michael Scanlan, the outside director of
the Company. The Compensation Committee has authority to set reasonable terms
and conditions as to options granted under the plan, including requirements that
the employees granted an option must remain employed for a specified time
period.
The plan also authorizes the Committee to grant stock appreciation rights
in connection with options. Stock appreciation rights, if authorized by the
Committee, would permit an employee to receive an amount equal to the difference
between the exercise price of the option and the fair market value of the
Company's common stock upon exercise date in paid-up stock of the Company or in
cash, depending upon the Committee's determination. Stock appreciation rights
have not been granted in connection with any outstanding options and it is not
presently intended that stock appreciation rights will be granted.
No options to purchase any securities from the Company were granted to or
exercised by any executive officer of the Company under the 1984 Incentive Stock
Option Plan during the fiscal year ended December 31, 1998 and there were no
outstanding options held by any executive officer on that date.
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Other Compensation.
The Company pays each officer (Mr. Knight and Mr. Salmen) incidental
compensation from time to time, consisting primarily of reimbursement for
business-related activities on behalf of the Company. The aggregate of all such
other compensation did not exceed 10% of the cash compensation reported for the
fiscal year ended December 31, 1998.
Compensation of Directors
Standard Arrangements. In 1992, Mr. Scanlan was not paid for attending
director meetings; however, he received a stock option entitling him to acquire
up to 40,000 restricted shares at a per share price of $.038. In 1993, the board
approved compensating Mr. Scanlan with 3,500 shares of restricted common stock
for attending each board meeting. Since 1993, Mr Scanlan has earned a total of
49,000 shares that were issued during 1998.
Other Arrangements. The Directors authorized the issuance of two
convertible notes in the amount of $25,000 each for compensation due officers
but unpaid during 1992. These two notes were issued during 1994. Each note,
could be converted into 657,895 shares of common stock ($.038 per share) or
repaid in cash with interest. Each note has interest payable at the rate of 19%
per annum. During 1998, both $25,000 notes were converted into the prescribed
number of shares and $3,400 of interest was converted into 140,00 shares ($.025
per share). Interest of $51,125 is still due the officers.
Additionally, the Board of Directors authorized on July 1, 1993 the
issuance of 315,790 shares to the officers for previous expenses and salaries
that were not paid in 1993 and 1992. Each officer was owed $6,000 in salaries
and car allowance that was unpaid as of March 31, 1993. This total of $12,000
was converted into 315,790 shares of common stock at the conversion rate of
$.038 per share.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows as of December 31, 1998, the shares of the
Company's $.025 par value common stock beneficially owned by each director of
the Company, by all the officers and directors as a group, and by each person
known to the Company who owns more than 5% of the Company's common stock.
Amount of Beneficial
Name and Address Ownership (1) Percent of Class
- ---------------- -------------------- ----------------
Paul F. Knight ....................... 1,658,710(2) 31.8%
Larry J. Salmen ...................... 1,621,819(2) 31.1%
Michael Scanlan ...................... 188,000(2) 3.6%
All Officers and Directors
as a Group (Three Persons) ........... 3,468,529(2) 66.5%
- --------------
(1) Beneficial owners listed have sole voting and investment power with
respect to the shares unless otherwise indicated.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Company granted stock options to officers and directors - see Item 11 of
this report. The Company also authorized the issuance of stock to officers and
directors in lieu of compensation - see Item 11 of this report.
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PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements:
The financial information beginning on page F-1 is filed as part of
this report:
(a)(2) Schedules:
none
(b) 8-K Reports:
none
(c) Exhibits:
Exhibit 27 - Financial Data Schedule
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INFOAMERICA, INC.
INDEX TO FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants...........................F-2
Balance Sheet - December 31, 1997 and 1998...................................F-3
Statement of Operations - Years Ended December 31,
1997 and 1998.............................................................F-5
Statement of Changes in Stockholders' Equity -
Years Ended December 31, 1997 and 1998....................................F-6
Statement of Cash Flows - Years Ended December 31,
1997 and 1998.............................................................F-7
Notes to Financial Statements................................................F-9
F-1
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
InfoAmerica, Inc.
We have audited the balance sheet of InfoAmerica, Inc. as of December 31, 1997
and 1998, and the related statements of operations, changes in stockholders'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based upon our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of InfoAmerica, Inc. as of
December 31, 1997 and 1998, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses and at December
31, 1998, the Company has a working capital deficit of $86,104 and a
stockholders' deficit of $54,082. These conditions raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
March 17, 1999
Denver, Colorado /s/ CAUSEY DEMGEN & MOORE INC.
F-2
<PAGE>
INFOAMERICA, INC.
BALANCE SHEET
December 31, 1997 and 1998
ASSETS
1997 1998
---------- ---------
Current assets:
Cash $ 50,255 $ 93,557
Trade accounts receivable, net of allowance for
doubtful accounts of $-0- 38,632 70,295
Short-term loans to officers (Note 2) - 17,147
---------- ---------
Total current assets 88,887 180,999
Property and equipment, at cost:
Furniture and fixtures 35,344 35,344
Computer equipment 75,662 38,828
Vehicles (Note 3) 52,170 52,170
---------- ---------
163,176 126,342
Less accumulated depreciation and amortization 87,635 71,605
---------- ---------
Net property and equipment 75,541 54,737
Other assets:
Deposits 1,598 1,598
---------- ---------
$ 166,026 $ 237,334
========== =========
See accompanying notes.
F-3
<PAGE>
INFOAMERICA, INC.
BALANCE SHEET
December 31, 1997 and 1998
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
1997 1998
--------- ---------
Current liabilities:
Accounts payable $ 10,019 $ 34,931
Accrued salaries and payroll taxes 4,387 -
Accrued interest (Note 2) 52,924 57,598
Accrued profit sharing plan contribution 14,542 845
Customer deposits 40,000 40,000
Accrued bonuses and expenses due officers 63,925 99,153
Advances payable - officers 11,979 11,979
Current portion of notes payable (Note 3) 6,972 7,597
Convertible notes payable (Note 3) 15,000 15,000
Deferred revenue (Note 3) 15,000 -
--------- ---------
Total current liabilities 234,748 267,103
Long-term liabilities:
Convertible notes payable - officers (Note 2) 50,000 -
Notes payable (Note 3) 31,838 24,313
--------- ---------
Total long-term liabilities 81,838 24,313
Commitments and contingencies (Notes 3, 6 and 7)
Stockholders' equity (deficit) (Notes 2,3 and 7):
Preferred stock, $1 par value; 5,000,000 shares
authorized, none issued - -
Common stock, $.025 par value; 900,000,000 shares
authorized, 5,214,521 shares (3,405,731 shares in
1997) issued and outstanding 83,356 130,363
Additional paid-in capital 1,977,228 1,989,034
Accumulated deficit (2,211,144)(2,173,479)
---------- ---------
Total stockholders' equity (deficit) (150,560) (54,082)
---------- ---------
$ 166,026 $ 237,334
========== =========
See accompanying notes.
F-4
<PAGE>
INFOAMERICA, INC.
STATEMENT OF OPERATIONS
For the years ended December 31, 1997 and 1998
1997 1998
--------- ---------
Revenues (Note 5):
Software sales $ 490,832 $ 466,106
Consulting and other sales 4,770 38,719
--------- ---------
Total revenues 495,602 504,825
Operating costs and expenses:
General and administration (Note 8) 477,411 439,892
Depreciation and amortization 10,259 20,804
--------- ---------
Total operating costs and expenses 487,670 460,696
--------- ---------
Income from operations 7,932 44,129
Other income (expense):
Interest income 791 1,711
Interest expense (10,720) (8,175)
--------- ---------
Total other income (expense) (9,929) (6,464)
--------- ---------
Net income (loss) (Note 4) $ (1,997) $ 37,665
========= =========
Basic net income (loss) per share $ (*) .01
========= =========
Diluted net income (loss) per share $ (*) .01
========= =========
* less than $.01 per share
See accompanying notes.
F-5
<PAGE>
INFOAMERICA, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the years ended December 31, 1997 and 1998
Additional Deferred
Common stock paid-in Accumulated compen-
Shares Amount capital deficit sation
------ ------ ---------- ----------- --------
Balance, December
31, 1996 3,542,981 $ 88,572 $ 1,977,228$ (2,209,147) $ (6,185)
Return of unvested shares
issued as compensation
(Note 7) (137,250) (5,216) - - 5,216
Deferred compensation
earned during 1997 (Note 7) - - - - 969
Net income for the year ended
December 31, 1997 - - - (1,997) -
--------- ------ ----------- --------- --------
Balance, December
31, 1997 3,405,731 83,356 1,977,228 (2,211,144) -
Common stock issued as
compensation to employees
at $.025 per share,
subject to forfeiture
(Note 7) 352,500 8,876 - - (3,563)
Return of unvested shares
issued as compensation
(Note 7) (142,500) (3,563) - - 3,563
Common stock issued upon
conversion of notes pay-
able to officers
(Note 2) 1,315,790 34,619 15,381 - -
Common stock issued in lieu
of interest to officers
(Note 2) 140,000 3,500 - - -
Issuance of common stock for
prior year debt conversion 80,000 2,000 (2,000) - -
Common stock issued upon
conversion of notes payable
to individuals (Note 3) 63,000 1,575 (1,575) - -
Net income for the year ended
December 31, 1998 - - - 37,665 -
-------- ------ ----------- --------- --------
Balance, December
31, 1998 5,214,521 $ 130,363 $ 1,989,034 $(2,173,479) $ -
========= ========= =========== =========== =========
See accompanying notes.
F-6
<PAGE>
INFOAMERICA, INC.
STATEMENT OF CASH FLOWS
For the years ended December 31, 1997 and 1998
1997 1998
-------- --------
Cash flows from operating activities:
Net income (loss) $ (1,997) $ 37,665
Adjustments to reconcile net income (loss) to net
cash provided by operations:
Depreciation and amortization 10,259 20,804
Decrease in deferred revenue - (15,000)
Common stock issued for services - 5,313
Common stock issued for interest - 3,500
Deferred compensation earned 969 -
Decrease (increase) in trade accounts receivable 55,855 (31,663)
Increase (decrease) in accounts payable and accrued
liabilities (3,107) 11,502
Increase in accrued bonuses and expenses due
officers 2,414 35,228
Decrease in customer deposits (42,250) -
--------- ---------
Total adjustments 24,140 29,684
--------- ---------
Net cash provided by operations 22,143 67,349
Cash flows from investing activities:
Purchase of property and equipment (16,687) -
Increase in short-term loans to officers - (17,147)
--------- ---------
Net cash used in investing activities (16,687) (17,147)
Cash flows from financing activities:
Advances from officers 11,979 -
Payments on notes payable (1,381) (6,900)
--------- ---------
Net cash provided by (used in) financing activities 10,598 (6,900)
--------- ---------
Net increase in cash 16,054 43,302
Cash balance at beginning of year 34,201 50,255
--------- ---------
Cash balance at end of year $ 50,255 $ 93,557
========= =========
Supplemental disclosure of cash flow information:
Interest paid during the period $ 974 $ 974
====== =====
See accompanying notes.
F-7
<PAGE>
INFOAMERICA, INC.
STATEMENT OF CASH FLOWS
For the years ended December 31, 1997 and 1998
(Continued from preceding page)
Supplemental disclosure of non-cash investing and financing activities:
During the year ended December 31, 1997, the Company financed the
acquisition of $40,191 in vehicles by the issuance of notes payable.
During the year ended December 31, 1998, the Company's Board of Directors
approved the issuance of 352,500 shares of the Company's common stock for
services valued at $8,876 of which $3,563 has been recorded as deferred
compensation.
During the year ended December 31, 1998, the Company issued common stock
for the conversion of $50,000 of notes payable into stock and for the
payment of $3,500 of accrued interest.
See accompanying notes.
F-8
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
1. Organization and summary of significant accounting policies
InfoAmerica, Inc. (the "Company") is in the business of developing and
marketing software applications for touch-sensitive computer display
systems primarily for national fast food chains.
Basis of presentation:
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 losses and at December 31,
1998, the Company has a working capital deficit of $86,104 and a
stockholders' deficit of $54,082. As a result, substantial doubt exists
about the Company's ability to continue to fund future operations using its
existing resources.
The Company intends to reduce operating expenses where appropriate and
attempt to secure consulting contracts with current as well as new
customers. In addition, the Company has been pursuing debt and equity
financing to support its fast food business strategy and intends to settle
outstanding debt by the issuance of common stock, where possible. 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.
The financial statements do not include any adjustments that might be
necessary should the Company be unable to continue as a going concern.
Revenue recognition policy:
Revenue from the sale of equipment and software systems is recognized upon
delivery and installation of the system in situations where the Company has
no significant obligations after the sale, or ratably over the term of the
support agreement for the software portion of the sale where the Company
has significant obligations after the sale.
Use of estimates:
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 and
disclosure of contingent 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.
F-9
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
1. Organization and summary of significant accounting policies (continued)
Property and equipment:
Property and equipment are recorded at cost. Depreciation is provided using
the straight-line and accelerated methods over the assets' estimated useful
lives of three to five years.
Software development costs:
Costs to develop and enhance software under contracts with third parties
have been charged to expense as incurred.
Costs incurred to establish the technological feasibility of computer
software to be sold are research and development costs, and charged to
expense as incurred. Software development costs incurred subsequent to
establishment of technological feasibility are capitalized and amortized on
the greater of the straight-line method over the remaining estimated
economic life of the product or the estimate of current and future revenue
for the related software product.
Income taxes:
The Company accounts for income taxes under the liability method in
accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, under which deferred income taxes are provided
based upon enacted tax laws and rates applicable to the periods in which
the taxes become
payable.
Net income per share:
Basic net income per share of common stock is computed using the weighted
average number of shares outstanding during each period. Basic net income
per share includes the shares of common stock pending issuance as if the
shares were outstanding for all of the periods presented and excludes
shares issued which have not vested (the weighted average number of shares
was approximately 3,660,000 and 3,788,000 for 1997 and 1998, respectively).
Diluted net income per share gives effect to all dilutive potential common
shares that were outstanding during the years. The weighted average number
of shares was approximately 3,788,000 and 5,442,000 for 1997 and 1998,
respectively.
Advertising costs:
The Company expenses the costs of advertising as incurred.
F-10
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
1. Organization and summary of significant accounting policies (continued)
Fair value of financial instruments:
The following methods and assumptions were used to estimate the fair value
of each financial instrument for which it is practicable to estimate that
value:
For cash, cash equivalents, and trade accounts receivable, the carrying
amount is assumed to approximate fair value due to the short-term
maturities of these instruments.
The carrying amounts of the Company's notes payable approximate their fair
value, estimated by discounted cash flow analyses based on the Company's
current incremental borrowing rates for similar types of borrowing
arrangements.
Cash flows:
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Credit risk:
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and trade
receivables. The Company places its cash with high quality financial
institutions. At times during the year, the balance at one financial
institution may exceed FDIC limits. The Company provides credit, in the
normal course of business, to its customers. The Company is directly
affected by the well-being of three major customers, which accounted for
almost 100% of all revenue in 1997 and 1998.
2. Related party transactions
During 1994, the Company issued $50,000 of convertible subordinated
promissory notes in exchange for accrued bonuses and expenses owed to two
officers of the Company. Interest is payable quarterly at the rate of 19%
per annum upon the attainment of certain financial goals or upon conversion
of the notes into common stock of the Company. The notes were convertible
at the option of the holder into 1,315,790 shares of common stock of the
Company in the aggregate ($.038 per share) and were unsecured. In December
1998, these notes were converted into 1,315,790 shares of the Company's
common stock. The Company also issued 140,000 shares of common stock in
payment of accrued interest on these notes in the amount of $3,500. As of
December 31, 1997 and 1998, accrued but unpaid interest amounted to $47,500
and $51,125, respectively.
F-11
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
2. Related party transactions (continued)
During December 1998, the Company advanced an aggregate of $17,147 to two
officers of the Company. The advances were evidenced by promissory notes
payable on demand including interest at 9% per annum. During January 1999,
one of the notes with a principal balance of $12,147 was repaid including
interest.
3. Notes payable
During 1992 and 1993, the Company borrowed an aggregate of $15,000 from
three individuals. The notes bear interest at the rate of 7% per annum and
all principal and accrued interest was due prior to December 31, 1996. The
notes were in default at December 31, 1997. Each of the three notes was
convertible at the option of the lender into 21,000 shares of the Company's
common stock plus payment of accrued interest. During December 1998, the
note holders elected to convert their notes into an aggregate of 63,000
shares of the Company's common stock. In connection with the above notes,
the Company may have additional amounts due if the value of the Company's
common stock should be less than $.36 on January 1, 2000, therefore, the
notes are reflected as outstanding at December 31, 1998.
During 1997, the Company financed the acquisition of vehicles by the
issuance of notes payable. The notes bear interest at rates between 6.90%
and 8.15%, are payable monthly through October 2002 at $808 in the
aggregate and the vehicles are pledged as collateral on the notes.
Principal maturities of these notes are as follows:
1999 $ 7,597
2000 8,121
2001 8,766
2002 7,426
--------
Principal balance $ 31,910
========
4. Income taxes
No provision for income taxes is required for 1997 since the Company had
net operating loss carryforwards. No provision for income taxes is required
for 1998 due to the utilization of a net operating loss carryforward. The
recognized tax benefit of the utilized carryforward was $6,700 for 1998.
F-12
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
4. Income taxes (continued)
As of December 31, 1997 and 1998, total deferred tax assets, liabilities
and valuation allowance are as follows:
1997 1998
-------- ---------
Deferred tax assets $ 17,400 $ 17,500
Deferred tax assets resulting from loss
carryforward 364,500 352,900
Valuation allowance (381,900) (370,400)
-------- ---------
$ - $ -
======== ========
At December 31, 1998, the Company had a net operating loss for tax purposes
of approximately $1,357,000 which, if not utilized, will expire as follows:
December 31,
2000 $ 140,000
2001 283,000
2002 112,000
2005 133,000
2006 317,000
2007 166,000
2008 88,000
2010 118,000
-----------
$ 1,357,000
===========
The net operating loss for financial reporting purposes differs from that
for tax purposes primarily due to differences in recording depreciation,
the compensatory element of stock options, and common stock issued for
services and extinguishment of debt.
5. Major customers
The following table summarizes sales to major customers for the years ended
December 31, 1997 and 1998, respectively.
1997 1998
---------- ---------
Customer #1 36% 52%
Customer #2 - 35%
Customer #3 64% *
* less than 10%
F-13
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
6. Commitments and contingencies
Lease commitments:
The Company has a lease agreement for its office space expiring November 1,
1999. Future minimum lease payments under this lease as of December 31,
1998, are as follows:
Year ending December 31
1999 $ 11,431
========
Rent expense for the years ended December 31, 1997 and 1998, was $17,932
and $19,158, respectively.
Employment agreements:
In June, 1989, the Company entered into three year employment agreements
with two officers which contain self-renewing terms, subject to the option
of the Company to terminate the self-renewing provision near the end of
each three year term. The agreements provide severance benefits under
certain conditions, of the greater of two times annual salary or $180,000
each, and are payable upon termination of employment. The aggregate
estimated contingency under these agreements at December 31, 1998 is
$360,000.
7. Common stock
Incentive stock option plan:
On March 1, 1984, the stockholders approved an incentive stock option plan
(the "plan") for key employees, officers and directors of the Company,
covering 64,000 shares of common stock. Under the terms of the plan, the
purchase price of the shares granted will not be less than the estimated
fair market value at the date of grant unless the purchaser owns more than
5% of the total combined voting power of all classes of stock on the date
of grant, in which case the purchase price shall not be less than 110% of
the estimated fair market value at the date of grant. Options granted are
exercisable for periods from two to five years from the date of the grant
for stockholders owning more than 5% of the total combined voting power of
the Company's stock. Options granted to other employees are exercisable for
periods from two to ten years from the date of grant. The plan contains
provisions that permit the granting of stock appreciation rights by the
committee that administers the plan. The rights may be exercised by
surrendering the option and receiving an amount equal to the difference in
the fair market value of the shares on the date of surrender and the option
price of such shares.
F-14
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
7. Common stock (continued)
All previously issued options have been canceled under the terms of the
plan, and options covering the 64,000 shares of common stock reserved for
the plan are available for issuance.
Stock options:
On September 27, 1991, the Company granted options to purchase an aggregate
of 880,000 shares of common stock to three officers and directors as
follows:
Shares Option price Vesting date Expiration date
------ ------------ ------------ ---------------
220,000 $0.09 October 1, 1991 September 30, 1997
220,000 0.11 October 1, 1992 September 30, 1998
220,000 0.13 October 1, 1993 September 30, 1999
220,000 0.15 October 1, 1994 September 30, 2000
On November 24, 1992, the Company granted an option to purchase 40,000
shares of the Company's common stock to a director exercisable at $.038 per
share.
As of December 31, 1998, none of the above options have been exercised, and
no compensation expense has been recorded relating to the options granted.
During the years ended December 31, 1997 and 1998, options to purchase
220,000 shares of the Company's common stock expired each year.
The following is a summary of stock option activity:
Weighted
Option price average Number of
per share exercise price shares
_____________ ______________ _________
Balance December 31, 1996 $.038 to $.15 $.12 920,000
Cancelled $.09 $.09 (220,000)
--------
Balance December 31, 1997 $.038 to $.15 $.12 700,000
Cancelled $.11 $.11 (220,000)
--------
Balance December 31, 1998 $.038 to $.15 $.13 480,000
========
F-15
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
7. Common stock (continued)
Stock grants:
During February 1996, the Company issued 191,500 shares of common stock to
five employees, which stock vests over a period of four years. Compensation
expense with respect to the above shares is being amortized over the
restriction period, resulting in a charge against operations of $1,663 and
$399 for 1997 and 1998, respectively. The remaining deferred compensation
of $5,216 was offset against common stock when the unvested shares were
returned in 1997.
As of December 31, 1997, the Company had agreed to issue 175,500 shares of
common stock for the performance of services to the Company valued at
between $.025 and $.038 per share. This liability was reflected as accrued
salaries at December 31, 1997. During 1998 these shares were issued.
During January 1998, the Company's Board of Directors authorized the
issuance of 140,000 shares of the Company's common stock to an employee of
the Company valued at $3,500. The stock would vest 35,000 shares each
January 1, commencing January 1, 1999 for continued employment with the
Company. During 1998, the employee terminated employment and the shares
were returned. During September 1998, the Company issued 37,000 shares of
common stock to an employee for services rendered valued at $925.
Common stock to be issued:
Due to the Company's cash flow problems in prior years, the Company agreed
to issue stock in order to pay certain accounts payable; however, due to
the lack of funds, the Company could not afford to physically issue the
shares. All of the shares promised had been issued except for 40,000 shares
as consideration for making loans and 40,000 shares for conversion of debt
into equity for a total of 80,000 shares of common stock to be issued, as
of December 31, 1997. During 1998, these shares were issued.
Contingent issuance of common stock:
In September 1996 the Company entered into a two year consulting agreement
with a nonaffiliated entity. Under the agreement the consultant was to
provide advice and assistance to the Company in connection with
identifying, qualifying and negotiating with candidates for a merger with
the Company. As compensation to the advisor, the Company was to issue
options to purchase up to 300,000 shares of the Company's common stock at
various prices, and warrants to purchase up to 1% of the outstanding common
stock.
F-16
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1998
7. Common stock (continued)
The Company's obligation to the consultant was intended to be subject to
completion of acceptable transactions. The Company considers that
obligations of the Company under the agreement have terminated due to
nonperformance by the consultant. Certain ambiguities in the agreement
could be subject to other interpretation, although the Company would
vigorously contest any assertion by the consultant that compensation is
owed under the agreement.
8. Retirement plan
The Company maintains a 401(k) plan for the benefit of substantially all of
its employees. The amount of the Company's contribution is determined
annually by the Board of Directors. During 1997 and 1998, the Company
recognized expense in the amount of $8,632 and $3,641, respectively.
F-17
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INFOAMERICA, INC.
Date: March 31, 1999 /s/ Paul F. Knight
------------------------------
Paul F. Knight, President and
Chief Financial Officer
In accordance with the Exchange Act, the report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date: March 31, 1999 /s/ Larry J. Salmen
------------------------------
Larry J. Salmen, Vice President
Secretary and Director
Date: March 31, 1999 /s/ Michael J. Scanlan
------------------------------
Michael J. Scanlan, Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 93,557
<SECURITIES> 0
<RECEIVABLES> 70,295
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 180,999
<PP&E> 126,342
<DEPRECIATION> 71,605
<TOTAL-ASSETS> 237,334
<CURRENT-LIABILITIES> 267,103
<BONDS> 0
0
0
<COMMON> 130,363
<OTHER-SE> (184,445)
<TOTAL-LIABILITY-AND-EQUITY> 237,334
<SALES> 0
<TOTAL-REVENUES> 504,825
<CGS> 0
<TOTAL-COSTS> 460,696
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,175
<INCOME-PRETAX> 37,665
<INCOME-TAX> 0
<INCOME-CONTINUING> 37,665
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,665
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
