SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 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 number 0-13338
INFOAMERICA, INC.
(Exact name of small business issuer as specified in its charter)
COLORADO 84-0853869
(State of other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
5 Clover Leaf Court
Tehachapi, California 93561
(Address of principal executive offices)
(661) 821-6018
(Issuer's Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes |X| No
|_|
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: Common Stock, $.025 par value per
share - 21,798,521 shares outstanding as of March 31, 2000.
<PAGE>
INFOAMERICA, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---------- ----------
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $1,020,161 $ 9,438
Accounts Receivable - net of
allowance for doubtful accounts of $ 5,000 in 1999 and 1998 77,353 69,454
Supplies 31,000 31,000
---------- ----------
TOTAL CURRENT ASSETS 1,128,514 109,892
PROPERTY AND EQUIPMENT - net of accumulated
depreciation 1,577,595 1,637,595
---------- ----------
TOTAL $2,706,109 $1,747,487
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 139,696 $ 280,991
Revenue billed in advance 53,829 51,125
Franchise fees payable 8,255 96,787
Customer deposits 5,200 5,200
---------- ----------
TOTAL CURRENT LIABILITIES 206,980 434,103
---------- ----------
SHAREHOLDERS' EQUITY
Preferred stock, $1 par value; 5,000,000 shares authorized,
none issued
Common stock, $.025 par value; 900,000,000 shares authorized,
21,798,521 and 19,408,521 shares issued and outstanding
in 2000 and 1999 544,963 476,213
Additional paid-in capital 2,790,395 1,484,314
Accumulated deficit (836,229) (647,143)
---------- ----------
Total Shareholders' Equity 2,499,129 1,313,384
TOTAL $2,706,109 $1,747,487
========== ==========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
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<PAGE>
INFOAMERICA, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended
March 31, March 31,
2000 1999
---------- ----------
(unaudited) (unaudited)
REVENUES $ 154,150 $ 154,734
EXPENSES
Programming content 37,951 31,503
Cable operating 54,541 38,635
General and administrative 190,744 64,427
Depreciation 60,000 60,000
---------- ----------
TOTAL EXPENSES 343,236 194,565
---------- ----------
NET INCOME (LOSS) (189,086) (39,831)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 19,965,188 19,048,521
========== ==========
BASIC INCOME (LOSS) PER SHARE $ (0.009) $ (0.002)
========== ==========
See accompanying Notes to Consolidated Condensed Financial Statements
-3-
<PAGE>
INFOAMERICA INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(189,086) $ (39,831)
Adjustments to reconcile net loss to net cash provided by (used
in) operating activities:
Depreciation 60,000 60,000
Changes in operating assets and liabilities:
Accounts receivable (7,899) (28,695)
Accounts payable and accrued expenses (141,295) 12,037
Revenue billed in advance 2,704 (1,882)
Franchise fee payable (88,532) -
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES (364,108) 1,629
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of stock 1,374,831 -
NET INCREASE IN CASH 1,010,723 1,629
CASH AND CASH EQUIVALENT, BEGINNING OF PERIOD 9,438 4,658
CASH AND CASH EQUIVALENT, END OF PERIOD $1,020,161 $ 6,287
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
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<PAGE>
INFOAMERICA, INC.
CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
---------------------- Additional Accumulated
Shares Amount Paid in Capital Deficit Total
------ ------ --------------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1999 19,048,521 $ 476,213 $ 1,484,314 $ (647,143) $1,313,384
Net proceeds from sale of common stock 2,750,000 $ 68,750 $ 1,306,081 $1,374,831
Net loss $ (189,086) $(189,086)
Balance, December 31, 1999 21,798,521 $ 544,963 $ 2,790,395 $ (836,229) $2,499,129
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements
-5-
<PAGE>
INFOAMERICA, INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The interim financial statements presented have been prepared by
InfoAmerica, Inc. (the "Company") without audit and, in the opinion of
the management, reflect all adjustments of a normal recurring nature
necessary for a fair statement of (a) the results of operations for the
three months ended March 31, 2000 and 1999, (b) the financial position
at March 31, 2000 and December 31, 1999, and (c) the cash flows for the
three months ended March 31, 2000 and 1999. Interim results are not
necessarily indicative of results for a full year.
The balance sheet presented as of December 31, 1999 has been derived
from the financial statements that have been audited by the Company's
independent public accountants. The financial statements and notes are
condensed as permitted by Form 10-QSB and do not contain certain
information included in the annual financial statements and notes of
the Company. The financial statements and notes included herein should
be read in conjunction with the audited financial statements and notes
for the years ended December 31, 1999 and 1998 included in the
Company's Annual Report on Form 10-KSB.
Effective June 8, 1999, pursuant to a Merger Agreement and Plan of
Reorganization (the "Merger Agreement") the Company acquired DDD
Cablevision Ltd., a limited liability partnership, resulting in the
partners and management of DDD Cablevision Ltd. having actual and
effective control of the Company, the surviving corporation. For
accounting purposes, the transaction was treated as an acquisition of
the Company by DDD Cablevision Ltd. and as a recapitalization of DDD
Cablevision Ltd. The historical financial statements prior to the
acquisition became those of DDD Cablevision Ltd. even though they were
labeled as those of the Company. In the recapitalization, historical
partners' equity of DDD Cablevision Ltd., prior to the merger, was
retroactively restated for the equivalent number of shares received in
the merger with an offset to paid-in capital. Operations prior to the
merger were those of DDD Cablevision, Ltd. Basic loss per share prior
to the merger were restated to reflect the number of equivalent shares
received by partners of DDD Cablevision Ltd.
2. SHAREHOLDERS' EQUITY
As described under Basis of Presentation in Note 1, the historical
partners' equity of DDD Cablevision Ltd., prior to the merger, was
retroactively restated for the equivalent number of shares received in
the merger as a credit to common stock and the remaining balance of
partners' equity as a credit to paid-in capital. At the time of merger,
DDD Cablevision's partners received an aggregate of 13,834,000
unregistered "restricted" shares with par value of $.025 per share.
Prior to the merger, InfoAmerica, Inc. had 5,214,521 shares of common
stock outstanding. Total issued and outstanding shares of common stock
immediately after the merger was 19,048,521.
In March, the Company received net proceeds of $1,374,831 from the
private placement of 2,750,000 shares of the Company's common stock at
$.50 per share, par value $0.25 per share. The private placement was
completed on April 18, 2000. As of March 31, 2000, the Company had
transferred into its bank account $1,154,886 of the private placement
proceeds. The remaining balance of $219,945 in the Company's escrow
account was subsequently transferred into the Company's bank account on
April 6, 2000. Total issued and outstanding shares of common stock as
of March 31, 2000 is 21,798,521.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
- ------------
The Company was incorporated under the laws of the state of Colorado on
June 8, 1991 and is the surviving corporation of a merger on June 8, 1999
between it and DDD Cablevision, Inc., a Delaware corporation.
The Company, through its wholly-owned subsidiary DDD Cablevision, Inc.
d/b/a Country Cable ("Country Cable") operates a cable television system in Kern
County, California. Country Cable serves approximately 2,000 cable television
subscribers in the unincorporated areas of Kern County, California. The Company
was issued a fifteen (15) year Cable Television Franchise License in 1991 by the
County of Kern, California. To date, the Company has installed approximately 175
miles of coaxial and feeder cable throughout the Kern County area. The Company
transmits its programming with a spectrum energy of 450 megahertz (MHz).
The Company maintains an existing cable telecommunications
infrastructure of a three stage microwave satellite receiver and transmit system
which interconnects into areas of the 175 miles of cable plants. The Company has
been issued a second cable franchise in the City of Tehachapi, California. It is
the intention of the Company, subject to securing sufficient financing, to
upgrade its present cable infrastructure and construct an additional 135 miles
of cable and plant facilities, all of which will be in the form of fibre optical
cable. This would allow the Company to have the availability to serve a
potential market of over 12,000 homes, which includes the present 2,000
subscribers. The result would be a communications network providing 120 channels
of programming, business to business carriage data network and high speed
Internet access to its subscribers.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
For the three month period ended March 31, 2000, the Company's cash and
cash equivalents increased by $1,010,723, from $9,438 to $1,020,161 during the
first quarter. Operating activities used net cash in the amount $364,108 to fund
the Company's cash loss from operations of $129,086 (net of non-cash expense of
$60,000 for depreciation). Net cash of $235,022 was used by changes in operating
assets and liabilities primarily as a result of an increase in accounts payable
and accrued expenses ($141,295), an increase in franchise fees payable ($88,532)
and a decrease in accounts receivable ($7,899). Financing activities provided
net proceeds in the amount of $1,374,831 from the issuance of stock in a private
placement in March. The Company believes that its present cash and cash flow
generated from operations, as well as additional future financing from outside
sources, will be sufficient to meet its operational needs.
RESULTS OF OPERATIONS
- ---------------------
The Company's net loss of $189,086 for the first quarter ended March
31, 2000 increased by $149,255 from a net loss of $39,831 for the first quarter
ended March 31, 1999. The increase in the net loss is primarily due to an
increase in the expense of programming content of $6,448, cable operating
expenses of $15,906 and general and administrative expenses of $126,317.
-7-
<PAGE>
Revenue during the first quarter of 2000 was primarily from cable
television subscriptions, the installation of cable televisions and advertising.
Programming content expenses increased by $6,448, from $31,503 to
$37,951 principally due to an increase in the costs associated with obtaining
programming from the content providers, such as ESPN, etc.
Cable operating expenses increased by $15,906 from $38,635 to $54,541,
as a result of an increase in wages payable to employees, the increased cost of
insurance and other operating expenses in connection with maintaining a cable
telecommunications infrastructure.
General and administration expenses increased by $126,317, as a result
of the payment of certain expenses, including professional fees relating to the
merger, the audit of the Company's financial statements in compliance with
securities laws and subsequent other fees.
-8-
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
In connection with a private placement consummated in March, the
Company issued 2,750,000 shares of common stock, par value $.025 per share. The
shares were sold to "accredited investors", as that term is defined in
Regulation D promulgated under the Securities Act of 1933 (the "Securities
Act"), as amended. The shares were sold at $.50 per share and the aggregate
offering price was $1,375,000. The Company received net proceeds in the amount
of $1,374,831. The difference of $169 being attributed to the bank charges in
connection with the wiring of the funds. The Company believes that the exemption
afforded by Section 4(2) of the Securities Act and Regulation D promulgated
thereunder, is applicable to the above issuances as a transaction by an issuer
not involving a public offering.
Item 7. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
On February 28, 2000, the Company filed a report under Item 4,
Changes in Registrant's Certifying Accountant. No financial
statements were filed during the quarter.
-9-
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: May 19, 2000 InfoAmerica, Inc.
/s/ Richard G. Lubic
--------------------------------
By: Richard G. Lubic
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
27 Financial Data Schedule
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's consolidated financial statements for the three months ended March 31,
2000 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,020,161
<SECURITIES> 0
<RECEIVABLES> 82,353
<ALLOWANCES> 5,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,128,514
<PP&E> 3,660,011
<DEPRECIATION> 2,082,416
<TOTAL-ASSETS> 2,706,109
<CURRENT-LIABILITIES> 206,980
<BONDS> 0
0
0
<COMMON> 544,936
<OTHER-SE> 1,954,166
<TOTAL-LIABILITY-AND-EQUITY> 2,706,109
<SALES> 154,150
<TOTAL-REVENUES> 154,150
<CGS> 92,492
<TOTAL-COSTS> 343,236
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (189,086)
<INCOME-TAX> 0
<INCOME-CONTINUING> (189,086)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (189,086)
<EPS-BASIC> (0.009)
<EPS-DILUTED> (0.009)
</TABLE>
