UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A-1
(Mark One)
[X] Annual report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended December 31, 1996
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) for the transition period from to
Commission file number: I-9418
CyberAmerica Corporation
(Name of Small Business Issuer in Its Charter)
Nevada 87-0509512
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
268 West 400 South, Suite 300, Salt Lake City, Utah 84101
(Address of Principal Executive Offices) (Zip Code)
(801) 575-8073
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Title of Each Class Name of each Exchange on Which Registered
Common Stock ($0.001 Par Value) Boston Stock Exchange
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 XX No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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. [ ]
The issuer's total consolidated revenues for the year ended December 31, 1996,
were $2,655,482.
The aggregate market value of the registrant's Common Stock, $0.001 par value
(the only class of voting stock), held by non-affiliates was approximately
$1,789,147 based on the average closing bid and asked prices for the Common
Stock on March 31, 1997.
At March 31, 1997, the number of shares outstanding of the registrant's Common
Stock, $0.001 par value (the only class of voting stock), was 9,725,389.
<PAGE>
On October 12, 1992, the Company effected a 1:4 reverse split of the
outstanding shares of its common stock, par value $0.001 per share ("Common
Stock"), pursuant to a special meeting of the Company's shareholders. On April
28, 1993, the Company's shareholders and board of directors voted to increase
the number of shares of Common Stock authorized for issuance to 100,000,000
shares and further authorized the issuance of 20,000,000 preferred shares, par
value $0.001 per share. On May 24, 1994, the Company's shareholders approved a
proposal to increase the number of shares of Common Stock authorized for
issuance from 100,000,000 to 200,000,000 shares as well as a proposal to effect
a 1:10 reverse split of the Common Stock. The increase in authorized shares
became effective on or about July 26, 1994, while the 1:10 reverse stock split
was effective on August 1, 1994.
Shareholders
As of March 31, 1997 there were approximately 810 shareholders of record
holding a total of 9,725,389 shares of Common Stock.
Dividends
There are no restrictions that currently limit the Company's ability to pay
dividends on its Common Stock other than those generally imposed by applicable
state law.
On March 4, 1996, the Company declared a property dividend consisting of
one share of the common stock of both Oasis Hotel, Resort & Casino I, Inc. and
Oasis Hotel, Resort & Casino II, Inc. for every 100 shares of the Company's
common stock owned as of the March 27, 1996 record date. The dividend was paid
on May 15, 1996. Every entity owning less than 100 shares of the Company's
Common Stock as of the record date received one share of common stock in each
corporation.
On March 21, 1996, the Company declared a property dividend consisting of
one share of the common stock of both Zahav, Inc. and Cyber Information, Inc.
for every 100 shares of the Company's common stock owned as of the April 23,
1996 record date. This dividend was paid on June 1, 1996. Every entity owning
less than 100 shares of the Company's Common Stock as of the record date
received one share of each corporation's common stock. The Company has requested
its shareholders who received the Cyber Information dividend to return their
respective stock certificates so that a restrictive legend could be affixed. The
Company also gave their shareholders the right to receive the cash equivalent of
$0.02 per share of Cyber Information in lieu of retaining the certificate.
On June 14, 1996, the Company declared a property dividend consisting of
one share of the common stock of INFOTECH International, Inc., or the cash
equivalent of such stock, for every 100 shares of the Company's Common Stock
owned as of the June 24, 1996 record date. On October 25, 1996, the Company
restated the dividend's terms. A dividend of $0.02 for every 100 shares of the
Company's Common Stock shall be paid to each shareholder of record as of June
24, 1996 in lieu of the shares of stock previously declared. Shareholders owning
less than 100 shares of Common Stock shall also receive a $0.02 dividend. The
Company has not yet declared the payable date for distribution. This dividend
represents the only cash dividend declared on the Common Stock in the last two
fiscal years and the Company does not anticipate the payment of future
dividends.
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company recorded a net loss of $2,049,413 for the fiscal year ended
December 31, 1996. This significant loss was partially attributable to computer
equipment and salary costs incurred with respect to the Company's wholly owned
subsidiary, CyberMalls, Inc. CyberMalls was incorporated by the Company in 1996
to design, develop, and market Internet virtual malls. As discussed in "Item 1 -
Description of Business," a virtual mall is a central address on the Internet
used to market the goods and services of vendors which consists of the
inter-linked home pages of several different business entities. CyberMalls'
business plan consisted of soliciting entities interested in owning, managing
and marketing Internet virtual malls with a specific theme or industry niche.
CyberMalls would develop ideas for the Internet marketing of products and
services with a common theme. CyberMalls would then transfer to its customers a
corporation owning a name and Uniform Resource Locator Number (more commonly
known as an Internet address) indicating the theme mall the purchaser was to
develop. CyberMalls would also transfer to the purchaser a contract obligating
CyberMalls to provide the ongoing support and maintenance necessary for the
purchaser to establish a viable Internet virtual mall including the use of
CyberMalls' computer programmers, graphic artists, and writers. The purchaser of
the mall was to be responsible for marketing and leasing the space on the
Internet virtual mall to providers of retail products and services.
CyberMalls also planned to develop a search engine on the Internet and
related proprietary software known as WebSafariTM. WebSafariTM, which was to be
used in connection with the development and marketing of the Company's Internet
virtual malls, was designed to be a search engine specifically limited to
databases involving the sale of products or services over the Internet.
CyberMalls intended to market WebSafariTM to purchasers and potential purchasers
of its Internet virtual malls.
Since CyberMalls was a start-up venture with limited capitalization, the
Company advanced most of the expenses necessary to commence CyberMalls'
operations. The Company incurred expenses of $576,160 related to the development
of its CyberMalls division, including the development of WebSafariTM. Fourteen
percent (14%) of this amount involved expenditures for computer hardware,
software and data connection lines. Sixty-one percent (61%) of this total
represented salaries of the 20 to 25 employees CyberMalls employed to effect its
business plan. The remaining 25% were selling and miscellaneous general and
administrative expenses.
During the 1996 fiscal year, CyberMalls sold five Internet virtual malls to
purchasers involved in industries such as sports, music, health and travel. The
consideration for the sale of each Internet virtual mall involved some
combination of the following: proceeds of equity financing to be subsequently
obtained by the purchaser; a fixed percentage of the revenues ultimately
generated by the purchaser's Internet virtual mall; shares of the purchaser's
common stock; and unsecured promissory notes.
As of the fourth fiscal quarter of 1996, none of the purchasers of the
Company's Internet virtual malls had taken material steps toward obtaining
equity financing or developing the malls as viable entities. Accordingly,
CyberMalls had been unable to realize any cash from its sale of Internet virtual
malls. CyberMalls was in need of an immediate cash infusion to sustain its
operations and to continue to provide services to the purchasers of its malls.
At the same time, the Company was experiencing its own cash flow shortfalls
resulting from the Company's operating losses and its inability to raise
sufficient capital through private equity offerings. This impaired the Company's
ability to advance further funds to CyberMalls. In late October 1996, CyberMalls
began downsizing its staff as a cost reducing measure. By December 31, 1996,
CyberMalls staff had been reduced to seven employees.
On February 25, 1997, the Company's board of directors decided to
permanently discontinue the operations of CyberMalls. The Company's management
made this decision based on its belief that the expenditures necessary to
continue competing in the highly competitive market of Internet commerce would
earn a higher rate of return if invested in other segments of the Company's
business. The Company is attempting to liquidate CyberMalls' assets in an effort
to mitigate losses incurred as a result of advancements made to CyberMalls. This
includes selling proprietary information related to the development of
WebSafariTM and equipment or software purchased by CyberMalls. The Company is
currently leasing some of the equipment previously purchased by CyberMalls to
another corporation. The Company recorded a loss of $576,160 on its financial
statements for the fiscal year ended December 31, 1996 to account for its
investment in CyberMalls.
<PAGE>
During the 1996 fiscal year and first fiscal quarter of 1997, four
consolidated subsidiaries of the Company sold (or entered into real estate
contract to sell) parcels of real estate as a means of generating cash flow and
settling liabilities.
On July 2, 1996, CFSC entered into a Stock Purchase Agreement with Premier
Sales Corporation ("PSC"), a foreign corporation, pursuant to which CFSC sold
PSC its 100% interest in the outstanding capital stock of Cyber Real Estate in
exchange for a $1 million promissory note dated that day. The note is due July
2, 1998 and does not bear interest provided that the full $1 million is paid
when due. If the full amount is not paid by July 2, 1998, the unpaid principal
shall accrue interest at 9% per annum. The note is secured by investment
securities pledged by the purchaser. Cyber Real Estate's sole asset consists of
a dormitory facility located in Dekalb, Illinois. Cyber Real Estate originally
acquired the Dekalb property on February 20, 1996 by issuing 825,000 shares of
its preferred stock and assuming a $275,000 mortgage on the property.
On November 20, 1996, Investment Sanctuary Corporation, a Utah corporation
("ISC") and consolidated subsidiary of the Company, sold its 50% interest in the
sixth floor of a commercial building located at 68 South Main Street, Salt Lake
City, Utah and known as the McIntyre Building. ISC received a cash payment of
$91,270 from this transaction. The Company had acquired all of the outstanding
capital stock of ISC pursuant to a Stock Exchange Agreement it executed with
Richard Surber, who previously owned 100% of ISC. Mr. Surber is also the
Company's president, chief executive officer and director. For more information
on this Stock Exchange Agreement, see "Item 12 - Certain Relationships and
Related Transactions." The interest in the sixth floor of the McIntyre Building
represented the only asset owned by ISC at the time it was acquired by the
Company. The Company recorded a gain of $49,575 on its consolidated financial
statements as a result of this transaction.
On February 7, 1997, TAC, Inc., a consolidated subsidiary of the Company,
executed a Real Estate Purchase Contract proposing the sale its 60,000 square
foot commercial warehouse and underlying 3.5 acres of real estate located at
5280 West Wells Park Road, Salt Lake City, Utah. Under the Contract, TAC is to
receive proceeds totaling $1.35 million and net cash proceeds of approximately
$632,000. TAC is to receive $200,000 in cash at the closing with the remaining
balance to be paid 90 days after closing. TAC acquired the TAC Warehouse on June
28, 1996 through its exercise of an option under the terms of a lease. TAC
exercised this option though the payment of $293,394 and the assumption of a
$306,456 mortgage on the property.
On February 11, 1997, Canton Industrial Properties Management Corporation
of Salt Lake City ("CIPMC"), a consolidated subsidiary of the Company, executed
a Real Estate Purchase Contract. The Contract covers the proposed sale of real
property located at 202 West 400 South, Salt Lake City, Utah and consisting of
an 18,000 square foot office building and covered parking lot. The sale price
for the property is $950,000 and upon sale CIPMC should receive net cash
proceeds of approximately $431,000. Closing was originally scheduled for April
1997 but has been extended until July 10, 1997. The sale is contingent upon the
buyer acquiring financing and the completion of a due diligence investigation.
The Company is continually searching for additional properties. The amount
the Company is willing to pay for a property is determined by management. The
criteria for purchasing properties is broad. Management's determination of value
and the terms of financing are critical factors in the Company's decision to
purchase properties. The Company generally searches for properties that it
believes are undervalued and can be financed by assuming an existing mortgage
along with the issuance of equity securities or a nominal amount of cash as the
down payment. This method of financing real estate purchases has been utilized
to preserve the Company's cash flows. The Company has been successful in
acquiring several properties using this method of financing.
<PAGE>
Results of Operations
Revenues for 1996 were $2,655,482 compared to $2,049,068, an increase of
30%. This increase was primarily due to the expansion of the Financial
Consulting Division and the Real Estate Division whose revenues went up 11% and
71%, respectively. During 1996, the Company actively sought to increase the
occupancy rates of its real estate holdings, and event which contributed to the
substantial increase in rental revenue.
Costs of revenues soared 41% from $1,255,374 in 1995 to $1,774,050 in 1996.
The Company incurred $1,211,758 in payroll and payroll related taxes Costs of
revenue from the real estate operations accounted for $506,516. As a result of
the dramatic increase in costs of revenue, costs of revenue as a percentage of
sales was 67% for 1996 compared to 61% in 1995. Gross Profit was $881,432 for
1996 compared to $794,594 for 1995.
Selling, general, and administrative expenses for 1996 increased to
$2,797,535 from 1,205,931 for 1995. One of the factors behind this increase is
the bad debt expenses in the amount of $233,261 during 1996 compared to zero
during 1995. This was primarily attributable to separate promissory notes of
$75,600 held by two of the Company's subsidiaries. The Company now believes that
these notes may be uncollectible and is investigating its legal rights with
respect to collecting on the notes. In addition, the Company incurred $781,797
in consulting expenses during 1996 through issuance of Common Stock and cash.
Property taxes, depreciation expenses, rental expenses, investor/public
relations expenses, and office supplies accounted for another $754,332. Finally,
the Company incurred $576,160 in computer development costs associated with its
Internet division.
Operating losses were 1,916,103 and $411,337 for the years ended December
31, 1996 and 1995, respectively.
Interest income dropped precipitously from $86,565 in 1995 to $4,663 in
1996. The collection of an interest-bearing note receivable during the first
quarter of 1996 accounted for the majority of this decline. Interest expenses
were $213,141 for 1996 compared to $123,137 for 1995. During 1996, the Company
purchased additional property by assuming mortgages payable on the property. As
a result, interest expenses increased substantially.
The Company recorded a gain from investment securities in the amount of
$46,014 during 1996. During 1995, the Company realized $73,425 in gain from
investment securities. In 1996, permanent decline in value of the Company's
investment securities was $447,513 compared to $94,295 in 1995.
In 1996, the Company realized a gain from the issuance of shares by
subsidiaries in the amount of $272,848 compared to $151,966 in 1995.
Capital Resources and Liquidity
The Company continued to suffer from a working capital deficiency, which
increased to $962,296 as of December 31, 1996 from $834,294 at the end of 1995.
The increase is primarily due to the following factors: (1) the write-off of
uncollectible consulting fees; (2) significant investments in CyberMalls which
drained the Company's resources; (3) the write-down of investment securities
that suffered permanent decline during fiscal year ended December 31, 1996.
Total stockholders' equity decreased slightly from $3,370,814 as of
December 31, 1995 to $3,348,347 as of December 31, 1996. Net loss during 1996 is
offset by the increase in additional paid-in capital from issuance of the Common
Stock to employees and consultants for services rendered and to investors for
cash and promissory notes
ITEM 7. FINANCIAL STATEMENTS
The Company's financial statements for the fiscal year ended December 31,
1996 are attached hereto as pages F-1 through F-25.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PAGE
Independent Auditors' Report.................................................F-2
Consolidated Balance Sheet December 31, 1996.................................F-3
Consolidated Statements of Operations December 31, 1996 and 1995.............F-5
Consolidated Statements of Shareholder's Equity December 31, 1996 and 1995...F-7
Consolidated Statements of Cash Flows December 31, 1996 and 1995.............F-8
Notes to Consolidated Financial Statements December 31, 1996.................F-9
Independent Auditors' Report on Other Information...........................F-24
Schedules
V Property, Plant and Equipment......................................F-25
VI Accumulated Depreciation of Property, Plant and Equipment..........F-26
<PAGE>
ANDERSEN ANDERSEN & STRONG, L. C.
- ------------------------------------------ 941 East 3300 South, Suite 202
Certified Public Accountants and Business Consultants Salt Lake City, UT 84106
Member SEC Practice Section of the AICPA Telephone: (801)486-0096
Fax: (801)486-0098
E-Mail: K Anderson @msn.com
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
CyberAmerica Corporation
Salt Lake City, Utah
We have audited the accompanying consolidated balance sheets of CyberAmerica
Corporation and Subsidiaries as of December 31, 1996 and the related
consolidated statements of operations, shareholder's equity, and cash flows for
the years ended December 31, 1996 and 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 consolidated financial position of CyberAmerica
Corporation and Subsidiaries as of December 31, 1996, and the consolidated
results of their operations, shareholders' equity, and cash flows for the years
ended December 31, 1996 and 1995, in conformity with generally accepted
accounting principles.
/s/ Anderson, Anderson & Strong
Salt Lake City, Utah
April 14, 1997
A member of ACF International with affiliated offices worldwide.
F-2
<PAGE>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1996
ASSETS
CURRENT ASSETS
Cash ...................................................... $ 78,368
Accounts receivable - trade
(Net of allowance for bad debt of $189,097) ........... 1,039,807
Accounts receivable - related parties ..................... 230,933
Accounts receivable - other ............................... 337,508
-----------
Receivable - brokerage account ............................ 585
Note receivable - current (Note 12) ....................... 12,000
Prepaid expenses .......................................... 55,654
Securities available for sale (Note 11) ................... 649,460
-----------
TOTAL CURRENT ASSETS ......................................... 2,404,315
PROPERTY AND EQUIPMENT
Schedules V and VI ........................................ 7,170,312
OTHER ASSETS
Investment securities at cost (Note 11) ................... 176,910
Notes receivable - net of current (Note 12) ............... 36,000
Investments - other ....................................... 255,653
Deposits .................................................. 35,162
Trade credits ............................................. 170,961
-----------
Other assets .............................................. 9,304
-----------
TOTAL OTHER ASSETS ........................................... 683,990
TOTAL ASSETS ................................................. $10,258,617
===========
See notes to consolidated financial statements.
F-3
<PAGE>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS(Continued)
December 31, 1996
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable-trade ...................................... $ 294,887
Accounts payable - related parties .......................... 86,091
Accrued liabilities
Interest .................................................. 19,788
Real estate taxes and assessments (Note 8) ................ 368,957
Payroll and related taxes payable ......................... 165,616
EPA liabilities ........................................... 325,398
Refundable deposits ....................................... 31,006
Refund to investors ....................................... 177,614
Other ..................................................... 159,207
Debenture payable (Note 9) .................................. 290,000
Current maturities of long-term debt (Note 5) ............... 1,430,456
Current maturities of capitalized lease (Note 6) ............ 17,591
------------
TOTAL CURRENT LIABILITIES ...................................... 3,366,611
LONG-TERM LIABILITIES
Long-term debt, less current portion (Note 5) ............... 2,840,342
------------
Long-term capitalized lease, less current portion (Note 6) .. 359,419
------------
TOTAL LONG-TERM LIABILITIES .................................... 3,199,761
CONTINGENCIES (Note 14) ........................................ --
MINORITY INTEREST .............................................. 343,898
SHAREHOLDERS' EQUITY
Preferred stock par value $.001; 20,000,000
shares authorized; No shares issued ........................ --
Common stock par value $.001; 200,000,000
shares authorized; 9,484,557 shares issued ................ 9,485
Additional paid-in capital .................................. 14,058,256
Accumulated deficit ......................................... (10,113,160)
Unrealized loss from securities available for sale .......... (606,234)
------------
TOTAL SHAREHOLDERS' EQUITY ..................................... 3,348,347
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ..................... $ 10,258,617
============
See notes to consolidated financial statements.
F-4
<PAGE>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 1996 and 1995
1996 1995
---------- ---------
REVENUE
Consulting revenue ............................. $ 1,927,224 $ 1,742,679
Rental revenue ................................. 492,513 287,215
Other revenue .................................. 235,745 26,074
----------- -----------
TOTAL REVENUE ..................................... 2,655,482 2,049,968
COSTS OF REVENUE
Costs associated with consulting revenue ....... 1,211,758 940,280
Costs associated with rental revenue ........... 348,815 169,292
Interest expenses associated with rental revenue 157,701 133,320
Costs associated with other revenue ............ 55,776 12,482
----------- -----------
TOTAL COSTS OF REVENUE ............................ 1,774,050 1,255,374
----------- -----------
GROSS PROFIT (LOSS) ............................... 881,432 794,594
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ...... 2,201,375 1,073,088
Computer development costs ..................... 576,160 --
Environmental cleanup .......................... 20,000 132,843
----------- -----------
TOTAL SELLING, GENERAL AND ADMINISTRATIVE ......... 2,797,535 1,205,931
OPERATING LOSS .................................... (1,916,103) (411,337)
----------- -----------
OTHER INCOME (EXPENSE):
Interest income ................................ 4,663 86,565
Interest expense ............................... (213,141) (123,137)
Gain from sale of assets ....................... 16,479 71,660
Gain from investment securities ................ 46,014 73,425
Gain from issuance of shares by subsidiary ..... 272,848 151,966
Unrealized loss from securities ................ (447,513) (94,295)
Gain from disposal of subsidiary ............... -- 70,544
Other income ................................... 50,699 217,420
----------- -----------
TOTAL OTHER INCOME (EXPENSES) ..................... (269,951) 454,148
----------- -----------
INCOME (LOSS) BEFORE DISCONTINUED
OPERATIONS AND OTHER ITEMS ...................... (2,186,054) 42,811
DISCONTINUED OPERATIONS:
Gain from discontinued operations .............. -- 23,912
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES,
EXTRAORDINARY ITEMS, AND MINORITY INTEREST ....... (2,186,054) 66,723
PROVISION FOR INCOME TAXES ....................... -- --
----------- -----------
See notes to consolidated financial statements.
F-5
<PAGE>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
Years Ended December 31, 1996 and 1995
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS ... (2,186,054) 66,723
AND MINORITY INTEREST:
Gain from extinguishment of debt ......... -- 13,454
Loss on foreclosure (Note 17) ............ -- (562,406)
----------- -----------
NET INCOME (LOSS) BEFORE MINORITY INTEREST .. (2,186,054) (482,229)
------------ ----------
MINORITY INTEREST IN LOSS ................... 136,641 63,500
----------- ---------
NET INCOME (LOSS) ........................... $(2,049,413) $ (418,729)
=========== =========
INCOME (LOSS) PER COMMON SHARE
Gain (loss) before discontinued operations
and other items ........................ $ (.28) $ .01
Gain from discontinued operations ........ -- .01
Extraordinary items ...................... -- (.14)
Minority interest in loss ................ .01 .01
--------- ------------
Net income (loss) per weighted average
common share outstanding ............... $ (.27) $ (.11)
=========== =========
Weighted average number of common
shares outstanding (Note 2) ............ 7,715,173 3,825,264
=========== =========
See notes to consolidated financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1996 and 1995
Net
Stock Unrealized loss Total
Common Stock Paid-in Subscription On securities Shareholders'
Shares Amount Capital Deficit Receivable Available for Sale Equity
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES AT DECEMBER 31, 1994 .... 2,832,864 $ 2,833 $ 10,268,120 $ (7,645,018) $ -- $ -- $ 2,625,935
Common stock activity:
Issued for debt ............... 241,743 242 82,073 -- -- -- 82,315
Issued for assets ............. 420,000 420 267,330 -- -- -- 267,750
Issued for services
- related parties ............ 407,000 407 148,045 -- -- -- 148,452
Issued for services ........... 390,451 390 83,260 -- -- -- 83,650
Issued for cash ............... 1,594,741 1,595 579,846 -- -- -- 581,441
Net loss for year .............. -- -- -- (418,729) -- -- (481,729)
BALANCES AT DECEMBER 31, 1995 .... 5,886,799 $ 5,887 $ 11,428,674 $ (8,063,747) $ -- $ -- $ 3,370,814
------------ ------------ ------------ ------------ ------------ -------- ---------
Common stock activity:
Issued for debt ............... 95,460 96 11,839 -- -- -- 11,935
Issued for assets ............. 1,325,000 1,325 357,175 -- -- -- 358,500
Issued for services
- related parties .......... 320,000 320 128,575 -- -- -- 128,895
Issued for services ........... 400,202 400 427,686 -- -- -- 428,416
Issued for cash ............... 1,457,096 1,457 1,706,257 -- -- -- 1,707,384
Stock subscription
receivable (Note 13) ...... 750,001 750 870,832 -- (871,582) -- --
Cancellation stock
subscription receivable ...... (750,001) (750) (870,832) -- 871,582 -- --
(Note 13)
Dividends paid ................ -- -- (1,950) -- -- -- (1,950)
Unrealized loss from securities
available for sale ........... -- -- -- -- -- (606,234) (606,234)
Net loss for year .............. -- -- -- (2,049,413) -- -- (2,049,413)
BALANCES AT DECEMBER 31, 1996 .... 9,484,557 $ 9,485 $ 14,058,256 $(10,113,160) $ -- $ (606,234) $3,348,347
============ ============ ============ ============ ========== ========== ==========
See notes to consolidated financial statements.
F-7
</TABLE>
<PAGE>
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1996 and 1995
1996 1995
-----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) ................................ $(2,049,413) $ (418,729)
Adjustments to reconcile net income (loss)
to net cash provided
Gain from debt settlements ..................... -- (13,454)
(Gain) loss from sale of investments ........... (46,014) (73,425)
Permanent decline in investments ............... 447,513 94,295
(Gain) from sale of assets ..................... (16,479) (71,660)
(Gain) from sale of subsidiary ................. -- (70,544)
(Gain) from issuance of shares of subsidiary ... -- (151,966)
(Gain) from discontinued operations ............ -- (23,912)
Loss on foreclosure ............................ -- 562,406
Minority interest .............................. (136,641) (63,500)
Depreciation and Amortization .................. 247,399 205,937
Services paid with common stock ................ 557,312 232,102
Common stock issued for assets and debt ........ 11,935 82,315
Bad debt provisions ............................ 201,097 --
Decrease (increase) in assets:
Receivables .................................. (1,346,447) (301,967)
Inventories .................................. 36,371 (36,371)
Prepaid expenses and other ................... (47,783) (63,747)
Investments - other .......................... -- (74,125)
Increase (decrease) in liabilities:
Accounts and notes payable ................... 74,085 (8,807)
Accrued liabilities .......................... 195,458 381,429
Deferred income .............................. (171,900) 51,615
----------- -----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES ... $(2,043,507) $ 237,892
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures ........................... (584,453) (223,220)
Proceeds from sales of investments ............. 315,618 258,901
Purchase of security investments .............. (257,586) (1,018,691)
----------- -----------
NET CASH FLOWS (USED) IN INVESTING ACTIVITIES ...... $ (526,421) $ (983,010)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Sales of common stock for cash .................. 1,707,385 981,441
Increase in long term debt ...................... 890,925 218,000
Loans from investors ............................ 269,704 --
Cash disbursements to stockholders .............. (1,950) --
Reduction of long term debt ..................... (236,373) (464,727)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES .......... $ 2,629,691 $ 734,714
----------- -----------
INCREASE (DECREASE) IN CASH ........................ $ 59,763 $ (10,404)
CASH AT BEGINNING OF YEAR .......................... 18,605 29,009
-----------
CASH AT END OF YEAR ................................ $ 78,368 $ 18,605
=========== ===========
See Note 3 for supplemental disclosures
F-8
<PAGE>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 1: ORGANIZATION AND OPERATIONS
Organization
CyberAmerica Corporation (the "Company") was incorporated in the State of Ohio
on July 10, 1984 as The Canton Corporation and adopted its present name in June
1996. Effective May 3, 1993, the Company's domicile was changed to Nevada.
Operations
The Company provides financial consulting services and invests in undervalued
property. The Company provides services and support functions to its clients
including advice relating to regulatory compliance, document preparation,
capital formation, financial analysis, promotional campaigns, debt settlement,
and general corporate problem solving. Part of the Company's business operations
includes the acquisition, management, leasing and sale of real estate.
During 1996, the Company was involved in the preparation, development and
marketing of Internet virtual malls. These operations were conducted through
CyberMalls, Inc., a wholly-owned subsidiary of the Company ("CyberMalls"). The
Company invested a substantial amount in computer equipment and personnel. In
February 1997, the Company decided to permanently discontinue CyberMalls'
operations based on its belief that future expenditures in this division would
earn a higher return if invested in the Company's other operations.
During the second and third quarter of 1996, CyberConnect, Inc.("CC") and
CyberDimensions, Inc. ("CD"), both majority-owned subsidiaries of the Company,
conducted offerings in the amount of $269,704 pursuant to Rule 504 of the
Regulation D of the Securities Act of 1933 ("504 exemption"). The Company later
became aware that these offerings might have been conducted outside the
requirements of 504 exemption. As a result, CC and CD began to rescind the
offerings starting fourth quarter of 1996 and agreed to refund the investments
made by the shareholders by January 15, 1997; however, due to cash shortages, CC
and CD were unable to repay each individual investor in full. CC and CD then
agreed to refund 10% of the investments plus accrued interest to each investor
every 45 days until the debts are paid in full. As of December 31, 1996, CC and
CD were indebted to their investors in the amount of $177,614.
Reorganization
On February 22, 1988, the Company filed a voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Code. On November 7, 1994, the
bankruptcy was discharged.
Basis of Financial Statement Presentation
The Company's financial statements have been presented on the basis that it is a
going concern which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.
Company Plans
The Company was discharged from bankruptcy in 1994 and no longer has to allocate
time and resources in this area. Also, a number of unprofitable operations have
been discontinued. This will save time and resources which the Company is now
devoting to profitable activities.
The Company hopes to generate sufficient cash flow to cover operating expenses,
to meet its obligations and to generate revenues for expansion as set forth
below:
<PAGE>
NOTE 1: ORGANIZATION AND OPERATIONS (CONTINUED)
1. The Company's primary source of revenue is through providing
consulting services. The Company plans to increase its client
base by broadening the type and number of clients. The Company
currently targets public companies who are interested in the
Company's services and private entities seeking to raise
capital or to become a public corporation. The Company has
extended its client base to include large individual estates,
nonprofit and religious organizations. In addition, the
Company plans to expand its range of consulting services
provided to include dissemination of financial information.
The Company intends to achieve this goal by publishing regular
quotations of its clients in national financial publications
and designing home pages on the World Wide Web through which
clients can publicly distribute corporate information, press
releases and periodic reports filed under the Securities Act
of 1934.
2. The Company is expanding its real estate holdings to include a
wide variety of commercial and residential properties. The
Company hopes to increase the revenues generated from these
properties by increasing the occupancy of available rentable
space and has engaged various companies and individuals to
help lease and manage the real estate it owns. Real estate
holdings are also available for sale at prices which will
provide a reasonable return to the Company. Indications are
that the commercial real estate market is continuing to
improve and that there is a strong demand for commercial
rental space.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company's accounting policies reflect current accounting practices and
conform to generally accepted accounting principles. The policies considered to
be significant are as follows:
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
CyberAmerica Corporation and its subsidiaries as summarized in Note 4.
All significant intercompany accounts and transactions have been eliminated in
the consolidation.
Accounting Method
The accompanying financial statements have been prepared on the accrual method
using generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and the liquidation of liabilities
in the normal course of business. All assets are listed at historical cost.
Income Taxes
The Company reports income and losses for financial reporting and income tax
purposes on the accrual method of accounting in accordance with Financial
Accounting Standards ("FAS") No. 109 with the cumulative effects reflected in
the year ended December 31, 1993. FAS 109 requires deferred tax balances to be
adjusted to reflect the tax rates in effect when those amounts are expected to
become payable or refundable.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets. Depreciation
expenses for 1996 and 1995 were $247,397 and $202,368, respectively. The cost of
assets sold or retired and the related amounts of accumulated depreciation are
removed from the accounts in the year of disposal. Any resulting gain or loss is
reflected in current operations.
Expenditures for maintenance and repairs are expended as incurred; additions and
improvements are capitalized.
Sales of Undeveloped Land
The Company uses the deposit method for reporting sales of certain undeveloped
land. Under this method the effective
<PAGE>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
date of sale is deferred until substantial cash is collected. Until that time
all cash received is accounted for as a deposit.
Sales of Internet Mall Sites
Revenue from the sales of Internet mall sites is generally tied to certain
contingencies relating to product development and to sale of the clients'
securities. As a result, recognition of any revenue is postponed until those
contingencies are met. The contracts for the Internet mall sites also provide
for the client's payment of costs associated with the development and service of
the mall site. Revenue from these sources is generally recognized as the related
costs are incurred.
Investment Securities Marketable equity securities are stated at market value in
accordance with Financial Accounting Standards ("FAS") No. 115. Valuation of
other security investments is based on acquisition costs. Markdowns are made to
reflect significant (permanent) impairment in values. During 1996, unrealized
loss from investment securities available for sale was recorded as $606,234 and
permanent decline in value of investment securities acquired at cost was
$447,513. Gains and losses on sale of securities available for sale are
determined using a first-in first-out method.
Common Shares and Income (Loss) Per Common Share
Income (loss) per common share is computed using the weighted average number of
common shares outstanding (7,715,173 shares in 1996 and 3,825,264 shares in
1995).
Income or Loss Per Share
Income or loss per share of common stock is computed based on the weighted
average number of common shares outstanding during the periods shown. The
Company had common stock equivalents (CSEs) outstanding at December 31, 1996 and
1995 in the form of stock purchase options. The options are held by present and
former employees. The inclusion of the outstanding options would not affect the
income or loss per share in 1996 or 1995 and therefore such options have not
been included in the weighted average number of common shares. If all
outstanding options were exercised, the total proceeds would be approximately
$493,856. The Company's outstanding common stock purchase options at December
31, 1996 are as summarized as follows:
Expiration Exercise No. of Shares
Issue Date Date Price Subject to Options
10/21/93 10/30/98 $4.44 98,472
09/08/93 09/30/98 $4.44 6,000
11/19/96 11/19/06 $0.60 50,000
---------
Total 154,472
========
Issuance of Common Stock
The Company frequently issues shares of its common stock to acquire assets,
retire debt and pay for services. When stock is issued for services, the value
of the stock and related services is determined by the Board of Directors. In
the case of settling debt, the market value of the stock, the type and age of
the debt and any other related factors are considered. In the case of assets
acquired, the value is negotiated based on a combination of factors including,
but not limited to:
The significance of the assets to the Company;
The liquidity of the assets;
The trading price and volume of the assets (if a security).
Final approval of the basis for issuance of capital stock is made by the Board
of Directors.
<PAGE>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Environmental Compliance and Remediation
Environmental expenditures are expensed or capitalized as appropriate.
Expenditures that relate to an existing condition caused by past operations and
that do not have future economic benefit are expensed. Expenditures which extend
the life of the related property or mitigate or prevent future environmental
contamination are capitalized. The Company determines its liability on a site by
site basis and records a liability at the time when it is probable and can be
reasonably estimated.
Research and Development Costs
The Company expenses research and development costs related to software
development that has not reached technological feasibility and started
production for sale. Capitalized costs are amortized over a maximum of five
years or expected life of the product, whichever is less. Computer research and
development costs for 1996 of $576,160 have been expensed. No expenses were
incurred in 1995.
Concentration of Business and Credit Risk
Financial instruments which potentially subject the Company to concentration of
credit risk consist primarily of cash, receivables and investments. The Company
places its cash with high quality institutions. The Company monitors its
exposure for credit losses and maintains allowances for anticipated losses on
receivables. Collateral is not generally required to support customer
receivables. The Company's six largest clients accounts for approximately 72% of
consulting revenue in 1996 and approximately 96% of accounts receivable at
12/31/96. The Company follows Statement of Financial Accounting Standards No.
115 as it applies to investments in equity securities.
NOTE 3: SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
The following are supplemental disclosures of cash flow information:
1. Cash paid for interest was $370,284 in 1996 and $256,457 in 1995.
2. Common stock was issued for the following purposes:
1996
Shares Amounts
---------------- -----------
95,460 Issued for debt $ 11,935
1,325,000 Issued for other assets 358,500
320,000 Issued for services - related party 128,895
730,253 Issued for services 428,416
-------------- --------------
2,470,713 $ 927,746
============== =================
1995
Shares Amounts
---------------- --------------
241,743 Issued for debt $ 82,315
420,000 Issued for other assets 267,750
407,000 Issued for services - related party 148,452
390,451 Issued for services 83,650
-------------- -------------
1,459,194 $ 582,167
============== ==============
<PAGE>
NOTE 3: SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION (Continued)
During 1996, the Company acquired the following assets:
Real estate purchased $ 776.659
Debts incurred (425,442)
-----------
Cash paid 351,217
Real estate acquired through foreclosure 497,593
Debt settled (475,000)
Debt incurred (18,472)
---------------
Cash paid 4,121
Total cash paid $ 355,338
=========
During 1995, the Company incurred mortgage debt of $1,200,000 in connection with
a land acquisition.
NOTE 4: SUBSIDIARIES
Canton Financial Services Corporation
Canton Financial Services Corporation, a Utah corporation, ("CFS"), was formed
by the Company on June 8, 1994. CFS, a wholly-owned subsidiary of the Company,
provides a wide range of consulting services, primarily for public companies.
Canton Personnel, Inc.
Canton Personnel, Inc., a Utah corporation ("CPI"), was incorporated by the
Company on January 21, 1994 for the purpose of managing the various personnel
and payroll operations of the Company and its subsidiaries. CPI, a wholly-owned
subsidiary, does not currently have any tangible assets.
Canton Properties I, Inc.
Canton Properties I, Inc., a Utah corporation ("CPII"), was incorporated by the
Company on May 4, 1994 for the purpose of acquiring, owning and managing the
property it acquires. On June 21, 1994, CPII, a wholly-owned subsidiary of the
Company, purchased a two-thirds undivided interest in the land located at 238
West 400 South, Salt Lake City, Utah. On May 26, 1995, CPII sold its interest in
the property and recorded a gain on the sale of assets of $71,660.
Canton Tire Recycling of West Virginia
Canton Tire Recycling of West Virginia, Inc. ("CTRWV") was incorporated by the
Company on February 25, 1993 for the purpose of acquiring, owning and managing
the Parkersburg Terminal. CTRWV, a wholly-owned subsidiary of the Company,
purchased the Parkersburg Terminal on May 15, 1993.
Canton's Wild Horse Ranch, Inc.
Canton's Wild Horse Ranch, Inc., an Arizona corporation ("CWHR"), was
incorporated by the Company on November 10, 1993 for the purpose of leasing,
acquiring, owning and managing property related to the Wild Horse Ranch. CWHR, a
wholly-owned subsidiary of the Company, has ceased operations due to a lack of
profitability.
Canton's Wild Horse Ranch, II
Canton's Wild Horse Ranch, II, an Arizona corporation ("CWHRII"), was
incorporated by the Company on February 3, 1994, for the purpose of expanding
Canton's Wild Horse Ranch. On February 16, 1994 CWHRII, a wholly-owned
subsidiary of the Company, acquired ten acres of raw, unimproved land adjacent
to the Ranch suitable for expansion of the Ranch.
West Jordan Real Estate Holdings, Inc.
West Jordan Real Estate Holding, Inc., a Utah corporation ("WJREH"), was
incorporated by the Company on June 7, 1994 for the purpose of acquiring, owning
and managing a specific property. On August 31, 1995, WJREH, a wholly-owned
subsidiary of the Company, entered into a lease with an option to purchase a
retail shopping plaza in Salt Lake City, Utah.
<PAGE>
NOTE 4: SUBSIDIARIES (CONTINUED)
Oasis International, Inc.
Oasis International, Inc., a Nevada corporation ("Oasis"), was incorporated by
the Company on November 20, 1995 for the purpose of acquiring, owning and
managing a specific property. On December 27, 1995, Oasis, a wholly-owned
subsidiary of the Company, purchased 1,126 acres of land in Elko County, Nevada.
Oasis International Hotel & Casino, Inc.
Oasis International Hotel & Casino, Inc., a Nevada corporation ("OIHC"), was
incorporated by the Company on November 20, 1995 for the purpose of acquiring,
owning and managing a specific property. On December 27, OIHC, a wholly-owned
subsidiary of the Company, purchased land in Elko County, Nevada.
Oasis Property Management Services, Inc.
Oasis Property Management Services, Inc., a Nevada corporation ("OPMS"), was
incorporated by the Company on November 20, 1995 for the purpose of operating
the facilities in Elko County, Nevada. On December 27, 1995, OPMS, a
wholly-owned subsidiary of the Company, commenced operation of the facilities in
Elko County, Nevada.
KMC Foods, Incorporated
KMC Foods, Incorporated ("KMC") was incorporated on April 12, 1988 under the
laws of the Commonwealth of Virginia. KMC was purchased by the Company in 1993.
KMC held a note secured by a deed of trust on the KMC Foods Plant upon which it
foreclosed during the third quarter of 1996.
Canton Industrial Properties Management Corporation of Salt Lake City
Canton Industrial Properties Management of Salt Lake City, a Utah corporation
("CIPMC"), was incorporated by the Company on October 30, 1994 for the purpose
of acquiring, owning and managing property. On October 9, 1993, CIPMC purchased
an office building at 202 West 400 South in downtown Salt Lake City. The
property is a 18,000 sq. ft. office building with two stories of interior
rentable space and above ground level parking. CIPMC was a wholly-owned
subsidiary of the Company until the fourth quarter of 1995 when the subsidiary
sold shares to accredited investors and issued shares to employees and
consultants in a private placement offering pursuant to a Regulation D, 504
Offering. During the first quarter of 1997, the Company reacquired a majority of
the shares sold and plans to cancel the remaining shares.
Canton Industrial Corporation of Salt Lake City
Canton Industrial Corporation of Salt Lake City, a Utah corporation ("CICSLC"),
was incorporated by the Company on September 29, 1993 for the purpose of
acquiring, owning and managing the Plandome Building. On September 30, 1993,
CICSLC acquired the Plandome Building located at 69-75 East 400 South, Salt Lake
City, Utah. CICSLC was a wholly-owned subsidiary of the Company until the fourth
quarter of 1995 when the subsidiary sold shares to accredited investors and
issued shares to employees and consultants in a private placement offering
pursuant to a Regulation D, 504 Offering. During the first quarter of 1997, the
Company reacquired a majority of the shares sold and plans to cancel the
remaining shares.
Canton Commercial Carpet Corporation
Canton Commercial Carpet Corporation, a Utah corporation ("CCCC"), was
incorporated by the Company on January 21, 1994 for the purposes of distributing
and wholesaling commercial carpet. On May 23, 1994, CCCC entered into a lease
with an option to purchase real property located at 268 West 400 South in Salt
Lake City, Utah. On February 1, 1995, the Company relocated its corporate
headquarters to this Building. CICSLC was a wholly-owned subsidiary of the
Company until the fourth quarter of 1995 when the subsidiary sold shares to
accredited investors and issued shares to employees and consultants in a private
placement offering pursuant to a Regulation D, 504 Offering. During the first
quarter of 1997, the Company reacquired a majority of the shares sold and plans
to cancel the remaining shares.
<PAGE>
CYBERAMERICA CORPORATION
(FORMERLY KNOWN AS THE CANTON INDUSTRIAL CORPORATION)
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 4: SUBSIDIARIES (CONTINUED)
TAC, Inc.
TAC, Inc., a Utah corporation ("TAC"), was formed by Logos International, Inc.
("Logos"), an affiliate of the Company, on August 27, 1992. TAC was acquired
from Logos on December 30, 1994 pursuant to a Settlement Agreement. TAC was a
wholly-owned subsidiary of the Company until the fourth quarter of 1995 when the
subsidiary sold additional shares in a private placement offering pursuant to a
Regulation D, 504 Offering and diluted the Company's ownership to just over
fifty percent. In June 1996, TAC exercised its option on a warehouse facility
consisting of approximately 60,000 square ft. located in West Jordan, Utah.
During 1996, the Company advanced TAC funds to purchase the warehouse in
exchange for shares of common stock in TAC, which brought its ownership to over
80%.
Wasatch Capital Corporation
Wasatch Capital Corporation, a Utah corporation ("Wasatch") was incorporated on
June 10, 1991. The Company acquired a 20% interest in Wasatch on December 30,
1994 in exchange for the Company advancing monies to exercise an option to
purchase real estate located at 55-57, 61-65 West 100 South, Salt Lake City,
Utah (the "Bennett Building"). Wasatch is consolidated because the Company,
through its officers, directors and affiliates, exercises significant control
over the decisions and operations of Wasatch. The Company's investment is
secured by the Bennett Building and Wasatch is not allowed to dilute the
Company's interest in Wasatch or lease, sell, exchange, or encumber the property
in any way unless the Company approves.
Thistle Properties, Inc.
Thistle Properties, Inc., an Illinois corporation ("Thistle") was acquired by
the Company on May 12, 1995 as a result of a Mutual Release Agreement between
the Company, ATC II and Thistle (Please see Note 10 for additional information
on this transaction). Thistle holds title to the Canton Plant in Canton,
Illinois.
CyberMalls, Inc.
CyberMalls, Inc., a Nevada corporation, was incorporated by the Company on
February 15, 1996, for the purpose of preparing, developing, and marketing
Internet virtual malls. On February 25, 1997, the Company decided to permanently
discontinue the operations of CyberMalls. Accordingly, CyberMalls is no longer
an operating entity.
CyberConnect, Inc.
CyberConnect, Inc., a Nevada corporation, was incorporated by the Company on
February 15, 1996, for the purpose of developing and marketing an Internet
virtual mall.
CyberDimensions, Inc.
CyberDimensions, Inc., a Nevada corporation, was incorporated by the Company on
February 15, 1996, for the purpose of developing and marketing an Internet
virtual mall.
Diversified Holdings XIII, Inc.
Diversified Holdings XIII, Inc., a Nevada corporation, was incorporated by the
Company on April 16, 1996, for the purpose of providing business consulting
services. On March 5, 1997, Diversified Holdings XIII, Inc. changed its name to
Hudson Consulting Group.
Diversified Holdings XIX, Inc.
Diversified Holdings XIX, Inc., a Nevada corporation, was incorporated by the
Company on April 29, 1996, for the purpose of acquiring, owning, and managing
certain real estate property. On August 2, 1996, Diversified Holdings XIX
purchased land located in Cheriton, Virginia in a foreclosure sale. For more
information on this property, see "Item 2 - Description of Properties."
Investment Sanctuary Corporation
Investment Sanctuary Corporation, a Utah corporation ("ISC"), was incorporated
on April 23, 1993 as a Subchapter S Corporation pursuant to Internal Revenue
Service Code. On October 31, 1996, ISC became a wholly-owned subsidiary of the
Company and its Subchapter S Corporation status was terminated.
<PAGE>
NOTE 4: SUBSIDIARIES (CONTINUED)
42 Exchange Place Inc. - Disposition
42 Exchange Place, Inc., a Utah corporation, was incorporated by the Company on
April 21, 1994 for the purpose of acquiring, owning and managing a specific
property. On September 28, 1994, 42 Exchange Place Inc., a wholly owned
subsidiary of the Company, purchased property located at 42 Exchange Place, Salt
Lake City, Utah. On August 4, 1995, the Company sold the corporation and
realized a gain of $70,544.
NOTE 5: LONG-TERM DEBT
Long-term debt consists of the following at December 31, 1996:
1996
Mortgage payable, BP&G (10%), monthly payments
of $7,929, due 11/99 $ 522,555
Mortgage payable, Rich Bennion, (9%) monthly
payments of $4,780, due 10/99 585,000
Mortgage payable, Rick Lucas Keogh (9%)
monthly payments of $1,575, due 11/03 163,874
Mortgage payable, Mark Cummings (9%)
monthly payments of $1,350, due 11/03 140,489
Mortgage payable, Title Security Agency (8%),
monthly payments of $825, due 02/99 53,868
Note payable, Paul R. Rubey (5%), due 10/98 100,000
Mortgage payable, Solar Logos Foundation,(7%), quarterly
payments of interest only until 1/99, due 07/04 900,000
Mortgage payable, Howard Bernstein, (18%), monthly payments
of interest only, due 12/97 300,000
Note payable to The Capital Company, (18%), monthly payments
of interest only until 4/97, $5,000 monthly thereafter
until paid in full 166,480 Mortgage payable to
Zions Mortgage, (9.5%), monthly payments
of $309, due 04/15 32,151
Mortgage payable to First American Title,
(8.25%), monthly payments of $298, due 10/01 34,873
Mortgage payable to Republic Mortgage, (9.18%),
monthly payments of $6,389, due 6/01 285,922
Mortgage payable to The Capital Company, (15%), due 06/97 332,557
Mortgage payable to Barnett Bank, (9.63%), monthly payments
of $4,367, due 07/97 423,213
Mortgage payable to Tucker, (10%), monthly payments of
$471, due 11/04 50,514
Notes payable, Alexander Senkovski Trust (24%), due on demand 71,936
Notes payable, David Michael Trust (24%), due on demand 92,366
Notes payable, AZ Professional (24%), due on demand 15,000
-----------
Total 4,270,798
Current portion 1,430,456
--------------
Long-term portion $ 2,840,342
==========
Scheduled principal reductions are as follows:
December 31, 1997 $ 1,430,456
December 31, 1998 312,188
December 31, 1999 1,196,247
December 31, 2000 153,344
December 31, 2001 133,855
Thereafter 1,044,708
---------------
$ 4,270,798
<PAGE>
NOTE 6: CAPITALIZED LEASE OBLIGATIONS
The Company leases space for its corporate offices in Salt Lake City for $4,596
per month. The lease is for 10 years and expires May 2004. The Company paid
$15,000 for an option to purchase the building at the end of the lease for
$415,000. A portion of the lease payments apply to the purchase price. The lease
is being treated as a capital lease. The leased property under Capital lease as
of December 31, 1996 has a cost of $430,000 including land, accumulated
amortization of $21,714 and a net book value $408,286. Amortization of leased
property is included in depreciation expense. Scheduled annual minimum rental
commitments under the capital lease are as follows:
1997 $ 55,158
1998 55,158
1999 55,158
2000 55,158
2001 55,158
Thereafter 325,500
Total $ 601,290
--------------
Less: amounts representing interest (224,280)
-------------
Present value of future minimum
Capital lease payments 377,010
Less: current obligations under
Capital lease (17,591)
Long-term capital lease obligation $ 359,419
NOTE 7: FEDERAL INCOME TAXES
At December 31, 1996, the Company had net operating loss carryovers of
approximately $5,290,000. The net operating loss carryovers expire as follows:
Expiration
Loss Year Date Amount
12/31/91 12/31/2006 $ 1,248,000
12/31/92 12/31/2007 229,000
12/31/93 12/31/2008 1,616,000
12/31/94 12/31/2009 71,000
12/31/95 12/31/2010 256,000
--------
12/31/96 12/31/2011 1,870,000
---------
$ 5,290,000
At December 31, 1996, the Company has a capital loss carryover of approximately
$985,000, $810,000 of which expires in 1998 and $175,000 expires in 1999.
No benefit resulting from loss carry forwards have been reported in the
financial statements because the Company believes there is at least a fifty
percent (50%) chance that the carry forwards will expire unused. Accordingly,
the tax benefit of the loss carry forward has been offset by a valuation
allowance of the same amount. The expected tax benefit resulting from applying
federal statutory tax rate to the pretax loss differs from amounts reported in
the financial statements because of the increase in valuation allowance. Certain
provisions of the tax law may limit the net operating loss and capital loss
carryovers in the event of a significant change in ownership of the Company.
NOTE 8: REAL ESTATE TAXES PAYABLE
The Company owes real estate taxes and assessments of approximately $368,957
(including penalties and interest) as of December 31, 1996.
Unpaid property taxes and assessments consist of the following:
Canton Plant - Canton, Illinois $ 285,942
202 West 400 South Property - Salt Lake City, Utah 7,296
Pima County Property - Tuscon, Arizona 1,811
Plandome Building - Salt Lake City, Utah 53,665
Glendale Plaza - Salt Lake City, Utah 7,660
Parkersburg Terminal - Parkersburg, West Virginia 853
TAC warehouse 9,952
Other 1.778
$ 368,957
====================
<PAGE>
NOTE 9: DEBENTURES PAYABLE
On September 17, 1996, the Company issued a 6.0% Convertible Debenture with a
face amount of $300,000 (the "Debenture") to Legong Investments, N.V., a
corporation organized under the laws of Curacao, Netherlands Antilles
("Legong"). The Debenture matures on September 17, 1997. The Debenture can be
converted into the Company's Common Stock at any time prior to maturity at the
option of Legong. The conversion price of the Debenture is 70% of the closing
bid prices for the Common Stock during the five days immediately preceding
conversion. At maturity, the Company has the option of paying the face amount of
the Debenture plus accrued interest in either cash or shares of Common Stock in
accordance with the conversion price set forth above. On December 17, 1996,
Legong converted $10,000 of the principal plus accrued interest into 87,220
shares of the Company's Common Stock.
NOTE 10: RELATED PARTY TRANSACTIONS
1. A-Z Professional Consultants, Inc.
During 1995 and 1996, the Company completed several transactions with A-Z
Professional Consultants, Inc. ("A-Z"), a beneficial owner of more than 5%
of the Company's common stock. A-Z's sole owner is Allen Wolfson, a control
person of the Company.
Since 1992, A-Z has served as a financial consultant to the Company to
discover and introduce the Company to business opportunities. On May 1,
1995, the Company and A-Z entered into a Settlement Agreement to settle the
unpaid fees and expenses earned by A-Z. Pursuant to this Settlement
Agreement, the Company issued Allen Wolfson, personally, 80,000 shares of
its Common Stock.
On August 30, 1995, the Company and A-Z entered into a one year Consulting
Agreement whereby the Company agreed to again retain A-Z as one of its
primary consultants. Pursuant to this Agreement, the Company issued A-Z
40,000 restricted shares of its Common Stock to A-Z monthly, or a total of
480,000 shares of Common Stock. The 1995 Consulting Agreement expired
according to its own terms on August 31, 1996.
On December 22, 1995, the Company entered into a Stock Option Agreement
with A-Z. Pursuant to the Agreement, the Company granted an option to A-Z
giving A-Z the right to purchase a quantity of shares of the Company's
Common Stock equivalent to 26% of the issued and outstanding shares on the
exercise date. The exercise price of the option is $0.59 per share. The
option was granted to compensate Mr. Wolfson and A-Z for consulting
services rendered to the Company and to provide them an incentive to
perform such services in the future. The granting of the option gives
substantial, indirect control of the Company to Mr. Wolfson.
2. Richard Surber
On September 30, 1994, the Company retained Investment Sanctuary
Corporation, a Utah corporation ("ISC") owned 100% by Richard Surber ("Mr.
Surber"), to provide consulting services. The agreement called for the
Company to pay ISC $20,000 per month effective January 1, 1995, either in
cash or shares of the Company's restricted common stock valued at one-half
of the average between the low bid and ask price to be paid on quarterly
basis. On May 4, 1995 the Company issued 167,000 shares of its common stock
under the Company's 1994 Stock Option Plan as payment under the agreement.
Mr. Surber entered into several Consulting Agreements to provide various
consulting services to clients, with the assistance of the Company's
consultants and certain employees. Payments were made in shares of the
clients' stock, which were later sold providing income to the Company
valued at $134,500.
On December 22, 1995, the Company entered into a Stock Option Agreement
with ISC. Pursuant to the agreement, the Company granted options giving the
right to purchase a quantity of shares of the Company's common stock
equivalent to 25% of the issued and outstanding shares on the exercise
date, with an established exercise price of $0.59 per share. Effective
October 31, 1996, the Company executed a Stock Exchange Agreement with ISC
and Richard Surber pursuant to which the Company acquired 100% outstanding
capital stock of ISC. In addition, ISC's option to purchase 25% of the
Company's Common Stock was canceled. As consideration for the transfer of
ISC and the cancellation of the option, the Company issued to Mr. Surber
1.1 million restricted shares of the Company's Common Stock.
3. Thistle Properties, Inc. - Foreclosure on Canton Property
On August 23, 1994, but effective June 20, 1994, the company entered into a
Real Estate Sales Agreement ("RESA") with Thistle Properties, Inc.
("Thistle"). On the effective date of both the RESA and an amended
<PAGE>
NOTE 10: RELATED PARTY TRANSACTIONS (CONTINUED)
RESA, Richard Surber was an executive officer of Thistle's parent company,
ATC II, Inc.; however, at the time the agreements were actually executed,
Mr. Surber was not an officer or director of ATC II, Inc. and did not have
any authority to approve or disapprove any transactions being contemplated
by ATC II, Inc. or any of its subsidiaries.
On May 4, 1995, the Company served Thistle with a Notice of Default of the
Real Estate Lien Note entered into pursuant to the amended RESA. The
Company subsequently executed a Mutual Release with ATC II and Thistle
effective May 12, 1995. The net effect of the Mutual Release is that
Thistle, which holds title to the Canton Plant, became a wholly-owned
subsidiary of the Company. This resulted in a loss of $562,406. A gain on
the sale of $752,467 had been previously recorded by the Company during the
third quarter of 1994.
NOTE 11:
The cost and approximate market value of securities available for sale at
December 31, 1996 are as follows:
Gross Unrealized Market
Cost Gains Losses Value
Marketable equity
Securities $1,255,694 $145,580 $(751,814) $694,460
========== ========== ============== ===========
Other equities securities in the amount of $176,910 are carried at cost. There
is no readily available market for these securities or they are restricted.
Securities carried at cost are marked down to reflect impairment in values.
During 1996 impairment mark-downs were $447,513.
During 1996 proceeds from sales of securities were $333,418. Gross gains of
$114,292 were realized on those sales. Gross losses realized were $68,278.
NOTE 12: NOTES RECEIVABLE
Associated Technologies
On March 23, 1995, the Company entered into an Agreement of Purchase and Sale
with Associated Technologies, Inc. relating to certain equipment. Under the
agreement, Associated Technologies is required to pay the Company $60,000 over a
5 year period. Each $12,000 payment is due on or before March 1 of each year,
with the final payment due in the year 2000. In April 1996, Associated
Technologies made its first payment in the amount of $12,000.
The above receivable is included in the financial statements as follows:
Notes receivable:
Associated Technologies 48,000
$ 48,000
Less current portion 12,000
$ 36,000
============
NOTE 13: STOCK SUBSCRIPTION RECEIVABLE
On May 31, 1996, the Company entered into a Stock Subscription Agreement with
two offshore entities. The Agreements provided for the offshore entities to
purchase 750,001 shares of the Company's Common Stock for a total of $871,582 in
cash. The Agreements were later canceled due to the fact that the offshore
entities failed to remit payment for the shares. As a result, the Company had no
stock subscription receivable as of December 31, 1996.
<PAGE>
NOTE 14: CONTINGENT LIABILITIES
1. Canton, Illinois Property - environmental cleanup
A legal action was filed in September 1993 against the Company seeking the
cleanup of tires and toxic paint drums at the plant in Canton, Illinois. On
September 28, 1995, Illinois Environmental Protection Agency informed the
Company it was rejecting the proposed plan of the Company for tire cleanup
and would send its own contractor to remove the remaining waste tires. The
Company sought relief from this decision from the Circuit Court in Fulton
County. After a hearing on October 10, 1995, the District Court denied any
relief to the Company. Both the Company and the IEPA contractors removed
tires. The State has filed an action before the Illinois Pollution Control
Board seeking to recover $325,398 as the costs incurred to remove the
tires, plus an equal amount as punitive damages. The Company's balance
sheet at December 31, 1996 included an accrued liability in the amount of
$325,398 representing the potential liability associated with this lawsuit.
The Company does not believe that it will be liable for the punitive
damages.
2. Xeta Corporation
Xeta is seeking recovery of funds alleged to have been improperly
transferred to the Company by ATC II, Inc. ("ATC") The amount sought by
Xeta is $116,500, an amount equal to the funds transferred by ATC to the
Company for consulting services and other expenses incurred for the benefit
of ATC. Xeta's Motion for Summary Judgment has been granted and the Company
is required to pay Xeta $116,500, which has been accrued on the Company's
Balance Sheet as of December 31, 1996. The Company is in the process of
appealing this case before the Tenth Circuit Court of Appeals.
3. Key L.C. Corporation
Key L.C. Corporation ("Key") alleges that the Company violated the Exchange
Act of 1934 in the sale of the Company's Common Stock to Key. Damages are
sought in the amount of $291,682, the purchase price of 214,900 shares of
the Company's Common Stock. The Company has filed a Motion to Dismiss the
Complaint for failure to state a cause of action under the Exchange Act of
1934 and the Private Securities Litigation Reform Act. As a result, the
Company does not believe that it will be liable for the damages sought.
NOTE 15: OPERATING LEASE COMMITMENTS
The Company is obligated under an operating lease to pay $5,663 per month on the
one building it rents. The lease is for three years expiring August 1998. The
Company has an option to purchase the building at the end of the lease term.
Scheduled rent payments are as follows:
December 31, 1997 $ 67,956
December 31, 1998 45,304
-----------
$ 113,260
The Company receives rents on lease of buildings under operating leases.
Additional information is included as follows:
Cost of real estate under lease $ 2,530,648
Accumulated depreciation (214,104)
-------------
Net carrying amount $ 2,316,544
===========
Future minimum rentals on noncancellable leases are as follows:
1997 $ 328,585
1998 74,840
1999 48,465
2000 2,940
Thereafter -
-------------
$ 454,830
<PAGE>
<TABLE>
<CAPTION>
NOTE 16: STOCK OPTION PLANS AND AGREEMENTS
During 1994, the Company established a new stock option plan for its employees
and consultants. Each option issued under the plan has a term of five years and
an exercise price of either the average of the closing bid and ask price for the
Stock over the 20 day trading period immediately prior to the date of grant or
the bid price on the date of grant as determined by the Board of Directors or an
Authorized Committee. Under the plan, up to 500,000 shares can be issued. In
1994, 203,584 shares were issued under the plan. In 1995, the Company issued the
balance of the shares under the plan.
On December 22, 1995, the Company entered into a Stock Option Agreement with A-Z
Professional Consultants. Pursuant to the agreement, the Company granted options
giving the right to purchase a quantity of shares of the Company's common stock
equivalent to 26% of the issued and outstanding shares on the exercise date,
with an established exercise price of $0.59 per share.
On December 22, 1995, the Company entered into a Stock Option Agreement with
Investment Sanctuary Corporation ("ISC"). Pursuant to the agreement, the Company
granted an option giving the right to purchase a quantity of shares of the
Company's common stock equivalent to 25% of the issued and outstanding shares on
the exercise date, with an established exercise price of $0.59 per share. The
option was canceled on October 31,
NOTE 16: STOCK OPTION PLANS AND AGREEMENTS
1996, when the Company executed a Stock Exchange Agreement with ISC and Richard
Surber. Pursuant to the Agreement, the Company acquired 100% outstanding capital
stock of ISC and issued 1.1 million shares of the Company's Common Stock to
Richard Surber.
In January 1996, the Company established a Stock Option Plan (the "1996 Plan")
for its employees and consultants. The 1996 Plan was registered with the SEC
pursuant to a Form S-8 Registration Statement. Under the 1996 Plan, options to
purchase 1,000,000 shares of the Company's Common Stock may be granted. The 1996
Plan was designed to provide compensation and incentive bonuses to the Company's
employees and consultants who, due to current financial constraints of the
Company, cannot be adequately compensated in cash. The Company has granted
options to purchase all shares registered under the 1996 Plan.
A summary of the status of the Company's Stock Option Plan as of December 31,
1996 and the changes due the year ending December 31, 1996 as presented below:
Options Shares Weighted Average Exercise Plan
- --------------------------------------------------------------------------------
January 1, 1996 104,472 $4.44
Granted 823,981 1.20
Exercised (773,981) 1.23
----------- -------
154,472 $3.20
===========
The following table summarizes information about fixed stock options outstanding
at December 31, 1996:
Outstanding Options Exercisable Options
Number Weighted- Number Weighted-average
Outstanding Remaining Average Exercisable Exercise
Exercise Price at 12/31/96 Contractual Life Exercise Price at 12/31/96 Price
- -------------- ------------ ---------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
$.60 50,000 10 years $ .60 50,000 $ .60
$4.44 104,472 2 years $4.44 104,472 $4.44
-------
Total 154,472
</TABLE>
If the Company had used the fair value based method of accounting for its stock
option plan, as prescribed by Statement of Financial Accounting Standards No.
123, compensation cost in net loss for the year ended December 31, 1996 would
have increased by $9,000 resulting in a net loss of $2,058,413.
<PAGE>
NOTE 17: LOSS ON FORECLOSURE
On August 23, 1994, but effective June 20, 1994, the Company entered into a Real
Estate Sales Agreement ("RESA") with Thistle Properties, Inc. ("Thistle"). On
the effective date of both the RESA and an amended RESA, Richard Surber was an
executive officer of Thistle's parent company, ATC II, Inc., although at the
time the agreements were actually executed, Mr. Surber was not an officer or
director of ATC II, Inc. and did not have any authority to approve or disapprove
any transactions being contemplated by ATC II, Inc. or any of its subsidiaries.
On May 4, 1995 the Company served Thistle with a Notice of Default of the Real
Estate Lien Note entered into pursuant to the amended RESA. The Company
subsequently executed a Mutual Release with ATC II and Thistle effective May 12,
1995. The net effect of the Mutual Release is that Thistle, which holds title to
the Canton Plant, is now a wholly-owned subsidiary of the Company. This resulted
in a loss of $562,406. A gain on the sale of $752,467 had been previously
recorded by the Company during the third quarter of 1994.
NOTE 18: BUSINESS ACQUISITIONS
On October 31, 1996, the Company acquired 100% of the outstanding stock of
Investment Sanctuary Corporation in exchange for 1,100,000 shares of the
Company's common stock. The transaction was valued at $49,500 and was accounted
for as a purchase. The purchase price was allocated to the net assets acquired
based on their estimated fair values. The consolidated statements of operations
reflect the operating results of Investment Sanctuary Corporation since the date
of acquisition.
In July 1996, the Company acquired 90% of the outstanding stock of Venice
Automall, Inc. for $8,402. The transaction was accounted for as a purchase. The
purchase price was allocated to net assets acquired based on their estimated
fair values. The consolidated statements of operations reflect the operating
results of Venice Automall, Inc. since the date of acquisition.
NOTE 19: SUBSEQUENT EVENT
On February 25, 1997, the Company discontinued operations to develop and market
certain computer programs. This business commenced in 1996 and all research and
development expenses incurred during the year were expensed. No significant
additional expenses were incurred after December 31, 1996. No significant
revenue was realized from this activity.
<PAGE>
ANDERSEN ANDERSEN & STRONG, L. C.
Certified Public Accountants and Business Consultants
941 East 3300 South, Suite 202
Salt Lake City, UT 84106
Member SEC Practice Section of the AICPA
Telephone: (801)486-0096
Fax: (801)486-0098
E-Mail: K Andersen @msn.com
Board of Directors and Shareholders
CyberAmerica Corporation
Salt Lake City, Utah
Our examinations of the basic financial statements presented in the preceding
section of this report were made primarily to form an opinion on such financial
statements taken as a whole. The additional information, contained in the
following pages, is not considered essential for the fair presentation of the
financial position of CyberAmerica Corporation and Subsidiaries, the results of
their operations or cash flows in conformity with generally accepted accounting
principles. The following information consisting of Schedule V and Schedule VI
is included to comply with reporting requirements of the Securities and Exchange
Commission. Such data was subjected to the audit procedures applied in the
examination of the basis financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ Andersen Andersen & Strong
Salt Lake City, Utah
April 14, 1997
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Balance at Balance
Beginning Additions at the end
of Period at Cost Retirement of Period
Year ended December 31, 1995:
<S> <C> <C> <C> <C>
Land ................... $ 617,190 $1,734,150 $ 104,840 $2,246,500
Leasehold improvements . 26,698 - 0 - - 0 - 26,698
Building and Structures 2,233,401 399,078 114,155 2,518,324
Machinery and Equipment 500,000 98,374 - 0 - 598,374
Furniture and Fixtures . 93,786 26,728 2,401 118,113
---------- ---------- ---------- ----------
$3,471,075 $2,258,330 $ 221,396 $5,508,009
========== ========== ========== ==========
Year ended December 31, 1996:
Land ................... $2,246,500 $1,219,018 $ - 0 - $ 3,465,518
Leasehold improvements . 26,698 20,589 - 0 - 47,287
Building and Structures 2,518,324 1,157,040 - 0 - 3,675,364
Machinery and Equipment 598,374 26,845 - 0 - 625,219
Furniture and Fixtures . 118,112 207,549 - 0 - 325,661
---------- ---------- ---------- ----------
$5,508,008 $2,631,047 $ - 0 - $ 8,139,049
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE VI - ACCUMULATED DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
Balance at Balance
Beginning Additions at the end
of Period at Cost Retirement of Period
Year ended December 31, 1995:
<S> <C> <C> <C> <C>
Land $ - 0 - $ - 0 - $ - 0 - $ - 0 -
Leasehold Improvements 3,949 (1) 4,428 - 0 - 8,377
Building and Structures 150,943 (2) 262,827 906 412,864
Machinery and Equipment 113,750 (3) 88,580 - 0 - 202,330
Furniture and Fixtures 9,655 14,895 372 24,178
---------------- ---------------- ----------------- -------------------
$ 278,297 $ 370,730 $ 1,278 $ 647,749
=============== =============== ================ ==================
Includes amounts acquired from subsidiary:
(1) $154,943
(2) 13,339
(3) 80
----------------
$168,362
Year ended December 31, 1996:
Land $ - 0 - $ - 0 - $ - 0 - $ - 0 -
Leasehold Improvements 8,377 (1) 4,763 - 0 - 13,140
Building and Structures 412,864 (2) 178,003 - 0 - 590,867
Machinery and Equipment 202,330 (3) 95,591 - 0 - 297,921
Furniture and Fixtures 24,178 42,631 - 0 - 66,809
---------------- ---------------- ------------------- -------------------
$ 647,749 $ 320,988 $ - 0 - $ 968,737
=============== =============== ================== ==================
Included amounts acquired from subsidiary:
(1) $65,759
(2) 7,832
-------
$73,591
</TABLE>
<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, this 14th day of May 1997
CyberAmerica Corporation
/s/ Richard D. Surber
---------------------
Richard D. Surber, President and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Title Date
/s/ Richard D. Surber President, Chief Executive Officer May 14, 1997
- -------------------- and Director
Richard D. Surber
/s/ Philip Lamb
- ------------------ Director May 14, 1997
Philip Lamb
/s/ Adrienne Bernstein
- ----------------------- Director May 14, 1997
Adrienne Bernstein
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
UNAUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE COMPANY'S DECEMBER 31,
1996 ANNUAL REPORT ON FORM 10-KSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 78,368
<SECURITIES> 649,460
<RECEIVABLES> 1,809,930
<ALLOWANCES> 189,097
<INVENTORY> 0
<CURRENT-ASSETS> 2,404,315
<PP&E> 8,139,049
<DEPRECIATION> 968,737
<TOTAL-ASSETS> 10,258,617
<CURRENT-LIABILITIES> 3,366,611
<BONDS> 0
0
0
<COMMON> 9,485
<OTHER-SE> 3,338,862
<TOTAL-LIABILITY-AND-EQUITY> 10,258,617
<SALES> 0
<TOTAL-REVENUES> 2,655,482
<CGS> 0
<TOTAL-COSTS> 1,774,050
<OTHER-EXPENSES> 2,797,535
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 213,141
<INCOME-PRETAX> (2,186,054)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,186,054)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,049,413)
<EPS-PRIMARY> (0.27)
<EPS-DILUTED> (0.27)
</TABLE>
