<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended - June 30, 2000
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _______________ to __________________
Commission File Number 0-18299
NEWS COMMUNICATIONS, INC.
-------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 13-3346991
------------------ -----------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2 Park Avenue, New York, New York 10016
---------------------------------------
(Address of principal executive offices)
(212) 689-2500
----------------
(Issuer's telephone number)
______________________________________________
(Former name, former address and former fiscal
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
12, 13 or 15 (d) of the Exchange Act during the past 12 months (or 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 __
----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes ______ No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of August 14, 2000: 8,568,162 shares $ .01 par value common stock.
Transitional Small Business Disclosure Format (check one) Yes _____ No X
-----
<PAGE>
FORM 10-QSB
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. Financial Information
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet
at June 30, 2000......................................... 3
Unaudited Consolidated Statements of
Operations for the three and six months
ended June 30, 2000 and May 31, 1999..................... 5
Unaudited Consolidated Statements of Cash
Flows for the six months ended
June 30, 2000 and May 31, 1999........................... 6
Notes to Consolidated Financial Statements............... 8
Item 2. Management's Discussion and Analysis
or Plan of Operation..................................... 10
PART II. Other Information........................................ 15
Item 6. Exhibits and Reports on Form 8-K......................... 15
Signatures.............................................................. 16
</TABLE>
2
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2000
(UNAUDITED)
Assets:
Current Assets:
Cash $ 374,071
Accounts receivable [less: allowance for
doubtful accounts of $2,059,405] 3,079,070
Due from related parties 1,500
Other 195,202
----------
Total Current Assets 3,649,843
Property and equipment at cost- net 831,112
Intangible assets - net 2,775,365
Other - net 267,950
----------
Total Assets $7,524,270
==========
3
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $ 2,292,085
Accrued expenses -
Payroll 434,734
Other 481,887
Unearned revenue 148,723
Capital lease, current 16,102
------------
Total current liabilities 3,373,531
------------
Capital lease, non-current 57,698
------------
Minority interest 570,658
------------
Stockholders' Equity:
Preferred stock, $1.00 par value; 500,000 shares authorized: 197,535 shares
issued and outstanding; $2,094,000 aggregate liquidation value 197,535
Common stock, $.01 par value; authorized 100,000,000
shares; 8,618,495 shares issued and outstanding 86,184
Paid-in-capital preferred stock 1,748,350
Paid-in-capital common stock 23,428,760
(Deficit) (21,529,717)
------------
Total 3,931,112
Less: Treasury stock 53,333 shares - at cost (408,729)
------------
Total Stockholders' Equity 3,522,383
------------
Total Liabilities and Stockholders' Equity $ 7,524,270
============
</TABLE>
4
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NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2000 May 31, 1999 June 30, 2000 May 31, 1999
------------- ------------ ------------- ------------
Unaudited
---------
<S> <C> <C> <C> <C>
Net revenues $5,594,225 $4,740,014 $ 9,543,828 $ 8,019,190
---------- ---------- ----------- -----------
Expenses:
Editorial 444,919 365,377 838,865 713,822
Production and Distribution 1,788,824 1,740,581 3,232,516 3,275,547
Selling 1,112,239 934,277 2,067,257 1,723,555
General and Administrative 1,933,533 1,589,944 3,778,521 3,050,187
Depreciation and Amortization 113,042 101,481 216,959 205,795
---------- ---------- ----------- -----------
Total expenses 5,392,557 4,731,660 10,134,118 8,968,907
---------- ---------- ----------- -----------
Operating Income (Loss) 201,668 8,354 (590,290) (949,717)
Gain on Sale of
Subsidiary 236,714 ---- 236,714 ----
Gain on Disposal of Unconsolidated
Entity (75) ---- 22,687 ----
---------- ---------- ----------- -----------
Income (Loss) Before Interest,
Minority Interest in Income of
Subsidiary and Taxes 438,307 8,354 (330,889) (949,717)
Interest Expense 2,237 37,235 18,149 137,834
Minority Interest in Income of
Subsidiary 39,150 ---- 78,300 ----
---------- ---------- ----------- -----------
Net Income (Loss) Before Taxes 396,920 (28,881) (427,338) (1,087,551)
Tax Expense 1,000 5,157 3,864 23,069
---------- ---------- ----------- -----------
Net Income (Loss) $ 395,920 $ (34,038) $ (431,202) $(1,110,619)
========== ========== =========== ===========
Net income (loss) per share -
basic and diluted $.05 $(.01) $(.05) $(.24)
========== ========== =========== ===========
Weighted average shares
Outstanding - basic and diluted 8,568,162 6,575,000 8,301,466 4,786,112
========== ========== =========== ===========
</TABLE>
5
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
----------------
June 30, 2000 May 31, 1999
------------- ------------
Unaudited
---------
<S> <C> <C>
Cash flows from operating activities:
Net Loss $ (431,202) $(1,110,619)
----------- -----------
Adjustments to Reconcile Net
Loss to Net Cash Used in Operating Activities:
Depreciation and Amortization 216,959 205,795
Provision for Doubtful Accounts 471,550 164,500
Minority Interest 78,300 ----
Gain on Sale of Unconsolidated Entity (22,687) ----
Gain on Sale of Subsidiary (236,714) ----
Changes in Assets and Liabilities:
(Increase) Decrease in:
Accounts Receivable (1,441,476) (510,242)
Due from Related Parties 16,066 (15,226)
Other Assets 62,887 142,805
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 449,748 (737,135)
Unearned Revenue 5,708 28,578
Due to Related Parties (191,250) (160,180)
----------- -----------
Total Adjustments (590,909) (881,105)
----------- -----------
Net Cash Used in Operating Activities - (1,022,111) (1,991,724)
forward
</TABLE>
6
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------
June 30, 2000 May 31, 1999
-------------- -------------
Unaudited
---------
<S> <C> <C>
Net Cash Used in Operating Activities -
forwarded (1,022,111) (1,991,724)
=========== ===========
Cash Flows from Investing Activities:
Capital Expenditures (451,085) (40,148)
Investment in Unconsolidated Subsidiaries (31,194) 335
Proceeds from Sale of Assets 200,000 ----
Proceeds from Sale of Unconsolidated Entity 225,000 ----
----------- -----------
Net Cash Used in Investing Activities (57,279) (39,813)
----------- -----------
Cash Flows from Financing Activities:
Payment of Capital Lease Obligations (6,784) ----
Proceeds from Notes Payable ---- 1,200,000
Principal Payments - Notes Payable ---- (1,950,000)
Net Proceeds from Issuance of Common Stock 2,710,521 5,353,601
Payment of Related Party Notes Payable (2,500,000) ----
Dividend on Preferred Stock (564) (16,560)
----------- -----------
Net Cash Provided by Financing Activities 203,173 4,587,041
----------- -----------
Net Increase (Decrease) in Cash (876,217) 2,555,504
Cash, Beginning of Periods 1,250,288 123,621
----------- -----------
Cash, End of Periods $ 374,071 $ 2,679,125
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest $ 1,569 $ 134,691
Capital lease obligation incurred $ 80,584 ----
Note receivable on sale of subsidiary $ 126,000 ----
</TABLE>
7
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NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation:
---------------------
In the opinion of News Communications, Inc.'s (NCI) management, the accompanying
unaudited consolidated financial statements contain all adjustments (consisting
of only normal recurring adjustments) necessary to present fairly the
information set forth therein. These consolidated financial statements are
condensed and, therefore, do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. The results for the interim periods are not necessarily indicative
of the results for a full year.
These consolidated financial statements should be read in conjunction with NCI's
Annual Report on Form 10-KSB for the fiscal year ended November 30, 1999 and the
one month ended December 31, 1999 and the related audited financial statements
included therein.
In December 1999, NCI changed its fiscal year end from November 30 to December
31.
Certain items in the 1999 financial statements have been reclassified to conform
to the 2000 presentation.
B. Loss per Share:
--------------
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings per Share", ("SFAS No. 128"), which
provides for the calculation of "basic" and "diluted" earnings per share. Basic
earnings per share includes no dilution and is computed by dividing income
available to common shareholders by the weighted average number of shares of
common stock outstanding for the period. Diluted earnings per share reflect, in
periods in which they have a dilutive effect, the effect of shares of common
stock issuable upon exercise of common stock equivalents. The assumed conversion
of the options would have been anti-dilutive and, therefore, were not considered
in the computation of diluted earnings per share for the three and six months
ended June 30, 2000 and May 31, 1999.
C. New Authoritative Accounting Pronouncements
-------------------------------------------
In March 2000, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation - an Interpretation of APB No. 25 ("FIN No. 44"). FIN No. 44
clarifies the application of Opinion No. 25 for certain issues including: (a)
the definition of employee for purposes of applying Opinion No. 25, (b) the
criteria for determining whether a plan qualifies as a noncompensatory plan, (c)
the accounting consequence of various modifications to the terms of a previously
fixed stock option or award, and (d) the accounting for an exchange of stock
compensation awards in a business combination. In general, FIN No. 44 is
effective July 1, 2000. The Company does not expect the adoption of FIN No. 44
to have a material impact on its financial position or results of operations.
8
<PAGE>
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 requires companies to
recognize all derivative contracts at their fair values, as either assets or
liabilities on the balance sheet. If certain conditions are met, a derivative
may be specifically designated as a hedge, the objective of which is to match
the timing of gain or loss recognition on the hedging derivative with the
recognition of (1) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk, or (2) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized in income in the period of
change. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000.
Historically, NCI has not entered into derivative contracts either to hedge
existing risks or for speculative purposes. Accordingly, NCI does not expect
adoption of the new standard to affect its financial statements.
D. Intangible Assets:
A breakdown of Intangible Assets is as follows:
Cost Amortization Net
--------- ------------ ---------
Goodwill 2,117,708 919,594 1,198,114
Tradenames 2,850,000 1,272,749 1,577,251
--------- --------- ---------
4,967,708 2,192,343 2,775,365
========= ========= =========
E. Common Stock:
-------------
On January 31, 2000 we sold an aggregate of 1,548,889 shares of common stock at
a price of $1.75 per share. The proceeds of the sale of shares was used to pay
the $2,710,521 unpaid principal balance and accrued interest on our indebtedness
to D.H. Blair Investment Banking Corp. and Wilbur L. Ross.
F. Sale of Unconsolidated Subsidiary:
----------------------------------
On March 1, 2000, we completed the sale of our 50% interest in the New York
Blade News to our partner, the Washington Blade, Inc., for $225,000 resulting in
a net gain on the sale of $22,687.
G. Sale of Subsidiary
-------------------
On June 15, 2000, we completed the sale of substantially all of the assets and
liabilities of the Parkchester Publishing Co., Inc to Metro North Media, Inc.,
for $326,000 resulting in a net gain on the sale of $236,714. As part of the
proceeds, the Company received a non-interest bearing note receivable of
$126,000 due in equal installments over the next three years. This note is
secured by certain assets and revenue streams of Metro North Media, Inc.
9
<PAGE>
NEWS COMMUNICATIONS, INC. AND SUBSIDIARIES
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The information contained in this Item 2, Management's Discussion and Analysis
or Plan of Operation, contains "forward looking statements" within the meaning
of Section 27A of the Securities Act 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Actual results may materially
differ from those projected in the forward looking statements as a result of
certain risks and uncertainties set forth in this report. Although management
believes that the assumptions made and expectations reflected in the forward
looking statements are reasonable, there is no assurance that the underlying
assumptions will, in fact, prove to be correct or that actual future results
will not be different from the expectations expressed in this report.
News Communications, Inc. is a well established publisher of various weekly
community newspapers in the New York metropolitan area and related targeted
audience publications such as Dan's Papers in the Hamptons and The Hill in
Washington D.C., which covers congressional news and events. As of June 30,
2000, we published twenty two weekly newspapers and one monthly.
Effect of Change in Fiscal Year-End
Due to the change in our fiscal year-end from November to December at the end of
1999, the second quarter of fiscal 1999 included the months of March, April and
May 1999 while the second quarter of fiscal 2000 included the months of April,
May and June 2000. Therefore, our management discussion compares these slightly
different time periods, referring to them as second quarter 1999 and second
quarter 2000. The net effect in this quarter and in the six months is not, in
the opinion of our management, significant.
Results of Operations:
Three Months Ended June 30, 2000 Compared With Three Months Ended May 31, 1999
Revenues
On a consolidated basis, revenue for the second quarter of 2000 increased 18% to
$5,594,225 compared with $4,740,014 in the second quarter of 1999. Display
advertising, which represented 74% of total revenues improved by 24% to
$4,352,975 in the second quarter 2000 from $3,512,387 in the second quarter
1999. Legal notice advertising grew 15% while classified had modest growth of
2%.
Among our individual operating units, total revenue at Dan's Papers increased by
64% with record setting issues for the Memorial Day and the Independence Day
(issue published June 30th) holidays. The Hill continued its strong year with
revenue growth of 32% for the quarter. The
<PAGE>
Queens Tribune's revenues increased 23%, with classified advertising increasing
47% and display advertising increasing 12%. Revenue growth in Queens was aided
by the introduction of a new publication, the Press of Southeast Queens, which
was launched in the middle of May. Average revenue per ad page continued to
increase in most of the publications.
Operating Expenses
Operating expenses for the second quarter of 2000 were $5,392,557, an increase
of 14% compared with operating expenses of $4,731,660 during the second quarter
of 1999. Approximately $200,000 of the increase resulted from certain estimates
that are now being recorded throughout the year rather than at the end of the
year, as had been the practice in prior years. Editorial expenses for the second
quarter of 2000 increased 22% compared with the second quarter of 1999 primarily
at The Hill and the Manhattan newspapers, reflecting our continuing commitment
to strengthen editorial content. In Manhattan, Our Town and West Side Spirit
added a new section featuring listings of cultural events. The launch of the
Press of Southeast Queens contributed to an increase in editorial expenses. The
new newspaper, which commenced operations in May, was created to serve the
African-American community in the Southeast region of Queens. While we were able
to utilize some existing personnel from the Queens Tribune, there were several
new editorial and sales positions created.
Production and Distribution expenses grew by just 3% for the second quarter of
2000 compared with the second quarter of 1999 despite a large increase in
advertising revenues. Manufacturing costs grew 5% despite increases in paper
prices, as a result of more efficient advertising/editorial ratios. Distribution
costs, including employees and outside vendors, were slightly lower for the
quarter primarily due to the reduction of the Nassau Newspaper Group's
Lifestyles frequency from weekly to monthly.
Selling expenses increased 19% for the second quarter of 2000 compared with the
second quarter of 1999 as a result of commissions on higher display advertising
revenues. Display advertising department expenses increased 16%, while
classified advertising department expenses increased 13%. The more competitive
job market for qualified sales personnel has impacted our ability to recruit and
has increased salary expenses in these departments. There was also a small
increase in marketing expenses.
General and Administrative expenses increased by 22% for the second quarter of
2000 compared with the second quarter of 1999 due to several factors. As
described earlier, we changed certain estimates in the current year. Therefore,
there will be higher expenses during the first three quarters, which will be
offset by not having to record these expenses in the fourth quarter. Management
believes this is a more accurate way to look at our business. Some of these
items include: reserves for doubtful accounts, minority interest in one of our
subsidiaries and executive bonuses. In addition, we invested in new senior
management in August 1999, which created two new senior level positions.
Overall, gross profit margins increased to 60% in the second quarter of 2000
from 56% in the second quarter of 1999.
11
<PAGE>
Net Income
The company had net income of $395,920 in the second quarter of 2000 compared
with a net loss of $34,038 in the second quarter of 1999. On a per share basis,
the company earned $.05 in the second quarter of 2000 compared with a loss of
$.01 in the second quarter of 1999. Earnings before interest, taxes,
depreciation and amortization (EBITDA), excluding the gain on the sale of the
Bronx (Parkchester Publishing) subsidiary in June of 2000, increased 151% in the
second quarter of 2000 to $275,560 from $109,835 in the second quarter of 1999.
EBITDA, a measure that is widely used among media related businesses, is used in
this report because management believes that it is an effective way of
monitoring the operating performance of our company. EBITDA should be considered
in addition to, not instead of, operating profit, net income, cash flows and
other measures of financial performance reported in accordance with generally
accepted accounting principles.
Six Months Ended June 30, 2000 Compared With Six Months Ended May 31, 1999
Revenues
On a consolidated basis, revenues for the first six months of 2000 increased
$1,524,638 or 19% to $9,543,828 from $8,019,190 in the first six months of 1999.
In the six-month period, display advertising increased 24% to $7,109,899 in 2000
from $5,719,115 in 1999; classified advertising increased 10% to $1,328,213 in
2000 from $1,204,101 in 1999; and legal notice advertising revenue increased 16%
during the same period.
Among the individual operating units, total revenue at Dan's Papers increased
53% for the first six months of 2000 compared with the first six months of 1999,
as the paper continued to take advantage of the Hamptons' growing popularity
from Summer resort for primarily Manhattan residents to year round resort
community. The Hill continued its strong year with revenue growth of 55% for the
first six months of 2000 compared with the first six months of 1999. In election
years, as Congress begins and ends its sessions earlier in the year, the result
is a stronger first half and a weaker second half. The Queens Tribune's
revenues increased 23% compared with the first six months of 1999, with
classified advertising increasing 48% and display advertising increasing 11%.
Revenue growth in Queens was aided by the introduction of a new publication, the
Press of Southeast Queens, which began publication in mid May. In Manhattan,
display and classified taken as a whole in the first six months of 2000 grew 13%
over the combined revenues for the first six months of 1999. Display advertising
revenue decreases in Brooklyn and Nassau outweighed increases in classified in
both groups and legal notice revenue growth in Nassau.
Operating Expenses
Operating expenses during the first six months of 2000 were $10,134,118, an
increase of 13% compared with operating expenses of $8,968,907 during the first
six months of 1999. Approximately $415,000 of that increase resulted from
certain estimates that are now being recorded throughout the year rather than at
the end of the year, as had been the previous practice.
12
<PAGE>
Despite the strong revenue growth (+19%) in the first six months of 2000, total
costs of goods sold increased by only 2%. These costs include manufacturing and
distribution of the newspapers and personnel costs in the areas of editorial,
production and distribution. Total selling expenses, which include salaries and
commissions for display and classified advertising personnel and marketing
expenses, grew 20% in the first six months of 2000. The primary reason for this
increase was the large revenue increases at Dan's Papers and The Hill.
Net Income
We had a net loss of $431,202 in the first six months of 2000 compared with a
net loss of $1,110,619 in the first six months of 1999, an improvement of
$679,417. On a per share basis, we lost $.05 in the first six months of 2000
compared with a loss of $.24 in the first six months of 1999. Operating losses
before interest, taxes, depreciation and amortization (EBITDA), excluding the
gain on the sale of the Bronx (Parkchester Publishing) subsidiary in June of
2000 and the sale of our interest in the New York Blade News in March 2000,
decreased by $292,291 in the first six months of 2000 to a loss of $451,631 from
a loss of $743,922 in the first six months of 1999. EBITDA is used in this
report because management believes that it is an effective way of monitoring the
operating performance of the company and is widely used among media related
businesses. EBITDA should be considered in addition to, not instead of,
operating profit, net income, cash flows and other measures of financial
performance reported in accordance with generally accepted accounting
principles.
Sale of the Bronx Newspapers
On June 15, 2000, we completed the sale of substantially all the assets and
liabilities of our Parkchester Publishing Co., Inc. to Metro North Media, Inc.
for $326,000. Metro North was a newly formed company controlled by our former
publisher. Parkchester was the publisher of two weekly newspapers in the Bronx,
The Bronx Press Review and the Riverdale Review. The Bronx Press Review was
acquired by the company in 1993 and the Riverdale Review was started by the
company in 1994. The Parkchester subsidiary consistently lost money and
management believed the sale would help allow it to focus on growing its other
properties. Consistent with its stated mission to turn the company around,
senior management decided the investment needed to attain the desirable level of
success was greater than the upside potential of the operation.
Sale of New York Blade News
On March 1, 2000, we completed the sale of our 50% interest in the New York
Blade News to our partner, the Washington Blade, Inc. Two and half years after
entering the New York gay and lesbian market, we decided it was in the best
interest of NCI to eliminate the losses associated with this venture and focus
on building our core properties. Since the New York Blade News had never been
profitable, the net effect of the sale will be to save our share of the ongoing
losses, which in 1999 were approximately $200,000.
13
<PAGE>
Retirement of Outstanding Indebtedness
As described in "Liquidity and Capital Resources" below, on January 31, 2000, we
effectively converted our outstanding indebtedness of $2,500,000 into equity. As
a result, we expect to save more than $200,000 in interest payments during 2000.
For the first six months of 2000 interest expense was $18,149 compared with
$137,384 for the six months of 1999.
Liquidity and Capital Resources
During the first half of 2000, the total cash used in operations was $1,022,111,
driven primarily by a net loss of $431,202 for the period and an increase in net
accounts receivable of $969,926. Cash used in investing activities totaled
$57,279 as capital expenses of approximately $450,000 were offset by the
$225,000 in proceeds from the sale of our 50% interest in the New York Blade and
the $200,000 in proceeds from the sale of the net assets of the Bronx papers.
On January 31, 2000, we sold an aggregate of 1,548,889 shares of common stock at
a price of $1.75 per share. The proceeds from the sale of these shares was used
to repay the $2,710,521 unpaid principal balance and accrued interest on our
indebtedness to D.H. Blair Investment Banking Corp. and Wilbur L. Ross. The net
cash provided by financing activities totaled $203,173.
At June 30, 2000, we had an excess of current assets over current liabilities in
the amount of approximately $276,000. While we cannot be sure we will generate
positive cash flow for the year ending December 31, 2000, management is
confident that along with the current cash balance it has the resources
available to it to fund NCI's future cash needs.
14
<PAGE>
Part II.
OTHER INFORMATION
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On January 31, 2000 we sold an aggregate of 1,548,889 shares of our common
stock at a price of $1.75 per share. The proceeds of the sale of shares was used
to pay $2,710,521 representing the unpaid principal balance and accrued interest
on our indebtedness to DH Blair Investment Banking Corp. and Wilbur L. Ross, Jr.
The shares were issued pursuant to an exemption under Section 4(2) of the
Securities Act.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
Exhibit
Number Description
27 Financial Data Schedule
B. Reports on Form 8-K
None
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NEWS COMMUNICATIONS, INC.
(Registrant)
Date: August 14, 2000 By: /s/ Steven Farbman
----------------------------
Steven Farbman, President & Chief Executive
Officer
Date: August 14, 2000 By: /s/ Paul Mastronardi
---------------------------
Paul Mastronardi, Chief Financial Officer
16
