U.S. SECURITIES AND EXCHANGE COMMISSION
<P>
Washington, D.C. 20549
FORM 10-QSB
<P>
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
<P>
For the quarterly period ended September 30, 2000
<P>
[] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
<P>
For the transition period from to
<P>
Commission file no. 0-15303
<P>
UNICO, INC.
(Name Of Small Business Issuer In Its Charter)
<P>
<TABLE>
<S> <C> <C>
Delaware 73-1215433
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation) Identification No.)
</TABLE>
<P>
24 Lakeside Avenue, Pompton Lakes, NJ 07442
(Address of Principal Executive Offices) (Zip Code)
<P>
(973) 839-7200
(Issuer's Telephone Number, Including Area Code)
<P>
Check whether the issue: (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.
<P>
Yes No X
<P>
State the number of shares outstanding of each of the
issuer's classes of common equity as of the latest
practical date: As of November 21, 2000, the company had
13,153,192 shares of common stock outstanding, $0.01 par
value.
<P>
UNICO, INC.
Form 10-QSB
Quarterly Report
For The Period Ended September 30, 2000
<P>
<TABLE>
<S> <C>
Page
Part I - FINANCIAL INFORMATION
<P>
Item 1. Financial Statements
<P>
Unaudited Consolidated Statement of Financial Condition
At September 30, 2000 and December 31 1999 For Unico, Inc.
and Subsidiaries 4
<P>
Unaudited Consolidated Statement of Operations for the Nine
Months Ended September 30, 2000 and 1999 for Unico, Inc.
and Subsidiaries 5
<P>
Unaudited Consolidated Statement of Operations for the Quarters
Ended September 30, 2000 and 1999 6
<P>
Unaudited Statement of Cash Flows for the Nine months ended
September 30, 2000 and 1999 for Unico, Inc. and Subsidiaries 7
<P>
Unaudited Statement of Stockholders' Equity (Deficiency) at
September 30, 2000 for Unico, Inc. and Subsidiaries 7
<P>
Notes to Interim Consolidated Financial Statements 8
<P>
Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations 12
<P>
Part II - OTHER INFORMATION
<P>
Item 1. Legal Proceedings 15
<P>
Item 2. Changes in Securities 15
<P>
Item 3. Defaults Upon Senior Securities 15
<P>
Item 4. Submission of Matters to a Vote of Security Holders 15
<P>
Item 5. Other Information 15
<P>
Item 6. Exhibits and Reports on Form 8-K 16
<P>
Signatures 16
<P>
</TABLE>
<P>
PART 1 - FINANCIAL INFORMATION
<P>
Item 1. Financial Statements
<P>
BASIS OF PRESENTATION
<P>
The accompanying unaudited financial statements are
presented in accordance with generally accepted
accounting principles for interim financial information
and the instructions for Form 10-QSB and Item 310 under
subpart A of Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements. The accompanying statements should
be read in conjunction with the audited financial
statements for the years ended December 31, 1999 and
December 31, 1998. In the opinion of management, all
adjustments (consisting only of normal occurring
accruals) considered necessary in order to make the
financial statements not misleading have been included.
Operating results for the quarter ended September 30,
2000 are not necessarily indicative of results that may
be expected for the year ended December 31, 2000. The
financial statements are presented on the accrual basis.
<P>
UNICO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
AS OF SEPTEMBER 30, 2000
<P>
<TABLE>
<S> <C> <C>
September 30 December 31,
2000 1999
ASSETS
<P>
CURRENT ASSETS
Cash and cash equivalents $ 7,856 $ 4,910
<P>
Accounts and notes receivable, net 199,907
<P>
Capital receivable 0 35,000
---------------------------
Total current assets 207,763 39,910
<P>
FIXED ASSETS
<P>
Computer equipment 183,892 0
----------------------------
Total fixed assets, net 183,892 0
<P>
OTHER ASSETS
<P>
Goodwill 1,045,172
Gas, oil and mineral lease 40,000 40,000
-----------------------------
<P>
Total other assets 1,085,172 40,000
<P>
TOTAL ASSETS $ 1,476,827 $ 79,910
=============================
<P>
LIABILITIES AND STOCKHOLDERS' EQUITY
<P>
CURRENT LIABILITIES
<P>
Accounts payable $ 270,115 $ 43,381
<P>
Other short term debt 238,970
<P>
Due to shareholders 261,076 122,470
<P>
Due on Independent News Acquisition 200,000 0
------------------------------
<P>
Total current liabilities 970,161 165,851
----------------------------
Total liabilities 970,161 165,851
----------------------------
LONG-TERM LIABILITIES
<P>
STOCKHOLDERS' EQUITY (DEFICIENCY)
<P>
Common stock
$.01 par value, 20,000,000 shares authorized,
11,950,996, and 5,929,185 outstanding at
September 30, 2000,
and December 31, 1999, respectively 119,502 59,292
Additional paid-in capital 7,835,916 6,834,525
Retained earnings (7,448,752) (6,979,758)
------------------------------
<P>
Total stockholders' equity (deficiency) 506,666 (85,941)
<P>
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
(DEFICIENCY) $ 1,476,827 $79,910
===============================
</TABLE>
<P>
UNICO, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
AND SEPTEMBER 30, 1999
<TABLE>
<S> <C> <C>
2000 1999
---- ----
REVENUE
Advertising revenue $ 538,000
Other $ 31,568 $ 0
------- --------
Total revenue 569,568 0
------- --------
<P>
EXPENSES
Cost of sales 157,697 0
General and administrative 922,481 145,503
------- --------
Total expenses 1,080,178 145,503
------- --------
INCOME (LOSS) BEFORE INCOME TAXES (510,610) (145,503)
<P>
INCOME TAX PROVISION - -
-------- --------
<P>
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS $ (510,610) $(145,503)
<P>
EXTRAORDINARY ITEMS:
Cancellation of debt 245,000 0
Gain on the sale of subsidiary 0 0
--------- ----------
NET INCOME (LOSS) $ (265,610) $(145,503)
<P>
BASIC NET INCOME (LOSS) PER COMMON SHARE
Weighted average common shares outstanding
Basic common shares 8,777,667 2,787,640
Assuming dilution for unexercised options 8,777,667 2,787,640
(Loss) from continuing operations $(0.06) $(0.05)
Extraordinary items (0.03)
<P>
NET EARNINGS (LOSS) PER SHARE $ (0.03) $ (0.05)
</TABLE>
<P>
UNICO, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTERS ENDED SEPTEMBER 30, 2000
AND SEPTEMBER 30, 1999
<TABLE>
<S> <C> <C>
2000 1999
---- ----
REVENUE
Advertising $ 538,000 $ 0
Other $ 31,568 $ 0
------- ---------
Total revenue 569,568 0
------- ---------
EXPENSES
Cost of sales 157,697 0
General and administrative 361,342 0
------- -----------
Total expenses 519,039 0
------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 50,529 0
<P>
INCOME TAX PROVISION - -
-------- -----------
<P>
NET INCOME (LOSS) BEFORE EXTRAORDINARY $ 50,529 $ 0
<P>
EXTRAORDINARY ITEMS
Cancellation of debt 245,000 -
Gain (loss) on sale of subsidiary - -
-------- -----------
NET INCOME $ 295,592
<P>
BASIC NET INCOME (LOSS) PER COMMON SHARE
Weighted average common shares outstanding
Basic common shares 8,777,667 6,703,371
Assuming dilution for unexercised options 8,777,667 6,703,371
(Loss) from continuing operations $ 0.01 $ (0.00)
Extraordinary Items $ 0.03
<P>
NET EARNINGS (LOSS) PER SHARE $ (0.04) $ (0.00)
</TABLE>
<TABLE>
UNICO, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999
<S> <C> <C>
2000 1999
------- -----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(265,611) $ ( 149,434)
<P>
Adjustments to reconcile net income to net cash
provided by operating activities:
<P>
Proceeds of bank loans 70,000
Accounts receivable 4,595 315,354
Stock Options for services rendered
Stock issued for services rendered 7,500
<P>
Receivable from shareholder 35,000
Receivable from NexGen 834,665
<P>
Accounts payable 126,609 (694,707)
<P>
Prepaid expenses 145,943
Depreciation and amortization 98,404
Deferred rent and revenue (477,376)
Deposits (26,895)
Accrued expense 57,700 0
------------------------
Net cash provided by (used) by operating
activities 28,293 53,454
------------------------
<P>
CASH FLOWS PROVIDED BY (USED) BY
INVESTING ACTIVITIES
<P>
Investment in Independent News (1,060,000)
<P>
Goodwill (986,681)
Purchase of computer equipment (74,637) -
Sale of Property 0 1,734,098
-----------------------
<P>
Net cash provided (used) by Investing
Activities (2,121,318) 1,734,098
-----------------------
CASH FLOW FROM FINANCING ACTIVITIES
<P>
Loan from shareholder 112,842
Retained earnings (133,558)
Capital stock 36,218
<P>
Proceeds from sale of Stock and additional capital 2,068,682
Proceeds from note payable 200,000 40,000
Payment of note payable (215,732) (677,726)
Capital receivable 35,000
Cash Dividend (172,665)
Loss on sale of subsidiary (1,112,565)
Acquisition of SVE 0 35,000
-----------------------
Net cash provided (used) by
financing activities 2,068,452 (1,852,956)
-----------------------
<P>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (24,573) (65,404)
<P>
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 32,429 105,404
------------------------
<P>
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 386 $ 40,000
========================
</TABLE>
<P>
UNICO, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
AT JUNE 30, 2000
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Excess Stock Shares of
Retained Capital Over Dividend Total Common
Earnings At Par Par Declared Equity Stock
---------------------------------------------------------------
<P>
As of
December 31, 1998 ($6,768,187) $18,773 $7,921,443 $172,665 $1,344,694 1,877,272
<P>
Correction # shares
outstanding 1,686 (1,686) 168,600
<P>
Stock issued for services 1,333 11,167 12,500 133,313
<P>
Dividend paid (172,665) (172,665)
<P>
Off-set of amount due to
subsidiary sale (1,106,399) -1,106,399
<P>
Stock issued in connection
with Silver Valley 2,500 2,500 5,000 250,000
<P>
Contributions to capital 35,000 7,500 42,500 3,500,000
<P>
Net Income- (211,571) -211,571
<P>
As of
December 31, 1999 ($6,979,758) $59,292 $6,834,525 $0 ($85,941) 5,929,185
-----------------------------------------------------------------
<P>
Acquisition of BidInvite 1,000 (1,000) 100,000
<P>
Net Income (33,953) (33,953)
<P>
As of
March 31, 2000 (7,013,711) $60,292 $6,833,525 $0 ($119,894) 6,029,185
-----------------------------------------------------------------
Proceeds of Offering 25,000 25,000
<P>
Stock Issued for Services 27,218 261,001 288,219 2,721,811
<P>
Net Income for Period (527,185) (527,185)
<P>
As of June 30, 2000 (7,540,896) 87,510 $7,119,526 $0 (333,860) 8,750,996
-----------------------------------------------------------------
Shares issued in
acquisition 31,991 768,009 800,000 3,200,000
<P>
Capital contribution 5,000 5,000
<P>
Net income 295,527 295,527
<P>
Prior retained earnings
of acquired subsidiary (203,384) (203,384)
<P>
Paid in capital of
acquired subsidiary 1,008,381 1,008,381
<P>
Investment in subsidiary
eliminated in
consolidation (1,060,000) (1,060,000)
<P>
As of Sept. 30, 2000 (7,448,753) 119,601 7,835,916 $0 506,684 11,960,996
=================================================================
</TABLE>
<P>
UNICO, INC. AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
<P>
NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
<P>
(A) Nature of operation
<P>
In May 1998, the Company entered into an agreement to
sell the common stock of its wholly owned subsidiary,
United Marketing Solutions, Inc. (UMSI) to Next
Generation Media (NexGen). Closing on this sale occurred
on April 1, 1999, leaving Unico as a publicly traded
shell company.
<P>
Under new management, the Company intends on becoming a
diversified holding company focusing on multi media and
high technology companies and is actively seeking private
financing for that purpose.
<P>
(B) Basis of consolidation
<P>
The consolidated financial statements include the
accounts of the Company, UMSI, until sold, and its two
wholly owned subsidiaries, Silver Valley Energy, Inc.
(SVE), BidInvite, Inc. (BidInvite) until sold and The
Independent News. All material inter-company transactions
have been eliminated.
<P>
(C) Acquisitions
<P>
During May 1999 the Company acquired all of the common
stock of SVE for $35,000 in cash and 120,000 shares of
common stock. SVE owns oil, gas, and mineral lease
rights on approximately 1,200 acres of land located in
Texas. SVE is inactive and is not developing these
rights. The subsidiary has not had any operations since
inception.
<P>
Effective March 1, 2000, the Company acquired all the
issued and outstanding stock of BidInvite, Inc, solely
for the Company's common stock. This acquisition is
accounted for as a pooling of interests. On July 1, 2000
the Company acquired all the issued and outstanding stock
of The Independent News, Inc. for 3,200,000 shares of the
Company's common stock, the issuance of $200,000 of the
Company's debt, and the assumption of a $60,000 note
payable to a commercial bank.
<P>
(D) Property
<P>
Property is recorded at cost and is depreciated over its
estimated useful life.
<P>
(E) Cash and cash equivalents
<P>
The statement of cash flows is presented on a basis of
cash available.
<P>
UNICO, INC. AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
September 30, 1999
<P>
(F) Income taxes
<P>
The Company files a consolidated federal tax return.
<P>
(G) Impairment of long-lived assets
<P>
The company policy is to periodically evaluate the
economic recoverability of all of its long-lived assets.
In accordance with that policy, when the company
determines that an asset has become impaired, it
recognizes the loss on the basis of the discounted cash
flows from that asset.
<P>
(H) Earnings (loss) per share
<P>
Basic earnings (loss) per share are computed by dividing
the net income for the applicable period by the weighted
average number of shares outstanding during the year.
Diluted earnings (loss) per share are computed by taking
into consideration stock options as if the stock was
issued.
<P>
Note- 2 LEASES
<P>
The company currently leases offices at 24 Lakeside
Avenue, Pompton Lakes, NJ.
<P>
Note- 3 RELATED PARTY TRANSACTIONS AND THE LOSS ON
SALE OF SUBSIDIARY
<P>
During 1998 and 1999, throughout the pendency of the
NexGen acquisition of UMSI, monies were advanced by
NexGen to the Company. All monies received in this sale
during 1998 were reported in equity as paid in capital.
<P>
In 1999, after all monies were actually received, the
full amount previously recognized as paid in capital in
1998, or $ 1,106,399, was offset and the net difference
of $ 6,166 is reported in 1999 as a loss in the statement
of operations.
<P>
During 1998, the Company's President and certain other
members of the Board of Directors resigned and became
stockholders of NexGen, having exchanged their interests
in the Company for NexGen's common stock. New management
was appointed by the new majority stockholders.
<P>
During 2000, the Company acquired all the issued and
outstanding stock of The Independent News from NexGen. In
connection with this transaction, preferred stock in
NexGen that was held by a shareholder of the Company was
cancelled. In consideration for this cancellation,
3,200,000 shares of the Company's stock were issued to
the shareholder.
<P>
UNICO, INC. AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
<P>
NOTE 4- INCOME TAXES
<P>
The company accounts for income taxes in accordance with
Financial Accounting Standards No. 109, which requires
and asset and liability approach to accounting for income
taxes. The company has not recorded a deferred tax asset
because its realization is unknown and depends on future
results of operations
<P>
NOTE 5- COMMON STOCK
<P>
On May 28, 1999, the Company acquired 100% of SVE for
1,080,000 restricted shares of common stock.
<P>
Subsequently, the purchase price was renegotiated
providing for the return of the 1,080,000 shares, giving
SVE a cash payment of $35,000 and 120,000 shares of
Common stock. The financial statements recognize only
the amended agreement and sets aside the original
agreement.
<P>
The Company also made a 1 for 3 reverse stock split
immediately before acquiring SVE. This 1 for 3 reverse
stock split has been recognized in these financial
statements retroactive to December 31, 1999.
<P>
On July 1, 2000, the Company acquired all of the common
stock of The Independent News, Inc. and, among other
items, issued 3,200,000 shares of the Company's common
stock.
<P>
The stock transfer agent was changed in May of 1999. In
the transition, an additional 168,587 shares of issued
and outstanding stock came to light. Management has not
been able to explain who owns these shares or for what
purpose they were issued. Management has chosen to
record these 168,587 shares as a reduction in paid in
capital and an increase in common stock at par value.
<P>
NOTE 6- DISCONTINUED OPERATIONS OF SUBSIDIARY
<P>
During 1998, the Company entered into an agreement to
sell its principal operating subsidiary UMSI, formerly
United Coupon Corporation. Accordingly, the results of
operations for 1999 are presented showing the results of
continuing operations and discontinued operations net of
taxes. UMSI was fully disposed of on April 1, 1999. The
Company, after this transaction had no assets or
liabilities.
<P>
UNICO, INC AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
<P>
NOTE 6- DISCONTINUED OPERATIONS OF SUBSIDIARY
<P>
<TABLE>
<S> <C>
As Of
December 31, 1999
-----------------
Revenue
Printing, design, and advertising sales $ 1,902,906
Other 62,383
-----------------
Total Revenue 1,965,289
<P>
Expenses
Direct cost of sales 1,495,041
General and administrative 474,159
-----------------
Total expenses 1,969,200
-----------------
Net income (loss) before
Tax provision (3,931)
<P>
Income tax provision -
<P>
Income (loss) from operations $ (3,931)
</TABLE>
<P>
UNICO, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
<P>
NOTE 7- PRECISION COMMUNICATION CONSULTANTS, LTD -
ACQUISITION
<P>
On December 28, 1999 the Company entered into a share
exchange agreement with Precision Communication
Consultants LLC. (Communication). In that agreement the
Company was to acquire all of the interests in
Communication in exchange for warrants to acquire 500,000
shares of stock at varying prices and 416,470 shares of
common stock. The company plans to cancel all of the
common stock issued in the transaction and will not honor
the warrants when they are presented for exercise. The
Company believes that it was induced to enter into the
transactions based on several financial
misrepresentations by Communication. Management does not
know of any litigation with respect to its decisions at
present.
<P>
NOTE 8- BIDINVITE.COM, INC. SALE
<P>
On September 15, 2000, the Company sold 95% of its
interest in BidInvite for a $1,000,000 non interesting
bearing note. Under the terms of the note, payment of
$500,000 is to be made if and when the new owners obtain
$3,000,000 in financing for BidInvite. Additionally,
$500,000 will also be due when and if the new owners
secure an additional $3,000,000 in funding. Because of
the contingent nature of the ultimate realization of any
monies with respect to the note, the note has not been
recognized in the Company's financial statements.
<P>
NOTE 9- STOCK OPTIONS
<P>
Effective September 30, 1999 the Company adopted an
omnibus stock option plan. The plan provides for
2,000,000 shares as either Incentive Stock Options or
Employee Stock Options. As of December 31, 1999, 359,450
options have been granted to Directors and key employees.
The exercise price is $.01 per share. These options were
exercised on April 2, 2000. In addition, on June 15,
2000, 272,011 of additional options were granted to
employees and directors of the company along with
1,085,000 shares given to various consultants for
services rendered. In April, 2000, the Officers and
Directors of the Company exercised their stock options
for the acquisition of 350,000 shares. Also in April,
2000, 845,000 shares were given to Nateko, SA, the
Company's strategic software development partner.
<P>
Note 10- LITIGATION AND OTHER MATTERS
<P>
The Company has been sued in connection with its
acquisition of Silver Valley Energy, Inc. and is in the
process of negotiating a settlement, which is not
expected to have a material effect on the Company's
financial statements. In addition, NexGen has claimed
that Unico is in default with respect to the interest due
on its $200,000 note payable to NexGen with respect to
the Independent News Acquisition. The Company believes
that it is not in default on this note due to certain
payments the Company made on behalf of NexGen to outside
third parties to settle claims the outside third parties
had against NexGen. This matter is currently under
negotiation and no lawsuit has been filed.
<P>
NOTE - 11 - INTERCOMPANY SALE
<P>
On September 30, 2000, The Independent News sold all of
its assets and liabilities to a wholly owned subsidiary
for a promissory note in the amount of $260,000, bearing
interest at 12% per annum and payable semi-annually. The
note matures September 30, 2005. This promissory note is
secured by $260,000 worth of preferred stock in Unico.
This intercompany transaction has been eliminated in
consolidation.
<P>
Item 2. Managements Discussion and Analysis of
Financial Conditions and Results of Operations.
<P>
MANAGEMENT DISCUSSION AND ANALYSIS
<P>
Certain matters discussed herein are forward-looking
statements intended to qualify for the safe harbors from
liabilities established by the Private Litigation Reform
Act of 1995. These forward-looking statements can
generally be identified as such because the context will
include words such as the Company "believes," "plans,"
"intends," "anticipates," "expects," or words of similar
import. Similarly, words that describe the Company's
future plans, objectives, estimates, goals, are also
forward-looking statements.
<P>
Such statements address future events and conditions
concerning capital expenditures, earnings, litigation,
capital resources and accounting matters. Actual results
may vary materially from those currently anticipated in
such statements by reason of factors such as future
economic conditions, including changes in customer
demands, and changes in legislative or regulatory
environments.
<P>
On April 1, 1999, the Company sold its only asset, the
stock of its operating subsidiary United Marketing to
NexGen, Inc. This sale was agreed to in May of 1998 and
Unico received $1,106,000. The Company declared a stock
dividend of $ 172,000 in December 1998 to be paid in
1999. The subsidiary was in the franchising of
cooperative direct mail advertising distributorships
business. The results of operations of United Marketing
are included in the statement of operation for the period
January 1, 1999 through April 1, 1999.
<P>
As a result of the above-described transaction, Unico,
Inc. became a publicly traded "shell" company. The
company, immediately after the sale of United Marketing,
had no assets and no liabilities. The company was funded
by two new shareholders, Nathan International and TC
Equities, selected a new Board of Directors and
Management Team, and changed its "mission."
<P>
In May of 1999, the Company purchased an interest in an
oil and gas lease covering approximately 1,200 acres of
land in Texas.
<P>
Unico originally intended to become a Diversified holding
company focused on the incubation, acquisition and
financing of young, development stage high technology
multi-media companies. This concept was abandoned in
the third quarter of 2000 largely because of the recent
decline in technology stocks and, in particular, Internet
incubation stocks. Some of these stocks have lost over
90% of their highest value. This decision was also
influenced by the Company's acquisition of The
Independent News on July 1, 2000.
<P>
The Company's management observed that approximately 90%
of the freely distributed independent newspapers in the
USA did not have a WEB presence because of the onerous
start up costs and, as a result, were not capitalizing on
additional revenues that could be generated from their
existing advertising clients. Concurrent with this
observation, on July 1, 2000 Unico acquired The
Independent News, a freely distributed newspaper in
Northern New Jersey, having approximately 2.5 million in
projected advertising revenues.
<P>
Working in conjunction with the Independent News, the
Company developed a WEB based advertising platform that
the Independent News used to put parts of its local
newspaper on the WEB, along with its advertisers. This
enabled the Independent News to charge additional fees to
their existing advertisers because they enjoyed increased
exposure.
<P>
Unico and The Independent News further developed this
product so that it could be migrated to other newspapers
at no cost to the newspaper. This new product is "THE
WEB IN A BOX'. "THE WEB IN A BOX" is a fully functional,
turn-key web-site personalized to the local newspaper
that allows the newspaper to put its local content and
advertisements on the WEB. Unico, Inc. shares in the
newspapers increased advertising revenue.
<P>
This concept was further developed to include "The Local
Times.com." The Local Times.com is currently under
development and will include items on a national level
that, through a search engine, can be targeted to a
specific local area. These amenities to The Web In A Box
include shopping malls (where the local advertiser can
display their products), chat rooms, and local auctions.
<P>
There is no other company that Unico or The Independent
News is aware of that is marketing anything similar to
The Local Times.com and The Web In A Box.
<P>
Part II. OTHER INFORMATION
<P>
Item 1. Legal Proceedings
<P>
The Company had a default judgment entered against it in
the case of Southwin Financial, Ltd. v. Unico, Inc., et
al. in the 104th District Court in and for Taylor County,
Texas, Case No. 22,208-B. The default judgment is in the
amount of $960,000 plus attorney's fees of $1,500, court
costs and post-judgment interest from the date of
judgment at the rate of 10% per annum. This lawsuit is
in connection with its acquisition of Silver Valley
Energy. The company is attempting to settle this matter.
<P>
NexGen, Inc. has threatened that it will file suit
regarding the share of Independent News which it sold to
Unico, Inc. on September 30, 2000 pursuant to a Stock
Acquisition Agreement ("Agreement"). Pursuant to the
Agreement, Nexgen was to be paid pursuant to the terms of
a promissory note. Nexgen is alleging that the Company
is in default under the terms of the promissory note and
that Nexgen is entitled to the shares of Independent News
pursuant to the Agreement. The Company is presently
attempting to settle this matter.
<P>
On November 2, 2000, a lawsuit was filed, David V.
Venables v. Unico, Inc. and BidInvite, in the Superior
Court of the State of Delaware in and for Sussex County,
whereby the plaintiff is alleging that the Company has
breached the Share Exchange Agreement ("Agreement")
between the Company and David Venables. The Company
denies that it is in breach of the Agreement and are in
the process of retaining an attorney in Delaware to file
an answer.
<P>
Item 2. Change of Securities
<P>
The following information sets forth certain information
as of September 31, 2000, for all securities the Company
sold since June 30, 2000, without registration under the
Act, excluding any information "previously reported as
defined in Rule 12b-2 of the Securities Exchange Act of
1934." There were no underwriters in any of these
transactions, nor were any sales commissions paid
thereon.
<P>
On July 6, 2000, Richard S. Hyland returned 130,000
shares to treasury and the Company issued 35,000 shares
to Richard S. Hyland in consideration for acting as
Executive Vice President of the Company. Such shares
were issued in reliance on the exemption under Section
4(2) of the Securities Act of 1933, as amended (the
"Act") and are restricted in accordance with Rule 144 of
the Securities Act of 1933.
<P>
On July 12, 2000, the Company issued 1,200,000 shares to
Sibernick Holdings, Inc.as consideration for the NexGen
transaction. Such shares were issued in reliance on the
exemption under Section 4(2) of the Securities Act of
1933, as amended (the "Act") and are restricted in
accordance with Rule 144 of the Securities Act of 1933.
<P>
Item 3. Defaults Upon Senior Securities.
<P>
NexGen, the seller of the Independent News, is claiming
that the Company is in default on its $200,000 obligation
to NexGen because of the Company's failure to pay
interest on the appropriate date. The Company believes
it is not in default, because it has advanced monies to
outside third parties on NexGen's behalf, the amount of
which would equal or exceed the amount of interest owed
to NexGen on the $200,000 debt. The Company is presently
attempting to settle this matter.
<P>
Item 4. Submission of Matters to a Vote of Security
Holders.
<P>
On June 25, 1999 the shareholders of the company approved
the acquisition of Silver Valley Energy, which includes
the assets of the "Glass Mountains 799" property
comprising oil and gas reserves located in Pecos County,
Texas in exchange for stock and cash of the company.
<P>
Item 5. Other information. None.
<P>
Item 6. Exhibits and reports on Form 8-K. None.
<P>
Exhibit 27 - Financial data schedule - electronic filing
only.
<P>
Signatures
<P>
Pursuant to the requirements of section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed in its behalf by the
undersigned , thereunto duly authorized, on November 20,
2000.
<P>
Unico, Inc.
Registrant
<P>
/s/Joseph Nicastro
------------------------------
Joseph Nicastro
Director
