SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d)
Securities Exchange Act of 1934
for Quarterly Period Ended December 31, 1999
- -OR-
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities And Exchange Act of 1934
for the transaction period from _________ to________
Commission File Number 0-15413
Progressive Telecommunications Corporation
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(Exact name of registrant as specified in its charter)
Nevada 95-3480640
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
601 Cleveland Street, Suite 930, Clearwater, Florida 33755
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(Address of principal executive offices, Zip Code)
(727) 466-9898
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(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of outstanding shares of the registrant's common stock,
par value $.001 as of January 20, 2000 is 9,760,967
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
CONDENSED BALANCE SHEETS
DECEMBER 31, 1999 SEPTEMBER 30, 1999
(NOTE 1) (NOTE 1)
(Audited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 303,743 $ 33,346
Certificates of deposit 52,602 52,133
Notes receivable 127,900 100,000
Accounts receivable, net 270,811 541,545
Inventory 10,948 35,478
Prepaid and other assets 30,000 45,035
Total current assets 796,004 807,537
Property and equipment, net 1,222,972 944,392
Other assets:
Goodwill, net 4,291,571 4,348,039
Intangible assets, net 316,291 205,174
Deferred charges 51,413 50,000
Deposits 60,118 27,002
Total other assets 4,719,393 4,630,215
Total assets $ 6,738,369 $ 6,382,144
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,015,075 $ 1,380,378
Accrued liabilities:
Accrued payroll and taxes 606,359 567,378
Other 360,411 599,064
Convertible debentures 228,000 -
Notes payable to related parties 906,025 41,200
Lines of credit 32,764 32,834
Current maturities of long-term debt 119,556 139,386
Current portion of capital lease obligation141,712 143,466
Deposits on unissued common stock 438,800 151,000
Total current liabilities 3,848,702 3,545,706
Long-term liabilities:
Long-term debt, net of current maturities100,030 207,334
Long-term portion of capital 21,974 56,886
lease obligation
Total liabilities 3,970,706 3,718,926
Minority interest 747,303 747,303
Stockholders' equity:
Common stock par value $.001, 50,000,000
shares authorized, 9,014,467 and 8,222,122
shares issued and outstanding at December 31,
1999 and September 30, 1999, respectively 9,014 8,222
Additional paid-in capital 10,350,309 8,546,226
Accumulated deficit (8,338,963) (6,638,533)
Total stockholders' equity 2,020,360 1,915,915
$ 6,738,369 $ 6,382,144
The accompanying notes are an integral part of these financial statements.
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED
DECEMBER 31,
1999 1998
REVENUES: $ 1,425,503 $ 105,131
COSTS AND EXPENSES:
Cost of sales 1,116,586 79,061
Selling, general & administrative 2,021,066 889,269
3,137,652 968,330
OPERATING LOSS (1,712,149) (863,199)
OTHER INCOME (EXPENSE) 11,720 (26,033)
NET LOSS $(1,700,429) $(889,232)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 8,541,848 2,824,831
NET LOSS PER SHARE (.20) (.31)
Unaudited -- See accompanying notes to condensed financial statements.
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended
December 31,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(1,700,429) $ (889,232)
Adjustments to reconcile net loss to
net cash flows used in operating activities:
Depreciation and amortization 130,272 8,450
Bad debt expense 10,365 16,801
Issuance of stock for services 846,250 475,000
Decrease in accounts receivable 260,369 2,877
(Increase) in notes receivable (27,900) -
Decrease in inventory 24,530 -
Decrease (increase) in prepaid
and other 13,152 (53,000)
(Decrease) increase in accounts
payable (326,322) 203,217
(Decrease) in accrued expenses (113,653) (22,576)
Net cash flows used in operating activities(883,366) (258,463)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (332,479) (4,765)
Purchase of intangible assets (131,022) -
Decrease in loans to stockholders - 11,150
(Increase) in deposits (33,116) (25,000)
Net cash (used for) investing
activities (496,617) (18,615)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 603,500 54,954
Proceeds from deposits on unissued
common stock 291,750 -
Increase (decrease) in loans from
stockholders 591,000 (7,000)
Increase in convertible debentures 228,000 -
Proceeds from line of credit (70) 291,200
Payments on capital lease
obligations (36,666) -
Payments on long-term debt (27,134) -
Net cash flows provided by
financing activities 1,650,380 339,154
NET CHANGE IN CASH AND CASH EQUIVALENTS 270,397 62,076
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 33,346 4,886
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 303,743 $ 66,962
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 31,501 $-
Conversion of debt into common stock$ 230,125 $-
Unaudited-See accompanying notes to condensed financial statements.
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1-BASIS OF PRESENTATION:
The accompanying consolidated financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete statements. Management believes that all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of such
financial statements, have been included. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. If such differences prove significant and material, Progressive
Telecommunications Corporation (the "Company") will file an amendment to this
report on Form 10-QSB.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
NOTE CONCERNING FORWARD-LOOKING INFORMATION
Some of the information in this report contains forward-looking statements that
involve substantial risks and uncertainties. You can identify these statements
by forward-looking words such as "may," "will," "expect," "anticipate,"
"believe," "estimate" and "continue" or similar words. You should read
statements that contain these words carefully because they: (1) discuss our
future expectations; (2) contain projections of our future results of operations
or of our financial condition; or (3) state other "forward-looking" information.
We believe that it is important to communicate our future expectations to our
investors. However, there may be events in the future that we have not
accurately predicted or over which we have no control. These events may include
future operating results, our efforts to address Year 2000 issues and potential
competition, among other things. Cautionary language in this report provides
examples of risks, uncertainties and events that may cause our actual results to
differ materially from the expectations we describe in our forward-looking
statements. You should be aware that the occurrence of the events described in
this report could have a material adverse effect on our business, operating
results and financial condition.
OVERVIEW
Progressive Telecommunications Corporation ("Progressive" or the "Company"), a
Nevada corporation, is a fully-integrated provider of advanced
telecommunications, communications management and e-commerce services to
businesses. The Company plans to capitalize upon trends in technology
convergence, marketplace preference for single source suppliers and the advent
of e-commerce in several ways. First, it manages global telecommunications
services capable of transporting all types of voice, data and wireless
communications. This includes all aspects of network planning and management,
operation of switches, transmission capacity, enhances service delivery
platforms, and billing systems. Second, it offers, through its OPUS division, a
communications and messaging management service using human voice commands to
manage voice, fax and e-mail messaging and communications from North America.
Finally, the Company plans to offer an array of e-commerce applications enabling
businesses of all kinds to utilize the Internet and World Wide Web. Combined,
these capabilities enable Progressive to provide services in two areas to
growing companies: communications and e-commerce.
More specifically, Progressive's business strategy revolves around four areas:
Internet directory that targets small to medium businesses through its
subsidiary, The Yellow Page Directory.Com Corp. ("Yellow Page"); business to
business e-commerce through its subsidiary, BusinessMall.com, Inc.; traditional
local, long distance and international telephone services, including calling
cards, wireless services and paging with integrated access and data networks
through its subsidiary, StormTel, Inc.; and Computer Telephony (a unified
messaging, voice activated virtual assistant) through its subsidiary, OPUS(TM)
Assistant, Inc.
On July 30, 1999 Progressive Telecommunications Corporation, a Florida
corporation ("Progressive Florida") and Marquee Entertainment, Inc. ("Marquee")
completed the first part of a transaction whereby Marquee acquired in excess of
82% of the issued and outstanding shares of Progressive Florida. As a condition
to consummating the transaction, Marquee amended its Certificate of
Incorporation so as to increase its authorized common shares from 25,000,000 to
50,000,000, authorized a 1 for 5 reverse stock split, changed its name to
Progressive Telecommunications Corporation and reduced its par value from $.04
to $.001.
RESULTS OF OPERATIONS
The Company had revenue from operations of $1,426,000 for the three months ended
December 31, 1999 compared to $105,000 in the three months ended December 31,
1998. Gross profit for the three months ended December 31, 1999 was $309,000
compared to $26,000 for the three months ended December 31, 1998. The
significant increases in revenue and gross profit were due to the acquisition of
CCC Communications Corporation as of December 31, 1998.
Selling, general and administrative expenses were $2,057,000 for the three
months ended December 31, 1999 compared to $889,000 in the three months ended
December 31, 1998. The increase in expenses resulted from the acquisition of
CCC Communications Corporation and the start-up of The Yellow Page Directory.Com
Corp., BusinessMall.Com, Inc., and Opus (tm) Assistant, Inc.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $883,000 for the three months ended
December 31, 1999 compared to $258,000 for the comparable period in 1998. The
change was primarily due to increased operating expenses from the acquisition of
CCC Communications Corporation and increases in accounts payable.
Net cash used for investing activities was $497,000 for the three months ended
December 31, 1999 compared to $19,000 for the comparable period in 1999. The
increase is primarily due to leasehold improvements on a new facility for The
Yellow Page Directory.Com Corp.
Net cash provided by financing activities was $1,650,000 for the three months
ended December 31, 1999 compared to $339,000 for the comparable period in 1998.
During the three months ended December 31, 1999, the Company raised $895,000
through private placements, received $600,000 from a stockholder, and issued
$228,000 in convertible debentures.
Part II
ITEM 1 - LEGAL PROCEEDINGS
We are involved in legal proceedings from time to time, none of which we
believe, if decided adversely to us, would have a material adverse effect on our
business, financial condition or results of operations.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5 - OTHER INFORMATION
Not applicable.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is filed herewith:
Exhibit 27.1 Financial Data Schedule
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.
PROGRESSIVE TELECOMMUNICATIONS CORPORATION
Dated: December 30, 1999 By: /s/ Barry L. Shevlin
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Barry L. Shevlin
Chief Executive Officer
EXHIBIT 27
ARTICLE 5
MULTIPLIER
PERIOD - TYPE 3 MONTHS
FISCAL YEAR END SEPTEMBER 30, 2000
PERIOD END DECEMBER 31, 1999
CASH SECURITIES $356,345
RECEIVABLES $270,811
ALLOWANCES 0
INVENTORY $10,948
CURRENT ASSETS $796,004
DEPOSIT $60,118
PP&E $1,472,363
DEPRECIATION $249,391
TOTAL ASSETS $6,738,369
CURRENT LIABILITIES $3,848,702
BONDS 0
COMMON $9,014
OTHER - SE $2,011,346
TOTAL LIABILITY AND EQUITY $6,738,369
SALES $1,425,503
TOTAL REVENUES $1,425,503
CGS 0
TOTAL COSTS $3,137,652
OTHER EXPENSES $11,720
LOSS PROVISION 0
INTEREST EXPENSE $31,271
INCOME PRETAX 0
INCOME TAX 0
NET LOSS $(1,700,429)
EPS PRIMARY $(.20)
EPS DILUTED $(.20)
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