Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended March 31, 2000.
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from __________ to __________
Commission file number 0-18122
ANTENNAS AMERICA, INC.
----------------------------------------
(Exact name of small business issuer as specified in its charter)
Utah 87-0454148
------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization No.)
4860 Robb Street, Suite 101,
Wheat Ridge, Colorado 80033
- ---------------------------------------- ------------------------
(Zip Code)
(303) 421-4063
------------------------------------------------
(Issuer's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes __X__ No _____
-
As of May 8, 2000, the Registrant had outstanding 120,864,345 shares of its
common stock, par value $.0005.
Transitional Small Business Disclosure Format (Check One):
Yes _____ No __X__
<PAGE>
Antennas America, Inc.
FORM 10-QSB
March 31, 2000
Table of Contents
Page No.
Part I
Item 1. Financial Statements
Balance Sheets as of March 31, 2000 (unaudited)
and December 31, 1999.........................................3
Statements of Operations for the Three Months Ended
March 31, 2000 and 1999 (unaudited)...........................4
Statements of Cash Flows for the Three Months Ended
March 31, 2000 and 1999 (unaudited)...........................5
Notes to Financial Statements........................................6
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition.....................................8
Results of Operations................................................8
Financial Condition..................................................8
Year 2000 Compliance.................................................9
Forward Looking Statements..........................................10
Part II
Item 5. Other Information...................................................11
Item 6. Exhibits and Reports on Form 8-K....................................11
2
<PAGE>
Part I
Item 1. Financial Statements
Antennas America, Inc.
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------------------------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash $ 473,360 $ 177,679
Accounts receivable, less allowance for doubtful accounts 414,440 324,481
Inventory, net 320,704 579,713
Prepaid expenses 21,378 139
----------------------------------
Total current assets 1,229,882 1,082,012
Property and equipment, net 355,073 369,381
Other assets:
Intangible assets, net 40,177 40,491
Deposits 16,085 16,085
----------------------------------
Total assets $1,641,217 $1,507,969
==================================
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 155,936 $ 357,474
Notes payable-others 127,271 114,143
Notes payable-officers 16,637 33,274
Current portion of capital lease obligations 41,343 54,846
Accrued expenses 89,511 70,528
----------------------------------
Total current liabilities 430,698 630,265
Capital lease obligations, less current portion 2,607 6,111
Notes payable-others, less current portion - 125,653
----------------------------------
Total liabilities 433,305 762,029
Commitments
Stockholders' equity:
Common stock, $.0005 par value, 250,000,000 shares authorized,
104,106,011 and 95,089,563 shares issued,
in 2000 and 1999 respectively 52,053 47,545
Additional paid-in capital 2,452,906 1,891,686
Accumulated deficit (1,297,047) (1,193,291)
----------------------------------
Total stockholders' equity 1,207,912 745,940
----------------------------------
Total liabilities and stockholders' equity $1,641,217 $1,507,969
==================================
</TABLE>
See accompanying notes.
3
<PAGE>
Antennas America, Inc.
Statements of Operations
<TABLE>
<CAPTION>
Three months ended
March 31,
2000 1999
-----------------------------------
(unaudited)
<S> <C> <C>
Sales, net $ 969,555 $ 474,844
Cost of sales 792,722 341,490
-----------------------------------
Gross profit 176,833 133,354
Selling, general and administrative expenses 344,352 252,334
-----------------------------------
Loss from operations (167,519) (118,980)
Other income (expense):
Interest expense (9,722) (25,241)
Other income 73,485 70
-----------------------------------
Total other income (expense) 63,763 (25,171)
-----------------------------------
Loss before income taxes (103,756) (144,151)
Benefit from income taxes - (53,397)
-----------------------------------
Net loss $ (103,756) $ (90,754)
===================================
Basic and diluted loss per share $(0.00) $(0.00)
Weighted average shares outstanding 97,871,239 75,382,957
</TABLE>
See accompanying notes.
4
<PAGE>
Antennas America, Inc.
Statements of Cash Flows
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
---------------------------------------
(unaudited)
<S> <C> <C>
Operating activities
Net loss $ (103,756) $ (90,754)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization 28,359 26,581
Noncash expense for issuance of stock and options 500 -
Accrued interest on notes payable added to principal 3,218 4,677
Accrued salary added to note payable - 3,527
Amortization of note discount 500 1,000
Deferred tax benefit - (53,396)
Changes in operating assets and liabilities:
Accounts receivable (89,959) 215,446
Inventory 259,009 (7,087)
Prepaid expenses (21,239) (4,096)
Accounts payable and accrued expenses (178,034) (43,708)
Other (8,346) -
---------------------------------------
Net cash provided by (used in) operating activities (109,748) 52,190
Investing activities
Patent acquisition costs (1,138) -
Purchase of plant and equipment (12,599) (5,208)
---------------------------------------
Net cash used in investing activities (13,737) (5,208)
Financing activities
Repayment of notes and capital lease obligations (129,425) (27,007)
Proceeds from private placement, net 545,428 -
Proceeds from exercise of options, net 19,800 -
Repayment of notes payable - officers (16,637) -
Reductions in notes payable - others - (209,892)
Proceeds from distributor note payable - 200,000
---------------------------------------
Net cash provided by (used in) financing activities 419,166 (36,899)
---------------------------------------
Net increase in cash 295,681 10,083
Cash, beginning of period 177,679 17,555
---------------------------------------
Cash, end of period $ 473,360 $ 27,638
=======================================
Supplemental cash flow information:
Cash paid for interest $ 6,742 $ 18,802
Non-cash financing activities:
Acquisition of stock in exercise of warrants and options for
issuance of newly issued shares of common stock $ 562,000 -
</TABLE>
See accompanying notes.
5
<PAGE>
Antennas America, Inc.
Notes to Financial Statements
March 31, 2000
Note 1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) 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. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 2000
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2000. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 1999.
Note 2. Equity Transactions
During the latter six months of 1999, the Company undertook a private
placement offering of units for $.0525 per unit with each unit consisting of one
share of the Company's restricted common stock and one redeemable common stock
purchase warrant to purchase one share of the Company's common stock. A minimum
of 6,000,000 units and maximum of 22,000,000 units were authorized, and the
maximum offering was sold for a total of $1,155,000. The warrants included in
the units entitle the holder to purchase one share of common stock at an
exercise price of $.175 per share and became exercisable on March 14, 2000, the
date a registration statement on Form SB-2 relating to the resale of the common
stock sold in this private placement and of the common stock underlying the
warrants was declared effective by the Securities and Exchange Commission. The
warrants were called for redemption by the Company at the price of $.001 per
warrant on April 6, 2000. By May 7, 2000, all 22,000,000 warrants had been
exercised by the holders.
As of March 31, 2000, the financial statements include $545,428 of
equity related to private placement transactions (purchase of shares and
exercise of warrants) in 2000. The total cash received during the first quarter
of 2000 was $596,634 and related offering expenses were $51,206. As of May 7,
2000, $2,890,708 in additional funds related to the warrant exercises had been
received subsequent to March 31, 2000.
On March 30, 2000, as approved by the Board of Directors, two officers
who are also directors, and one other director, exchanged previously owned
shares of the Company's common stock for their warrants acquired in the private
placement. These transactions resulted in the Company receiving 219,320 shares
of stock valued at $483,875 as payment for 2,765,000 shares underlying the
outstanding warrants. The value of the 219,320 shares of common stock received
by the Company in this transaction was based on the average closing price of the
Company's common stock on the five days prior to March 30, 2000, which was
$2.2062.
On March 30, 2000, a director of the Company also used previously owned
stock to exercise vested options. These options had a total exercise price of
$78,125. Based on the same average closing price as used in the warrant exercise
transaction, a total of 35,412 shares of previously owned stock was given to the
Company as payment of the exercise price for the 900,000 new shares of common
stock underlying the options.
6
<PAGE>
The shares of common stock acquired by the Company in these exchange
transactions were valued at a total of $562,000 which is equal to the 5-day
average closing price multiplied by the number of previously owned shares that
were exchanged and which is also equal to the aggregate exercise price for the
shares underlying the warrants and options that were exercised in these
transactions. The Company received 254,732 shares from these transactions.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition
Antennas America, Inc.
For the Period Ended March 31, 2000
Results of Operations
Sales were $969,555 for the three month period ended March 31, 2000, as
compared to $474,844 for the three month period ended March 31, 1999. The 104%
increase in revenues resulted from the sales of the local TV antennas systems
sold under the GE brand name through Jasco Products and shipments under the
contract from Thomson Consumer Electronics for local TV antenna systems under
the RCA brand name. Shipments of these products began in April 1999.
The Company had a net loss before income taxes of $103,756 for the
three months ended March 31, 2000 compared to a net loss before income taxes of
$144,151 for the same period in 1999. Although a benefit from income taxes in
the amount of $53,397 was recorded for the three months ended March 31, 1999, no
tax benefit was recorded for the three months ended March 31, 2000 because of
the full valuation reserve recorded against the net operating loss tax asset
during 1999. Current results do not demonstrate that the net operating loss will
be utilized; therefore all additions to the asset are fully reserved for.
The improved pre-tax results for 2000 were due to a gain reflected in
other income from a lawsuit settlement of $65,000 for which payment was received
in February 2000. Gains were also generated from cancellation of debt from a
vendor for $4,660 and cancellation of accrued interest of $3,825 on a note paid
in full as discussed in "Financial Condition".
Gross profit margins decreased to 18% for the three months ended March
31, 2000 from 28% for the same period in 1999, which impacted the net results.
The primary factor contributing to the lower margins was the higher percentage
of sales of the local TV antenna systems which generally have lower gross
margins due to the competitive nature of the consumer electronics market.
Interest expense for the three month period ended March 31, 2000
decreased by $15,519 due to the repayment on January 31, 2000 of the note
payable to a distributor which had been initiated on February 16, 1999 and the
cancellation of the accounts receivable purchase agreement with the bank on
March 10, 2000. Also, during the time the bank agreement was in effect during
2000, there were fewer accounts purchased by the bank resulting in lower
interest charges. The private placement proceeds received primarily in the
latter part of 1999 reduced the need for additional cash through the bank
agreement.
Financial Condition
During the last six months of 1999 through January 2000, the Company
undertook a private placement offering of units, with each unit consisting of
one share of restricted common stock and one redeemable common stock purchase
warrant to purchase one share of common stock, for $.0525 per unit. A minimum of
6,000,000 units and maximum of 22,000,000 units were authorized, and the maximum
offering was sold for a total of $1,155,000. The warrants included in the units
entitle the holder to purchase one share of common stock at an exercise price of
$.175 per share and became exercisable on March 14, 2000. The warrants were
called for redemption by the Company at the price of $.001 on April 6, 2000. All
warrants were exercised prior to the redemption date.
8
<PAGE>
During the first quarter of 2000, the Company received $596,634 of
gross proceeds in funding from the private placement from the sale of units and
exercise of warrants which is reflected in the financial statements. Expenses
relating to the private placement in this quarter were $51,206. As of May 7,
2000, $2,890,708 in additional funds had been received subsequent to March 31,
2000. The funds received during 2000 will be used primarily for acquisitions. A
small portion of these funds have been used to pay outstanding debt and for
working capital.
Pursuant to authorization from the Board of Directors on March 30, 2000
three directors, two of whom are officers, exchanged previously owned shares of
the Company's common stock as payment of the exercise price for warrants and
options. Based on the average closing price of the stock of $2.2062 per share
for the five days previous to the exchange, 254,732 shares of previously owned
stock valued at $562,000 were given to the Company as payment for the 3,665,000
new shares of common stock underlying the 2,765,000 warrants and 900,000
options.
Compared to December 31, 1999, the Company's total assets as of March
31, 2000 increased by $133,248 to $1,641,217. Increases in cash and accounts
receivable were offset by a decrease in inventory. Cash also increased due to
the private placement transactions. Accounts receivable increased due to the
timing of sales at the end of the quarter. Inventory was lower because of
finished goods on hand at December 31, 1999 which were shipped in January, as
well as the completion of the contract during the quarter for Thomson Consumer
Electronics.
The Company entered into an accounts receivable purchase agreement with
a bank on February 1, 1999. Under this arrangement, the bank would purchase 85
percent of approved accounts receivable from the Company. The financing cost for
this arrangement was 1% of the receivable for the first 10 days and 1/15 of 1%
each day thereafter until the account is paid in full. This arrangement was
canceled with the bank effective March 10, 2000. Current operations are being
funded through cash flow from operations and the proceeds from the private
placement transactions. Additional funding may be needed to complete business
expansion through acquisitions and for working capital purposes due to internal
growth within the Company's core operations if all available funds are used for
acquisitions.
Liabilities decreased $328,724 from December 31, 1999 to $433,305. An
outstanding note payable to a distributor with an original balance of $200,000
was paid in full on January 31, 2000. In addition, another note payable to a
vendor was paid in full on March 31, 2000 for $100,000. The settlement of the
$100,000 vendor note resulted in a gain which has been reflected as other income
of $3,825 due to interest forgiven by the vendor on the note. Funding from the
private placement as well as cash flow from operations resulted in lower
accounts payable than at December 31, 1999.
Year 2000 Compliance
Year 2000 compliance is the ability of computer hardware and software
to respond to the problems posed by the fact that computer programs
traditionally have used two digits rather than four digits to define an
applicable year. As a consequence, any computer programs or equipment using
internal programs may recognize a date using "00" as the year 1900 rather than
the year 2000. This could have resulted in a system failure or miscalculations
causing interruption of operations, including temporary inability to send
invoices or engage in normal business activities or to operate equipment such as
telephone systems, facsimile machines and production machinery. However, neither
the Company nor its suppliers or customers have had any Year 2000 problems to
date. If Year 2000 problems are encountered, the Company's contingency plans
include using alternative vendors, although this may not be efficient for some
products due to required set up times for new vendors.
9
<PAGE>
Forward Looking Statements
This report contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although the Company believes that the expectations
reflected in the forward looking statements and the assumptions upon which the
forward looking statements are based are reasonable, it can give no assurance
that such expectations and assumptions will prove to be correct. See the
Company's Annual Report on Form 10-KSB for additional statements concerning
important factors, such as demand for products, manufacturing costs and
competition, that could cause actual results to differ materially from the
Company's expectations.
10
<PAGE>
PART II
Item 5. Other Information
Pursuant to Rule 14a-4(c) under the Securities Exchange Act of 1934, as
amended, the Company hereby notifies its stockholders that the proxies solicited
by the Company in connection with the Company's annual meeting to be held in
2000 following the 1999 fiscal year will confer discretionary authority to vote
on matters raised by stockholders for which the Company did not have notice a
reasonable time before the Company's mailing of proxy materials for that
meeting. Based on current planning for scheduling the annual meeting, notice
must be received on or before June 1, 2000 in order for the Company not to have
discretionary authority. In addition, if the Company receives notice on or
before June 1, 2000 of a matter that a stockholder intends to raise at the
annual meeting of stockholders to be held in 2000, the proxies solicited by the
Company may exercise discretion to vote on each such matter if the Company
includes in its proxy statement advice on the nature of the matter raised and
how the Company intends to exercise its discretion to vote on each such matter.
However, the Company may not exercise discretionary voting authority on a
particular proposal if the proponent of that proposal provides the Company with
a written statement, on or before June 1, 2000, that the proponent intends to
deliver a proxy statement and form of proxy to holders of at least the
percentage of the Company's voting shares required under applicable law to carry
the proposal (the "Required Percentage"), which would be a majority of the
Company's outstanding common stock or a majority of the shares of common stock
represented at the meeting, depending on the nature of the proposal, if the
proponent includes the same statement in its proxy materials filed under Rule
14a-6, and if the proponent, immediately after soliciting the holders of the
Required Percentage, provides the Company with a statement from any solicitor or
any other person with knowledge that the necessary steps have been taken to
deliver a proxy statement and form of proxy to the holders of the Required
Percentage.
Item 6. Exhibits And Reports On Form 8-K
(a) Exhibits.
Financial Data Schedule
(b) Reports on Form 8-K.
None.
11
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act Of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
ANTENNAS AMERICA, INC.
Date: May 15, 2000 By: /s/ Randall P. Marx
---------------------
Randall P. Marx
Chief Executive Officer
and Principal Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 473,360
<SECURITIES> 0
<RECEIVABLES> 432,000
<ALLOWANCES> (17,560)
<INVENTORY> 320,704
<CURRENT-ASSETS> 1,229,882
<PP&E> 708,354
<DEPRECIATION> (353,281)
<TOTAL-ASSETS> 1,641,217
<CURRENT-LIABILITIES> 430,698
<BONDS> 0
0
0
<COMMON> 52,053
<OTHER-SE> 1,155,859
<TOTAL-LIABILITY-AND-EQUITY> 1,641,217
<SALES> 969,555
<TOTAL-REVENUES> 969,555
<CGS> 792,722
<TOTAL-COSTS> 344,352
<OTHER-EXPENSES> 73,485
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (9,722)
<INCOME-PRETAX> (103,756)
<INCOME-TAX> 0
<INCOME-CONTINUING> (103,756)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (103,756)
<EPS-BASIC> (0)
<EPS-DILUTED> (0)
</TABLE>
