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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended March 31, 1996 Commission File No. 0-17591
BNN CORPORATION
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(Exact name of registrant as specific in charter)
Nevada 93-0957030
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
345 Park Avenue South, New York, New York 10010
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(Address of principal executive offices)
(212) 779-6601
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(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the proceeding 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 _____ No __X__
The number of shares of Common Stock outstanding as of March 31, 1995
was 14,563,082.
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 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 the latest practicable date: 14,563,061
Transitional Small Business Disclosure Format (check one): Yes______
No_____
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BNN Corporation
(A Development Stage Company)
INDEX
PAGE
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PART I. Financial Information
Item 1. Financial Statements
Balance Sheets at March 31, 1996
(unaudited) and December 31, 1995 3
Statements of Income for the
Three Months Ended March 31, 1996
and 1995 (unaudited) 4
Statements of Cash Flows for the Six
Months Ended March 31, 1996 and 1995 (unaudited) 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
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BALANCE SHEET
ASSETS
Current Assets March 31, 1996 December 31, 1995
Cash $ -0- $ -0-
Accounts Receivable 75,000
Deposits 3,900 3,900
Total Current Assets 78,900 3,900
Other Assets
Organizational Costs 25,000 25,000
Total Assets 103,900 28,900
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LIABILITIES & STOCKHOLDERS' EQUITY
Total Liabilities $ -0- $ -0-
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Stockholders' Equity
Common Stock $.01 par value
authorized 50,000,000 shares
Issued and outstanding 14,563,061 146,731 82,631
Paid-in Capital 3,393,573 3,361
Stock Subscription (1,853,773) (1,865,713)
Retained Earnings - 12/31/94 (1,550,631) (1,401,204)
Loss on Operations (30,000) (149,427)
Total Stockholder's Equity 103,900 28,900
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Total Liabilities and Stockholders Equity $ 103,900 $ 28,900
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The accompanying notes are an integral part of this financial statement.
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BNN Corporation
(A Development Stage Company)
Statement of Operations
For the three months ended March 31
1996 1995
Revenue $ -0- $ -0-
Operating expenses
general administrative expenses 30,000 -0-
Operating income (loss) (30,000) -0-
Income (loss) before income tax (30,000) -0-
Net Loss per share (002) -0-
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BNN Corporation
(A Development Stage Company)
Statement of Cash Flow
Three Months Three Months
ended March ended
31, 1996 March 31, 1995
Cash Flows from Operating Activities:
Net loss (30,000) -0-
Adjustment to reconcile net loss to net cash
used by operating activities: -0-
Increase in receivables (75,000) -0-
Increase in accrued expenses -0- -0-
Net cash used in operating activities 105,000 -0-
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Cash Flows from Financing Activities -0-
Proceeds from issuance of common stock 105,000 -0-
Net cash provided by financing activities (105,000) -0-
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Net change in cash -0- -0-
Cash
Beginning of the period -0- 0
End of the period -0- -0-
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BNN Corporation
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
Note 1. SIGNIFICANT ACCOUNTING PRINCIPLES
The accompanying balance sheet and the income and cash flow
statements of the Company have been prepared by the Company,
without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to
present fairly the financial position and results of
operations and cash flows at the date and for the period
herein have been made.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
The results of operations for the interim periods are not
necessarily indicative of the results for the full year.
BNN Corporation is a successor of Sunburst Construction, Inc.,
a corporation organized under the laws of the state of Utah on
February 27, 1978. The corporation had little activity since
its inception and on May 21, 1987 merged with Polo Clubs of
America, Inc., a Nevada corporation. Terms of the merger
included in domicile, from Utah to Nevada, a change in the
capital structure of the corporation, the cessation of
subsidiary, and a name change of the parent to Polo Clubs of
America, Inc.
On August 11, 1987, Polo Clubs of America, Inc., acquired 100%
of the outstanding stock of Business News Network, Inc., a
Nevada corporation followed by the merger of the parent and
subsidiary into a single entity named Business News Network,
Inc. The Company entered into a transaction whereby it
acquired assets of a business.
On March 3, 1990, the Company decided to wind down its
operations. Since this time, the Company was dormant and on
February 2, 1992, the Company's Corporate Charter was revoked
by the State of Nevada. On November 18, 1994, a Certificate of
Reinstatement was issued by the State of Nevada and the name
of the Company was changed to BNN Corporation.
The Company is a development stage company, as defined in
Financial Accounting Standards Board No. 7. The Company is
devoting substantially all of its present efforts in securing
and establishing a new business. The Company's ability to
achieve these objectives cannot be determined at this time.
The Company acquired all of the shares of Celebrity Shopping
Network, Inc., a start-up company, in March
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1995 and rescinded the transaction in November 1995. No effect
is given to the transaction herein. Therefore, its planned
principal operations have not commenced and, accordingly, no
revenue has been derived therefrom during the inactive period.
In addition, the Company does not presently have adequate
financing to carry out its business plan.
The financial statements have been prepared on the basis of
accounting principles applicable to a going concern.
Accordingly, they do not purport to give effect to
adjustments, if any, that may be necessary should the Company
be unable to continue as a going concern. The continuation of
the Company as a going concern is dependent upon a successful
purchase and financing of a business and its ability to
establish itself as a profitable business.
Note 3. Start Up Costs
These amounts represent certain capitalized expenses incurred
in the formation of the business including consulting fees,
travel expenses, and other costs. They will be amortized when
revenue begins to be generated.
Note 4. Income Taxes
BNN has filed its corporate income taxes since its inception.
There is an operating loss which expires between 2003 and
2005.
Note 5. Subsequent Events
In 1995 the company raised working capital through the
issuance of 4,000,000 shares of common stock for notes in the
amount of $2,100,000. In 1996 the Company has received
$1,512,718.94 in payments against these notes.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
The following is management's discussion and analysis of
significant factors which have affected the Registrant's financial position and
operations. The financial information included herein should be read in
conjunction with the Financial Statements, including the Notes thereto.
General
The Company had no activities during the year ended December 31,
1994. On January 11, 1995 an Exchange Agreement was entered into between the
Company and Celebrity Shopping Network, Inc. ("Celebrity") which called for the
exchange of shares of the Company's common stock for shares of Celebrity common
stock. On March 3, 1995, the Company completed the Exchange and Celebrity became
a wholly-owned subsidiary of the Company. Celebrity was formed as a start-up
venture to launch a television celebrity home shopping network; and never
commenced operations Celebrity was a start up and did not implement its business
plan. In November 1995, that Agreement was rescinded. All of the shares of stock
issued by the Company to Celebrity shareholders were returned to the Company
with the exception of 800,000 shares retained as complete compensation incurred
by certain Celebrity Shareholders.
Results of Operations
The Company continued to seek other business subsequent to the
rescission and in June 1996 entered into a letter of intent to acquire
Kaleidoscope Media Group, Inc. ("KMG"). During the quarter ended March 31, 1996,
the Company advanced sums to KMG and incurred other expenses in connection with
seeking to enter into separate business venture with KMG. In June the Company
determined to acquire KMG instead of establishing operations by itself.
The Company incurred expenses of $30,000 during this period
while receiving no revenue. As a result, the company incurred a loss of $30,000
during the three months ended March 31, 1996. This compares to no income or
revenue in prior periods.
Liquidity
The Company's funds have been provided by the sale of
securities. These funds have been used by the Company for advances to KMG and
for expenses incurred in connection with the exploration of new business.
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PART II - OTHER INFORMATION
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 on its behalf by the undersigned thereunto duly authorized.
Dated: November 5, 1996
BNN CORPORATION
(Registrant)
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Henry Siegel, Chariman of the Board, Director
(Principal, Financial and Accounting Officer)
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Paul Siegel, Director
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Martin Miller, Treasurer and Director
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Raymond Volpe, Director
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