<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.20549
FORM 1O-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended: June 30, 1997
Commission File No. 0-27160
CALL NOW, INC.
----------------------------------------------------
(Exact name of small business issuer in its charter)
FLORIDA 65-0337175
- --------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
P.O. BOX 531399, MIAMI SHORES, FL 33153
----------------------------------------
(Address of principal executive offices)
(305) 751-5115
---------------------------
(Issuer's telephone number)
Check whether the issuer (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. Yes X
---
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: 8,203,944 shares as of August 12,
1997.
Transitional Small Business Format: NO
-----
<PAGE> 2
PART I - FINANCIAL INFORMATION
FINANCIAL STATEMENTS
Registrant's Financial Statements filed herewith begin after
the signature page.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND LIQUIDITY AND
CAPITAL RESOURCES
Results of Operations For the Three month and Six Month Periods
Ended June 30, 1997
a. REVENUES
The Company's revenues for the three months ended June 30, 1997 were
$331,541 as compared to $2,010,070 for three months ended June 30, 1996. For the
six month period ended June 30, 1997 revenues were $4,261,450 compared to
$3,834,369 for the six month period ended June 30, 1996. The increase in
revenues for both periods were attributable to the Company's sale of marketable
securities. Net gain from the sale of securities amounted to $102,254 for the
quarter ended June 30, 1997 and $1,921,079 for the quarter ended June 30, 1996.
For the six months ended June 30, 1997 the gain on sale of marketable securities
was $3,955,341 compared to $3,701,893 for the six months ended June 30, 1996.
b. EXPENSES
(1) GENERAL AND ADMINISTRATIVE expense for the quarter ended June 30,
1997 was $577,407 compared to $360,968 for the quarter ended June 30,
1996. For the six month period ended June 30, 1997 expense was $891,755
compared to $461,309 for the six month period ended June 30, 1996.
These increased expenses were attributable to additional salary,
travel, and associated expenses required to purchase the Retama Park
Bonds.
(2) INTEREST expense for the quarter ended June 30, 1997 was $33,049
compared to $25,205 for the quarter ended June 30, 1996. For the six
month period ended June 30, 1997 interest expense was $72,762 compared
to $25,238 for the six months ended June 30, 1996. Interest expense for
1997 increased as a result of debt service payments on the property
acquired in Williamson County, Texas.
c. DISCONTINUED OPERATIONS:
Call Now, Inc. discontinued operation of ARN Communications, Corp., its
long distance resale subsidiary in August 1996. Loss for the June 30,
1996 quarter was $29,941. Loss for the six month period ended June 30,
1996 was $122,311.
d. EARNINGS PER SHARE
For the three month period ended June 30, 1997 the Company recorded
$.02 per share loss compared to a $.14 per share gain for the three
month period ended June 30, 1996. For the six month period ended June
30, 1997 earnings per share was $.26 compared to $.27 per share for the
six month period ended June 30, 1996.
2
<PAGE> 3
Liquidity and Capital Resources
Through June 30, 1997 the Company sold marketable securities for net
proceeds of $3,955,341 compared to $3,701,893 for the six month period ended
June 30, 1996. For the period ended June 30, 1997, the Company's operating
activities used cash of $3,274,516 compared to cash used of $1,151,216 for the
six month period ended June 30, 1996. Investing activities for the six month
period ended June 30, 1997 provided cash of $2,473,380 compared to cash provided
by investing activities of $7,175,596 for the six month period ended June 30,
1996. Cash provided by financing activities was $143,929 for the six month
period ended June 30, 1997 compared to cash used by financing activities of
$1,330,447 for the six month period ended June 30, 1996.
The Company has investments in the common stock of Cable-Sat
Compression, Inc. and Retama Park tax free municipal bonds. In addition, the
Company has entered into an agreement with Barron Chase Securities, Inc. whereby
the Company executed a secured demand note payable to Barron Chase in the amount
of $1,155,000. Under the terms of the agreement Barron Chase has purchased
$1,327,162 in U.S. Treasury Bills as security for the demand note. The note pays
the Company $11,550 per month which the Company utilizes as working capital.
Such arrangement terminates on March 31, 1998. Income from the above described
investments currently generates revenues sufficient to cover approximately
one-half of the Company's annual operating expenses. To meeting its additional
working capital requirements the Company utilized a portion of its bond
defeasance proceeds. The Company has sufficient marketable securities and
borrowing power if necessary to meet its working capital requirements for the
foreseeable future.
PART II - OTHER INFORMATION
INVESTMENT COMPANY CLASSIFICATION
The Company has been advised by the Securities and Exchange Commission
that it may be considered an investment company and therefore subject to certain
provisions of the Investment Company Act of 1940. The Company does not believe
it is an investment company and has taken the following actions:
a. On July 15, 1996, the Company acquired 118 acres of land for
development for at a purchase price of $2,360,000. Such land
is located in Williamson County, Texas. The Company executed a
purchase money mortgage in connection with the purchase of the
property which is payable in semi-annual installments of
$85,721.39 commencing January 15, 1997. The mortgage bears
interest at the rate of 9% annually with the entire unpaid
balance due on July 15, 2003.
3
<PAGE> 4
b. The Company disposed of its shares of Intermedia
Communications, Inc. which it received in December 1994 in
connection with its disposition of Phone One, Inc. The Company
currently holds less than 150 of such shares.
c. In November 1996, the Company acquired certain secured notes
issued by the Retama Development Corporation of Selma, Texas.
The notes are secured by a lien on real estate which includes
the Retama Park Racetrack located in suburban San Antonio,
Texas.
d. The Company distributed a dividend of shares of Compressent
Corporation to the Company's shareholders on March 27, 1997.
The balance of the Company's holdings in Compressent
Corporation were registered by the Company in Compressent
Corporation's recent registration statement on Form S-1. By
agreement with the underwriter, such shares may not be sold
until September 25,1997.
e. As of June 30, 1997 the Company has liquidated all of its
money market holdings.
In the event the Company is deemed to be an investment company, the
Company may become subject to certain restrictions relating to the Company's
activities, including restrictions on the nature of its investments and the
issuance of securities. In addition, the Investment Company Act imposes certain
requirements on companies deemed to be within its regulatory scope, including
registration as an investment company, adoption of a specific form of corporate
structure and compliance with certain burdensome reporting, record keeping,
voting, proxy, disclosure and other rules and regulations. In the event of
characterization of the Company as an investment company, the failure of the
Company to satisfy regulatory requirements, whether on a timely basis or at all,
could, under certain circumstances have a materially adverse effect on the
Company.
RETAMA DEVELOPMENT CORPORATION SERIES A AND SERIES B BONDS
As a result of the confirmation of the Plan of Adjustment by the U.S.
Bankruptcy Court of Retama Development Corporation, (RDC), the RDC bonds held by
the Company were converted into a new series of bonds; 1997 Series A and 1997
Series B which are described as follows:
(1) Series A Bonds are secured by a senior lien on all revenues
derived from the Track as well as all other Retama assets. The debt service on
$7,000,000 in Senior A Bonds will be approximately $595,000 and will be payable
from the existing net operating revenues of the RDC. A portion of each year's
debt service will be delivered to a sinking fund. The Series A Bonds are
4
<PAGE> 5
repayable without penalty on any interest payment date from any available
source, including future refunding bonds. The total principal amount of Series A
Bonds initially issued was $7,000,000. The principal amount of Series A Bonds
can be increased by the conversion of Series B Bonds to Series A Bonds pursuant
to a formula described below.
(2) The Series B Bonds in the principal amount of $86,925,000 are
payable solely from revenues derived from the Track secured by a subordinate, or
junior lien on all revenues derived from the Retama Park Race Track through
January 1, 2037. The interest on the Series B Bonds will initially accrue,
except that portion paid by excess cash flow. Both principal and interest on the
Series B Bonds will only be payable from excess cash flow after meeting general
and administrative expenses of the track, regularly scheduled debt service, on
the Series A Bonds and paying the management fees. The Series B Bonds can be
prepaid semiannually from any available source, including excess cash flow or
future refunding bonds.
(3) The Series B Bonds will convert into senior lien Bonds on parity
with the Series A Bonds, but only when the following conditions are satisfied:
(a) No event of default has occurred and is continuing with regard to
the outstanding Series A Bonds.
(b) There has been delivered to the Trust a certificate from an
independent certified public accountant displaying that the revenues received by
the Track during any twelve (12) consecutive months, the lesser amount of each
12 month period of the twenty-four (24) months immediately preceding the date of
such conversion are sufficient to cover the original Series A Bonds as well as
the newly converted Bonds based on the following formula: Conversion of B Bonds
= (EBITDA/Coupon applicable to Series A Bonds)/Coverage Ratio (as defined in the
New Trust Indenture) of 1.25] - Amortization (as defined in the new Trust
Indenture) Face Value Outstanding on Series A.
(c) There has been delivered to New Indenture Trustee and the RDC a
certificate from an independent certified public accountant stating that upon
the conversion of any Series B Bonds to Series A Bonds, the RDC shall have the
ability to repay the stated interest and principal payments on the Series A
Bonds once converted.
(d) Twenty percent (20%) of EBITDA, on an annual basis, will go into
the debt service reserve account ("DSR") until the account balance is
$1,000,000. At that point 10% of EBITDA, on an annual basis, will go into the
DSR until the account balance is at $9,775,000 at which point the percentage
deposited to the DSR will be zero (0%). If at any point the DSR balance drops
below $1,000,000, the percentage deposited will go back to 20% until $1,000,000
is in the account.
5
<PAGE> 6
If at any point the DSR balance drops below $9,775,000 after its exceeded
$9,775,000 until the account balance is at $9,775,000, at which point the
percentage to the DSR will be zero (0%), the percentage deposited will go back
to 10%
The DSR will be pledged as collateral to the New Indenture Trustee.
(4) The Series A Bonds have a maturity date of January 1, 2027,
although the Series B Bonds may be prepaid, without penalty, at any time. In the
event any Series B Bonds remain outstanding after the stated maturity and
January 1, 2033, the interest on these outstanding Bonds will stop accruing, and
Revenues from the Track (after satisfying general and administrative expenses
and any management fee) will be applied to the repayment of (1) any accrued but
unpaid interest, and (2) the outstanding principal. The RDC shall not, be
obligated in any way to make payments on the outstanding New Bonds beyond
January 1, 2034.
(5) Call Now, Inc. irrevocably assigned to the RDC the Licensing
Enhancement. Until the New Bonds are paid in full by the RDC or January 1, 2034,
whichever comes first, the Licensing Enhancement and any revenues attributable
thereto shall be used by the RDC for the purpose of retiring the RDC's
obligations under the Bonds. Once the Bonds have been discharged, any interest
in the Licensing Enhancement assigned to the RDC will revert to Call Now or
their respective successors or assigns.
License Enhancement includes 50% of any new rights granted to Retama
Partners, Ltd. as holder of the Retama Park race track license. Such new rights
could be related to off-track betting or gaming devices located at the race
track.
PART III - EXHIBITS AND REPORTS
(1) REPORTS ON FORM 8-K
Registrant filed no reports on Form 8-K during the quarter
ended June 30, 1997.
(2) EXHIBITS
27 Financial Data Schedule (for SEC use only)
6
<PAGE> 7
CALL NOW, INC AND SUBSIDIARY
Consolidated Balance Sheet as of June 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,012,913
Marketable securities, at market value
Unrestricted 11,431,543
Restricted 1,283,000
Notes and loans receivable 1,215,587
Other 144,049
-----------
TOTAL CURRENT ASSETS 15,087,092
Furniture and equipment
(less accumulated depreciation of $11,322) 17,280
Land held for development 2,366,875
Long term receivables 695,838
Other 81,072
-----------
TOTAL ASSETS $18,248,157
===========
</TABLE>
See notes to Consolidated Financial Statements
7
<PAGE> 8
CALL NOW, INC AND SUBSIDIARY
Consolidated Balance Sheet as of June 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturity of mortgage payable $ 12,975
Accounts payable 39,626
Note payable 1,155,000
Accrued expenses 127,925
Deferred income taxes payable 736,592
Income taxes payable 1,858,517
------------
TOTAL CURRENT LIABILITIES 3,930,635
Mortgage payable, less current maturity 1,750,954
------------
TOTAL LIABILITIES 5,681,589
------------
CONTINGENCIES AND COMMITMENTS --
STOCKHOLDERS' EQUITY:
Preferred stock, no par, 800,000 shares authorized , none
outstanding --
Common stock, no par, 50,000,000 shares authorized,
8,293,944 shares issued, and 8,203,944 shares outstanding 4,904,965
Treasury stock (206,050)
Retained earnings 6,846,786
Less subscription notes receivable for 250,000 shares of common stock (200,000)
Unrealized holding gain on marketable securities
(net of $736,593 income taxes) 1,220,867
------------
TOTAL STOCKHOLDERS' EQUITY 12,566,568
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,248,157
============
</TABLE>
See notes to Consolidated Financial Statements
8
<PAGE> 9
CALL NOW, INC AND SUBSIDIARY
Consolidated Statements of Operations
For the Three Months and Six Months ended June 30
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
----------------------------- -----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Gain on sale of marketable securities $ 102,254 $ 1,921,079 $ 3,955,341 $ 3,701,893
Interest 229,287 84,183 300,974 127,668
Other 0 4,808 5,135 4,808
----------- ----------- ----------- -----------
TOTAL REVENUES 331,541 2,010,070 4,261,450 3,834,369
----------- ----------- ----------- -----------
COST AND EXPENSES:
General, and administrative 577,407 360,968 891,755 461,309
Loss from unconsolidated entity -- 25,839 -- 93,967
Depreciation and amortization 4,162 9,432 8,324 14,111
Interest 33,049 25,205 72,762 25,238
----------- ----------- ----------- -----------
TOTAL COSTS AND EXPENSES 614,618 421,444 972,841 594,625
----------- ----------- ----------- -----------
INCOME/(LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND DISCONTINUED OPERATIONS (283,077) 1,588,626 3,288,609 3,239,744
Income tax (expense)/benefit 106,522 (597,800) (1,189,691) (1,147,301)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS (176,555) 990,826 2,098,918 2,092,443
Loss from operation of discontinued subsidiary
(net of tax benefit of $5,991 and
$73,795 respectively) -- (9,930) -- (122,311)
----------- ----------- ----------- -----------
NET INCOME (LOSS) (176,555) 980,896 2,098,918 1,970,132
=========== =========== =========== ===========
EARNINGS (LOSS) PER SHARE:
Continuing operations $ (0.02) $ 0.14 $ 0.26 $ 0.29
Operations of discontinued subsidiary -- $ -- -- $ (0.02)
----------- ----------- ----------- -----------
Net income (loss) per share $ (0.02) $ 0.14 $ 0.26 $ 0.27
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - PRIMARY AND FULLY DILUTED 8,205,323 7,233,700 7,925,428 7,233,700
=========== =========== =========== ===========
</TABLE>
See notes to Consolidated Financial Statements
9
<PAGE> 10
CALL NOW, INC AND SUBSIDIARIES
Consolidated Statement of Changes in Stockholders' Equity
For the six months ended June 30,1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK TREASURY STOCK
---------------------------- --------------------------
NUMBER OF NUMBER OF
SHARES AMOUNT SHARES AMOUNT
--------- ------------ --------- ------------
<S> <C> <C>
BALANCE - DECEMBER 31,1996 7,519,400 $ 3,259,965
Unrealized holding gain, net of income taxes
Call Now common stock issued for
property 141,081 423,244
Call Now common stock issued for HSH
portion of Retama Park bonds 760,000 1,615,000
Call Now common stock issued for bonuses 14,544 30,000
Call Now property returned for Call Now
common stock (141,081) (423,244)
Purchase of treasury stock 90,000 (206,050
Net income
--------- ------------ ------ ------------
BALANCE - JUNE 30,1997 8,293,944 $ 4,904,965 90,000 $ (206,050
========= ============ ====== ============
</TABLE>
<TABLE>
<CAPTION>
SUBSCRIPTION
NOTES RECEIVABLE
---------------------- UNREALIZED
NUMBER OF HOLDING RETAINED
SHARES AMOUNT GAIN EARNINGS TOTAL
--------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE - DECEMBER 31,1996 250,000 $(200,000) $ 593,897 $ 4,747,868 $ 8,401,730
Unrealized holding gain, net of income taxes 626,970 626,970
Call Now common stock exchanged for
property 423,244
Call Now common stock exchanged for HSH
portion of Retama Park bonds 1,615,000
Call Now common stock bonus 30,000
Call Now property returned for Call Now
common stock (423,244)
Purchase of treasury stock (206,050)
Net income 2,098,918 2,098,918
------- --------- ------------ ------------ ------------
BALANCE - JUNE 30,1997 250,000 $(200,000) $ 1,220,867 $ 6,846,786 $ 12,566,568
======= ========= ============ ============ ============
</TABLE>
See notes to Consolidated Financial Statements
10
<PAGE> 11
CALL NOW, INC AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Six Month Periods ended June 30
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 2,098,918 $ 1,970,132
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 8,129 14,111
Deferred income taxes -- (1,026,509)
Gain on sale of securities (3,955,341) (3,701,893)
Furniture and equipment charged off 21,960 --
Loss from unconsolidated entity -- 93,967
Cancellation of stock for services -- (8,000)
Issuance of stock for bonuses 30,000 --
Changes in assets and liabilities net of business sold
(Increase) decrease in assets:
Accounts receivable -- (27,477)
Merchandise inventory -- (31,750)
Other current assets (122,093) (26,777)
Other assets (12,962) 3,703
Increase (decrease) in liabilities:
Accounts payable (448,924) (205,165)
Accrued expenses 15,012 83,637
Income taxes payable (909,215) 1,710,805
----------- -----------
CASH (USED) BY OPERATING ACTIVITIES (3,274,516) (1,151,216)
----------- -----------
INVESTING ACTIVITIES:
Capital (expenditures) returns 2,335 (5,456)
Purchase of short term securities (41,740) (1,313,575)
Purchase of marketable securities (1,564,442) (270,433)
Purchase of treasury stock (206,050) --
Proceeds from sale of marketable securities -- 9,664,680
Proceeds from bond defeasance 3,853,087 --
Investment in land (3,815) --
Investment in Cable-Sat Systems, Inc. -- (546,000)
Deposits on bond and land purchases -- (77,470)
Notes and loans receivable:
Advances (603,000) (250,000)
Collections 1,037,005 --
Purchase of customer base -- (26,150)
----------- -----------
CASH PROVIDED BY INVESTING ACTIVITIES 2,473,380 7,175,596
----------- -----------
FINANCING ACTIVITIES:
Proceeds from loans 150,000 24,852
Payments on margin loan -- (1,329,117)
Application of funding obligation to purchase of
marketable securities (1,075,000) --
Funding obligation 1,075,000 --
Payment on long term debt and capital lease obligations (6,071) (26,182)
----------- -----------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES 143,929 (1,330,447)
----------- -----------
NET (DECREASE) INCREASE IN CASH (657,207) 4,693,933
CASH, BEGINNING OF PERIOD 1,670,120 241,256
----------- -----------
CASH, END OF PERIOD $ 1,012,913 $ 4,935,189
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
11
<PAGE> 12
CALL NOW, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1997
1. SHORT TERM &
MARKETABLE
SECURITIES
The carrying amounts of marketable securities as show in the
accompanying balance sheet and their approximate market values
at June 30, 1997 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
HELD TO MATURITY
U.S. government
obligations $ 1,283,000 $ -- $ -- $ 1,283,000
=========== ===========
AVAILABLE FOR SALE
Municipal bonds
and notes $ 8,576,143 $ -- $ -- $ 8,576,143
Corporate securities 897,940 1,957,460 2,855,400
----------- ---------- ---------- -----------
$ 9,474,083 $1,957,460 $ -- $11,431,543
=========== ========== ===========
</TABLE>
The gross unrealized holding gain decreased by $1,032,447 for
the period ended June 30, 1997. Unrealized gains on securities
available for sale at June 30, 1997 are shown net of income
taxes as a component of stockholders' equity.
At June 30, 1997, U.S. government obligations with a carrying
value of $1,283,000 were pledged to collateralize the note
payable to a broker dealer.
2. NOTES AND LOANS
RECEIVABLE
CURRENT NOTES AND LOANS RECEIVABLE WERE COMPOSED OF THE
FOLLOWING:
Broker-dealer note $1,155,000
Stockholders' notes 60,587
----------
Total $1,215,587
==========
3. INCOME TAXES
The components for the provision for income taxes are as
follows:
Current $1,189,691
Deferred (0)
----------
Net income tax expense $1,189,691
==========
12
<PAGE> 13
4. RELATED PARTY In June 1997, the Company reversed the acquisition of
TRANSACTIONS its office building from its chief executive officer.
141,081 shares of Call Now, Inc. common stock were
returned to the Company and the land and building
accounts were reduced by $210,000 and $213,244,
respectively.
5. BOND DEFEASANCE On March 26, 1997, the Company participated in a
defeasance of its holdings of Retama Development
Corporation Special Facilities Revenue Bonds, Series
1993. Under the terms of the defeasance Call Now, Inc.
exchanged the Series 1993 bonds for Retama Development
Corporation Special Facilities Revenue Bonds, 1997
Series A and B plus cash in the amount of $3,853,087.
6. CONTINGENCIES Under the terms of the bond defeasance, Call Now, Inc.
agreed to fund any operating deficit of the Retama
Development Corporation for a two year period in an
amount up to $1,075,000 and for a two-year period
commencing on the date of the defeasance. In addition,
the company received $1,075,000 from the owner of the
other portion of the bonds representing their matching
share of the two year deficit funding agreement. The
$1,075,000 held by the Company on behalf of the Seller
and recorded on the balance sheet as a current
liability was applied toward the purchase of the
Seller's portion of the bonds (see note 7). As a result
the Company's contingent liability increased to a total
of $2,150,000 of which amount $603,000 has been
advanced.
7. BOND ACQUISITION On April 7, 1997, the Company acquire the balance of
the Retama Development Corp. Bonds in exchange for
760,000 shares of Call Now, Inc. common stock, 15,000
shares of Compressent common stock, and $2,150,000 in
cash. In addition, it was agreed between the parties
that the funding obligation of $1,075,000 held by the
Company on behalf of the seller would be applied to the
purchase price. The net cost of the remaining bonds to
the Company including legal fees was $3,179,442. The
Company's total holdings of Retama Bonds after the
acquisition are: (a) 1997 Series A, 7% bonds -
$7,000,000 (b) 1997 Series B, 8% bonds - $86,925,000.
8. STOCK OPTIONS On April 25, 1997, the Company granted cash bonuses,
stock bonuses, and stock options to its directors,
officers, and employees as follows:
CASH AND STOCK BONUSES
----------------------
BONUS CASH
SHARES BONUSES
------ -------
Employees 15,544 18,250
STOCK OPTIONS
-------------
SHARES OPTION AGGREGATE
GRANTED PRICE PRICE
------- ------ ---------
Directors and officers 530,000 $2.00-$4.00 $1,731,400
13
<PAGE> 14
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.
CALL NOW, INC.
By: /s/ Bryan P. Brown
-----------------------
Bryan P. Brown
President
August 14, 1997 By: /s/ James D. Grainger
-----------------------
Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,012,913
<SECURITIES> 12,714,543
<RECEIVABLES> 1,359,636
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,087,092
<PP&E> 28,602
<DEPRECIATION> 11,322
<TOTAL-ASSETS> 18,248,157
<CURRENT-LIABILITIES> 3,930,635
<BONDS> 1,750,954
0
0
<COMMON> 4,904,965
<OTHER-SE> 7,661,603
<TOTAL-LIABILITY-AND-EQUITY> 18,248,157
<SALES> 0
<TOTAL-REVENUES> 4,261,450
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 972,841
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72,762
<INCOME-PRETAX> 3,288,609
<INCOME-TAX> 1,189,691
<INCOME-CONTINUING> 2,098,918
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,098,918
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
