UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
----------
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
-------
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 33-853963
INTELICOM CORPORATION
---------------------
Exact Name of Registrant as Specified in its Charter
Delaware 72-1265159
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State or Other Jurisdiction of IRS Employer Identification
Incorporation or Organization Number
28050 US Hwy 19 N - Suite 202, Clearwater, FL 34621
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(Address of principal executive offices) (Zip Code)
(813)-797-9000
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Registrant's Telephone Number, Including Area Code
Three-L Enterprises, Inc. 1109 Andrews, Metairie, LA 70005
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(Former Name, Former Address, and Formal Fiscal Year, if Changed Since
Last Report.)
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 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 shares outstanding of each of the issuer's classes of common
shares, as of the latest practicable date:
$.0001 Par Value Outstanding at September 30, 1993
Common Shares
1,527,620
------------------- --------------------------
Class of Securities Outstanding Securities
<PAGE>
INTELICOM CORPORATION, INC.
INDEX
Page
----
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 2
September 30, 1996 and December 31, 1995
Consolidated Statements of Operations 3
for the three months ended September 30,
1996 and 1995, the nine months ended
September 1996 and 1995, and the period
from March 18, 1994 (inception) to
September 30, 1996.
Statement of Stockholders' Equity 4
for the period from March 18, 1994
(inception) to September 30, 1996
Consolidated Statements of Cash Flows 5
for the nine months ended September 30,
1996 and 1995 and the period from
March 18, 1994 (inception) to
September 30, 1996.
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
Part II. OTHER INFORMATION 9
1
<PAGE>
INTELICOM CORPORATION, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30, December 31,
1996 1995
------ ------
ASSETS
------
CURRENT ASSETS:
Cash $ 234,708 $ 395
Accounts Receivable 7,254 -
Accounts Receivable Trade 331,943 -
Prepaid Expenses 5,630 -
--------- ---------
Total Current Assets 579,535 395
FIXED ASSETS:
Equipment, Computers, Furniture 64,529 -
Depreciation (24,609) -
--------- ---------
Net Cost 39,920 -
OTHER ASSETS:
Deposits 10,000 -
Deferred offering costs - 36,825
Cash held in escrow - 133,110
--------- ---------
TOTAL ASSETS $ 629,455 $ 170,330
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 18,266 $ 4,990
Note payable - officer - 5,000
Commissions Payable 207,465 -
Current Portion of LT Debt 1,104 -
Wages Payable 36,539 -
--------- ---------
Total Liabilities 263,404 9,990
COMMITMENTS AND CONTINGENCIES - -
ESCROWED COMMON STOCK - 133,110
STOCKHOLDERS' EQUITY:
Preferred stock, $.0001 par value; - -
25,000,000 shares authorized;
none issued
Common stock, $.0001 par value; 153 4
100,000,000 shares authorized;
1,527,620 and outstanding
Additional paid-in capital 119,497 35,411
(Deficit) accumulated during the - (8,185)
development stage
Retained Earnings 246,401 -
--------- ---------
Total equity 366,051 27,230
TOTAL LIABILITIES AND EQUITY $ 629,455 $ 170,330
========= =========
Note: The balance sheet at December 31, 1995, has been taken from the
audited financial statements at that date and consolidated.
2
<PAGE>
INTELICOM CORPORATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
March 18,
1994
(Inception)
Sept 30, Sept 30, Sept 30, Sept 30, to Sept 30,
1996 1995 1996 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
REVENUES $ 685,155 $ - $ 685,155 $ - $ 685,155
--------- -------- --------- -------- ---------
EXPENSES:
General and
administrative 597,921 3,097 605,419 4,532 613,604
--------- -------- --------- -------- ---------
NET (LOSS) $ 87,234 $ (3,097) $ 79,736 $ (4,532) $ 71,551
========= ======== ========= ======== =========
NET (LOSS) PER SHARE
OF COMMON STOCK $ .06 $ (.07) $ .05 $ (.10)
========= ======== ========= ========
Weighted average
number of common
shares outstanding 1,527,620 44,000 1,527,620 44,000
========= ======== ========= ========
</TABLE>
3
<PAGE>
INTELICOM CORPORATION, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
For the Period March 18, 1994 (Inception)
To September 30, 1996
(Unaudited)
Common Stock
------------
<TABLE>
<CAPTION>
(Deficit)
Accumulated
Additional During The
Paid-in Development
Shares Amount Capital Stage
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
Balances, March 18, 1994 - $ - $ - $ -
(inception)
Issuance of common stock 44,000 4 20,621 -
for cash, $.46875 per
share
Net (loss) for period - - - (682)
March 18, 1994 ------- ------- ------- -------
(inception) to December
31, 1994
Balances, 44,000 4 20,621 (682)
December 31, 1994
Net proceeds received - - 14,790 -
from public offering
(note 2)
Net (loss) for the - - - (7,503)
period ------- ------- ------- -------
Balances,
December 31, 1995 44,000 4 35,411 (8,185)
Net gain/(loss) for - - - 79,736
the period ------- ------- ------- -------
Issuance of Common Stock
in Merger with
Intelicom International
Corporation
1,527,620 $ 152 $119,498 $ 71,551
========= ======= ======== ========
Balances, June 30, 1996
</TABLE>
4
<PAGE>
INTELICOM CORPORATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
-----------------
March 18,
1994
(Inception) to
September September September
30, 1996 30, 1995 30, 1996
-------- -------- --------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net gain/(loss) $ 79,735 $ (4,532) $ 71,542
(Increase)/decrease (4,315) (7,000) (4,315)
in prepaid expenses
Increase in accounts payable 59,356 - 61,854
--------- --------- ---------
Net cash provided (used)
by operating activities 134,776 (11,532) 129,081
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES: - - -
--------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from sale of - - 20,625
common stock
Proceeds from sale of - - 14,790
escrowed common stock
(note 2)
Proceeds from borrowings (7,500) 14,790 -
on note payable - officer
Deferred offering costs 59,359 (9,925) -
Cash from merger with IIC 70,212 - 70,212
--------- --------- ---------
Net cash provided (used) 122,071 4,865 105,627
by financing activities --------- --------- ---------
NET INCREASE (DECREASE) IN CASH 256,847 (6,667) 234,708
CASH, beginning of period 395 8,147 -
--------- --------- ---------
CASH, end of period $ 234,708 $ 1,480 $ 234,708
========= ========= =========
5
<PAGE>
INTELICOM CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------
The consolidated balance sheet as of September 30, 1996, and the
consolidated statements of operations and cash flows for the three
months ended September 30, 1996, and the nine months ended September
30, 1996, and the period March 18, 1994 (inception), to September 30,
1996, 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,
results of operations and cash flows at September 30, 1996, and for
all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been consolidated or omitted. It is
suggested that these consolidated financial statements be read in
conjunction with the December 31, 1995 financial statements and notes
thereto included in the Company's Form 10-K dated March 28, 1996. The
results of operations for the period ended September 30, 1996 are not
necessarily indicative of the operating results for the full year.
The financial statements for the entire third quarter were prepared on
a consolidated basis between 3-L Corporation and Intelicom
International Corporation.
2. INITIAL PUBLIC OFFERING
-----------------------
In April 1995, the Company completed an initial public offering of
32,381 shares of $.0001 par value common stock, through an underwriter
on a "firm commitment" basis at $5.25 per share. The offering, which
was made under Rule 419 of Regulation C, requires that the proceeds,
less certain allowable deductions and all the securities purchased by
investors, be placed into an escrow account until the offering has
been reconfirmed by the Company's shareholders and the Company becomes
a party to a merger or acquisition with another business in accordance
with the provisions of Rule 419. In the event an acquisition is not
consummated within 18 months of the effective date of this offering,
which was April 13, 1995, the proceeds held in escrow will be returned
to all investors.
The Company paid the underwriter a commission of 10% of the gross
proceeds of the offering. In addition, the Company issued the
underwriter warrants to purchase 3,238 shares of common stock, which
will be exercisable for a period of four years, commencing one year
from the date of closing, which was April 13, 1995, at an exercise
price of $6.30 per share, subject to adjustment in certain events.
The shares underlying the warrants are subject to piggybank
registration rights, expiring seven years after the effective date of
the offering.
6
<PAGE>
INTELICOM CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL SERVICES
(Unaudited)
3. BUSINESS COMBINATION
--------------------
On November 20, 1995, the Company entered into a letter of intent to
acquire all of the issued and outstanding shares of Intelicom
International Corporation (Intelicom). Consummation of the
transaction is dependent upon the shareholders of the Company
reconfirming their investment in the Company in accordance with Rule
419 and approving the issuance of 1,420,687 shares of the Company's
common stock to the holders of Intelicom's common stock. The Company
filed the required Amendment to its registration statement on July 12,
1996 to comply with Rule 419. A meeting is scheduled for September
10, 1996 to obtain the shareholders' consent. Shareholder's
unanimously gave consent to the merger. The merger with Intelicom
International Corporation was completed on September 10, 1996
7
<PAGE>
INTELICOM CORPORATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
The Company had cash of $234,708, and cash of $395 at December 31,
1995.
Results of Operations
- ---------------------
For the period from March 18, 1994 (inception) to September 10, 1996,
the Company was inactive. The Company was in the development stage
and its activities through September 10, 1996 consisted primarily of
efforts to complete the public offering and pursue a merger. During
this time the Company's limited expenditures consist of minimal
operating expenses and deferred offering costs. The Company continued
to incur losses until the merger was completed with Intelicom
International Corporation on September 10, 1996.
Management does not expect inflation or changing prices to have any
effect on the Company's financial condition.
Since the statements now include the operations of Intelicom
International Corporation (IIC) all reported numbers now reflect an
active operating company. The statements include the entire third
quarter operations of IIC. The cash held in escrow from 3-L was
deposited in the IIC account upon completion of the merger. Accounts
receivable trade is comprised of commissions due from marketing
agreements with long distance carriers which IIC has marketing
agreements with. This receivable results from a timing difference
from the time an account bills out to when IIC receives a commission.
Accounts receivable are from sales on long distance being rebilled by
IIC. Prepaid expenses are comprised entirely of prepaid federal
income tax for the 1996 year. IIC has placed a $10,000 deposit with
Network Long Distance to secure their interest in a wholesale long
distance agreement with this provider.
8
<PAGE>
INTELICOM CORPORATION, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
NONE.
ITEM 2. CHANGES IN SECURITIES
---------------------
NONE.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
NONE.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
--------------------------------------------------
On September 10, 1996, the shareholders approved the Stock
Exchange Agreement between Three-L Enterprises and Intelicom
International Corporation. The shareholders also approved the
change of the corporation's name to Intelicom Corporation and
the appointment of new Officers and Directors.
ITEM 5. OTHER INFORMATION
-----------------
NONE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
NONE.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTELICOM CORPORATION, INC.
Date: November 7, 1996 By: /s/ DAVID SPEZZA, PRESIDENT
---------------------------------
David Spezza, President
10
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 234,708
<SECURITIES> 0
<RECEIVABLES> 339,197
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 579,535
<PP&E> 64,529
<DEPRECIATION> 24,609
<TOTAL-ASSETS> 629,455
<CURRENT-LIABILITIES> 263,404
<BONDS> 0
0
0
<COMMON> 153
<OTHER-SE> 365,898
<TOTAL-LIABILITY-AND-EQUITY> 629,455
<SALES> 0
<TOTAL-REVENUES> 685,155
<CGS> 0
<TOTAL-COSTS> 597,921
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 87,234
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,234
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
