<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
COMMISSION FILE NUMBER 0 - 25112
ADVANCED MEDIA, INC
(Exact name of registrant as specified in its charter)
DELAWARE 11-2899603
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
80 ORVILLE DRIVE
BOHEMIA, NEW YORK 11716
(Address of Principal Executive Offices) (Zip Code)
(516) 244 -1616
(Registrant's telephone number, including area code)
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__
There were 64,070,133 shares of registrant's common stock outstanding as of July
31, 1996.
<PAGE> 2
ADVANCED MEDIA INC.
INDEX
PART I - FINANCIAL INFORMATION PAGE
----
Balance Sheets 3
Statements of Operations 4
Statements of Changes in Stockholders' Equity (Deficit) 5
Statements of Cash Flows 6
Notes to Financial Statements 7-9
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-11
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 12
Item 2 - Changes in Securities 12
Item 3 - Defaults Upon Senior Securities 12
Item 4 - Submission of Matters to a Vote of Security Holders 12
Item 5 - Other Information 12
Item 6 - Exhibits and Reports on Form 8-K 12
Signatures 13
2
<PAGE> 3
ADVANCED MEDIA, INC.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
---- ----
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 10,203 $ 151,463
Accounts receivable, net of allowance for
doubtful accounts of $15,218, respectively 346,276 307,535
Note receivable from stockholder 100,000 100,000
Other receivable 40,000 --
Inventories, net 158,864 169,002
Prepaid expenses and other current assets 48,307 15,155
----------- -----------
Total current assets 703,650 743,155
Fixed assets, net 303,897 283,170
Intangible assets, net 1,572,513 1,709,859
Other assets 20,953 27,834
----------- -----------
Total assets $ 2,601,013 $ 2,764,018
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 588,691 $ 334,345
Cash overdrafts 107,609 --
Accrued expenses and other liabilities 162,530 185,816
Payable to related parties 123,514 41,381
Due to broker 100,000 100,000
Current portion of capital lease obligations 13,174 9,499
----------- -----------
Total current liabilities 1,095,518 671,041
Loan payable - stockholder 1,108,550 1,007,550
Long-term debt -- 950,500
Capital lease obligations, net of current portion 25,176 --
Payable to related parties, long term 272,276 153,608
----------- -----------
Total liabilities 2,501,520 2,782,699
========= =========
Stockholders' equity (deficit):
Preferred stock, par value $.0001 per share,
Shares authorized: 10,000,000, none issued and outstanding
Common stock, par value $.0001 per share,
Shares authorized: 100,000,000,
Shares issued and outstanding:
1996 - 62,750,362
1995 - 55,319,810 6,275 5,532
Additional paid-in capital 7,552,122 6,179,372
Accumulated deficit (7,371,469) (6,093,555)
Less deferred compensation (87,435) (110,030)
----------- -----------
Total stockholders' equity (deficit) 99,493 (18,681)
----------- -----------
Commitments and contingencies
Total liabilities and stockholders' equity (deficit) $ 2,601,013 $ 2,764,018
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
ADVANCED MEDIA, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
---------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $ 1,707,394 $ 1,212,932 $ 969,127 $ 418,619
Cost of sales 1,311,441 729,612 711,739 280,037
------------ ------------ ------------ ------------
Gross profit 395,953 483,320 257,388 138,582
Expenses:
Development 16,222 182,906 4,807 90,757
Selling and marketing 267,837 459,981 135,175 203,274
General and administrative 905,365 895,878 473,146 431,411
Amortization of intangible assets 112,346 144,390 56,172 72,195
Debt conversion expense 309,375 -- -- --
------------ ------------ ------------ ------------
Total expenses 1,611,145 1,683,155 669,300 797,637
------------ ------------ ------------ ------------
Loss from operations (1,215,192) (1,199,835) (411,912) (659,055)
Unrealized loss on available-for
sale securities -- (1,195,313) -- (609,055)
Interest expense (101,714) (254,596) (23,551) (228,154)
Gain on sale of trademark, net 36,372 -- 40,000 --
Other income (expense) 2,620 -- (74) --
------------ ------------ ------------ ------------
(62,722) (1,449,909) 16,375 (837,209)
------------ ------------ ------------ ------------
Net loss $ (1,277,914) $ (2,649,744) $ (395,537) $ (1,496,264)
============ ============ ============ ============
Net loss per share $ (.02) $ (.05) $ (.01) $ (.03)
============ ============ ============ ============
Weighted average number of
common shares outstanding 58,835,714 49,002,421 62,122,387 49,206,665
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
ADVANCED MEDIA, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL DEFERRED TOTAL
.0001 PAR PAID-IN ACCUMULATED COMPEN- VALUATION DOLLAR
SHARES AMOUNT CAPITAL DEFICIT SATION ALLOWANCE AMOUNTS
------ ------ ------- ------- ------ --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1994 48,531,144 $ 4,853 $ 4,805,621 $(1,846,669) $(188,324) $(951,563) $ 1,823,918
Sales to outside investors 10,180,824 1,018 1,717,034 -- -- -- 1,718,052
Sales to 401k Plan 6,391 1 3,175 -- -- -- 3,176
Contribution by officer:
Common stock (2,000,000) (200) 200 -- -- -- --
Issuance of common stock for:
Services 20,000 2 10,935 -- -- -- 10,937
Commissions on note agreement 800,000 80 296,795 -- -- -- 296,875
Acquisition revaluations 1,031,451 103 (103) -- -- -- --
Issuance of options as
commission on note agreement -- -- 73,875 -- -- -- 73,875
Amortization of deferred
compensation -- -- -- -- 68,559 -- 68,559
Change in valuation allowance -- -- -- -- -- 951,563 951,563
Cancellation of shares due to:
Employment termination (2,250,000) (225) (9,510) -- 9,735 -- --
Agreement termination (1,000,000) (100) (718,650) -- -- -- (718,750)
Net loss -- -- -- (4,246,886) -- -- (4,246,886)
---------- -------- ---------- ----------- --------- -------- -----------
BALANCE AT DECEMBER 31, 1995 55,319,810 5,532 6,179,372 (6,093,555) (110,030) -- (18,681)
Sales to outside investors 521,423 53 89,530 -- -- -- 89,583
Sales to 401k Plan 2,879 -- 788 -- -- -- 788
Additional stock issuance 1,087,500 108 (108) -- -- -- --
Amortization of deferred
compensation -- -- -- -- 21,447 -- 21,447
Cancellation of shares due to:
Employment termination (281,250) (28) (1,120) -- 1,148 -- --
Debt conversion 6,100,000 610 1,283,660 -- -- -- 1,284,270
Net loss -- -- -- (1,277,914) -- -- (1,277,914)
---------- --------- ----------- ----------- --------- -------- -----------
BALANCE AT JUNE 30, 1996 62,750,362 $ 6,275 $ 7,552,122 $(7,371,469) $ (87,435) $ -- $ 99,493
========== ======== =========== =========== ========= ========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
ADVANCED MEDIA, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,277,914) $(2,649,744)
Adjustments to reconcile net loss to net
cash provided by (used for) operating activities:
Unrealized loss on available-for-sale
securities 1,195,313
Gain on sale of trademark, net (36,372) --
Debt conversion expense 309,375 --
Depreciation and amortization 87,794 34,529
Amortization of goodwill and software 112,346 144,390
Amortization of deferred compensation 21,447 36,438
Interest on loan payable - officer 43,668 46,039
Amortization of loan costs -- 193,130
Issuance of common stock for services -- 4,063
Options issuable to officer as compensation 75,000 --
Changes in operating assets and liabilities:
Accounts receivable, net (38,741) 147,331
Other receivable (40,000) --
Receivable from related parties -- 79,804
Inventories 10,138 (7,790)
Prepaid expenses and other current assets (33,152) (6,900)
Accounts payable 254,346 (74,513)
Accrued expenses and other liabilities (23,286) (649)
Payable to related parties 82,133 (18,907)
----------- -----------
Net cash used for operating activities (453,218) (877,466)
----------- -----------
Cash flows from investing activities:
Additions to fixed assets (54,629) (36,436)
Net proceeds from sale of trademark 61,372 --
Issuance of note receivable -- (46,950)
(Increase) decrease in security deposits 6,881 --
----------- -----------
Net cash provided by (used for) investing activities 13,624 (83,386)
----------- -----------
Cash flows from financing activities:
Sale of common stock 90,371 452,050
Proceeds from loan payable - officer 101,000 53,776
Proceeds from notes payable, net -- 750,000
Proceeds from capital lease obligations, net (646) (1,182)
Payments of notes payable -- (5,209)
----------- -----------
Net cash provided by financing activities 190,725 1,249,435
----------- -----------
Net increase (decrease) in cash and cash equivalents (248,869) 288,583
Net cash, cash overdrafts and cash equivalents:
Beginning of period 151,463 44,195
----------- -----------
End of period $ (97,406) $ 332,778
=========== ===========
Cash paid during the period for:
Interest $ -- $ 15,427
=========== ===========
Taxes $ -- $ 3,353
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
6
<PAGE> 7
ADVANCED MEDIA, INC.
NOTES TO FINANCIAL STATEMENTS
1 - BASIS OF PRESENTATION
The unaudited interim financial statements of Advanced Media, Inc. (the
"Company") for the six months ended June 30, 1996 and 1995 have been prepared by
management and include all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the unaudited interim periods. The
results of operations for the six months ended June 30, 1996 are not necessarily
indicative of the results to be expected for the full year. These interim
financial statements should be read in conjunction with the financial statements
and related notes contained in the Company's annual report on Form 10-K for the
year ended December 31, 1995.
Any forward looking statements contained in this document reflect management's
current intentions and expectations. Actual future results could vary materially
depending on certain risks and uncertainties, including factors such as
financing, operational spending, and the factors referred to in the Company's
Form 10-K for the year ended December, 1995 and the Form 10-Q for the quarter
ended March, 1996.
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash overdrafts - Under the Company's cash management system, checks issued but
not presented to banks frequently result in overdraft balances for accounting
purposes and are classified as "cash overdrafts" in the balance sheet.
3 - LIQUIDITY
The Company incurred a net loss of $1,277,914 for the six months ended June 30,
1996 and cumulative net losses of $7,371,469 through June 30, 1996. As of June
30, 1996 the Company had a working capital deficit of $391,868 as compared to
working capital of $72,114 at December 31, 1995.
The Company's plan for improving liquidity includes both growth in its core
interactive multimedia application systems business as well as strategic
acquisitions of profitable businesses. Subject to financing, the Company has
multiple potential acquisitions under consideration and in various stages of
discussion. Although management believes, based on the development of the
Company's business and its preliminary discussions with various potential
investors and other sources of financing, that it will be able to raise
additional capital sufficient to meet its working capital needs over the next
twelve months, no assurance can be given that it will be successful in this
respect. Additionally, the Company's chief executive officer and largest
stockholder has indicated his intent to provide certain additional funding to
the Company, if necessary; however, there is no legal obligation on the part of
the Company's chief executive officer to so provide funding. The Company
currently has no line of credit or other access to debt financing from any
financial institution. Furthermore, the Company's assets are pledged as part of
the value guaranty described in Note 4 below.
See Note 10 reflecting present equity funding arrangements.
4 - DEBT AND EQUITY TRANSACTIONS
In March 1996, the Company reached agreement with Suan Investments Corp. and an
assignee thereof to convert their $1,000,000 principal amount of notes into
6,000,000 shares of common stock of the Company, at a conversion price of $.1667
per share. The agreement provides the noteholders a guaranteed value of $.33 per
share, twice the conversion price, on certain valuation dates, as defined. To
secure the Company's value guaranty obligation, the Company has left in place
the security agreements relating to the original Note Purchase Agreements,
pursuant to which substantially all of the Company's assets serve as collateral
for these obligations.
Originally, Suan Investments Corp. had agreed to convert their note into
5,000,000 shares of the Company's common stock (at a conversion price of $.20
per share). As an inducement to convert at the March 31, 1996 date, the Company
agreed to the new conversion price of $.1667 per share and to issue an
additional 100,000 shares as a further inducement. In accordance with Financial
Accounting Standards No. 84, the Company recorded the additional 1,100,000
shares issued at their fair market value at the date of conversion as debt
conversion expense of $309,375.
7
<PAGE> 8
ADVANCED MEDIA, INC.
NOTES TO FINANCIAL STATEMENTS
4 - DEBT AND EQUITY TRANSACTIONS (CONTINUED)
As a condition of certain agreements entered into by the Company in 1995
pursuant to which 7,250,000 shares of common stock were exchanged for $1,450,000
in gross proceeds, the Company was required to issue 1,087,500 shares of common
stock. According to the agreements, if as of January 1, 1996 the Company did not
have an effective registration statement covering those shares, then the Company
would be required to make monthly payments to each purchaser equal to 2.5% of
the purchase price, valued at $.20 per share, until such registration is
declared effective. The Company has satisfied such obligations through June,
1996 by issuing these additional shares of common stock.
5 - RELATED PARTY TRANSACTIONS
Expenses for the six and three months ended June 30, 1996 include certain
amounts payable to the Company's chief executive officer, $75,000 and $37,500,
respectively, representing compensation payable, and $43,668 and $21,968,
respectively, representing interest on the loan from officer. The Company
incurred consulting expenses of $39,032 and $19,929, respectively, to a
stockholder.
6 - INCOME TAXES
At June 30, 1996 the Company has net operating loss carryforwards for tax
purposes of approximately $5,300,000 which expire through 2011. Deferred tax
assets are comprised of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
<S> <C> <C>
Gross deferred tax assets $ 1,973,506 $ 1,576,855
Valuation allowance (1,973,506) (1,576,855)
----------- -----------
Net deferred tax asset $ -- $ --
=========== ===========
</TABLE>
The gross deferred tax assets arise primarily from net operating loss
carryforwards and differences in the valuation of receivables, inventory,
accruals and deferred compensation. The Company did not record a net tax benefit
from its gross deferred tax assets because a valuation allowance of an equal
amount was provided.
The Company had a significant change in its ownership during the nine months
ended December 31, 1993, which will result in a statutory annual limitation on
utilization of the loss carryforwards. Any significant future changes in
ownership could require further limitations of the loss carryforwards.
7 - STATEMENTS OF CASH FLOWS
The Company exchanged 6,100,000 shares for a $1,000,000 debt on March 31, 1996
(see note 4).
During the quarter ended June 30, 1996, the Company acquired computer equipment
pursuant to capital leases of $29,497.
During the six months ended June 30, 1995, the Company issued 300,000 shares of
common stock valued at $196,875 and 300,000 options to purchase common stock
valued at $73,875 in conjunction with the issuance of notes payable totaling
$500,000.
8
<PAGE> 9
ADVANCED MEDIA, INC.
NOTES TO FINANCIAL STATEMENTS
8 - JOINT VENTURE AGREEMENT
On May 2, 1996 the Company entered into a joint venture agreement with a
privately held corporation located in Ohio which specializes in the design and
development of interactive kiosks. The purpose of the joint venture is to
develop and service a kiosk project for a mutual customer. The parties have
agreed to share profits and losses equally.
9 - CONTINGENCIES
Legal Proceedings
On September 29, 1995, a former employee and owner of a business acquired by the
Company, Decision Vision, Inc., and his wife, also a former employee, initiated
a lawsuit seeking damages of $2,850,000 from the Company, and certain present
and former officers. The lawsuit is for claims arising from the employee's
alleged termination, and alleged misrepresentations made in connection with the
Company's acquisition and plan of reorganization for Decision Vision, Inc. The
Company had previously filed an action against the plaintiff in the
aforementioned matter, in the Supreme Court of the State of New York, seeking
$53,000 in damages for alleged breaches arising from the same acquisition and
plan of reorganization. Management believes the former employee's case is a
reaction to this case and is without merit. The Company plans to vigorously
contest the action which is set for trial in San Diego in October of 1996, along
with the Company's lawsuit against the former employee and owner of Decision
Vision, Inc. which was transferred to San Diego. The Company has not set aside
any reserves for this matter as management believes that it is not probable that
the Company will suffer any material loss as a result.
10 - SUBSEQUENT EVENTS
In August 1996 the Company entered into an equity funding agreement with
certain offshore investors whereby the investors have provided the Company with
approximately $600,000, consisting of $500,000 in cash and forgiveness of
$100,000 due to broker liability reflected on the accompanying balance sheet.
In return, the investors will be issued Class A Convertible Preferred Stock
(Class A Preferred). The Class A Preferred will be convertible to common stock
of the corporation after a designated holding period beginning 60 days and
ending 150 days after issuance. The Class A Preferred will convert at 55% of
the lesser of the average closing bid price of the common stock on the five
trading days immediately prior to (a) the date of issuance of the Class A
Preferred to be converted or, (b) the conversion date.
In connection with the aforementioned funding, the broker for this transaction
is entitled a commission in the form of warrants for the purchase of common
stock equivalent to 75% of the common stock issuable upon conversion of
$200,000 liquidation preference of the Class A Preferred. The warrants will
convert at the same price as that of the converted Class A Preferred.
9
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this Form 10-Q.
RESULTS OF OPERATIONS
SIX AND THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Revenue for the six and three months ended June 30, 1996 increased $494,462 and
$550,508, or 40.8%, and 131.5%, respectively. Gross profit increased by $118,806
or 85.7% for the three months ended June 30, 1996 as compared to the prior three
month period. Gross profit has declined for the six months ended June 30, 1996
$87,367 or 18%, as compared to the six months ended June 30, 1995. The increase
in revenue reflects the Company's shift in emphasis from the hardware and
software resale business to interactive kiosks and solution based sales
products. During the three months ended June 30, 1996 the Company completed a
pilot program for a customer for which it delivered 16 interactive kiosks which
generated approximately $300,000 in revenue. Compared to the prior six and three
month periods, revenues from interactive kiosks and other touchscreen based
solutions have increased $293,814 and $341,319, respectively. Over the same
comparative period, tradeshow and exhibition service revenues have increased
$156,997 and $40,725, respectively The design of interactive kiosks and
touchscreen based solutions is more labor intensive and the Company has not yet
been able to price its products competitively due to the low product volumes
associated with existing orders. There is also a higher labor cost associated
with kiosk design. Management believes the costs incurred, and which are
reflected in the reduced margins, are indicative of the efforts to design and
develop high quality interactive applications which are expected to provide
increases in future sales and marketing activities. Management has geared its
sales efforts at larger volume orders which would be expected to have a positive
impact on the Company's gross profit. Gross profit, as a percentage of sales,
for the three months ended June 30, 1996 was 26.5% as compared to 23.2% for the
six months ended June 30, 1996 reflecting higher volumes and lower unit costs in
the second quarter.
Expenses for the six and three months ended June 30, 1996 decreased $72,010 and
$128,337, or 4.3% and 16.1% respectively, as compared to the six and three
months ended June 30, 1995. Development expense decreased $166,684 and $85,950,
or 91.1% and 94.7% respectively, as compared to the six and three months ended
June 30, 1995, due to the Company focusing more on revenue producing activities,
trying to bring to market development activities incurred over the past years of
operations. Selling and marketing expense decreased $192,144 and $68,099, or
41.8% and 33.5%, respectively, as compared to the six and three months ended
June 30, 1995, reflecting a reduction in the Company's salesforce. General and
administrative expenses increased $9,487 and $41,735, or 1% and 9.7%, compared
to the six and three months ended June 30, 1995. These increases reflect an
increase in legal services of $69,904 and $26,480 over the respective periods,
which relate to the Company's defense costs in the litigation outlined in Note 9
to the accompanying unaudited financial statements. The decrease of $32,044 and
$16,023, or 22.2%, in amortization of intangible assets is related to the
reduction in goodwill recorded by the Company in the fourth quarter of 1995 and
reflected as an impairment loss. The debt conversion expense of $309,375 was
related to the costs associated with inducing Suan Investments Corporation to
retire their outstanding debt in the first quarter of 1996 in exchange for the
Company's equity securities and is more fully described in Note 4 to the
accompanying unaudited financial statements.
Interest expense reflects the accelerated amortization of deferred financing
costs in the second quarter of 1995. 1996 expenses reflect approximately $87,000
of interest costs associated with the conversion of Suan Investment Note to
equity at March 31, 1996.
During the fiscal quarter ended June 30, 1996, the Company sold the rights to
it's "Autosoft" trademark for $65,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company incurred a net loss of $1,277,914 for the six months ended June 30,
1996 and cumulative net losses of $7,371,469 through June 30, 1996. As of June
30, 1996 the Company had a working capital deficit of $391,868 as compared to
working capital of $72,114 at December 31, 1995. The decrease in working capital
is primarily attributable to the use of $453,218 for operating activities.
10
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
LIQUIDITY AND CAPITAL RESOURCES (CONT.)
The Company's plan for improving liquidity includes both growth in its core
interactive multimedia application systems business as well as strategic
acquisitions of profitable businesses. Subject to financing, the Company has
multiple potential acquisitions under consideration and in various stages of
discussion. Although management believes, based on the development of the
Company's business and its preliminary discussions with various potential
investors and other sources of financing, that it will be able to raise
additional capital sufficient to meet its working capital needs over the next
twelve months, no assurance can be given that it will be successful in this
respect. Additionally, the Company's chief executive officer and largest
stockholder has indicated his intent to provide certain additional funding to
the Company, if necessary; however, there is no legal obligation on the part of
the Company's chief executive officer to so provide funding. The Company
currently has no line of credit or other access to debt financing from any
financial institution. Furthermore, the Company's assets are pledged as part of
the value guaranty described in Note 4 in the accompanying unaudited financial
statements.
Refer to Note 10 of the accompanying unaudited financial statements discussing
the $600,000 of equity funding the Company has arranged.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
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) Exhibits:
Not applicable
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended June
30, 1996.
11
<PAGE> 12
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, thereunto duly authorized.
ADVANCED MEDIA, INC.
Date: 8/14/96 By /s/ Hans Kaemmlein
----------------------
Hans Kaemmlein, Chairman of the Board,
President and Chief Executive Officer
Date: 8/14/96 By /s/ Alan W. Schoenbart
--------------------------
Alan W. Schoenbart,
Chief Financial Officer
<PAGE> 13
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
27 FINANCIAL DATA SCHEDULE
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> (97,406)
<SECURITIES> 0
<RECEIVABLES> 486,276
<ALLOWANCES> (15,218)
<INVENTORY> 158,864
<CURRENT-ASSETS> 703,650
<PP&E> 543,656
<DEPRECIATION> (239,759)
<TOTAL-ASSETS> 2,601,013
<CURRENT-LIABILITIES> 1,095,518
<BONDS> 1,380,826
6,275
0
<COMMON> 0
<OTHER-SE> 93,218
<TOTAL-LIABILITY-AND-EQUITY> 2,601,013
<SALES> 1,707,394
<TOTAL-REVENUES> 1,707,394
<CGS> 1,311,441
<TOTAL-COSTS> 1,311,441
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 101,714
<INCOME-PRETAX> (1,277,914)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,277,914)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
