<SUBMISSION-INFORMATION-FILE>
<TYPE> 10QSB
<DOCUMENT-COUNT> 1
<SROS> NONE
<FILER>
<CIK> 0001081751
<CCC> #MD7FUEK
</FILER>
<PERIOD> 06/30/01
<DOCUMENT>
<TYPE> 10QSB
<DESCRIPTION> Form 10QSB
<TEXT>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended June 30, 2001
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number
AMERICANA PUBLISHING, INC.
---------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
COLORADO 84-1453702
------------ --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
303 SAN MATEO NE, SUITE 104A, ALBUQUERQUE, NM 87108
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(Address of principal executive offices)
505-265-6121
(Issuer's telephone number)
--------------------------------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 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 .
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 12, 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
As of June 30, 2001, there were 10,430,396 shares of common stock outstanding.
Transitional Small Business Disclosure Format (Check one): Yes_____. No_____.
<PAGE>
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets
December 31, 2000 (Audited) and
June 30, 2001 (Unaudited) 3
Condensed Statement of Income (Loss)
Three months ended June 30, 2001
and 2000 4
Condensed Statements of Cash Flows
Three months ended June 30, 2001
and 2000 5
Notes to Condensed Financial Statements 6
Independent Accountant's Report 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
Americana Publishing, Inc.
Condensed Balance Sheet
For Periods Ending
June 30, December 31,
2001 2000
Assets (unaudited) (Audited)
Current Assets
Cash $ 7,468 $ 20,027
Marketable Securities 5,000 30,000
Inventory 31,636 20,237
Accounts Receivable 42,123 24,837
Prepaid & Misc. 38,497 56,496
----------- -------------
Total Current Assets $ 124,724 $ 151,597
Property & Equipment
Audio Equipment & Production Costs 174,204 160,217
Database & Circulation 239,313 239,313
Computer Equipment 130,722 128,537
Software 20,274 15,953
Furniture & Fixtures 50,864 47,463
Website Development 44,663 43,463
Other 31,907 31,907
Less: Accumulated Depreciation
and Amortization (154,203) (92,399)
----------- -------------
Total Property & Equipment 537,744 574,902
Total Asset $ 662,468 $ 726,499
=========== =============
Liabilities & Stockholders Equity
Current Liabilities
Accounts Payables $ 64,900 19,978
Accrued Liabilities 15,657 51,296
----------- -------------
Total Current Liabilities 80,557 71,274
Stockholders Equity
Preferred Stock 20,000,000 Shares
No Par Value, Authorized, None Issued
Common stock 100,000,000 Shares Authorized
$.001 Par Value 7,812,396 & 10,430,396
Issued and outstanding for December 31,
2000 and June 30, 2001, respectively 10,430 7,822
Paid-In Capital 5,750,718 5,122,225
Accumulated Deficit (5,097,180) (4,474,822)
---------- ----------
Total Stockholders' Equity 581,911 655,225
Total Liabilities & Stockholders Equity $ 662,468 $ 726,499
============ ===========
See Accompanying Notes to Financial Statements.
3
<PAGE>
Americana Publishing, Inc.
Statement of Income (Loss)
(Unaudited)
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED JUNE 30 ENDED JUNE 30
2001 2000 2001 2000
------- ------- ------- ------
Revenues
Audio Book Sales 163,974 20,191 69,193 4,193
Other Revenue 30 - - -
-------- ------- -------- -------
Total Revenue 164,004 20,191 69,193 4,193
Cost of Goods Sold 42,338 8,251 11,910 5,668
------ ----- -------- -------
Gross Profit 121,666 11,940 57,283 (1,475)
Administration Expense
Compensation Expense 421,969 1,371,245 70,749 705,363
Management Fees 18,000 18,000 9,000 9,000
Professional Fees 166,501 26,285 41,300 12,389
Marketing Fees 45,706 109,887 27,196 42,446
Depreciation 61,802 16,824 31,039 9,920
Other Operating Expenses 30,175 92,955 16,035 16,255
------- ------- ---------- ----------
Total Expense 744,153 1,635,196 195,319 795,373
Net Operating Income (Loss) (622,487) (1,623,256) (138,036) (796,848)
Other Income (Expense)
Interest Income 129 9,533 - 1,373
-------- -------- --------- --------
129 9,533 - 1,373
------- ------- --------- --------
Net Income (Loss) before taxes (622,358) (1,613,723) (138,036) (795,475)
Income Tax - - - -
--------- ---------- --------- ---------
Net Income (Loss) (622,358) (1,613,723) (138,036) (795,475)
Weighted Average Number
of Common Shares Outstanding 9,606,513 4,548,755 10,311,693 4,928,085
Income (Loss) Per Share - Basic (.07) (.35) (.17) (.16)
and Diluted
Dividends Per Common Share $ - $ - $ - $ -
See Accompanying Notes to Financial Statements.
4
<PAGE>
Americana Publishing, Inc.
Condensed Statement of Cash Flows
(Unaudited)
Six Months Ended Six Months Ended
June 30, 2001 June 30, 2000
-------------------- --------------------
Cash Flows From Operating Activities:
Net Loss $ (622,358) $(1,613,722)
Adjustments to Reconcile Net Income(Loss)
To Net Cash Provided by Operating
Activities:
Depreciation 61,802 16,824
Capital Transactions 412,703 1,196,756
(Increase)Decrease in Accounts Receivable (17,376) (37,957)
(Increase)Decrease in Prepaids 17,999 (77,114)
Increase (Decrease) in Accounts Payable
and Accrued Liabilities (9,283) 7,122
Increase (Decrease) in Inventory (11,399) 8,392
(Increase) Decrease in Marketable Securities 25,000 104,160
------------ -------
Total Adjustments 479,446 1,209,791
------------ -------
Net Cash Used by Operating Activities (142,912) (403,931)
Cash Flows From Financing Activities:
Proceeds From Sale of Common Stock 155,000 310,000
Proceeds From Borrowings - -
------------ ------
Net Cash Provided by Financing 155,000 310,000
Cash Flows From Investing Activities:
Purchase of Property and Equipment (24,646) (152,750)
------------ -------
Net Cash Used in Investing Activities (24,646) (152,750)
Net Increase (Decrease) in Cash (12,557) (246,681)
Cash and Cash Equivalents at
Beginning of Period 20,027 308,376
------------ -------
Cash and Cash Equivalents at
End of Period 7,470 $ 61,695
============ ================
Non Cash Transactions:
Property Plant and Equipment
Exchanged for Common Stock - 100,000
Supplemental Disclosures:
Interest Paid $ 0
Taxes Paid $ $ 0
See Accompanying Notes to Financial Statements.
5
<PAGE>
AMERICANA PUBLISHING, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1.
The unaudited internal condensed financial statements and related notes have
been prepared by Americana Publishing, Inc. (the “Company”), and not
subject to an audit pursuant to the rules and regulations of the Securities and
Exchange Commission. 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 June 30, 2001 and
for all periods presented, have been made. Certain reclassifications have been
made to the prior year to conform with the current years presentation.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these condensed financial statements be
read in conjunction with the Company´s audited financial statements and
notes thereto for the fiscal year ended December 31, 2000. The results of
operations for the three and six months ended June 30, 2001 are not necessarily
indicative of the operating results for the full year.
NOTE 2. LIQUIDITY
The Company has historically financed its operations through the sale of common
stock. Since inception the Company has raised $1.2 million in equity capital.
The proceeds were used for start-up activities including website development as
well as other start-up activities. The Company has a working capital surplus of
approximately $44,167. The Company´s revenues have increased significantly
begininning in December 2000. This revenue is not adequate to cover current
monthly cash expenditures thus requiring the Company to raise additional capital
infusions to support operations. Currently management believes revenues will
increase to adequate levels to support cash expenditures. In addition management
has implemented a plan to lower cash expenditures and is actively pursuing
additional capital infusions. There is no assurance that adequate revenues will
be achieved to support operations, however, management believes it will be able
to raise additional capital, lower cash expenditures or a combination of both to
maintain operations for the next twelve months.
The Company will require future financing in various forms. The Company proposes
to finance working capital timing differences with an asset-based line of
credit. Capital improvements should be financed by intermediate-term debt. The
Company is not in possession of any commercial bank commitment letters or a
letter of intent from a capable underwriter at this time.
Note 3. Stock Transactions
During the first six months of 2001 the Company issued 1,943,000 shares of
common stock to various employees and consultants. The fair value of this stock
was booked as compensation expense and consulting expense.
During the first six months of 2001 the Company sold 735,000 of common shares
for $155,000 under regulation 4(2). Regulation 4(2) provides for the sale of
restricted shares of common stock without the preparation of a prospectus. The
share offered in the six months cannot be sold for a period of one year.
6
<PAGE>
Independent Accountant's Report
We have reviewed the accompanying condensed balance sheets of Americana
Publishing, Inc. as of June 30, 2001 and the related condensed statements of
operations for the three and six month periods ending June 30, 2001 and 2000
and of cash flows for the six month periods ending June 30, 2001 and 2000.
These financial statements are the responsibility of the Company´s
management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of material modifications that should be
made to the accompanying financial statements for them to be in conformity with
generally accepted accounting principles.
/s/ Null Lairson
Houston, Texas
August 14, 2001
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
All phases of the Company's operations are subject to influences outside of the
Company's control. Any one, or a combination, of these factors could materially
affect the results of the Company's operations. These factors include
competition pressures, inflation, trade restrictions, interest rate fluctuations
and other capital market conditions, weather, future and options trading or
paper commodities, and the availability of natural resources and services from
other sources. Forward-looking statements are made by or on behalf of the
Company's knowledge of its business and the environment in which it operates,
but because of the factors listed above, as well as other environmental factors
over which the Company has no control, actual results may differ from those in
the forward-looking statements. Consequently, all of the forward-looking
statements made are qualified in their entirety by these cautionary statements
and there can be no assurance that the actual results or developments
anticipated by the Company will be realized, or even if substantially realized,
that they will have the expected effect on the business and/or operations of the
Company.
The Company currently has limited internal and external sources of liquidity. At
this time, the Company has no material commitment for capital expenditures.
There are no known trends, events or uncertainties that are expected to have a
material impact on the net sales and income from continuing operations.
Americana Publishing is not subject to seasonal aspects.
On July 16, 2001 the Company executed a purchase agreement with Corporate Media
Group and Visual Energy Studios. The Company will issue 772,000 shares of common
stock in exchange for 100% of the common stock of both companies. The
finalization of this agreement is dependant on the approval of the board of
directors.
Site Development
The americanatextbooks.com website design and operating pages have been
completed. The site was fully operational on August 15th, 2000, but was
determined that the existing website was inadequate due to its limited database.
Therefore, a project to prepare and install a new database was undertaken and
completed in February, 2001.
Audio Book Development
Americana has purchased the audio production rights to over sixty (60) books. In
cooperation with John Wagner Studios, Americana is currently producing recording
and duplicating these books in preparation for sale to some 17,000 retail stores
and 3,000 libraries around the United States. Americana has completed production
and duplicated for inventory forty-five (45) audio books and is in various
stages of production on an additional seventeen (17) Additionally, the results
are beginning to show from the catalog mailing completed during the last
quarter. Total amount of approximately $ in invoiced sales have been achieved to
date. All forty five (45) titles are available for sale as a download from the
americanabooks.com website in addition to sales of audio tapes.
Liquidity and Capital Resources
The Company has historically financed its operations through the sale of common
stock. Since inception the Company has raised $1.7 million in equity capital.
The proceeds were used for start-up activities including website development as
well as other start-up activities. The Company has a working capital surplus of
approximately $44,167. The Company´s revenues have increased significantly
beginning in December 2000 and are expected to be average at a minimum of
$30,000 per month for 2001. This revenue is not adequate to cover current
monthly cash expenditures thus requiring the Company to raise additional capital
infusions to support operations. Currently management believes revenues will
increase to adequate levels to support cash expenditures. In addition management
has implemented a plan to lower cash expenditures and is actively pursuing
additional capital infusions. There is no assurance that adequate revenues will
be achieved to support operations, however, management believes it will be able
to raise additional capital, lower cash expenditures or a combination of both to
maintain operations for the next twelve months.
The Company will require future financing in various forms. The Company proposes
to finance working capital timing differences with an asset-based line of
credit. Capital improvements should be financed by intermediate-term debt. The
Company is not in possession of any commercial bank commitment letters or a
letter of intent from a capable underwriter at this time.
8
<PAGE>
Capital Expenditure
During the first quarter of 2001, Americana made approximately $25,400 in
capital expenditures. The expenditures were for audio equipment, computer
equipment, computer software, and furnishings.
Acquisition
As part of the "Integrated Publishing Plan" the Company anticipates it will
acquire small sponsored book publishing companies and list their book titles on
its website as well as list book titles they do not own, that complement and
enhance the consumer appeal of the catalogue overall. These enterprises will
account for the majority of revenue of the Company in the future. The Company
has identified hundreds of potential targets. These acquisitions will be
transacted with the use of the Company's common stock. Americana executed a
direct mail campaign to over 4,000 book publishers nationwide to encourage
responses concerning interest in selling their companies to Americana. As of
April 15, 2000, Americana had received 12 communications from various quality
publishing enterprises that had expressed interest in a potential sale
transaction. Americana has been actively evaluating these businesses and has
issued five letters of intent. These letters of intent indicate to the
interested party that Americana is interested in pursuing negotiations and
entering into a formal purchase and sale agreement. Although on June 30, 2000
formal purchase agreements were sent to two publishers which did not mature into
executed purchase agreements, at the close of the fourth quarter, Americana had
outstanding an agreement to purchase selected assets in Hollis Books, LLC. As of
December 15, 2000, negotiations had been completed and a definitive Purchase and
Sale of Assets had been agreed upon with Hollis Books, LLC. This acquisition was
completed during the first quarter of the calendar year 2001.
The Company began negotiations in May 2001 to acquire the purchase of a
privately held company located in Cleveland, Tennessee, engaged in the business
of duplicating video tapes on a contract basis. Negotiations are continuing and
the chief executive officers are both highly motivated to achieve a satisfactory
share exchange in the matter. It is expected that a final document and share
exchange will be executed early in the third quarter of 2001.
The Company intends to acquire a heat set web press company, and book binding
company. These enterprises will vertically integrate production and control of
quality audio books as well as re-print books for its family of over 100
publishers now supplying books through americanabooks.com. The Company currently
has upgraded its existing recording studio to accommodate digital equipment.
This currently serves as an additional facility to record audio books.
Results of Operations
Quarter Ended June 30, 2001 Compared to Quarter June 30, 2000
Revenue increased from $4,193 to $69,193 as a result of additional audio book
sales. Cost of goods increased to $1,910 from $5,668 due to the increase in tape
duplication Compensation expense decreased $634,614 due to the reduction of
staff and the issuance of common stock to employees and directors. Marketing and
other expenses combined decreased $15,470 as a result of management cost
reduction program. Professional fees increased $28,991 due to increased
acquisition related activities. Depreciation expense increased to $ from $31,039
primarily as a result of higher property, professional and management fees
remained relatively unchanged.
Year to Date Ended June 30, 2001 Compared to Same Period Ended June 30, 2000
Revenue increased from $20,191 to $164,004 primarily due to the sale of audio
books. During this same period, compensation expense decreased from $1,371,245
to $421,969 . This decrease is a result of the Company conserving cash
resources. Professional fees increased by $140,218 due to more acquisition type
activity. Marketing fees and other expenses combined decreased $126,931 due to
management cash expenditure reduction progra. Depreciation increased $44,978 due
to higher not assets.
9
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
During the first quarter of 2001, Americana Publishing, Inc. filed suit for
breach of contract against its former securities counsel, Mr. Raul Rodriguez, to
recover 50,000 shares of Rule 144 stock which had been issued to Mr. Rodriguez
in 1999 as a fee for his representation of the Corporation in SEC matters. As a
result of Mr. Rodriguez’ actions, Americana Publishing, Inc. has filed suit
to recover the stock remaining in Mr. Rodriguez’ possession in addition to
any profits which he attained through sale of the stock.
Item 2. Changes in Security
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
SIGNATURES
In accordance with 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.
Americana Publishing, Inc.
(Registrant)
By: /s/ George Lovato, Jr.
-----------------------------------
Date: August 14,2001 George Lovato, Jr., CEO/Chairman
10