-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T+ialy4kAYWBQxxtoFoZRl3eybYy6uAqOTEXiJp+waQ7JDxhHAOpes8/Jj8ri5ah Rxn/aSUJbju/AmqM2IBtOg== 0001005477-99-001552.txt : 19990402 0001005477-99-001552.hdr.sgml : 19990402 ACCESSION NUMBER: 0001005477-99-001552 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19990331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLISHING CO OF NORTH AMERICA INC CENTRAL INDEX KEY: 0001010615 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS PUBLISHING [2741] IRS NUMBER: 593203301 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 001-14384 FILM NUMBER: 99581085 BUSINESS ADDRESS: STREET 1: P O BOX 280 STREET 2: 186 P C N A PARKWAY CITY: LAKE HELEN STATE: FL ZIP: 32744 BUSINESS PHONE: 9042281000 MAIL ADDRESS: STREET 1: P O BOX 280 STREET 2: 186 P C N A PARKWAY CITY: LAKE HELEN STATE: FL ZIP: 32744 10QSB/A 1 FORM 10-QSB/A U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A |X| Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended June 30, 1998 Commission File No. 0-27994 The Publishing Company of North America, Inc. (Exact name of small business issuer as specified in its charter) Florida 59-3203301 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 186 P.C.N.A. Parkway Lake Helen, FL 32744 904-228-1000 (Address and telephone number of principal executive offices) Indicate by check mark 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: |X| Yes |_| No State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: Class Outstanding at March 15, 1999 - --------------------------- ----------------------------- Common Stock: no par value 3,263,000 Transitional Small Business Disclosure Format (check one): |_| Yes |X| No The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 INDEX Page PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Balance Sheets as of June 30, 1998 (unaudited) and December 31, 1997 3 Consolidated Statements of Operations for the three and six months ended June 30, 1998 and 1997 (unaudited) 4 Consolidated Statements of Cash Flows for the six months ended June 30, 1998 and 1997 (unaudited) 5 - 6 Notes to unaudited interim financial statements 7 - 9 ITEM 2. Management's Discussion and Analysis of Interim Financial Condition and Results of Operations 10 - 13 PART II - OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Securities Holders 14 ITEM 5. Other Information 14 ITEM 6. Exhibits and Reports on Form 8-K 14 Exhibit 27 - Financial data schedule 2 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 Consolidated Balance Sheets June 30, December 31, 1998 1997 -------------------------- Assets (Unaudited) Current assets: Cash and cash equivalents $ 2,379,261 $ 1,710,304 Available-for-sale securities 585,953 1,007,050 Accounts receivable, less allowance for doubtful accounts of $223,540 at June 30, 1998 and $414,693 at December 31, 1997 401,363 1,308,884 Directories in progress 306,421 463,414 Other current assets 114,377 65,010 -------------------------- Total current assets 3,787,375 4,554,662 Property and equipment, net 1,381,297 1,481,549 Goodwill, net -- 1,898,680 Investment in College Directory Publishing Corporation 200,000 -- Other assets 312,199 116,786 -------------------------- Total assets $ 5,680,871 $ 8,051,677 ========================== Liabilities and shareholders' equity Current liabilities: Accounts payable $ 289,352 $ 1,013,787 Accrued expenses 206,083 552,529 Income taxes payable 70,296 50,000 Deferred revenue 754,553 894,109 Capitalized leases -- 5,358 Mortgage payable 53,333 53,333 -------------------------- Total current liabilities 1,373,617 2,569,116 Capitalized leases payable after one year -- 10,717 Mortgage payable after one year 666,667 693,333 -------------------------- Total liabilities 2,040,284 3,273,166 Shareholders' equity: Common shares, no par value: 15,000,000 shares authorized; 4,048,600 shares issued and outstanding at June 30, 1998; 4,869,900 shares issued and outstanding at December 31, 1997 5,834,698 5,834,698 Treasury stock, at cost (421,667) -- Unrealized gain (loss) on available-for-sale securities 2,179 (3,033) Accumulated deficit (1,763,581) (1,037,737) Unearned compensation, net (11,042) (15,417) -------------------------- Total shareholders' equity 3,640,587 4,778,511 -------------------------- Total liabilities and shareholders' equity $ 5,680,871 $ 8,051,677 ========================== See accompanying notes. 3 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 Consolidated Statements of Operations (unaudited)
Three months ended Six months ended June 30, June 30, June 30, June 30, 1998 1997 1998 1997 ------------------------- ------------------------- Net sales $1,738,179 $1,624,397 $3,695,912 $3,058,093 Costs and expenses: Production 407,200 422,894 853,961 787,983 Marketing and selling 1,001,798 681,741 2,066,941 1,172,843 Depreciation 44,305 33,921 89,785 67,721 Amortization 25,072 6,725 55,974 13,982 General and administrative 468,909 502,773 1,069,241 1,046,635 ------------------------- ------------------------- 1,947,284 1,648,054 4,135,902 3,089,164 ------------------------- ------------------------- Loss from operations (209,105) (23,657) (439,990) (31,071) Interest income, net of expense 13,152 50,387 5,186 60,840 Loss from sale of subsidiary (220,744) -- (220,744) -- ------------------------- ------------------------- Income (loss) before income tax expense (416,697) 26,730 (655,548) 29,769 Income tax expense (70,296) -- (70,296) -- ------------------------- ------------------------- Net income (loss) ($486,993) $26,730 ($725,844) $29,769 ========================= ========================= Net income (loss) per common share Basic ($0.10) $0.01 ($0.15) $0.01 ========================= ========================= Diluted ($0.10) $0.01 ($0.15) $0.01 ========================= ========================= Shares used in computing net income (loss) per share Basic 4,707,012 4,121,274 4,785,339 4,120,020 ========================= ========================= Diluted 4,707,012 4,129,184 4,785,339 4,130,912 ========================= =========================
See accompanying notes. 4 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 Statements of Cash Flows (unaudited)
Six months ended June 30, June 30, Cash flows from operating activities 1998 1997 -------------------------- Net income (loss) ($725,844) $29,769 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 145,760 81,703 Accretion of unearned compensation 4,375 9,083 Bad debt expense 206,574 354,001 Exchange of advertising for machinery & equipment (2,100) (6,586) Gain on sale of securities (17,744) (22,651) Loss from sale of CDP 220,744 -- Changes in assets and liabilities, net of sale of CDP: (Increase) decrease in accounts receivable 434,994 (512,837) Increase in directories in progress (611,329) (72,955) Increase in other assets (162,447) (152,199) Increase (decrease) in accounts payable (650,738) 34,518 Increase (decrease) in accrued expenses (125,812) 14,207 Increase in income taxes payable 70,296 -- Increase in deferred revenue 553,530 81,970 -------------------------- Net cash used in operating activities (659,741) (161,977) Cash flows from investing activities Sale of CDP, net of cash balance 1,072,152 -- Sale of securities available-for-sale 444,000 1,000,000 Purchases of U.S. Treasury securities -- (399,781) Purchases of property, plant and equipment (66,427) (85,172) -------------------------- Net cash provided by investing activities 1,449,725 515,047 Cash flows from financing activities Compensation issued as shares of common stock -- 15,133 Repayment of mortgage principal (26,667) (26,667) Repayment of capitalized leases (2,187) -- Contingent consideration paid relating to acquisition of CDP (14,256) -- Purchase of treasury stock (77,917) -- -------------------------- Net cash used in financing activities (121,027) (11,534) Net increase in cash and cash equivalents 668,957 341,536 Cash and cash equivalents at beginning of period 1,710,304 1,760,831 -------------------------- Cash and cash equivalents at end of period $2,379,261 $2,102,367 ==========================
5 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 Statements of Cash Flows (continued) (unaudited) Six months ended June 30, June 30, Supplemental cash flow information 1998 1997 -------------------------- Interest paid $ 30,213 $ 32,869 ========================== Exchange of advertising for supplies $ 4,076 $ 8,452 ========================== Non-cash items received from sale of CDP $643,750 -- ========================== See accompanying notes. 6 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of The Publishing Company of North America, Inc. and subsidiary (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included in the accompanying unaudited consolidated financial statements. The results of operations of any interim period are not necessarily indicative of the results of operations for the fiscal year. 2. CONSOLIDATION The consolidated financial statements include the accounts of the Company's bar and medical association directory publishing division ("PCNA") and its wholly-owned subsidiary, College Directory Publishing, Inc. ("CDP") since the acquisition of CDP on July 3, 1997 and until its sale on June 10, 1998 (see Note 12). Intercompany transactions have been eliminated in consolidation. 3. CASH AND CASH EQUIVALENTS The Company considers all highly-liquid investments with a maturity of three months or less when purchased to be cash equivalents. 4. AVAILABLE-FOR-SALE SECURITIES Available-for-sale securities are carried at fair value, with the unrealized gains and losses reported in a separate component of shareholders' equity. Fair value is determined by readily available market quotations. Realized gains and losses and declines in value judged to be other-than-temporary are included in investment income. The cost of securities sold is based on the specific identification method. Interest and dividends are included in investment income. 5. ACCOUNTS RECEIVABLE Accounts receivable are comprised primarily of amounts due from advertisers in the bar association and campus directories. The Company's allowance for doubtful accounts is estimated by management as a percentage of sales. Prior to December 31, 1997, amounts outstanding more than six months but less than one year were included as accounts receivable but fully provided for in the allowance for doubtful accounts. At December 31, 1997 and thereafter all amounts outstanding in excess of six months are written off. 7 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 6. REVENUE RECOGNITION Revenues and related costs are recorded by the Company upon shipment of directories. Costs accumulated under directories in progress are stated at estimated costs, not in excess of estimated realizable value. Deferred revenue represents amounts received from advertisers prior to shipment of the related directories. 7. GOODWILL Goodwill resulting from the acquisition of CDP was amortized using the straight-line method over twenty years until the sale of CDP on June 10, 1998. (See Note 12.) 8. EARNINGS PER SHARE In 1997, the Financial Accounting Standards Board issued SFAS No. 128, Earnings Per Share. SFAS 128 replaced the calculation of primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. Earnings per share amounts for 1997 have been restated to conform to the Statement 128 requirements. The following table sets forth the computation of basic and diluted earnings per share:
Three months ended June 30, Six months ended June 30, 1998 1997 1998 1997 ------------------------ ------------------------- Numerator: Net income (loss) from continuing operations ($486,993) $26,730 ($725,844) $29,769 ------------------------ ------------------------- Numerator for basic earnings per share - income (loss)available to common shareholders (486,993) 26,730 (725,844) 29,769 Effect of dilutive securities -- -- -- -- ------------------------ ------------------------- Numerator for diluted earnings per share-income (loss) available to common shareholders after assumed conversions (486,993) 26,730 (725,844) 29,769 Denominator: Denominator for basic earnings per share-weighted-average shares 4,707,012 4,121,274 4,785,339 4,120,020 Effect of dilutive securities - stock options -- 7,910 -- 10,892 ------------------------ ------------------------- Denominator for diluted earnings per share-Adjusted weighted-average shares and assumed conversions 4,707,012 4,129,184 4,785,339 4,130,912 Basic earnings per share ($0.10) $0.01 ($0.15) $0.01 ======================== ========================= Diluted earnings per share ($0.10) $0.01 ($0.15) $0.01 ======================== =========================
In computing diluted EPS for 1998, options for 228,000 common shares were excluded from the diluted earnings per share computation because their effects would have been antidilutive. 8 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 9. INCOME TAXES The provision for income taxes is comprised primarily of current state income taxes payable related to the sale of CDP. 10. STOCK-BASED COMPENSATION The Company follows Statement of Financial Accounting Standards (SFAS) No. 123, Accounting and Disclosure of Stock-Based Compensation. SFAS No. 123 allows companies to continue to measure compensation cost for stock-based employee compensation plans using the intrinsic value method of accounting as prescribed in Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees and related interpretations. The Company has elected to continue its APB Opinion No. 25 accounting treatment for stock-based compensation, and has adopted the provisions of SFAS No. 123 requiring disclosure of the proforma effect on net earnings and earnings per share as if compensation cost had been recognized based upon the estimated fair value at the date of grant for options awarded. Such proforma disclosures are not required in interim financial statements. 11. USE OF ESTIMATES The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 12. ACQUISITION AND SALE OF COLLEGE DIRECTORY PUBLISHING, INC. On July 3, 1997, the Company, through a wholly-owned subsidiary, acquired 100% of the outstanding capital stock of CDP. The acquisition was accounted for under the purchase method of accounting, and accordingly, the results of operations have been included in the Company's consolidated statements of operations since the date of acquisition. The purchase price was allocated to assets acquired and liabilities assumed based on fair market value at the date of acquisition. This resulted in an excess of purchase price over net assets acquired of $1,947,282 which was amortized on a straight line basis over 20 years until the sale of CDP on June 10, 1998, at which time $91,935 of goodwill had been amortized. On June 10, 1998, the Company sold 100% of CDP to a group headed by the executive management of CDP in exchange for (i) $1,400,000 (including $1,100,000 in operating loans made to CDP by the Company; (ii) a $100,000 note from the corporation acquiring CDP (the "Acquiror" or "College Directory Publishing Corporation") due upon the earlier of December 15, 1999 or completion of the Acquiror's initial public offering ("IPO"); $200,000 in preferred stock of the Acquiror convertible into $1,000,000 of common stock upon completion of an IPO by the Acquiror; and (iv) 750,000 shares of the Company's common stock that it issued when it acquired CDP in July 1997. The Company posted a loss of $220,744 as a result of the sale transaction; which loss could be attributed primarily to the decline in value of the Company shares issued in the acquisition and returned in the sale. The value attributed to the shares at the time of the acquisition (excluding those considered contingent consideration) was $687,500; these same shares were valued at $343,750 when returned to the Company upon the sale. 9 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF INTERIM FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following tables set forth the Company's results of operations for the three and six months ended June 30, 1998 and 1997, showing the results of PCNA and CDP separately and on a consolidated basis (1997 results are for PCNA only because CDP was acquired on July 3, 1997):
Three months ended Three months ended June 30, 1998 June 30, 1998 June 30, 1997 PCNA CDP Consolidated PCNA --------------------------- ------------------------------ Net sales $1,738,179 -- $1,738,179 $1,624,397 Costs and expenses: Production 407,200 -- 407,200 422,894 Marketing and selling 908,539 $93,259 1,001,798 681,741 Depreciation 38,667 5,638 44,305 33,921 Amortization 25,072 -- 25,072 6,725 General and administrative 347,135 121,774 468,909 502,773 --------------------------- ------------------------------ 1,726,613 220,671 1,947,284 1,648,054 --------------------------- ------------------------------ Income (loss) from operations 11,566 (220,671) (209,105) (23,657) Interest income (expense), net 32,913 (19,761) 13,152 50,387 Loss from sale of subsidiary (220,744) -- (220,744) -- --------------------------- ------------------------------ Income (loss) before taxes (176,265) (240,432) (416,697) 26,730 Provision for income taxes 70,296 -- 70,296 -- --------------------------- ------------------------------ Net income (loss) ($246,561) ($240,432) ($486,993) $26,730 Six months ended Six months ended June 30, 1998 June 30, 1998 June 30, 1997 PCNA CDP Consolidated PCNA --------------------------- ------------------------------ Net sales $3,695,912 -- $3,695,912 $3,058,093 Costs and expenses: Production 853,961 -- 853,961 787,983 Marketing and selling 1,908,714 $158,227 2,066,941 1,172,843 Depreciation 78,886 10,899 89,785 67,721 Amortization 55,974 -- 55,974 13,982 General and administrative 833,674 235,567 1,069,241 1,046,635 --------------------------- ------------------------------ 3,731,209 404,693 4,135,902 3,089,164 ------------------------------------------------------------- Loss from operations (35,297) (404,693) (439,990) (31,071) Interest income (expense), net 37,869 (32,683) 5,186 60,840 Loss from sale of subsidiary (220,744) -- (220,744) -- --------------------------- ------------------------------ Income (loss) before taxes (218,172) (437,376) (655,548) 29,769 Provision for income taxes 70,296 -- 70,296 -- --------------------------- ------------------------------ Net income (loss) ($288,468) ($437,376) ($725,844) $29,769
10 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 Results of Operations (continued) PCNA's revenues increased 7% for the quarter ended June 30, 1998 from the same period a year earlier; it increased 21% for the six months then-ended from the same period a year earlier. CDP posted no revenues in the first two quarters of 1998. As is evident in the tables above, CDP's results of operations and its sale on June 10, 1998 (see Note 12 to the Unaudited Interim Financial Statements) had a very significant negative impact on the Company's consolidated operations. CDP's loss of $437,000 for the first half of 1998 was expected due to the seasonality of its business. The loss of $221,000 resulting from the sale of CDP could be attributed primarily to the decrease of $343,750 in the value of the stock which was issued in the acquisition and then returned to the Company in the sale. Excluding CDP's loss and the loss from the sale of CDP, the Company posted income from operations for the most recent quarter of $11,566. Again excluding the effect of CDP's losses, the loss from the sale of CDP and the tax expense related to that sale, the Company's net income for the three and six months ended June 30, 1998 was $44,479 and $2,572, respectively. The following table sets forth PCNA's results of operations (excluding CDP) in percentages of revenues for the three and six months ended June 30, 1998 and 1997: Three months ended June 30 Six months ended June 30 1998 1997 1998 1997 PCNA PCNA PCNA PCNA -------------------------------------------------------- Net sales 100.0% 100.0% 100.0% 100.0% Costs and expenses: Production 23.4% 26.0% 23.1% 25.8% Marketing and selling 52.3% 42.0% 51.6% 38.4% Depreciation 2.2% 2.1% 2.1% 2.2% Amortization 1.4% 0.4% 1.5% 0.5% General and administrative 20.0% 31.0% 22.6% 34.2% -------------------------------------------------------- 99.3% 101.5% 101.0% 101.0% -------------------------------------------------------- Income (loss) from operations 0.7% (1.5%) (1.0%) (1.0%) Management has been able to reduce PCNA's production costs and its general and administrative expenses as a percentage of revenues for the periods shown in 1998 from that in the same periods in 1997. The reduction in production costs was due primarily to lower in-house labor costs. Approximately half of the reduction in general and administrative costs was due to lower bad debt expenses in 1998; lower payroll expense in this area also was a significant factor. In the quarter ended June 30, 1998, the Company recognized a $43,000 insurance reimbursement for certain legal expenses which were incurred in prior periods. Amortization expense rose in 1998 from 1997 due to the amortization of the goodwill relating to the acquisition of CDP in July, 1997. Management also has taken efforts to reduce marketing and selling costs, the great majority of which are the costs of selling print advertising rather than the securing of publishing contracts. Management's efforts did not result in reductions of these expenses as a percentage of revenues for the first three quarters of 1998. However, these expenses were reduced to 45.2% of revenues in the fourth quarter of 1998. There can be no assurances that this lower level of expense will continue into 1999. 11 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 Results of Operations (continued) In March 1999 as a result of the preparation of the tax provision for the Company's annual financial statements, the Company learned that an estimated $70,296 of income tax expense had been incurred in connection with the sale of CDP, primarily related to state taxes. Upon learning this, the Company determined that this interim report should be amended in order to report the item in the period in which the taxable event occurred. Liquidity and Capital Resources At June 30, 1998, the Company had $2,379,261 in cash and cash equivalents and $585,953 in U.S. Treasury securities. This compares to $860,667 and $1,021,171, respectively, at March 31, 1998. The primary reason for this increase in liquidity was the net cash proceeds of $1,069,294 ($1,400,000 less CDP's cash balance of $330,706) which the Company received in the sale of CDP. The Company also received a promissory note from the Acquiror for $100,000 interest-bearing at 5% and due no later than December 15, 1999, and $200,000 of preferred stock of the Acquiror, convertible into $1,000,000 of common stock upon certain conditions generally involving the Acquiror's initial public offering of its common stock or its acquisition by a publicly-owned company. The Company used $659,741 of cash in operating activities in the first half of 1998, compared to $161,977 used in the same period in 1997. The net loss of $725,844 in 1998 included the non-cash loss of $220,744 from the sale of CDP and $70,296 of income taxes payable related to that sale. Other significant factors in 1998 included an increase of $611,329 in directories in progress, a decrease of $650,738 in accounts payable, and an increase of $553,530 in deferred revenue. All of these changes were primarily attributable to CDP's highly-seasonal business cycle. In the first half of 1998, CDP paid down the high accounts payable balance it had at the end of 1997 which resulted from the high volume of publications it had printed and shipped in the last quarter of that year. Also in the first half of 1998, CDP began to accumulate costs (which are reported as directories in progress) and it began to collect deferred revenues on directories that would not be published until late 1998. These changes were all expected and normal for CDP's business cycle. The Company has no plans at this time to acquire a material amount of capital assets. From January 1 through June 30, 1998, the Company purchased 71,300 shares of its common stock at an average cost of $1.09 per share, including 50,000 shares at $1.00 per share purchased in April from its former Executive Vice President and current director. Based on current cash and investment balances and the Company's anticipated results of future operations, the Company believes that it has sufficient cash resources to fund its operations for the next twelve months or more. 12 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 Forward-Looking Statements The statement made above relating to the Company's expectations with regard to the Company's future liquidity is a forward-looking statement within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The results anticipated by this forward-looking statement may not occur. Important factors that may cause actual results to differ materially from the forward-looking statements include the following: (1) unanticipated increases in expenses; and (2) unanticipated difficulties in selling advertising in bar association directories. 13 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 PART II - OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Securities Holders The annual meeting of the shareholders of the Company was held at the Company's corporate offices in Lake Helen, Florida, on May 28, 1998. At that time the shareholders, by direct vote and by proxy, re-elected Mr. Matt Butler as a director of the Company. The vote was 3,278,154 shares for Mr. Butler, 0 shares against, and 4,000 shares abstaining. The terms of Mssrs. Peter S. Balise, D. Scott Plakon, Richard Silver, and Michael S. Paul continued and they remained as directors of the Company. Also at that meeting the shareholders, by direct vote and by proxy, ratified the appointment of Ernst & Young LLP as independent auditors for the fiscal year ended December 31, 1998. The vote was 3,282,154 shares for, and no shares against or abstaining. There was no other business brought at the meeting requiring a vote of the shareholders. ITEM 5. Other Information On June 22, 1998, Michael S. Paul resigned from the Company's Board of Directors. Mr. Paul was CEO of the Company's former subsidiary, CDP. ITEM 6. Exhibits and Reports on Form 8-K a. Exhibits 1. Exhibit 27 - Financial Data Schedule b. Report on Form 8-K filed during the quarter ended June 30, 1998 1. On June 25, 1998 the Company filed a report relating to its sale of its wholly-owned subsidiary, CDP. The report included pro forma financial information relating to the transaction. 14 The Publishing Company of North America, Inc. Form 10-QSB/A - June 30, 1998 In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf on March 30, 1999 by the undersigned, thereunto duly authorized. The Publishing Company of North America, Inc. /s/ Peter S. Balise ----------------------------------- President (Chief Executive Officer) /s/ James M. Koller ----------------------------------- Chief Financial Officer (Principal Financial and Accounting Officer) 15 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS Dec-31-1998 Jun-30-1998 2,379,261 585,953 624,903 (223,540) 0 3,787,375 1,734,008 (352,711) 5,680,871 1,373,617 720,000 0 0 5,834,698 (2,194,111) 5,680,871 3,695,912 3,695,912 853,961 4,135,902 220,744 0 5,186 (655,548) 70,296 (725,844) 0 0 0 (725,844) (0.15) (0.15)
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