-----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, KzZI4AYsba2iVmB9d696C6hwkIva3VS88C2ngpv2+LVdRuNhlDEZoLC7Ok0U2Zs5 2ldNkyyMAkyDaHR9/JQvzw== 0000793595-97-000007.txt : 19970930 0000793595-97-000007.hdr.sgml : 19970930 ACCESSION NUMBER: 0000793595-97-000007 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970929 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEEPER PLUS INC CENTRAL INDEX KEY: 0000793595 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 880219239 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-05516-LA FILM NUMBER: 97687748 BUSINESS ADDRESS: STREET 1: 3900 PARADISE RD STE 201 CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027375560 MAIL ADDRESS: STREET 1: 3900 PARADISE RD STREET 2: STE 201 CITY: LAS VEGAS STATE: NV ZIP: 89109 10-K 1 BEEPER PLUS ANNUAL REPORT Year Ended June 30, 1997 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended June 30, 1997 Commission File Number: 33-5516-LA Beeper Plus, Inc. - ------------------------------------------------------ (Exact name of registrant as specified in its charter) Nevada 88-0219239 - ------------------------ ------------------------------------ (State of Incorporation) (IRS Employer Identification Number) 3900 Paradise Road, Ste 201 Las Vegas, NV 89109 - ----------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (702) 737-5560 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports re- quired 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 reg- istrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X NO As of June 30, 1997, 4,288,000 shares of Common Stock of Beeper Plus, Inc. were outstanding. The aggregate market value of the common stock held by persons other than officers and directors of the Registrant and holders of more than 10% of the Registrant's common stock was approximately $123,883. (Based upon the average of the opening bid and low asked prices of these shares). - 1 - PART I ITEM 1. BUSINESS - ----------------- A. General Development of the Business - -------------------------------------- Beeper Plus, Inc. (the "Company") was incorporated under the laws of the State of Nevada on March 25, 1986. On March 31, 1986, the Company entered into a Plan and Agreement of Merger with Dial-a-Score, Inc. (Dial), a Nevada Corpor- ation, to acquire all of its assets and outstanding shares of Common Stock from its sole shareholder. The Company disseminates sports information utilizing contracted paging services directly to customers nationwide, including Hawaii, Alaska and the Caribbean, through a hand-held alpha-numeric pager called The Sports Page. The Company also utilizes independent distributors to provide The Sports Page to clients in four locations throughout the United States. The distribtors in each territory enter into Distribution Agreements which provide that a percentage or minimum as per their contract of gross revenues earned by the distributor is paid to the Company. Also pursuant to the Agreement, the distributor is typically required to pay the Company a minimum monthly fee, thus ensuring a minimum monthly revenue for the Company. B. Financial Information About Industry Segment - ----------------------------------------------- The Company operates in mainly one industry segment, involving the dissemination of computer data sports information. However, the Company has introduced another product to the industry known as "The Front Page" which involves the dissemination of computer data news information. C. Narrative Description of Businesses - -------------------------------------- The Company has been marketing its sports information service nationwide, in- cluding Hawaii, Alaska and the Caribbean. To date the Company has continued to enter into additional markets without utilizing distributors. The Company maintains four existing distributorship contracts in Hawaii, Northern Califor- nia, Florida and New England. The Company, through its contracted paging services throughout the country, com- municates sports information to customers through a hand-held battery operated alpha-numeric pager called The Sports Page. The Company has terminated distrib- utorships in Chicago, Dallas and Maryland, and has started to service these territories directly through contracted paging services. The Sports Page displays a variety of sports data on a four-line LCD screen. Three different wire services feed information to The Sports Page through a series of satellite transmissions that originate at a particular sporting event and are sent to a home-base computer and uplink facility in Las Vegas. From Las Vegas, signals are sent through satellite to transmitters positioned in cities around the contry. These local transmitters then relay UHF, VHF and 900 MHz signals to The Sports Page, within a 30 to 150 mile radius of their loca- tion. The Sports Page displays information about sporting events on its LCD screen, including partial and final scores, game schedules, pitching changes, injuries and weather conditions and can also be utilized as a personal pager. - 2 - The information displayed on The Sports Page is updated as often as every three minutes. The three wire services used by the Company are "The Sports Network" (TSN), "The Sports Wire", and Don Best. The arrangements are not exclusive and the wire services have other customers. The Company is not reuqired to maintain paging licenses. Such licenses to provide personal paging services are held by paging companies that have contracts to provide paging services on behalf of the Company (the Company acts as a reseller of personal paging services). The pagers used by the customers are sold by the Company. The Company intends to continue expansion into other information markets at such time as the demand arises. The Company will be using the same methods of trans- mitting information. On March 23, 1992, the Company signed a joint venture agreement with NDC "National Dispatch Center" located in San Diego, California. Beeper Plus, Inc. and NDC together shall sell and promote the Front Page product. The product name has been changed to "News-Master/Front Page". In February 1993, the Company entered into a contract with National Dispatch Center (NDC) such that NDC will conduct all the monthly billing for all Front Page Subscribers. Beeper Plus, Inc. will maintain and enhance the product and continue in sales and mar- keting. The types of news provided in the "The Front Page" service include headline and top story updates, weather forecasts, daily business reports, daily sporting event results and television listings and weekly entertainment head- lines and listings. The information sources utilized by the "The Front Page" service include various wire services such as U.P.I. and T.S.N. Information up- dates are provided in excess of fifty times a day. During times of emergency, such as the 1989 San Francisco earthquake and Hurricane Andrew's assault on Florida, the Front Page has proven to be an invaluable tool in providing critical local news to residents without power. Accessing the Sports Information -------------------------------- Access to the Company's sports information is designed with an eye towards con- venience. The Sports Page provides immediate sports information and updated weather and racing results. For instance, during the professional and college football season, the scores of every professional game and the most actively watched college football games are displayed on the pager throughout the course of the event. The Sports Page alerts the customer when a new score is received by displaying a message of the most current score and team names of the combatants. Upon being alerted by the pager, the customer presses a button on the pager and the desired team name and score is displayed. This same process is utilized to alert the customer to injuries, weather conditions, racing results, hockey results, short stories related to sports events, statistics, probable pitchers for baseball, results of boxing matches and other sports news. - 3 - Market and Marketing -------------------- Currently the Company has no intention to engage any distributor for any new territory. The Company has been and will be marketing its products directly. The Company will continue to rely on current distributors and their ability to successfully market The Sports Page product in their territories. The Sports Page has received national recognition in newspapers and magazines throughout the country. New Products ------------ The Company is continuing to research new products and improve existing products. Competition ----------- The dissemination of sports information is a competitive industry. There are a number of entities which could be considered direct or indirect competition with the company in disseminating sports information. The Company, at this time, has identified several other companies in direct competition which disseminate sports information by virtue of a hand-held pager, one of which is a former terminated distributor of the New York, New Jersey, and Philadelphia territory. Indirect competition comes from cable television sports channels, commercial television sports new programs, sports information periodicals, the sports sec- tion of newspapers, radio, direct dial "900" score lines and online computer services. Management ---------- An annual meeting of shareholders was held on March 28, 1997 in Las Vegas, Nevada. The following persons were elected as Directors of the Company until the next annual meeting of stockholders and until their successors are duly elected and qualified: Basil B. Newton, May C. Newton and Kevin L. Persinger. Basil B. Newton is President and Chairman of the Board and May C. Newton is Vice President of Operations, Secretary/Treasurer and Chief Financial Officer. As of June 30, 1997, the Company has seventeen technical, administrative and clerical personnel. D. Financial Information About Foreign and Domestic Operations and Export Sales. - -------------------------------------------------------------------------------- The Company has no foreign operations or export sales. The Company's operations are within the United States, primarily in the State of Nevada. The financial information regarding its domestic operations in the United States is contained in the Financial Statements included in this report. - 4 - ITEM 2. PROPERTIES - ------------------- The Company owns no real property. The Company does not own or lease any paging transmitters. The Company has arrangements with the paging companies which pro- vide for priority transmission rights. The Company, as of March 1, 1989, moved all of its facilities to one office space area located at 3900 Paradise Road, Suite 201, Las Vegas, Nevada. The office space is leased from a non-affiliated lessor and is approximately 2,400 square feet. The term of the lease is 36 months beginning January 1, 1997 and ending December 31, 1999. The base minimum monthly rent for the term of this lease is $4,296 per month for January 1, 1997 to December 31, 1997. The rental rate is increased each January thereafter in accordance with the consumer price index. ITEM 3. LEGAL PROCEEDINGS - -------------------------- None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ An annual meeting of shareholders was held on March 28, 1997 in Las Vegas, Nevada. The following matters were submitted to a vote of security holders: Joseph F. Zerga, Ltd. was appointed as auditor for the fiscal year ended June 30, 1997. The following persons were elected as Directors of the Company until the next annual meeting of stockholders and until their successors are duly elected and qualified: Basil B. Newton May C. Newton Kevin L. Persinger The stockholders have approved the acquisition of additional technologies and/or companies and allowed the Board of Directors and Officers of the Company to raise additional capital. - 5 - PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER - -------------------------------------------------------------------------------- MATTERS ------- The Company's Common Stock, par value $.01, is currently listed on the Bulletin Board. The Company's registration statement was declared effective by the Securities and Exchange Commission on June 20, 1986. As of its fiscal year end, June 30, 1997, there were no trades through the National Association of Securities Dealers. The Bulletin Board does not constitute an established public market as described in item 201(a)(1) of Regulation S-K. The market price information for the common equity pursuant to Item 201(a)(i) (iii) for each quarter from January 1, 1995, through June 30, 1997, was as follows: Bid Prices Asked Price High Low High Low ---- --- ---- --- 1995 First Quarter $ .070 .004 .080 .060 Second Quarter $ .040 .004 .060 .060 Third Quarter $ .040 .001 .060 .020 Fourth Quarter $ .020 .001 .080 .020 1996 First Quarter $ .030 .020 .080 .080 Second Quarter $ .040 .010 .080 .080 Third Quarter $ .040 .040 .095 .080 Fourth Quarter $ .050 .040 .095 .080 1997 First Quarter $ .050 .050 .095 .080 Second Quarter $ .050 .050 .095 .095 The above bid and asked quotations represent prices between dealers and do not include retail markup, markdown or commission. They do not represent actual transactions and have not been adjusted for stock dividends or splits. No dividends have been declared with respect to the Common Stock since the Company's inception, and the Company does not anticipate paying dividends in the foreseeable future. However, there are no restrictions on the ability of the Company to declare dividends on its common stock. On June 30, 1997, the approximate number of holders of record of the Company's $.01 par value Common Stock was 266. - 6 - ITEM 6. SELECTED FINANCIAL DATA -------------------------------- Year Ended June 30
1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- Net sales - Operating Revenue $1,024,509 $1,150,270 $1,335,881 $1,341,292 $1,403,189 Net Income (Loss) ( 29,340) 52,887 35,425 232,095 138,643 Net Income (Loss) Per Common Share Outstanding ( .01) .01 .01 .06 .03 Balance Sheet Data - ------------------ Working Capital (Deficiency) 207,569 220,249 149,678 36,510 ( 100,757) Total Assets 475,489 430,699 397,819 556,203 453,263 Total Liabilities 130,042 56,287 68,073 262,068 391,283 Stockholders' Equity 345,447 374,412 329,746 294,135 61,980 Long Term Debt - 0 - - 0 - - 0 - - 0 - 86,496
The Company has not paid any dividends on its stock. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL - ---------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- Liquidity and Capital Reserves ------------------------------ As of June 30, 1997, the Company has working capital of $207,569 compared to $220,249 in fiscal year ended June 30, 1996. Operating activities provided $144,609 of cash flow, which was used in part to repay $10,000 of related party loans and purchase $14,199 of furniture and equipment. Net cash increased by $120,410 during the year. Management anticipates that its operations should generate sufficient income to cover operating expenses and debt service in future periods. The Company has no lines of credit or other financing arrangmeent in place and at the present time has no plans to offer additional Common Stock for sale in any public or private offering. - 7 - Results of Operations --------------------- Fiscal Year Ended June 30, 1997 Compared to ------------------------------------------- Fiscal Year Ended June 30, 1996 ------------------------------- During the fiscal year ended June 30, 1997, revenues were $1,024,509 as compared to $1,150,270 for the fiscal year ended June 30, 1996, representing a decline in revenue of $125,761 in fiscal 1997. The Company's statement of operations for the fiscal year ended June 30, 1997, reflects a net loss of $29,340, compared to net income of $52,887 in fiscal 1996. Bad debts in the amount of $69,523 for accounts for which collection is deemed to be doubtful were recog- nized in the year ended June 30, 1997. Fiscal Year Ended June 30, 1996 Compared to ------------------------------------------- Fiscal Year Ended June 30, 1995 ------------------------------- During the fiscal year ended June 30, 1996, revenues were $1,150,270 as compared to $1,335,881 for the fiscal year ended June 30, 1995, representing a decline in revenue of $185,611 in fiscal 1996. Despite this decline in revenue, the Company's 1996 statement of operations reflects net income of $52,887, an increase of $17,462 from fiscal 1995. Fiscal Year Ended June 30, 1995 Compared to ------------------------------------------- Fiscal Year Ended June 30, 1994 ------------------------------- During the fiscal year ended June 30, 1995, revenues were $1,335,881 as compared to $1,341,292 for the fiscal year ended June 30, 1994. This $5,411 decrease in revenues was primarily attributable to a reduction in revenues generated by Front Page sales. The revenues generated from the customer monthly services increased in fiscal 1995. As a result, the Company's statement of operations for the year ended June 30, 1995 reflects net income of $35,425. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ---------------------------------------------------- Financial Statements and Supplementary Data are listed in Part IV, Item 14 of this Annual Report Form 10-K. ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE - ------------------------------------------------------------- No disagreements with Accountants for the year ended June 30, 1997. - 8 - PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - ------------------------------------------------------------ The following table sets forth certain information regarding each director and executive officer of the Company:
Name Age Position - ---- --- -------- Basil B. Newton 74 President, Chairman of the Board and Director. May C. Newton 72 Vice President of Operations, Director, Chief Financial Officer, and Secretary/Treasurer. Kevin Persinger 31 Director, Computer Programmer.
The Directors of the Company are elected to hold office until the next annual meeting of shareholders and until their respective successors are duly elected and qualified. Officers of the Company serve at the discretion of the Board of Directors and are appointed by the Board of Directors. Basil Newton and May Newton are husband and wife. Basil B. Newton was president/part owner of various casinos in London, England and St. Maarten Island in the Caribbean. Mr. Newton developed the idea of disseminating major league sports results through alpha-numeric paging systems and established Beeper Plus, Inc. to undertake such a venture. Mr. Newton was appointed Vice-President by the Board of Directors on April 15, 1988, and was elected Presidnet of Beeper Plus, Inc. on October 5, 1992. May C. Newton had prior banking experience before joining Beeper Plus, Inc. at its inception. Mrs. Newton held the position of Vice-President of Operations and is also a Director of the Company. Mrs. Newton holds the position as Chief Financial Officer and Secretary/Treasurer of the Company. Kevin Persinger was elected as Director of the Company on March 10, 1995. Kevin Persinger joined the Company on September 18, 1990 as Computer Operator and was promoted to Computer Programmer. He holds an associate degreein Business In- formation Systems. - 9 - ITEM 11. EXECUTIVE COMPENSATION - -------------------------------- The following table sets forth the total compensation paid by the Company for its fiscal year ending June 30, 1997, to each of the executive officers of the Company. During the fiscal years ending June 30, 1995, 1996, and 1997, no Officer or Director of the Company received cash remuneration in excess of $60,000. There are no standard arrangements for the compensation of directors.
Capacity Cash Name Served Compensation - ---- ------ ------------ 1997 1996 1995 ---- ---- ---- Basil Newton President, Chairman of Board of Directors $37,721 $36,753 $40,875 May Newton Secretary/Treasurer, 13,471 13,255 11,800 Director, Chief Financial Officer, Vice President of Operations Nancy Troy (i) Chief Financial Officer -0- -0- 4,012 Secretary/Treasurer, Director Kevin Persinger Director 32,522 31,355 28,750 All Officers and Directors as a group $83,714 $81,363 $85,437 ======= ======= =======
(i) Nancy Troy resigned as Chief Financial Officer, Secretary/Treasurer and Director as of July 29, 1994. No retirement, pension, profit sharing or similar program has been adopted by the Company. No warrants or options are currently outstanding and none have been granted to any Officer, Director or other employee of the Company. The Company may offer stock bonuses, stock options, profit sharing or pension plans to key employees or executive officers of the Company in such amounts and upon such conditions as the Board of Directors may in its sole discretion determine. - 10 - ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - ------------------------------------------------------------------------ A. Security Ownership of Certain Beneficial Owners - --------------------------------------------------- The persons set forth on the chart below are known to the Company to be the beneficial owners of more than 5% of the Company's outstanding Common Stock:
Number of Percentage Name/Address Shares Owned Owned - ------------ ----------- ---------- Cede & Company (*) 699,256 16.31% P.O. Box 20 Bowling Green Station New York, NY 10004 May C. Newton 631,413 14.73% 47 Princeville Lane Las Vegas, NV 89113 Basil B. Newton 881,600 20.56% 47 Princeville Lane Las Vegas, NV 89113 Samuel A. Francis 362,500 8.45% 2610 San Mateo NE, #A Albuquerque, NM 87110 * CEDE & Company is a nominee for Depository Trust Company. The Company has been unable to determine how many shareholders this represents.
B. Security Ownership of Management - ------------------------------------ Information concerning the number and percentage of shares of the Company's outstanding Common Stock beneficially owned by Officers and Directors is set forth on the chart below.
Number of Percentage Name Shares Owned Owned - --------- ------------ ---------- Basil B. Newton 881,600 20.60% May C. Newton 631,413 14.75% Kevin Persinger 2,000 0.05% ---------- ------ All Officers & Directors as a Group 1,515,013 34.40% ========== ======
- 11 - ] ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - -------------------------------------------------------- At June 30, 1997, the Company owed one shareholder a total of $26,000, $10,000 was repaid during the year ended June 30, 1997. This loan has been classfied as a current liability, as no specific due dates have been determined. This loan does not provide for interest payment and its terms are as favorable to the Company as those which could have been obtained from a third party in an arm's length transaction. IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K - --------------------------------------------------------------------------- Documents filed as part of this report: - -------------------------------------- Page No. -------- 1. Financial Statements Independent Auditors' Report - June 30, 1997 and 1996 16 Balance Sheets - June 30, 1997 and 1996 17 Statements of Operations - Years Ended June 30, 1997, 1996 and 1995 18-19 Statements of Shareholders' Equity Years Ended June 30, 1997 and 1996 20 Statements of Cash Flows - Years Ended June 30, 1997 and 1996 21 Summary of Significant Accounting Policies and Notes to Financial Statements 22-26 Page No. -------- 2. Financial Statement Schedules Independent Auditors' Report on Financial Statement Schedules - June 30, 1997 and 1996 S-1 Schedule I - Property, Plant and Equipment S-2 Schedule II - Accumulated Depreciation and Amortization of Property, Plant and Equipment S-3 Schedules other than those listed above are omitted for the reason that they are not required or are not applicable, or the required informaiton is shown in the financial statements or notes thereto. Columns omitted from the schedules filed have been omitted because the information is not applicable. - 12 - SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its be- half by the undersigned, thereunto duly authorized. Beeper Plus, Inc. ----------------- (Registrant) 09/18/97 Basil B. Newton Dated: -------------------- By ------------------------------ Basil B. Newton President and Chairman of the Board Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 09/18/97 Basil B. Newton Dated: -------------------- By ------------------------------ Basil B. Newton President and Chairman of the Board 09/18/97 May C. Newton Dated: ------------------- By ----------------------------- May C. Newton Secretary/Treasurer Chief Financial Officer Director - 13 - Financial Statements of Beeper Plus, Inc. Years Ended June 30, 1997, 1996 and 1995 - 14 - Beeper Plus, Inc. Years Ended June 30, 1997, 1996 and 1995 TABLE OF CONTENTS Page # ------ Independent Auditor's Report 16 Financial Statements: Balance Sheet 17 Statements of Operations 18-19 Statements of Shareholders' Equity 20 Statements of Cash Flows 21 Summary of Significant Accounting Policies And Notes to Financial Statements 22-26 Independent Auditors' Report on Financial Statement Schedules S-1 Schedule I - Property, Plant and Equipment S-2 Schedule II - Accumulated Depreciation and S-3 Amortization of Property, Plant and Equipment - 15 - Joseph F. Zerga, Ltd. 2950 E Flamingo Rd, Ste L Las Vegas, NV 89121 (702) 732-2775 INDEPENDENT AUDITORS' REPORT ---------------------------- To the Board of Directors Beeper Plus, Inc. Las Vegas, Nevada We have audited the accompanying balance sheets of Beeper lus, Inc. as of June 30, 1997 and 1996 and the related statements of operations, shareholders' equity and cash flows for each of the years in the three-year period ended June 30, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing stand- ards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by man- agement, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Beeper Plus, Inc. as of June 30, 1997 and 1996 and the results of operations and its cash flows for each of the years in the three-year period ended June 30, 1997, in conformity with gen- erally accepted accounting principles. Las Vegas, Nevada September 16, 1997 - 16 - Beeper Plus, Inc. Balance Sheet June 30, 1997 and 1996 ASSETS
1997 1996 ---- ---- Current Assets: Cash $255,621 $135,211 Accounts Receivable (Net of allowance for doubtful accounts of $88,969 & $34,211 for 1997 and 1996) 55,734 130,827 Inventories 14,705 26,315 Prepaid Expenses 11,551 8,615 -------- -------- Total Current Assets 337,611 300,968 -------- -------- Furniture, Fixtures & Equipment, net of Depreciation (Note 1) 26,353 40,838 --------- -------- Other Assets: Deferred Tax Assets (Note 6) 100,525 100,525 Distributorship, net (Note 2) 11,000 12,800 -------- -------- Total Other Assets 111,525 113,325 -------- -------- TOTAL ASSETS $475,489 $455,131 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable, Trade $ 1,057 $ 8,957 Deferred Service Revenue 87,546 24,432 Deferred Distributorship Revenue 1,650 5,810 Other Accrued Expenses 13,789 5,520 Loans from Related Parties (Note 3) 26,000 36,000 -------- -------- Total Current Liabilities 130,042 80,719 -------- -------- Long-term Debt (Note 4) -0- -0- -------- -------- Stockholders' Equity: Common stock, par value $.01 per share; authorized 10,000,000 shares; issued and oustanding 4,285,500 42,880 42,805 Additional Paid-In Capital 948,950 948,650 Accumulated Deficit (646,383) (617,043) -------- -------- Total Stockholders' Equity 345,447 374,412 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $475,489 $455,131 ======== ======== The accompanying summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 17 -
Beeper Plus, Inc. Statement of Operations For the Years Ended June 30, 1997, 1996, and 1995
1997 1996 1995 ---- ---- ---- REVENUE: Monthly Distributorship Revenue $ 197,860 $ 309,522 $ 397,080 Monthly Service Revenue 616,713 605,233 685,956 Pager Sales 53,282 59,499 83,462 Phone Card Sales -0- 23,859 34,972 Front Page Sales 143,192 128,864 132,213 Other Revenue 13,462 23,293 2,198 ---------- ---------- ---------- TOTAL REVENUE 1,024,509 1,150,270 1,335,881 ---------- ---------- ---------- OPERATING COSTS AND EXPENSES: Cost of Sales 335,636 449,700 505,306 Advertising and Promotion 9,080 6,436 11,647 Amortization 1,800 2,200 46,131 Bad Debts 69,523 165 57,710 Depreciation 17,247 27,484 29,994 Entertainment 2,092 618 1,239 Insurance 31,013 29,247 23,013 Professional Fees 12,050 11,633 10,481 Maintenance and Repairs 11,221 18,505 18,916 Office Supplies and Expense 11,966 26,270 14,245 Salaries and Wages 342,693 309,263 347,265 Postage and Shipping 21,991 24,398 21,105 Printing 5,378 4,599 4,219 Office Rent 53,170 53,230 47,078 Payroll Taxes and Other Benefits 40,274 33,934 38,348 Taxes and Licenses 2,534 4,828 3,439 Telephone 17,494 19,345 18,722 Utilities 4,367 4,832 4,639 Front Page & Phone Card Expense 983 18,016 25,045 Legal and Accounting 26,639 24,656 36,197 Miscellaneous 41,742 30,029 32,424 ---------- ---------- ---------- TOTAL OPERATING COSTS AND EXPENSES $1,058,893 $1,099,388 $1,297,163 ---------- ---------- ---------- The accompanying summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 18 -
Beeper Plus, Inc. Statement of Operations (Continued) For the Years Ended June 30, 1997, 1996, and 1995
1997 1996 1995 ---- ---- ---- Operating Income ($ 34,384) $ 50,882 $ 38,718 Other Revenue (Expense): Interest Income 5,044 2,005 344 Interest Expense -0- -0- ( 3,637) ---------- ---------- ---------- Total 5,044 2,005 3,293 ---------- ---------- ---------- Income (Loss) Before Income Tax (Note 6) ( 29,340) 52,887 35,425 Income Tax - Current -0- ( 8,221) ( 5,314) ---------- ---------- ---------- Net Income ($ 29,340) $ 44,666 $ 30,111 ========== ========== ========== Earnings per share ($ .01) $ .01 $ .01 Weighted Average Number of Common Shares Outstanding 4,280,911 4,280,500 4,211,184 ========== ========== ========== The accompanying summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 19 -
Beeper Plus, Inc. Statement of Shareholders' Equity For the Years Ended June 30, 1997, 1996 and 1995
Add'l Common Stock Paid-In Accumulated Shares Amount Capital Deficit Total ------ ------ ------- ------- ----- Balance June 30, 1994 4,180,500 41,805 944,150 ( 691,820) 294,135 Issuance of common stock to employees in lieu of compensation 100,000 1,000 4,500 5,500 Net Income 30,111 30,111 --------- ------ ------- --------- -------- Balance June 30, 1995 4,280,500 42,805 948,650 ( 661,709) 329,746 Net Income 44,666 44,666 --------- ------ ------- --------- ------- Balance June 30, 1996 4,280,500 42,805 948,650 ( 617,043) 374,412 Issuance of common stock to employees in lieu of compensation 7,500 75 300 375 Net Income ( 29,340) ( 29,340) --------- ------ ------- -------- -------- Balance June 30, 1997 4,288,000 42,880 948,950 ( 646,383) ( 345,447) ========= ====== ======= ======== ======== The accompanying summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 20 -
Beeper Plus, Inc. Statement of Cash Flows For the Years Ended June 30, 1997, 1996, and 1995
1997 1996 1995 ---- ---- ---- Cash Flows from Operating Activities: Net Income (Loss) ($29,340) $ 44,666 $ 30,111 Adjustments to reconcile net income to net cash from operating activities: Depreciation 17,247 27,484 29,994 Amortization 1,800 2,200 46,130 Loss on Disposal of Assets 11,437 -0- -0- (Increase) Decrease in Deferred Tax -0- 8,221 5,314 Issuance of Stock as Compensation 375 -0- 5,500 (Increase) Decrease in Accts Receivable 75,093 ( 50,122) ( 7,319) (Increase) Decrease in Inventories 11,610 25,310 142,875 Increase (Decrease) in Accts Payable ( 7,900) ( 7,027) (191,745) Increase (Decrease) in Deferred Revenue 58,955 ( 6,680) 4,990 Increase (Decrease) in Accrued Expenses 8,268 1,921 ( 7,240) (Increase) Decrease in Prepaid Expenses ( 2,936) 6,794 ( 15,409) ------- ------- ------- Net cash from operating activities 144,609 52,767 43,201 ------- ------- ------- Cash Flows from Investing Activities: Capital Expenditures ( 14,199) -0- ( 3,881) Distributorship -0- ( 12,000) -0- ------- ------- ------ Net Cash from Investing Activities ( 14,199) ( 12,000) ( 3,881) ------- ------- ------ Cash Florws From Financing Activities: Principal payments on loans to related parties ( 10,000) -0- -0- ------- ------- ------ Net Cash from Financing Activities ( 10,000) -0- -0- ------- ------- ------ Net Increase (Decrease) in Cash 120,410 40,767 39,320 Cash at Beginning of Year 135,211 94,444 55,124 ------- ------- ------- Cash at End of Year $255,621 $135,211 $ 94,444 ======== ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest Paid $ -0- $ -0- $ 3,637 ======== ======== ======== SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Issuance of Common Stock as Partial Consideration for Compensation $ 375 $ -0- $ 5,500 ======== ======== ======== The accompanying summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 21 -
Beeper Plus, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements For the Years Ended June 30, 1997, 1996, and 1995 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ------------------------------------------ The Company: - ----------- Beeper Plus, Inc. (the Company) was incorporated under the laws of the State of Nevada on March 25, 1986. On March 31, 1986, the Company acquired Dial-A-Score, Inc. a Nevada corporation which was incorporated on July 5, 1985. Dial-A-Score, Inc. was a privately held company with one stockholder, who is also a director of the Company. Because Dial-A-Score was under common control for accounting purposes, it is considered to be the predecessor of the Company. The Company is engaged in the business of providing data services through pagers for all major sporting events. Inventories: - ------------ Inventories of pagers are stated at the lower of cost (first-in, first-out method) or market. Depreciation: - ------------ Furniture, fixtures and equipment are stated at cost. Depreciation is computed by the straight-line method over estimated useful lives of five to seven years. Maintenance, Repairs and Renewals: - --------------------------------- Maintenance, repairs and renewals which neither materially add to the value of the equipment nor appreciably prolong its life are charged to expense as in- curred. Gains or losses on dispositions of equipment are included in opera- tions. Amortization: - ------------ The Company amortizes new distributorships purchased over 15 years. Deferred Distributorship Revenue: - -------------------------------- Deferred revenue results from receipts of initial fees on distributorship agree- ments, which normally are for an initial term of one year. Since such agree- ments are generally renewable at the option of the distributor, the deferred revenue is recognized ratably over the estimated three year period until the continuing monthly fees will cover the cost of continuing services and provide a reasonable profit. - 22 - Beeper Plus, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements For the Years Ended June 30, 1997, 1996, and 1995 Estimates: - ---------- The preparation of financial statements in conformity with generally accepted accounting principles requires the use of management's estimates. Earnings per Share: - ------------------ The computation of earnings per share is based on the weighted average number of outstanding common shares. - 23 - Beeper Plus, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements (Continued) For the Years Ended June 30 1997, 1996, and 1995 NOTES TO FINANCIAL STATEMENTS ----------------------------- NOTE 1 - Furniture, Fixtures and Equipment: - ------------------------------------------ Furniture, fixtures and equipment consist of the following:
Service Life (Years) 1997 1996 1995 ----- ---- ---- ---- Furniture, Fixtures and Equipment 5 - 7 $271,770 $454,262 $454,262 Leasehold Improvements 5 12,380 12,380 12,380 -------- -------- ------- Total Fixed Assets 284,150 466,642 466,642 Less Accumulated Depreciation (257,797) (425,804) (398,320) -------- -------- -------- Net Fixed Assets $ 26,353 $ 40,838 $ 68,322 ======== ======== ========
NOTE 2 - Distributorship: - ------------------------ On April 11, 1996, the Company purchased the Dallas distributorship from Arthur Stevens for $12,000. The asset was recorded at cost and is amortizable over a period of fifteen years. NOTE 3 - Loans from Related Parties: - ----------------------------------- Loans from related parties include the following:
1997 1996 1995 ---- ---- ---- Notes Payable to Shareholders (Jamie Thompson) Non-Interest Bearing $ 26,000 $ 36,000 $ 36,000 ======== ======== ========
Payment on this note in the amount of $10,000 was made in February of 1997. No other payments have been made on loans from related parties for the three year period ended 6/30/97. NOTE 4 - Long Term Debt: - ----------------------- The Company had no Long Term Debt obligations during the three year period ended 6/30/97. - 24 - Beeper Plus, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements (Continued) For the Years Ended June 30, 1997, 1996, and 1995 NOTE 5 - Committments and Contingencies - ----------------------------------------- Operating Leases ---------------- The Company leases office space under a non-cancelable operating lease. (See Item 2 Form 10-K). Rents are adjusted each January based on the Consumer Price Index (CPI). Future minimum lease payments (unadjusted for CPI) are as follows: Year Ending June 30, 1998 $ 51,552 Year Ending June 30, 1999 51.552 Six Months Ending December 31, 1999 25,776 NOTE 6 - Income Taxes - --------------------- The Company has net operating loss carryforwards of $674,884, which if not utilized will expire as follows:
Year Ending For Financial June 30 Reporting Purposes ------- ------------------ 2003 $ 187,083 2004 308,251 2005 168,871 --------- $ 664,205 =========
During 1994, the Company adopted FASB Statement 109 on accounting for income taxes. The components of deferred tax assets are as follows: Deferred Tax Asset at July 1, 1993 $233,500 Tax Benefit of losses carried forward for the year ended June 30, 1994 ( 32,380) Valuation allowance at June 30 1994 ( 87,060) -------- Deferred Tax Asset at June 30, 1994 114,060 Less Deferred Tax Used as of June 30, 1995 ( 5,314) -------- Deferred Tax Asset at June 30, 1995 108,746 Less Deferred Tax Used as of June 30, 1996 ( 8,221) -------- Deferred Tax Asset at June 30, 1996 100,525 Less Deferred Tax Used as of June 30, 1997 -0- -------- Deferred Tax Asset at June 30, 1997 $100,525 ======== - 25 - Beeper Plus, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements (Continued) For the Years Ended June 30, 1997, 1996, and 1995 NOTE 7 - Common Stock to Officers/Directors/Employees - ----------------------------------------------------- Kevin Persinger, Joel Blakemore and David Stevens, all employees of the Company, each received 2,500 shares of common stock in lieu of compensation in June of 1997. - 26 - Joseph F. Zerga, Ltd. 2950 E Flamingo Rd, Ste L Las Vegas, NV 89121 (702) 732-2775 INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES To the Board of Directors Beeper Plus, Inc. Las Vegas, Nevada In connection with our audits of the financial statements of Beeper Plus, Inc. as of June 30, 1997, 1996 and 1995, we also audited the financial statement schedules listed under Item 14(a)(2). In our opinion, the financial statement schedules for the years ended June 30, 1997, 1996 and 1995 present fairly in all material respects, the information stated therein, when considered in relation to the financial statements taken as a whole. Las Vegas, Nevada September 16, 1997 S-1 Beeper Plus, Inc. Schedule 1 - Property, Plant and Equipment For the Years Ended June 30, 1997, 1996 and 1995
Furniture Fixtures June 30 June 30 June 30 and Equipment 1997 1996 1995 - ------------------ ------- ------- ------- Balance at Begin- ning of the Year $ 466,642 $ 466,642 $ 462,761 Additions 14,199 -0- 3,881 Disposals ( 196,691) -0- -0- --------- --------- --------- Balance at End of the Year $ 284,150 $ 466,642 $ 466,642 ========= ========= =========
S-2 Beeper Plus, Inc. Schedule II - Accumulated Depreciation and Amortization of Property, Plant and Equipment For the Years Ended June 30, 1997, 1996 and 1995
Accumulated June 30 June 30 June 30 Depreciation 1997 1996 1995 - ------------ --------- -------- ------- Balance at Begin- ing of the Year $ 425,804 $ 398,320 $ 368,326 Expenses 17,247 27,484 29,994 Disposals ( 185,254) -0- -0- --------- --------- --------- Balance at End of the Year $ 257,797 $ 425,804 $ 398,320 ========= ========= =========
S-3 EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 1997 10-K
5 1 12-MOS Jun-30-1997 Jul-01-1996 Jun-30-1997 255621 0 144703 88969 14705 337611 284150 257797 475489 130042 0 42880 0 0 302567 475489 1024509 1029553 335636 335636 723257 0 0 (29340) 0 (29340) 0 0 0 (29340) (.01) (.01)
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