-----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, Br6G/gi/rNulDedvldilo9dlP2LUHEe51ye40sQkhRdrKyIB8dRrnIE4ANmOlD+B JpgV4ZPVEqe0V2YTuLc0zQ== 0001085760-00-000035.txt : 20000518 0001085760-00-000035.hdr.sgml : 20000518 ACCESSION NUMBER: 0001085760-00-000035 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 20000517 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: 639014 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, INC. ANNUAL REPORT Year Ended June 30, 1999 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, 1999 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, Suite 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 required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes No X As of June 30, 1999, 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 as of April 30, 2000 was approximately $643,200. (Based upon the average of the opening bid and low asked prices of these shares). Beeper Plus, Inc. Form 10-K June 30, 1999 TABLE OF CONTENTS Page PART I ITEM 1. Business 3 ITEM 2. Properties 7 ITEM 3. Legal Proceedings 7 ITEM 4. Submission of Matters to a Vote of Security Holders 7 PART II ITEM 5. Market for the Registrant's Common Equity and Related Stockholder Matters 8 ITEM 6. Selected Financial Data 9 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 ITEM 8. Financial Statements and Supplementary Data 12 ITEM 9. Changes In and Disagreements with Accountants On Accounting and Financial Disclosure 12 PART III ITEM 10. Directors and Executive Officers of the Registrant 12 ITEM 11. Executive Compensation 13 ITEM 12. Security Ownership of Certain Beneficial Owners and Management 14 ITEM 13. Certain Relationships and Related Transactions 15 PART IV ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 16 2 PART I ITEM 1. BUSINESS Safe Harbor Statement This report contains a number of forward-looking statements, which reflect the Company's current views with respect to future events and financial performance including statements regarding the Company's projections, and the sports paging and related industries. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. These risks and uncertainties include but are not limited to economic conditions, changes in laws or regulations, demand for products and services of the company and the effects of competition. These risks and uncertainties could significantly affect anticipated results in the future and actual results may differ materially from any forward-looking statements. In this report, the words "anticipates", "believes", "expects", "intends", "future", "plans", "targets" and similar expressions identify forward-looking statements. Readers are cautioned to not place undue reliance on the forward- looking statements contained herein, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements, to reflect events or circumstances that may arise after the date hereof. Additionally, these statements are based on certain assumptions that may prove to be erroneous and are subject to certain risks including, but not limited to, the Company's dependence on limited cash resources, and its dependence on certain key personnel. Accordingly, actual results may differ, possibly materially, from any predictions contained herein. 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 Corporation, to acquire all of its assets and outstanding shares of Common Stock from its sole shareholder. The Company disseminates sports and news information by utilizing contracted paging services directly to customers nationwide, including Hawaii, Alaska and the Caribbean, through a hand-held alpha-numeric pagers called The Sports Page and The Front Page. The Company also utilizes independent distributors to provide The Sports Page to clients in two locations throughout the United States. The distributors 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. On August 5, 1998, the Company filed Board Resolutions with the Nevada Secretary of State, which reported that the Board of Directors had approved an amendment to the Company's articles of incorporation (the "Articles") changing the Company's name to "Maven Sports Page, Inc." The 3 Company was subsequently informed that the ticker symbol for the Company's common stock had been changed from BEPP to MAVN. An amendment to the Articles requires approval of the Company's shareholders, such an amendment to change the Company's name was not submitted to a shareholder vote. It is, therefore, the Company's position that its corporate name continues to be "Beeper Plus, Inc." The Company does not propose to amend the Articles to change the corporate name, and it has authorized necessary actions to be taken to (i) cause the Nevada Secretary of State's records to be corrected to reflect accurately the Company's name as "Beeper Plus, Inc." and (ii) change the ticker symbol back to BEPP or to a substantially similar symbol which reflects the correct corporate name. B. Financial Information About Industry Segment The Company operates in one industry segment, involving the dissemination of computer data sports and news information utilizing contracted paging services, the internet and via satellite LED display boards. C. Narrative Description of Businesses The Company has been marketing its sports information service nationwide through periodicals, newspapers, satellite feeds, Internet and customers, nation wide. To date, the Company has continued to enter into additional markets without utilizing distributors. However, the Company maintains two existing distributorship contracts in Hawaii and New England. The Company, through its contracted paging services throughout the country, communicates sports information to customers through a hand-held battery operated alphanumeric pager called The Sports Page. The Company has terminated distributorships in Chicago, Dallas, Maryland, Florida and Northern California, and has started to service these territories directly to its subscribers through contracted paging services. This paging service permits Beeper Plus to concentrate its paging services throughout the country and not is just one geographical area. 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 country. These local transmitters then relay UHF, VHF and 900 MHz signals to The Sports Page, within a 30 to 150 mile radius of their location. 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. The Sports Page may also be utilized as a personal pager. 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 services provided by TSN and the Sports Wire are subject to fixed contracts with automatic renewal for annual terms unless canceled by either party. The arrangements are not exclusive and the wire services have other customers. The Company is not required to maintain 4 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 Company sells the pagers used by customers. The Company intends to continue expansion into other information markets at such time as the demand arises. The Company proposes to use the same methods of transmitting information. On March 23, 1992, the Company signed a joint venture agreement with National Dispatch Center ("NDC") located in San Diego, California. Beeper Plus, Inc. and NDC together sell and promote a news paging service marketed as "News-Master/ Front Page". In February 1993, the Company entered into a contract with the NDC whereby NDC conducts all the monthly billing for all Front Page Subscribers. Beeper Plus, Inc. will maintain and enhance the product and continue in sales and marketing. 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 headlines and listings. The information sources utilized by the "The Front Page" service include various wire services such as United Press International ("UPI") and TSN. Information updates are provided in excess of fifty times a day. Accessing the Sports Information Access to the Company's sports information is designed with an eye towards convenience. The Sports Page provides immediate sports information, 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 contestants. 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. Market and Marketing Currently, Beeper works with one distributor and has no intention to engage any other distributors for other new territories. The Company has been and will continue to market its products directly to its subscribers. The Sports Page has received national recognition in newspapers and magazines throughout the country. In addition, Beeper will continue to rely on its current distributor and his ability to successfully market The Sports Page product in his territory. This Distributor Agreement is in the seventh year of a fifteen (15) year term, which may be extended for up to two (2), additional five (5) year terms. 5 New Products The Company is continuing to research the possible development of new products and improve existing products, including providing the line and wagering tips by subscription service to a hand held beeper, and by a telephone 900 line and via internet web sites. 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 news programs, sports information periodicals, the sports section of newspapers and radio, direct dial "900" score lines and online computer services. Management On March 20, 1998, at an annual meeting of shareholders, the following individuals were elected as Directors of the Company until the next annual meeting of stockholders and until their successors were duly elected and qualified: Basil B. Newton; May C. Newton; Kevin L. Persinger; Hugo V. Cianciulli; Frank H. DeRenzo; Robert Muni; and Rodd Buckle. In addition, as of March 20, 1998, Frank H. DeRenzo was elected President and Thomas J. Neavitt was elected Secretary/Treasurer. Subsequently, effective July 1, 1998, Robert Muniz resigned from the Board of Directors and effective August 24, 1998, Basil B. Newton and May C. Newton resigned from the Board of Directors and on July 14, 1998, Herb Jensen was elected as a Director and appointed Secretary/Treasurer. On October 12, 1998, the Board of Directors removed Rodd Buckle and Herb Jensen from the Board of Directors and all of their executive officer positions. Also on that date, the Board of Directors re-appointed Basil B. Newton and Thomas J. Neavitt as directors to fill the two vacancies and appointed Mr. Neavitt as Secretary/Treasurer. On April 1, 1999, Robert Muniz was re-appointed as a Director of the Company. At an annual meeting of share holders held on June 25, 1999 the following persons were elected as Directors of the Company until the next annual meeting of stockholders and until their successors were duly elected and qualified: Basil B Newton; Kevin L. Persinger, Hugo V. Cianciulli, Frank H. DeRenzo, Robert Muniz and Thomas J. Neavitt. Subsequently, on November 19, 1999, Basil B. Newton resigned as a Director of the Company, on November 24, 1999, Hugo V. Cianciulli resigned as a Director and on January 12, 2000, Thomas J. Neavitt resigned as a Director and Secretary/ Treasurer of the Company. 6 The Company at June 30, 1999 had twenty (20) 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. ITEM 2. PROPERTIES The Company does not own or lease any paging transmitters. The Company owns no real property. The Company has arrangements with the paging companies, which provide for priority transmission rights. The Company leases office space, located at 3900 Paradise Road, Suites 200 and 201, Las Vegas, Nevada. The office space is leased from a non- affiliated lessor and is approximately 3,500 square feet. The term of the lease is 36 months ending June 30, 2001. The base minimum monthly rent for the term of this lease is: $5,400 per month for June 25, 1998 to June 24, 1999; $5,600 per month for June 25, 1999 to June 24, 2000; and $5,800 per month for June 25, 2000 to June 30, 2001. ITEM 3. LEGAL PROCEEDINGS Beeper Plus, Inc. is not a party to any pending litigation and none is contemplated or has been threatened. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS An annual meeting of shareholders was held on June 25, 1999 in Las Vegas, Nevada. The following matters were submitted to a vote of security holders: Joseph F. Zerga, Ltd. was ratified as auditor for the fiscal year ended June 30, 1998. The following persons were elected as Directors of the Company until the next annual meeting of stockholders or until their successors are duly elected and qualified: Basil B. Newton; Kevin L. Persinger; Hugo V. Cianciulli; Frank H. DeRenzo; Robert Muniz; and Thomas J. Neavitt. The stockholders approved the acquisition of additional technologies and/or companies and authorized the Board of Directors and Officers of the Company to raise additional capital. There were no matters submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise. 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 NASD Bulletin Board. The Company's registration statement was declared effective by the Securities and Exchange Commission 7 on June 20, 1986. As of its fiscal year end, June 30, 1999, 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. See "ITEM 1. BUSINESS; A. General Description of the Business" herein regarding the Company's corporate name and the ticker symbol for the Company's common stock. The market price information for the common equity pursuant to Item 201 (a) (i) (iii) for each fiscal quarter from the first quarter beginning July 1, 1997, through June 30, 1999, was as follows: Bid Price Asked Price High Low High Low 1997 First Quarter .050 .050 .095 .080 Second Quarter .050 .050 .095 .095 Third Quarter .050 .050 .080 .070 Fourth Quarter .050 .050 .070 .070 1998 First Quarter .150 .040 .280 .080 Second Quarter .938 .031 1.000 .047 Third Quarter .040 .040 .060 .060 Fourth Quarter .050 .0312 .080 .080 1999 First Quarter .0625 .050 .21875 .080 Second Quarter .09375 .0312 .21875 .0937 Third Quarter .1875 .09375 .3750 .2182 Fourth Quarter .875 .10 .3750 .2182 2000 First Quarter .3750 .1875 .50 .1875 The above bid and asked quotations represent prices between dealers and does 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, 1999, the approximate number of holders of record of the Company's $.01 par value Common Stock was 250. 8 ITEM 6. SELECTED FINANCIAL DATA
Year Ended June 30 1999 1998 1997 1996 1995 Operating Revenue $ 828,331 $ 866,967 $1,011,047 $1,150,270 $1,335,881 Net Income (Loss) (290,173) (66,990) (29,340) 44,666 30,111 Net Income (Loss) Per Common Share Outstanding (.07) (.02) (.01) .01 .01 Balance Sheet Data Working Capital (deficit) (150,005) 136,253 207,569 220,249 149,678 Total Assets 250,540 439,568 475,489 430,699 397,819 Total Liabilities 371,623 161,111 130,042 56,287 68,073 Stockholders' Equity (deficit) (121,083) 278,457 345,447 374,412 329,746 Long-term Debt -0- - 0 - - 0 - - 0 - -0-
The Company has not paid any dividends on its stock. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Fiscal Year Ended June 30, 1999 Compared to Fiscal Year Ended June 30, 1998 During the fiscal year ended June 30, 1999, revenues were $828,331 as compared to $866,967 for the fiscal year ended June 30, 1998, representing a decline in revenue of $38,636 in fiscal 1999. The Company's statement of operations for the fiscal year ended June 30, 1999 reflects a net loss of $290,173, compared to a net loss of $66,990 in fiscal 1998. The drop in revenues from 1998 to 1999 was primarily due to a decrease in revenues provided by the Company's distributors. In 1998 the Company began the 10-year buy-out of the largest remaining distributor (Northern California). As a result, the Company expects to see diminishing distribution revenues, but larger per-customer fees as their contracts are renewed directly with Beeper Plus, Inc. Also, the Company was forced to reduce the monthly fees paid by the New England distributor in order to keep that company from becoming insolvent. Pager sales have decreased due to the attempt to lure more annual customers with a "one year contract, free pager" promotion. The Company expects to see the benefit of this program in the long term. Front Page revenues have dropped as competition from large and well known firms increases. Motorola and CNN both offer a similar service to the Company's Front Page product, at a lower price. 9 Cost of sales has decreased as the Company has made every effort to acquire the pagers, wire service and satellite fees at lower costs. Advertising costs have increased in an effort to explore new marketing venues for the Company. This policy was aggressively pursued in 1998 under the supervision of new management. Salaries and wages increased in 1998 most notably due to the addition of temporary staff members. Rent has increased due to an expansion in the Company's offices. Fiscal Year Ended June 30, 1998 Compared to Fiscal Year Ended June 30, 1997 During the fiscal year ended June 30, 1998, revenues were $866,967 as compared to $1,011,047 for the fiscal year ended June 30, 1997, representing a decline in revenue of $144,080 in fiscal 1998. The Company's statement of operations for the fiscal year ended June 30, 1998 reflects a net loss of $66,990, compared to a net loss of $29,340 in fiscal 1997. The drop in distribution revenue from 1997 to 1998 was due to a number of factors including the loss of the Baltimore territory and termination of the contract by the Florida distributor. Although a legal judgement has been rendered in the Company's favor against the Florida distributor, the Company has been unable to collect any restitution. In 1998 the Company began the 10-year buy-out of the largest remaining distributor (Northern California). As a result, the Company expects to see diminishing distribution revenues, but larger per-customer fees as their contracts are renewed directly with Beeper Plus, Inc. Also, as noted previously, the Company was forced to reduce the monthly fees paid by the New England distributor in order to keep that company from becoming insolvent. Pager sales have decreased due to the attempt to lure more annual customers with a "one year contract, free pager" promotion. The Company expects to see the benefit of this program in the long term. Front Page revenues have dropped as competition from large and well known firms increases. Motorola and CNN both offer a similar service to the Company's Front Page product, at a lower price. The drop in "Other Revenue" comes from an abandonment of the phone card product, which was still in service in 1996, but the Company has ceased to support. Cost of sales has decreased as the Company has made every effort to acquire the pagers, wire service and satellite fees at lower costs. Advertising costs have increased in an effort to explore new marketing venues for the Company. This policy was aggressively pursued in 1998 under the supervision of new management. Salaries and wages increased in 1998 most notably due to the addition of temporary staff members. Rent has increased due to an expansion in the Company's offices. Liquidity and Capital Resources As of June 30, 1999, the Company had a working capital deficit of $150,005 compared to positive working capital of $136,253 at June 30, 1998. Operating activities used $260,575 of cash flow, investing activities used $107,677 and financing activities provided $166,561 primarily from proceeds of notes payable. Net cash decreased by $201,691 during the year. 10 The Company at June 30, 1999 had secured a line of credit with Community Bank of Nevada in the amount of $160,000 with a maturity date of August 13, 1999. As of August, 13, 1999, the line of credit was renewed using the previously existing Certificate of Deposit as collateral for the line of credit. $160,000 has subsequently been drawn on the line of credit, $59,931 to cover operating expenses and $100,000 has been loaned to Maven Properties, Inc., a related party to Maven Enterprises, Inc. ("MEI"), a Nevada Corporation and 45.87% shareholder of the Company, at 8% interest, due and payable November 4, 1998. See "ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" herein for information concerning these transactions. On August 31, 1998, the Company entered into an agreement with Edge Capital Investment Company, LLC (Edge) to coordinate a campaign to raise additional investment capital in the one to two million dollar range. The Agreement, entered into by John F. Yeomans, Jr., President and Managing Director of Edge and Rodd Buckle, Director and CEO of Maven Sports Page, Inc., was not authorized by the Board of Directors of the Company. The agreement did not specify how the capital was to be raised. The Agreement specified compensation to Edge including an $11,500 non-refundable retainer attributable to the first two months compensation and expense allowance and $5,750 due November 1, 1998 representing the third months compensation and expense allowance. Compensation for subsequent months was to be contingent upon the Company accepting and receiving a minimum of $400,000 during the term of this agreement. The Company exercised it's right to terminate the Agreement after the initial 120 days when funding in the amount of $500,000 was not accepted and received by the Company within that period. The Company did not accept or receive any funding at any time under this Agreement. After paying the initial $11,500, the Company settled with Edge to pay $2,000 for the third month's installment and be released from the contract. Due to the unauthorized transactions described in Item 13, the Company now requires a dual signature on all disbursements over $1,000 except payroll checks, which are issued by an outside agency. The Board of Directors also scrutinizes the disbursements on monthly basis. Since 1994, there have been sweeping changes to the industry. Larger paging companies have bought out many of their smaller competitors and consolidated their business. New pager services, including companies as large as Motorola and CNN, now offer competitive products at prices too low for the Company to compete with. Instead of selling the Front Page product to 96 local paging companies, as in 1994, the Company now has relations with only 32. Two of the largest distributors of the Sports Page product, in Florida and Washington DC/ Baltimore, have terminated their contracts with the Company after accruing large debts. Legal efforts to collect have not been successful to date. To prevent the loss of other distributors the Company has been forced to cut their monthly fees. The Company has taken a number of steps in an effort to regulate the monthly fluctuations of the business and focus on the long-term. For example, the emphasis is now on annual contracts directly 11 with customers, rather than on month-to-month arrangements through distributors. By buying out the distributors, the Company has been able to substantially reduce operating costs. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Financial Statements commencing on page F-1. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Effective April 21, 1999, Joseph Zerga, Ltd., the Registrant's Certifying Accountant, resigned. Joseph Zerga, Ltd.'s reports for the last two years have not contained an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. Nor has there been any disagreement with Joseph Zerga, Ltd. on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure. In November of 1999, Hein + Associates LLP, Certified Public Accountants (Hein), were engaged to serve as the Registrant's new auditors. The election of Hein, was approved by the Board of Directors of the Registrant. Prior to hiring Hein, neither management nor anyone acting on its behalf consulted Hein during our two most recent fiscal years or the subsequent interim periods. 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 Frank H. DeRenzo 64 Director and President Kevin Persinger 32 Director, VP of Operations Robert Muniz 47 Director and Secretary/Treasurer The Directors of the Company are elected to hold office until the next annual meeting of shareholders or 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. Frank H. DeRenzo was elected President and Director of the Company on March 20, 1998. From May of 1997 to March 26, 1999, Mr. DeRenzo served as President and Director of Maven Enterprises, Inc. of Las Vegas, NV, a media company within the gaming industry since 1997. He is currently a Vice-President of gaming sales for Trans-Lux Corporation, the leading manufacturer of LED Displays worldwide and has responsibility for sports and/or race book contracts. Customers have included Bally's Las Vegas, Monte Carlo Casino, MGM Grand, Mirage and others through out the United States, Mexico and the Bahamas. Prior to Tans-Lux, he was President of Intermark 12 Imagineering, Inc. (manufacturer of computerized Keno systems), Vice President of Sports Form, Inc. (satellite broadcast of horse racing), Vice president of Satellite Simulcast Service, Inc. (transmission and encryption services to race tracks). 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 degree in Business Information Systems. Robert Muniz was re-appointed as a Director of the Company on April 1, 1999. From March 20, 1998 to July 1, 1998, Mr. Muniz was a Director of the Company. Mr. Muniz has been in the gaming industry for over 20 years. Mr. Muniz was the Race Book Manager at the Barbary Coast & Casino in Las Vegas, Nevada, and also was the Race Book Manager at the Gold Coast Hotel & Casino. Mr. Muniz was the Director of Race Book Operations for Coast Resorts, Inc. which owns the Barbary Coast and Gold Coast Hotel as well as the Orleans Hotel & Casino. Coast Resorts, Inc.'s annual handle for horse races is over $80 million per year. Mr. Muniz has served as a consultant to Hyatt regency, Riveria Hotel & Casino, Las Vegas Dissemination Company and the University of Arizona's Race Track Industry Program. He also assisted in the establishment of the Nevada Pari-Mutuel Association. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth the total compensation paid by the Company for its fiscal year ending June 30, 1999, to each of the executive officers of the Company. During the fiscal years ending June 30, 1997, 1998, and 1999 no Executive 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 Compensation Name Served Year Ended June 30 1999 1998 1997 Frank H. DeRenzo (i) Director/President $25,900 $ 3,400 $ 0 Kevin Persinger Director/VP Operations 39,971 33,850 32,522 Robert Muniz Director/Secretary-Treasurer 0 0 0 Hugo V. Cianciulli (i) (ii) Director/VP 18,625 10,800 0 Tom Neavitt (ii) Director/Secretary 8,000 0 0 Basil B. Newton (iii) Director/President 0 46,150 37,721 May C. Newton (iii) Director/Secretary-Treasurer 0 13,200 13,471 _______ ________ ________ All Officers and Directors as a group $92,496 $107,400 $ 83,714 (i) Elected to positions on the Board of Directors and/or Corporate Officers as indicated, effective, March 20, 1998. (ii) On November 24, 1999 Mr. Hugo V. Cianciulli resigned as a Director and VP of the Company and on January 12, 2000, Mr. Tom Neavitt resigned as a Director and the Secretary/Treasurer of the Company. 13 (iii) Basil B. Newton and May C. Newton resigned their positions as President and Secretary/Treasurer, respectively, effective March 20, 1998 and resigned from the Board of Directors effective August 24, 1998. Basil B. Newton was reappointed to the Board of Directors on October 12, 1998 and subsequently resigned as a Director on November 19, 1999.
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. 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: # of Shares Percentage Name/Address Owned Owned Cede & Company (i) 1,039,553 24.24% P.O. Box 20 Bowling Green Station New York, NY 10004 Maven Enterprises, Inc. (MEI) (ii) (iii) 1,967,013 45.87% 45 Country Club Lane Las Vegas, NV 89109 (i) CEDE & Company is a nominee for Depository Trust Company. The Company has been unable to determine how many shareholders this represents. (ii) Rodd Buckle, a Company director, is the Chairman of the Board, Chief Executive Officer and a principal beneficial owner of the voting stock of MEI. Frank H. DeRenzo, the Company's President and a director, held positions as a director and President of MEI, however, Mr. DeRenzo resigned from thos positions on March 26, 1999 and is no longer affiliated with MEI. To the Company's knowledge, Mr. Buckle owns approximately 44.5%, Mr. DeRenzo owns approximately 8.9%, Hugo V. Cianciulli, a past director and Vice President of the Company, owns approximately 6.2%, and Thomas J. Neavitt, a past director, Secretary and Treasurer of the Company, owns approximately 3.6% of MEI's voting stock. (iii) As discussed in note (ii) above, Mr. Buckle may be deemed the beneficial owner of the Company's common stock held by MEI. In addition to MEI's stock holdings, Mr. Buckle is the record owner of 80,000 shares of the Company's common stock. Mr. DeRenzo disclaims beneficial ownership of the Company's common stock owned by MEI and he has advised the Company that as a past director and President of MEI, he has made no voting or investment decisions regarding Company stock owned by MEI. 14 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 Rodd Buckle (i) (ii) 80,000 1.87% Kevin Persinger 4,500 0.10% All Officers & Directors as a Group (ii) 84,500 1.97% (i) In addition to Mr. Buckle's direct ownership of 80,000 shares of the Company's common stock, he may be deemed the beneficial owner of 1,967,013 shares of such common stock owned by MEI, which would constitute an aggregate of 47.74% of the outstanding common stock. (ii) Mr. DeRenzo, a director and President of MEI, disclaims beneficial ownership of the Company's common stock held by MEI. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS At June 30, 1999, the Company owed one shareholder a total of $16,000. This loan bears no interest and has been classified as a current liability, as no specific due dates have been determined. The Company also has $10,000 owed to Mr. Frank H. DeRenzo, the Company's President and Director pursuant to a 12% interest note payable, due on demand. In addition, on February 15, 2000, the Company borrowed another $10,000 from Mr. Frank H. DeRenzo pursuant to a 12% interest demand note payable. On September 4, 1998, Maven Properties, Inc. (MPI), a related party to MEI, borrowed $100,000 from the Company to satisfy an obligation of MEI. The note, bears interest at 8% per annum, originally matured on November 4, 1998 and is secured by property owned by MPI and located at 1711 E Desert Inn Road, Las Vegas, NV 89109. MPI Had defaulted on the Note and the Company has been awarded a judgement against MPI for payment of the full amount due. The note refers to a Deed of Trust executed by MPI on this property. The Deed of Trust has not been recorded with the Clark County Recorders office, but the Company has initiated proceedings to sell the property to satisfy the loan. See "ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" herein for a discussion of relationships which certain directors and executive officers of the Company have with MEI. It is the position of the Company's Board of Directors that neither it nor the Company's President authorized the Line of Credit, the pledging of the certificate of deposit, or the loan to MPI to satisfy the obligation of MEI. It is the position of Mr. DeRenzo, while acting as President and a director of both the Company and MEI, that neither he, in his respective positions held with the two companies, nor the MEI Board of Directors approved any of the transactions described above. At a meeting on October 12, 1998, the Board of Directors removed Rodd Buckle and the Secretary/Treasurer from their executive officer positions with the Company and terminated their 15 signature authority over Company bank accounts. Also at that meeting, the Board of Directors appointed Basil B. Newton and Thomas J. Neavitt as directors to fill vacancies on the Board and appointed Mr. Neavitt as Secretary and Treasurer of the Company. Thereafter, the Board of Directors passed resolutions formally censuring Mr. Buckle based on the Board's determination that Mr. Buckle took, or caused to be taken, the following actions without Company authorization: (i) payments by the Company to Mr. Buckle in the amount of $5,000; (ii) issuance and use of 12 Company credit cards; (iii) change of Company bank accounts and designation of signatories on the accounts; (iv) procuring the Line of Credit in the amount of $160,000, pledging the Company's certificate of deposit and making the Loan to MPI, as discussed above; and (v) executing the contract with Edge capital costing the Company $13,500. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K Attached hereto commencing on Page F-1 are the financial statements and Supplementary Data required by Item 8 of this form. Schedules other than those listed are omitted for the reason that they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto. Columns omitted from the schedules filed have been omitted because the information is not applicable. Two reports filed on Form 8-K, pursuant to the Securities Act of 1934 and accepted on May 3, 2000 are summarized as follows: 16 Form 8-K, SEC accession number 0001085760-00-000025: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest reported) May 1, 2000 Beeper Plus, Inc. (Exact name of registrant as specified in its chapter) Nevada 33-5516-LA 88-0219239 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 3900 Paradise Road, #201 Las Vegas, Nevada 89109 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (702) 737-5560 None (Former name or former address, if changed since last report) Item 4. Changes in Registrant's Certifying Accountant. Effective April 21, 1999, Joseph Zerga, Ltd., the Registrant's Certifying Accountant, resigned. Joseph Zerga, Ltd.'s reports for the last two years have not contained an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. Nor has there been any disagreement with Joseph Zerga, Ltd. on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure. The registrant's Board of Directors approved and accepted Joseph Zerga, Ltd.'s resignation on May 17, 1999. Attached hereto as Exhibit "A" is a copy of a letter provided by Joseph Zerga, Ltd regarding any agreement or disagreement with the registrant's disclosure on its Form 8-K. 17 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Beeper Plus, Inc. (Registrant) /s/Frank DeRenzo (Signature)* Frank DeRenzo/President Date May 2, 2000 *Print name and title of the signing officer under his signature. 18 EXHIBIT "A" JOSEPH F. ZERGA, LTD. A Professional Corporation CERTIFIED PUBLIC ACCOUNTS A Member of the AICPA & NSCPA May 1, 2000 RE: Beeper Plus, Inc. 3900 Paradise Road, #201 Las Vegas, NV 89009 Securities Exchange Commission: We have read the disclosures in the 8-K dated May 1, 2000 regarding our resignation as the Company's Certified Public Accountants. We have no disagreements with the statements made by the registrant on Form 8-K in response to our resignation. Sincerely, /s/Aaron Tveter Aaron Tveter, CPA Joseph F. Zerga, Ltd. 2950 EAST FLAMINGO ROAD, SUITE L - LAS VEGAS, NEVADA 89121 TELEPHONE (702) 732-2775 -- FAX (702) 737-0600 19 Form 8-K, SEC accession number 0001085760-00-000026: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest reported) May 1, 2000 Beeper Plus, Inc. (Exact name of registrant as specified in its chapter) Nevada 33-5516-LA 88-0219239 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 3900 Paradise Road, #201 Las Vegas, Nevada 89109 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (702) 737-5560 None (Former name or former address, if changed since last report) Item 4. Changes in Registrant's Certifying Accountant. In November of 1999, Hein + Associates LLP, Certified Public Accountants (Hein), were engaged to serve as the Registrant's new auditors. The election of Hein, was approved by the Board of Directors of the Registrant. Prior to hiring Hein, neither management nor anyone acting on its behalf consulted Hein during our two most recent fiscal years or the subsequent interim periods. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Beeper Plus, Inc. (Registrant) /s/Frank DeRenzo (Signature)* Frank DeRenzo/President Date May 2, 2000 *Print name and title of the signing officer under his signature. 20 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 behalf by the undersigned, thereunto duly authorized. Beeper Plus, Inc. (Registrant) By: /s/Frank H. DeRenzo Date: 5/16/00 Frank H. DeRenzo, President By: /s/Robert Muniz Date: 5/16/00 Robert Muniz, Secretary/Treasurer 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. By: /s/Frank H. DeRenzo Date: 5/16/00 Frank H. DeRenzo, Director By: /s/Kevin Persinger Date: 5/16/00 Kevin Persinger, Director By: /s/Robert Muniz Date: 5/16/00 Robert Muniz, Director 21 INDEX TO FINANCIAL STATEMENTS Page Independent Auditor's Report, Hein + Associates LLP F-2 Independent Auditors' Report, Joseph F. Zerga, Ltd. F-3 Balance Sheets, June 30, 1999 and 1998 F-4 Statements of Operations, For the Years Ended June 30, 1999, 1998 and 1997 F-5 Statement of Stockholders' Equity (Deficit), For the Years Ended June 30, 1999, 1998 and 1997 F-6 Statements of Cash Flows, For the Years Ended June 30, 1999, 1998 and 1997 F-7 Notes to Financial Statements F-8 Schedule II - Valuation and Qualifying Accouts, For the years Ended June 30, 1999, 1998 and 1997 S-1 F-1 INDEPENDENT AUDITOR'S REPORT To the Board of Directors Beeper Plus, Inc. Las Vegas, Nevada We have audited the accompanying balance sheet of Beeper Plus, Inc. as of June 30, 1999 and the related statements of operations, stockholders' equity (deficit), and cash flows for the year then ended. 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 audit. We conducted our audit in accordance with generally accepted auditing standards. 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 management, 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, 1999 and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered losses from operations in each of the past three years and has an accumulated deficit as of June 30, 1999 of $1,003,546. These financial statements do not include any adjustments relating to the recoverability and classification of reported asset amounts or the amounts and classifications of liabilities that might result from the outcome of this uncertainty. Our audits referred to above include audits of the financial statement schedule included at Page S-1 of Form 10-K. In our opinion, the financial statement schedule presents fairly, in all material respects, in relation to the financial statements taken as a whole, the information required to be stated therein. HEIN + ASSOCIATES LLP Certified Public Accountants Orange, California February 18, 2000 F-2 INDEPENDENT AUDITOR'S REPORT To the Board of Directors Beeper Plus, Inc. Las Vegas, Nevada We have audited the accompanying balance sheet of Beeper Plus, Inc. as of June 30, 1998 and the related statements of operations, stockholders' equity (deficit), and cash flows for the years ended June 30, 1998 and 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 standards. 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 management, as well as evaluating the overall financial statement presentation. We believe that our audits provide 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, 1998 and the results of its operations and its cash flows for the years ended June 30, 1998 and 1997, in conformity with generally accepted accounting principles. Joseph F. Zerga, Ltd. Certified Public Accountants Las Vegas, Nevada October 16, 1998 F-3 BEEPER PLUS, INC. BALANCE SHEETS
JUNE 30, 1999 1998 ASSETS CURRENT ASSETS: Cash $ 25,031 $ 226,722 Restricted certificate of deposit 167,815 - Accounts receivable, net of allowance for doubtful accounts of $59,000 and $100,000 in 1999 and 1998, respectively 28,076 49,301 Inventories 696 8,426 Other current assets - 12,915 ________ _______ Total current assets 221,618 297,364 FURNITURE, FIXTURES AND EQUIPMENT, net of accumulated depreciation of $279,012 and $273,000 in 1999 and 1998, respectively 14,072 18,404 DEFERRED TAX ASSET - 108,150 OTHER ASSETS 14,850 15,650 ______ _______ TOTAL ASSETS $ 250,540 $ 439,568 ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Note payable $ 159,931 $ - Accounts payable 28,101 4,886 Accrued compensation and related expenses 64,725 2,587 Deferred service revenue 92,866 137,638 Loans from related parties 26,000 16,000 ______ _______ Total current liabilities 371,623 161,111 _______ _______ COMMITMENTS (Note 10) STOCKHOLDERS' EQUITY (DEFICIT): Common stock, par value $.01 per share; authorized 10,000,000 shares; issued and outstanding 4,288,000 in 1999 and 1998 42,880 42,880 Additional paid in capital 948,950 948,950 Accumulated deficit (1,003,546) (713,373) Treasury stock, at cost; 5,000 shares in 1999 (3,370) - Note receivable, stockholder (105,997) - _________ ________ Total stockholders' equity (deficit) (121,083) 278,457 _________ __________ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 250,540 $ 439,568 ========== ==========
F-4 The accompanying notes are an integral part of these financial statements. BEEPER PLUS, INC. STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1999 1998 1997 SERVICE REVENUES $ 828,331 $ 866,967 $1,011,047 __________ __________ __________ OPERATING COSTS AND EXPENSES: Cost of revenues 211,775 267,281 335,636 General and administrative expenses 806,077 680,557 723,257 __________ _________ __________ TOTAL OPERATING COSTS AND EXPENSES 1,017,852 947,838 1,058,893 __________ __________ _________ LOSS FROM OPERATIONS (189,521) (80,871) (47,846) OTHER INCOME (EXPENSE): Interest income and other 18,151 6,256 18,506 Interest expense (10,653) - - ___________ __________ _________ TOTAL OTHER INCOME (EXPENSE) 7,498 6,256 18,506 LOSS BEFORE INCOME TAX (182,023) (74,615) (29,340) INCOME TAX BENEFIT (EXPENSE) (108,150) 7,625 - ___________ ___________ __________ NET LOSS $ (290,173) $ (66,990) $ (29,340) __________ __________ __________ BASIC AND DILUTED EARNINGS PER SHARE $ (0.07) $ (0.02) $ (0.01) __________ __________ __________ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 4,288,000 4,288,000 4,288,000 ========= ========= =========
F-5 The accompanying notes are an integral part of these financial statements. BEEPER PLUS, INC. STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
TOTAL ADDITIONAL NOTE STOCKHOLDERS' COMMON STOCK PAID-IN ACCUMULATED TREASURY RECEIVABLE EQUITY SHARES AMOUNT CAPITAL (DEFICIT) STOCK STOCKHOLDER (DEFICIT) BALANCES, July 1, 1996 4,280,500 $42,805 $948,650 $ (617,043) $ - $ - $ 374,412 Common stock issued as compensation 7,500 75 300 - - - 375 Net loss - - - (29,340) - - (29,340) _________ ______ _______ __________ _______ _______ _________ BALANCES, June 30, 1997 4,288,000 42,880 948,950 (646,383) - - 345,447 Net loss - - - (66,990) - - (66,990) _________ ______ _______ _________ _______ _______ _________ BALANCES, June 30, 1998 4,288,000 42,880 948,950 (713,373) - - 278,457 Note receivable, stockholder - - - - - (105,997) (105,997) Repurchase of treasury stock - - - - (3,370) - (3,370) Net loss - - - (290,173) - - (290,173) _________ ______ _______ ___________ _______ _______ _________ BALANCES, June 30, 1999 4,288,000 $42,880 $948,950 $(1,003,546) $(3,370) $(105,997) $(121,083) ========= ====== ======= =========== ======= ========= =========
F-6 The accompanying notes are an integral part of these financial statements. BEEPER PLUS, INC. STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1999 1998 1997 CASH FLOW FROM OPERATING ACTIVITIES: Net loss $ (290,173) $ (66,990) $ (29,340) Adjustments to reconcile net loss to net cash provided by (used in) operations: Depreciation and amortization 6,812 16,003 19,047 Loss on disposal of assets - - 11,437 Issuance of stock as compensation - - 375 Deferred tax provision (Benefit) 108,150 (7,625) - (Increase) decrease in: Restricted cash (167,815) - - Accounts receivable 21,225 6,433 75,093 Inventories 7,730 6,279 11,610 Prepaid expenses 12,915 - - Other assets - (6,814) (2,936) Increase (decrease) in: Accounts payable 23,215 3,829 (7,900) Accrued compensation and related expenses 62,138 (11,202) 8,268 Deferred service revenue (44,772) 48,442 58,955 _________ _________ ________ Net cash provided by (used in) operating activities (260,575) (11,645) 144,609 _________ _________ ________ CASH FLOW FROM INVESTING ACTIVITIES: Purchase of furniture, fixtures and equipment (1,680) (7,254) (14,199) Note receivable, stockholder (105,997) - - _________ _________ ________ Net cash used in investing activities (107,677) (7,254) (14,199) _________ _________ ________ CASH FLOW FROM FINANCING ACTIVITIES: Principal paid to related parties - (10,000) (10,000) Amounts advanced from related parties 10,000 - - Purchase of Treasury Stock (3,370) - - Proceeds from issuance of notes payable 159,931 - - _________ _________ ________ Net cash provided by (used in) financing activities 166,561 (10,000) (10,000) _________ _________ ________ NET INCREASE (DECREASE) IN CASH (201,691) (28,899) 120,410 CASH, beginning of period 226,722 255,621 135,211 _________ _________ ________ CASH, end of period $ 25,031 $ 226,722 $ 255,621 ========= ========= ========= SUPPLEMENTAL DISCLOSURES: Interest paid $ 9,483 $ - $ - ========= ========= ========= Income taxes paid $ - $ - $ - ========= ========= =========
F-7 The accompanying notes are an integral part of these financial statements. BEEPER PLUSE,INC. NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND NATURE OF OPERATIONS: 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. The Company is engaged in the business of providing data services through pagers for all major sporting events. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Cash equivalents - The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Inventories - Inventories of pagers are stated at the lower of cost (first- in, first-out method) or market. Furniture, Fixtures, and Equipment - Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives (ranging from 5 to 7 years) of the respective assets. The cost of normal maintenance and repairs is charged to operating expenses as incurred. Material expenditures, which increase the life of an asset, are capitalized and depreciated over the estimated remaining useful life of the asset. The cost of properties sold, or otherwise disposed of, and the related accumulated depreciation or amortizations are removed from the accounts, and any gains or losses are reflected in current operations. Impairment of Long-Lived and Intangible Assets - In the event that facts and circumstances indicate that the cost of long lived assets may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset's carrying amount to determine if a write-down to market value or discounted cash flow value is required. Revenue Recognition and Deferred Revenue - Revenue is recognized as services are provided. Deferred revenue results from the cash received from customers for the prepayment of services to be provided. Use of Estimates - The preparation of the Company's financial statements in conformity with generally accepted accounting principles requires the Company's management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from these estimates. The Company's financial statements are based upon a number of significant estimates, including the recovery of receivables, and realizability of deferred tax assets. Due to the uncertainties inherent in the estimation process, it is at least reasonably possible that these estimates will be further revised in the near term and such revisions could be material. F-8 BEEPER PLUSE,INC. NOTES TO FINANCIAL STATEMENTS Concentrations of Credit Risk - Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below. In accordance with FASB Statement No. 105, "Disclosure of Information about Financial Instruments with Off-Balance- Sheet Risk and Financial Instruments with Concentrations of Credit Risk" the credit risk amounts shown do not take into account the value of any collateral or security. The Company operates primarily in one industry segment with customers located primarily in the Northwest United States, California, and Nevada. Financial instruments that subject the Company to credit risk consist principally of accounts and notes receivable. Fair Value of Financial Instruments - The estimated fair values for financial instruments under FAS No. 107, Disclosures about Fair Value of Financial Instruments", are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The fair value of the note receivable is based on its estimated recoverable value. The fair value of the note payable is based on borrowing rates that are available to the Company for loans with similar terms, collateral, and maturity. The estimated fair value of the note receivable and payable approximate their carrying values. Advertising - The Company expenses advertising when incurred. Income Taxes - The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for income Taxes". Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Loss Per Common and Common Equivalent Shares - Basic earnings per share excludes dilution and is calculated by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Common stock equivalents as of June 30, 1999, 1998 and 1997 were anti-dilutive and excluded in the earnings per share computation. Impact of Recently Issued Standards - In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 (FASB133), "Accounting for Derivative Instruments and Hedging Activities." This statement requires that an entity recognize all derivatives as assets or liabilities in the statement of financial position and measure those instruments at fair value. This statement was amended by FASB 137, issued in June 1999, such that it is effective for the Company's financial statements for the year ended June 30, 2002. The Company does not believe the adoption of FASB133 will have a material impact on assets, liabilities or equity. F-9 BEEPER PLUSE,INC. NOTES TO FINANCIAL STATEMENTS Reclassifications - Certain reclassifications have been made to prior years' financial statements to conform with the current presentation. Such reclassifications had no effect on net loss. 3. BASIS OF PRESENTATION: As shown in the accompanying financial statements, the Company has reported significant net losses for the years ended June 30, 1999, 1998 and 1997 resulting in an accumulated deficit of $1,003,546 as of June 30, 1999. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. During the latter part of 1999, the Company took steps to mitigate the losses and enhance its future viability by reducing personnel and other operating costs to levels commensurate with its existing revenue levels. The Company's ability to continue as a going concern is ultimately dependent on its ability to control costs and generate sufficient revenues to obtain profitable operations. No assurance can be given that the Company will be successful in these efforts. The financial statements do not include any adjustments relating to the recoverability and classification of reported asset amounts or the amounts and classifications of liabilities that might result from the outcome of this uncertainty. 4. RESTRICTED CERTIFICATE OF DEPOSIT: At June 30, 1999, the Company had a certificate of deposit in the amount of $167,815 which is pledged as security for its note payable (see Note 6) and is subject to withdrawal restrictions. 5. NOTE RECEIVABLE, STOCKHOLDER: At June 30, 1999 the Company had a note receivable in the amount of $100,000 (plus $5,997 of accrued interest) due from Maven Properties, Inc. (MPI), a related party to Maven Enterprises, Inc., (MEI) a 45.87% shareholder in the Company. The Chairman of the Board and Chief Executive Officer of the Company at the time of the transaction was also the Chairman of the Board and Chief Executive Officer of MEI and MPI. This individual has since been removed from office for the Company. The note was issued to settle obligations of MEI for its purchase of the Company's stock. The note bears interest at 8% and was due on November 4, 1998. MPI is in default on the note and the Company is pursuing collection through foreclosure on real property securing the note. Management expects to fully recover the amount of the note through proceeds from the foreclosure. 6. NOTE PAYABLE: At June 30, 1999 the Company had secured a line of credit with Community Bank of Nevada in the amount of $160,000, with a maturity date of August 13, 1999 (subsequently extended to August 13, 2000), secured by the certificate of deposit in the amount of $167,815. Borrowings on the line bear interest at 7.55% (payable monthly). At June 30, 1999, outstanding borrowings on this line were $159,931. The line of credit agreement contains covenants which restrict the Company from incurring additional debt or utilizing loan proceeds for purposes other than working capital. At June 30, 1999, the Company was in violation of the covenants with respect to use of proceeds. F-10 BEEPER PLUSE,INC. NOTES TO FINANCIAL STATEMENTS 7. LOANS FROM RELATED PARTIES: Loans from related parties include the following: JUNE 30, 1999 1998 Notes payable to shareholders, non-interest bearing, due on demand, unsecured $ 16,000 $ 16,000 Note payable to officer, interest at 12%, due on demand collateralized by note receivable, stockholder 10,000 - _______ _______ $ 26,000 $ 16,000 ======= ======= 8. STOCKHOLDERS' EQUITY In August 1998, the Company repurchased and retired 5,000 shares of its common stock for $3,370. 9. INCOME TAXES: Income tax expense (benefit) is comprised of the following: YEAR ENDED JUNE 30, 1999 1998 1997 CURRENT $ - $ - $ - DEFERRED 108,150 (7,625) - _______ ________ _______ INCOME TAX EXPENSE (BENEFIT) $ 108,150 $ (7,625) $ - ======== ======== ======= Total income tax expense differed from the amounts computed by applying the U.S. federal statutory tax as a result of changes in valuation allowances on deferred tax assets. F-11 The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below: JUNE 30, 1999 1998 Current deferred tax assets: Allowances for doubtful accounts $ 20,100 $ 34,000 Deferred compensation and accrued vacation 17,800 - ______ _______ 37,900 34,000 Less valuation allowance (37,900) (34,000) ________ ________ Net current deferred tax assets $ - $ - ======== ======== Noncurrent deferred tax assets: Net operating loss carryforwards 304,300 245,100 Less valuation allowance (304,300) (136,950) _________ _________ Net noncurrent deferred tax assets $ - $108,150 ========= ========= At June 30, 1999, the Company had net operating loss carryforwards of approximately $895,000, which expire in various years through 2019. These net operating losses may be subject to annual limitations imposed by the Internal Revenue Code in the event there is a change in control of the Company. 10. COMMITMENTS: Operating Leases The Company leases office space under a non-cancelable operating lease through June 30, 2001. Additionally, the Company leases certain office equipment under a noncancellable operating lease through April 2002. The future minimum lease payments for the terms of these leases are as follows: YEAR ENDED JUNE 30, 2000 $ 71,000 2001 73,400 2002 3,800 ________ $ 148,200 ======== Rent expense was $73,838, $55,509 and $$53,170 for the years ended June 30, 1999, 1998 and 1997, respectively. Service Contracts The Company has service contracts for satellite, paging, and information services with various vendors. Aggregate monthly payments due under these contracts was approximately $13,000 as of June 30, 1999. These contracts expire at various dates throughout the fiscal year ending June 30, 2000, but provide for automatic annual renewals unless cancelled by either party. F-12 BEEPER PLUSE,INC. NOTES TO FINANCIAL STATEMENTS
ADDITIONS BALANCE AT CHARGED TO BALANCE BEGINNING COSTS AND AT END OF DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS PERIOD For the year ended June 30, 1997: Allowance for doubtful accounts $ 34,000 $ 55,000 $ - $ 89,000 ========= ========= ========= ========= For the year ended June 30, 1998: Allowance for doubtful accounts $ 89,000 $ 11,000 $ - $ 100,000 ========= ========= ========= ========= For the year ended June 30, 1999: Allowance for doubtful accounts $ 100,000 $ - $ 41,000 $ 59,000 ========= ========= ========= =========
S-1 EX-27 2
5 0000793595 BEEPER PLUS, INC. 12-MOS JUN-30-1999 JUL-1-1998 JUN-30-1999 25,031 0 28,076 59,000 696 221,618 293,084 279,012 250,540 371,623 0 0 0 42,880 (163,963) 250,540 828,331 828,331 211,775 211,775 806,077 0 10,653 (182,023) 108,150 (290,173) 0 0 0 (290,173) (.07) (.07)
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