-----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, RjTLcsDp6rA3JdmG6CUV7jFK1RXj/jrQdWxgqQkfds9x4C7cWRvPluen9tke1Glc JtTpgEyZF4TzUAieSplCtw== 0000950123-01-505959.txt : 20010827 0000950123-01-505959.hdr.sgml : 20010827 ACCESSION NUMBER: 0000950123-01-505959 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010824 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNICO INC CENTRAL INDEX KEY: 0000797564 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-DIRECT MAIL ADVERTISING SERVICES [7331] IRS NUMBER: 731215433 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-15303 FILM NUMBER: 1722626 BUSINESS ADDRESS: STREET 1: 24 LAKESIDE AVENUE CITY: POMPTON LAKES STATE: FL ZIP: 07442 BUSINESS PHONE: 9738397200 MAIL ADDRESS: STREET 1: 24 LAKESIDE AVENUE CITY: POMPTON LAKES STATE: NJ ZIP: 07442 FORMER COMPANY: FORMER CONFORMED NAME: CMS ADVERTISING INC DATE OF NAME CHANGE: 19891107 10QSB 1 y52779e10qsb.txt UNICO, INC. 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to Commission file no. 0-15303 UNICO, INC. (Name Of Small Business Issuer In Its Charter) Delaware 73-1215433 (State or Other Jurisdiction of (I.R.S. Employer Incorporation) Identification No.) 24 Lakeside Avenue, Pompton Lakes, NJ 07442 (Address of Principal Executive Offices) (Zip Code) (973) 839-7200 (Issuer's Telephone Number, Including Area Code) Check whether the issue: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practical date: As of April 9, the company had 16,879,163 shares of common stock outstanding, $0.01 par value. UNICO, INC. Form 10-QSB Quarterly Report For The Period Ended June 30, 2001 2 TABLE OF CONTENTS PART I ITEM 1. FINANCIAL STATEMENTS ............................................... 3 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS ............................... 4 PART II ITEM 1. LEGAL PROCEEDINGS .................................................. 7 ITEM 2. CHANGES IN SECURITIES .............................................. 7 ITEM 3. DEFAULTS UPON SENIOR SECURITIES .................................... 7 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ................ 7 ITEM 5. OTHER INFORMATION .................................................. 7 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ................................... 7 SIGNATURES
2 3 ITEM 1. FINANCIAL STATEMENTS As used herein, the term "Company" refers to Unico, Inc., a Delaware corporation, and its subsidiaries and predecessors unless otherwise indicated. Consolidated, unaudited, condensed interim financial statements including a balance sheet for the Company as of the quarter ended June, 2001 and statements of operations, and statements of cash flows for the interim period up to the date of such balance sheet and the comparable of the preceding year are attached hereto as Pages F-1 through F-5 and are incorporated herein by this reference. [THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY.] 3 4 UNICO, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2001 ASSETS Current assets Cash and cash equivalents $ -- Accounts and notes receivable 82,223 ----------- Total current assets 82,223 ----------- Fixed assets Equipment - net 96,175 ----------- Total fixed assets 96,175 ----------- Other assets Goodwill 921,115 Gas, oil and mineral lease 40,000 All other assets 24,010 ----------- Total other assets $ 985,125 ----------- Total assets $ 1,163,523 =========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities Bank overdraft $ 38,094 Accounts payable 370,088 Other short term debt 305,314 Due on Independent News acquisition 156,000 ----------- Total current liabilities 869,496 ----------- Long-term liabilities Due to shareholder 240,311 Accrual for litigation 960,000 ----------- Total long-term liabilities 1,200,311 ----------- Total liabilities 2,069,807 ----------- Stockholders' equity (deficiency) Common stock, $.01 par value, 20,000,000 shares authorized, 16,005,496 shares issued and outstanding at June 30, 2001 160,055 Additional paid-in capital 7,587,393 Retained earnings (deficit) (8,653,732) ----------- Total stockholders' equity (deficiency) (906,284) ----------- Total liabilities and stockholders' equity (deficiency) $ 1,163,523 ===========
F-1 5 UNICO, INC. AND SUBSIDIARY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDING JUNE 30,
Three Months Ended Six Months Ended June 30, June 30, 2001 2000 2001 2000 ------------ ----------- ------------ ----------- Revenue Advertising income $ 596,380 $ -- $ 1,038,927 $ -- Other income 11,567 -- 37,522 -- ------------ ----------- ------------ ----------- Gross income 607,947 -- 1,076,449 -- (Less) : cost of production (223,649) (--) (367,196) (--) ------------ ----------- ------------ ----------- Gross profit 384,298 -- 709,253 -- ------------ ----------- ------------ ----------- Expenses Postage 137,137 -- 266,877 -- Selling, general and administrative expenses 397,368 527,545 636,232 561,138 Provision for litigation -- -- -- -- Depreciation of equipment 16,834 -- 31,366 -- Amortization of goodwill 16,333 -- 32,666 -- Debt elimination-sale of BidInvite -- -- -- -- ------------ ----------- ------------ ----------- Total Expenses 567,672 527,545 967,141 561,138 ------------ ----------- ------------ ----------- Income (loss) from operations (183,374) (527,545) (257,888) (561,138) Provision for income taxes 1,005 -- 1,005 -- ------------ ----------- ------------ ----------- Net income (loss) from operations (184,379) (527,545) (258,893) (561,138) Extraordinary items, net of taxes Write (down) of long term assets impaired -- -- -- -- Income from cancellation of debt -- -- -- -- Income (loss) from discontinued operations -- -- -- -- Net income (loss) $ (184,379) $ (527,545) $ (258,893) $ (561,138) ============ =========== ============ =========== Basic and dilutive earnings (loss) per share Income (loss) from continuing operations $ (0.01) $ (0.07) $ (0.02) $ (0.08) ============ =========== ============ =========== Net income (loss) per share Weighted average common shares Basic and dilutive common shares 16,005,496 7,273,846 14,255,496 7,273,846 ============ =========== ============ ===========
F-2 6 UNICO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY) For the Years Ended December 31, 2000 and 1999 (audited) For the Six Months Ended June 30, 2001 (unaudited)
Common Stock Retained Net ------------------------- Paid In Dividend Earnings Equity Shares Amount Capital Declared (Deficit) (Deficiency) ----------- ----------- ----------- -------- ----------- ----------- Balance as of December 31, 1998 1,877,272 $ 18,773 $ 7,921,443 $172,665 $(6,768,187) $ 1,344,694 Correction number of shares outstanding 168,600 1,686 (1,686) -- Stock issued for services 133,313 1,333 11,167 12,500 Dividend paid (172,665) (172,665) Off-set of amount received on sale of subsidiary (1,106,399) (1,106,399) Stock issued in connection with Silver Valley acquisition 3,500,000 35,000 7,500 42,500 Contribution to capital 250,000 2,500 2,500 5,000 Net income (loss) for the period (211,571) (211,571) ----------- ----------- ----------- -------- ----------- ----------- Balance as of December 31, 1999 5,929,185 $ 59,292 $ 6,834,525 $ -- $(6,979,758) $ (85,941) Acquisition of BidInvite 100,000 1,000 (1,000) -- Capital contribution 300,000 80,000 80,000 Stock issued for services 2,976,311 32,763 271,604 304,367 Independent News Acquisition 3,200,000 32,000 367,264 399,264 Net income (loss) for the period (1,415,081) (1,415,081) ----------- ----------- ----------- -------- ----------- ----------- Balance as of December 31, 2000 12,505,496 $ 125,055 $ 7,552,393 $ -- $(8,394,839) $ (717,391) Net income (loss) for the period (74,514) (74,514) ----------- ----------- ----------- -------- ----------- ----------- Balance as of March 31, 2001 12,505,496 $ 125,055 $ 7,552,393 $ -- $(8,469,353) $ (791,905) Stock issued for services 3,500,000 35,000 35,000 70,000 Net income (loss) for the period (184,379) (184,379) ----------- ----------- ----------- -------- ----------- ----------- Balance as of June 30, 2001 16,005,496 $ 160,055 $ 7,587,393 $ -- $(8,653,732) $ (906,284) =========== =========== =========== ======== =========== ===========
F-3 7 UNICO, INC. AND SUBSIDIARY UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
2001 2000 --------- --------- Cash flows from operating activities Net income (loss) $(258,893) $(561,138) --------- --------- Adjustments to reconcile net income to net cash Provided by operating activities: Income from cancellation of debt -- -- Income from debt elimination-sale of BidInvite -- -- Provision for litigation -- -- Depreciation 31,366 -- Amortization 32,666 -- Stock issued for services rendered 70,000 -- Changes in assets and liabilities: (Increase) decrease in accounts receivable, net 99,723 -- (Increase) decrease in other assets -- -- Increase (decrease) in accounts payable 75,465 134,771 Increase (decrease) in other current liabilities (53,835) 42,200 Increase (decrease) in due on Independent News Acq. -- -- --------- --------- Net cash provided (used) by operating activities (3,508) (384,167) --------- --------- Cash flows from investing activities Purchase of equipment (1,152) (72,666) Acquisition of subsidiary Independent News, net of cash -- -- (Increase) in other assets (12,231) -- --------- --------- Net cash provided (used) by investing activities (13,383) (72,666) --------- --------- Cash flows from financing activities Increase (decrease) in bank overdraft 16,763 -- Proceeds from sale of stock and additional capital -- 313,217 Increase (decrease) due to shareholder -- 139,092 --------- --------- Net cash provided (used) by financing activities 16,763 452,309 --------- --------- (Decrease) increase in cash and cash equivalents (128) (4,524) Cash and cash equivalents - beginning of period 128 4,910 --------- --------- Cash and cash equivalents - end of period $ -- $ 386 ========= ========= Supplemental cash flows disclosure Cash paid for interest $ -- $ -- ========= ========= NON CASH ITEMS Stock issued for services rendered $ 70,000 $ -- Provision for litigation -- -- Income from debt cancellation -- -- Income from debt elimination -- --
F-4 8 UNICO, INC. AND SUBSIDIARIES NOTES TO UNAUDITED INTERIM CONDENSED FINANCIAL STATEMENTS FOR THE PERIODS ENDED JUNE 30, 2001 NOTE 1 - BASIS OF PRESENTATION The interim financial statements at June 30, 2001, and for the three and six month periods ended June 30, 2001 and 2000 are unaudited, but include all adjustments which the Company considers necessary for a fair presentation. The accompanying unaudited financial statements are for the interim periods and do not include all disclosures normally provided in annual financial statements, and should be read in conjunction with the Company's Form 10-KSB for the year ended December 31, 2000. The accompanying unaudited interim financial statements for the three and six month periods ended June 30, 2001 are not necessarily indicative of the results which can be expected for the entire year. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - STOCK ISSUANCE On April 8, 2001, the Company filed with the Securities & Exchange Commission Form S-8 that registered approximately 3,500,000 shares of the Company, which were given to various employees, Directors, and consultants in lieu of cash payments for a total dollar amount of $70,000. F-5 9 ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS On July 1, 2000, the Company acquired all of the issued and outstanding stock of The Independent News, Inc. for its common stock and other consideration. The Independent News is a freely distributed, independent newspaper servicing various communities in Northern New Jersey. Prior to that time, the Company was a publicly traded "shell" company. The newspaper publishes several weekly editions in its region and two monthly editions. The weekly editions have a circulation of approximately 70,000 while the monthly circulation is approximately 40,000. The newspaper contains news content and advertisements for local business establishments along with classified advertisements. Revenues primarily come from Advertising display advertisements (82%), classified advertisements (12%), and inserts sales and other commissions (5%). The year 2000 had no revenue. Revenues were not generated until the Company acquired The Independent News on July 1, 2000. Consequently, income and expenses are not comparable between 2001 and 2000. However, we can make some comparisons between the first and second quarters of 2001 Gross revenue for the three months ending June 30, 2001 were $607,947 compared to the prior three months ending March 31, 2001 of $468,502, an increase of $139,444, or up 30%. Gross profit for the same periods went from $324,955 to $384,298, an increase of $59,343, or up 18%. Selling, general and administrative expenses are up $158,504, or up 66% for the three months ending June 30, 2001 of $397,368, compared to the three months ending March 31, 2001 of $238,864. The primary increase of $158,504 in selling, general and administrative expenses come from an increase in employee and non employee compensation and services, $70,000 of which is services for common stock in the Company. All other expenses are comparable between the first and second quarters of 2001. Prior to the acquisition of The Independent News, its shareholder, NexGen, advanced approximately $270,000 to the newspaper. In connection with the acquisition, NexGen agreed to convert its receivable from the Independent News into "trade credits," which essentially entitles NexGen to receive $270,000 of free advertising. The Independent News adjusted this liability to an amount which it believes is the cost of providing the free advertising, resulting in cancellation of debt in the amount of $245,000. This debt cancellation is accounted for as a non-recurring item. 4 10 As previously outlined in the "The Company's Business", The Independent News and the Company have developed a web-site that places advertisers' advertisements on the Internet permitting The Independent News to charge higher than normal advertising rates. This "platform" can be migrated to other non-competing newspapers allowing them to place their advertisers' advertisements on the Internet, permitting them to charge higher rates as well. The Company is marketing the web product to other newspapers without charging any up-front fees and shares in additional revenue by charging 50% of the additional revenue collected. The Company plans to vigorously market this product, as it believes that approximately 90% of the 15,000 freely distributed newspapers in the U.S. do not have web-sites. Mr. Joe Nicastro is the Publisher of The Independent News and has 15 years in the Newspaper business. He is also a Past President of the Independent Free Papers of America, the largest trade association of free papers in the U.S. and, as such, has numerous contacts in the industry. The marketing efforts are largely conducted through personal contacts, attending trade shows at various locations throughout the U.S., distribution of marketing materials, and other personal approaches. The Company plans to hire a National Sales Manager and General Manager in the next several months to augment its expansion activities in this area. The Company has signed a definitive agreement to acquire the Merrimack Publisher, a software company that produces and maintains software that is specific to the publishing industry. It is the Company's plan to integrate this software with its two web-based advertising platforms, The Web In a Box and The Local Times and to convert the current operating environment from its existing DOS based environment to a Windows environment. The Company is actively negotiating a settlement with the prior owners of Silver Valley Energy due to its acquisition of same and believes that it can reach an amicable non-monetary settlement. The Company's officers and directors have waived all current payment of cash compensation, and uses its stock as payment for services provided by outside consultants and advisors. In addition, the Company is seeking financing from outside sources. 5 11 PART II ITEM 2. CHANGES IN SECURITIES The following information sets forth certain information as of June 30, 2001 for changes in securities since December 31, 2000. On April 8, 2001, the Company filed with the SEC Form S-8 registering 3,503,667 shares of its common stock. The stock was given to various employees, consultants, and advisors in lieu of monetary payments. ITEM 3. DEFAULTS UPON SENIOR SECURITIES NexGen, the seller of The Independent News, is claiming that the Company is in default on its $200,000 obligation to NexGen because of the Company's failure to pay interest and principle on the appropriate date. The Company believes it is not in default, because it has advanced monies to outside third parties on NexGen's behalf, and that certain misrepresentations were made concerning financial aspects of The Independent News. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. None. 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 in its behalf by the undersigned, thereunto duly authorized, on August 21, 2001. Unico, Inc. Registrant /s/ Joe Nicastro Joe Nicastro President 6 -----END PRIVACY-ENHANCED MESSAGE-----