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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended September 30, 2003
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 000-25783
AMERICANA PUBLISHING, INC.
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(Exact name of small business issuer as specified in its charter)
COLORADO 84-1453702
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
303 SAN MATEO NE, SUITE 104A, ALBUQUERQUE, NM 87108
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(Address of principal executive offices)
505-265-6121
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X . No .
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes_____. No_____.
APPLICABLE ONLY TO CORPORATE ISSUERS
As of November 13, 2003, there were 92,066,829 shares of common stock outstanding.
Transitional Small Business Disclosure Format (Check one): Yes_____. No X .
<PAGE>
INDEX
PAGE
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets
December 31, 2002 (Audited) and
September 30, 2003 (Unaudited) 3
Condensed Statement of Income (Loss)
Three and nine months ended
September 30, 2003 and 2002 4
Condensed Statements of Cash Flows
Nine months ended September 30, 2003
and 2002 5
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-9
Item 3. Controls and Procedures 10
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 10
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
Americana Publishing, Inc.
Condensed Balance Sheet
For Periods Ending
Sept 30, December 31,
2003 2002
Assets (Unaudited)
Current Assets
Cash and cash equivalents $ 38,434 $ -
Accounts receivable, net of allowance for
doubtful accounts of $29,316 and $29,316 288,981 350,221
Inventory 125,904 69,246
Prepaid expenses and other current assets 4,853 7,470
Assets from Discontinued Operations 1,519,430 1,519,430
----------- -------------
Total Current Assets $1,977,601 $ 1,946,367
Property & Equipment, net 319,325 274,514
Total Assets $2,296,926 $ 2,220,881
=========== =============
Liabilities & Stockholders Equity
Current Liabilities
Accounts Payables $ 251,735 $ 224,123
Accrued expenses 160,822 316,562
Note payable - factor 143,181 -
Note Payable 2,708 -
Note payable - related parties due 74,282 125,546
Convertible debt - related parties due 387,500 387,500
Net liabilities due to discontinued
operations 3,686,233 3,686,233
----------- -------------
Total Current Liabilities 4,706,461 4,739,964
Commitments and contingencies (Note 6)
Stockholders' Equity
Preferred Stock No Par Value
20,000,000 shares authorized
0 (unaudited) and 0 issued and outstanding
Common stock, $0.001 par value
100,000,000 shares authorized
92,066,829 (unaudited) and
30,863,837 issued and outstanding 92,066 30,863
Additional paid-in capital 12,563,544 10,315,726
Accumulated deficit (15,065,145) (12,865,672)
------------ -----------
Total stockholders' equity (2,409,535) (2,519,083)
------------ -----------
Total Liabilities & Stockholders Equity $ 2,296,926 $ 2,220,881
============ ===========
See Accompanying Notes to Financial Statements.
3
Americana Publishing, Inc.
Consolidated Statements of Operations
(Unaudited)
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPT 30 ENDED SEPT 30
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenue $ 279,728 $ 233,436 $ 924,198 $ 376,196
Cost of Goods Sold 118,182 82,372 340,593 99,152
---------- ---------- --------- ---------
Gross Profit 161,546 151,065 583,605 277,044
Operating expenses
Compensation expense 658,608 300,440 2,258,961 1,184,071
Selling, general and
administration 108,679 110,206 460,344 420,135
Depreciation and amortization 24,890 25,479 67,752 76,872
------- ------- ---------- ----------
Total operating expenses 792,177 436,125 2,787,057 1,681,078
Loss from operations (630,631) (285,060) (2,203,452) (1,404,034)
Other Income (Expense)
Interest Expense (19) (1,875) (1,333) (61,805)
Other Income - - 5,314 -
-------- -------- --------- --------
Total other income (expense) (19) (1,875) 3,978 -
-------- -------- --------- --------
Loss before provision for
income taxes and
discontinued operations (630,650) (286,935) (2,199,474) (1,465,839)
Provision for income taxes - - - -
-------- --------- ---------- ---------
Loss before discontinued
operations (630,650) (286,935) (2,199,474) (1,465,839)
Loss on discontinued
operations - - - (686,741)
--------- --------- ----------- ---------
Net Loss $ (630,650) $ (286,935) $(2,199,474) $(2,152,581)
========== ========= =========== ===========
Basic and diluted loss per share:
From continuing operations (0.01) (0.01) (0.08) (0.07)
From discontinued operations - (0.06) - (0.06)
----------- ---------- ----------- ---------
Basic and diluted
weighted-average shares
outstanding 62,823,130 10,311,693 51,178,260 9,606,513
=========== =========== =========== =========
See Accompanying Notes to Financial Statements.
4
Americana Publishing, Inc.
Condensed Statement of Cash Flows
(Unaudited)
Nine Months Ended Nine Months Ended
Sept 30, 2003 Sept 30, 2002
-------------------- --------------------
Cash Flows From Operating Activities:
Net Loss from continuing operations $(2,199,474) $(2,152,581)
Adjustments to reconcile net loss to net cash
provided by operating activities
Activities:
Depreciation and amortization 67,752 76,872
Issuance of common stock to board members
and employees for services rendered 551,471 1,183,558
Issuance of common stock to consultants 1,707,491 60,025
Provision for allowance for doubtful accounts - 26,816
(Increase) decrease in
Accounts receivable 61,251 (79,519)
Inventory (56,658) (4,332)
Prepaid expenses and other current assets 2,617 2,080
Audio production costs - (2,030)
Increase (decrease) in
Account payable 27,612 98,525
Accrued expenses (12,509) 103,105
Liabilities from Discontinued Operations - 610,503
------------ ----------
Net cash used in continuing operating
activities 149,553 (76,978)
Net cash used in discontinued operating
activities - (14,957)
------------ ----------
Net Cash Provided (Used) by Operating Activities 149,553 (91,935)
Cash Flows From Investing Activities
Purchase of property and equipment (112,563) -
------------ ----------
Net cash used in investing activities (112,563) -
------------ ----------
Cash flows from financing activities
Proceeds from notes payable - 136,475
Payments on notes payable (48,556) (50,842)
Proceeds from the sale of common stock 50,000 174,250
------------ ----------
Net cash provided by continuing financing
activities 1,444 259,883
Net cash used in discontinued financing
activities - (150,365)
------------ ----------
Net cash provided by financing activities - 109,518
Net increase in cash and cash equivalents 38,434 17,583
Cash and cash equivalents, beginning of period - 1,992
------------ ----------
Cash and cash equivalents, end of period $ 38,434 $ 19,575
============ ==========
Supplemental disclosures of cash flow information
Interest paid $ 1,333 $ -
============ ==========
Income taxes paid $ - $ -
============ ==========
See Accompanying Notes to Financial Statements.
5
AMERICANA PUBLISHING, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1.
These unaudited internal condensed financial statements and related notes have
been prepared by Americana Publishing, Inc. (the "Company") and are not subject
to an audit pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at September 30, 2003 and for all
periods presented have been made. Certain reclassifications have been made to
the prior year to conform with the current year's presentation.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these condensed financial statements be
read in conjunction with the Company's audited financial statements and notes
thereto for the fiscal year ended December 31, 2002. The results of operations
for the three and nine months ended September 30, 2003 are not necessarily
indicative of the operating results for the full year.
NOTE 2. LIQUIDITY
The Company, over the preceding nine months, has generated $924,198in sales.
Based on current sales levels combined with a reduction of operating expenses,
we believe that we will have sufficient capital to sustain our operations until
December 31, 2003. However, we cannot guarantee that our revenues will continue
at their current levels, and any significant reduction in revenues may impair
the Company's ability to continue its operations. During the next 12 months, we
expect that the Company will be required to raise additional capital.
Historically the Company helped finance its operations through the sale of
common stock. Before the Company can sell additional shares of its common stock
to raise funds, however, the stockholders must approve an increase in the
authorized number of shares of common stock. There is no assurance that the
stockholders will approve any such increase. If the stockholders do not approve
an increase in the authorized number of shares of common stock, the Company's
ability to raise capital will be severely curtailed. If we need additional
capital before an increase in the authorized number of shares of common stock is
approved by our stockholders, we will attempt to borrow funds from our
affiliates. Our affiliates have no obligation to lend money to us, however.
The Company is financing working capital timing differences with an asset-based
line of credit factoring agreement with Langsam Borenstein Partnership. In April
2002, the Company entered into an agreement with Langsam Borenstein Partnership
providing for the sale of selected accounts receivable in the face amount of at
least $5,000.00 per month. Langsam Borenstein Partnership, in accordance with
the terms of the agreement, charges a varying percentage interest rate on each
invoice sold. The interest varies from 4% for payment by customers paying within
30 days to 10% for customers paying between 81 to 90 days.
Corporate Media Group, Inc. ("CMG") is a wholly owned subsidiary that ceased
operations on April 30, 2002. At the time operations ceased, CMG was in a
deficit position with regard to its stated assets and liabilities in an amount
exceeding $2,100,000.00. At October 31, 2002, CMG had total outstanding
obligations in excess of $3,600,000.00. Its $600,000.00 line of credit with
Volunteer National Bank was over drawn, the line of credit was terminated on
April 30, 2002, and demand was made for payment. Additionally, CMG's equipment
used in the production of CDs and DVDs was leased by CMG from Sony Financial
Services, CIT Financial Services, Caterpillar Financial Leasing and Deutche
Financial Services. The collateral for the line of credit consisted of
inventory, furniture, fixtures, equipment and other assets of CMG. The capital
leases for equipment were secured by the equipment itself. As of December 31,
2001, all of the above noted leases were in default.
As a result of rapidly declining sales which caused a lack of operating capital,
CMG sought protection under the U.S. Bankruptcy Code by approving the filing, on
August 2, 2003, of a bankruptcy petition under the provisions of Chapter 7 of
the Bankruptcy Code. The petition was filed of record in the Eastern District of
Tennessee on August 5, 2003.
During the nine months ended September 30, 2003 Americana Publishing, Inc.
generated $149,553 in cash from its operating activities. This is due to an
increase in sales. Of this amount, $112,563 was spent for the production of
master audio tapes which include the cost of studio time and voice talent. This
amount was capitalized. Cash proceeds were further reduced by the payment of
$48,556 towards various note payables.
The net result was an increase in cash of $38,434 for the nine months ended
September 30, 2003.
Note 3. Stock Transactions
During the first nine months of 2003, the Company issued 52,980,117 shares of
restricted common stock as follows:
(1) On June 15, 2003 the Company entered into an agreement with Advantage
Fund LLC and certain investors who had purchased our 12% debentures. Pursuant to
the agreement, Advantage Fund LLC and its designees exercised warrants and
purchased a total of 22,142,847 shares of our restricted common stock.
(2) 29,844,710 shares, were issued to employees and consultants of
Americana Publishing, Inc.
(3) The Company sold 992,560 shares of its common stock for $50,000 to two
individual investors, Mr. Greg Suess and Mr. Benjamin Padnos, on September 30,
2003.
6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward-Looking Statements
In addition to historical information, this Quarterly Report on Form 10-QSB
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially. Factors that might cause or contribute to
such differences include, but are not limited to, competitive pressures, changes
in the economy that would leave less disposable income to be allocated to
entertainment, the loss of any member of our management team, the loss of
certain key customers, and other factors over which we have no control. When
used in this report, the words "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," and similar expressions are generally intended
to identify forward-looking statements. You should not place undue reliance on
these forward-looking statements, which reflect our opinions only as of the date
of this Quarterly Report. We undertake no obligation to publicly release any
revisions to the forward-looking statements after the date of this document. You
should carefully review the risk factors described in other documents we file
from time to time with the SEC.
GENERAL
Management's discussion and analysis of financial condition and results of
operations is based upon our financial statements. These statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America. These principles require management to make certain
estimates, judgments and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, we evaluate our estimates based on
historical experience and various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
We were incorporated in Colorado in April 1997. We are a multi-media publishing
company. Our primary business is the publication and sale of audio books, but we
also offer print books and electronic books. All of our revenues for the periods
discussed herein have been earned from the sale of audio books.
As part of our business strategy we want to acquire small book publishing
companies and list their book titles on our web site. We also want to purchase a
heat set web press company and a book binding company. We plan to acquire
companies by using shares of our common stock, although we are not presently
engaged in any negotiations with, nor do we have any commitments to, any person
or entity to acquire any business or assets. We believe that active trading of
our common stock will be important to the principals of target companies and
future acquisitions may be dependent on the active trading of our common stock.
If our common stock continues to trade flatly, we may not be able to make
acquisitions.
In July 2001 we acquired Corporate Media Group, Inc. in an attempt to vertically
integrate our reproduction and duplication activities as they relate to our
audio book operation. The consideration for the acquisition consisted of 772,000
shares of our common stock that we issued to Richard and Susan Durand and other
key employees. Additionally, we issued 245,827 shares of our common stock,
valued at approximately $98,328 or $0.40 per share, to two creditors of
Corporate Media Group, Inc., in payment of existing debt. After we made this
acquisition, we raised $150,000 through the sale of our common stock in a
private placement, borrowed $385,000 from officers and directors and engaged in
two separate convertible debenture transactions that yielded $240,000. Over 80%
of these funds were contributed to Corporate Media Group, Inc. as working
capital to supplement the purchase of raw materials for ongoing orders and
payroll. We discontinued the operations of Corporate Media Group, Inc. in April
2002. This action was taken due to a lack of working capital, part of which was
to be generated by refinancing certain equipment belonging to Corporate Media
Group, Inc. The value of this equipment was insufficient to support an adequate
loan to value ratio for lending purposes. Furthermore, due to a decline in sales
that we believe was due partially as a result of a decline in quality control
and partially as a result of the terrorist attacks of September 11, 2001,
Corporate Media Group, Inc. was unable to support either increased debt service
or its general day-to-day operating expenses. As a result of its inability to
support its operations, Corporate Media Group, Inc., filed for protection under
the provisions of Chapter 7, Title 11 of the United States Bankruptcy Code on
August 2, 2003. The petition was dated-stamped August 5, 2003.
We currently have limited internal and external sources of liquidity. At this
time, aside from what we will spend on the production of audio masters, we have
made no material commitment for capital expenditures.
Other than the general decline in the economy of the United States, which
affects the discretionary spending of consumers, we do not know of any trends,
events or uncertainties that are expected to have a material impact on our net
sales and income from continuing operations. Sales of our books are not seasonal
in nature, although we may experience an increase in sales during the year-end
holidays.
7
RESULTS OF OPERATIONS.
Quarter Ended September 30, 2003 As Compared To The Quarter Ended September 30,
2002
Our revenues from operations for the quarter ended September 30, 2003 were
$279,728 as compared to revenues of $233,436 for the quarter ended September 30,
2002, an increase of 20%. The increase in revenues resulted from increased
sales. Sales increased as a result of our acquisition of the inventory of Sunset
Productions, Inc., which increased by approximately 200 the number of titles we
have available for sale, and the increased sales of our audio books that
resulted from the placement of our products in truck stops.
Our gross profit from operations for the quarter ended September 30, 2003
increased to $161,546 as compared to $151,065 for the quarter ended September
30, 2002. Our gross margin percent decreased to 58% for the quarter ended
September 30, 2003 from 65% for the quarter ended September 30, 2002. The
increase in gross profit from operations is attributable to our increased sales
while the decrease in gross margin percent is attributable to our decision to
sell older inventory at discounted prices. Discounting the prices of older,
slower selling items will be used from time to time in the future as needed.
Selling, general and administrative costs decreased by $1,527, to $108,679 for
the quarter ended September 30, 2003 as compared to $110,206 for the quarter
ended September 30, 2002, a 1% decrease. General and administrative expenses
consist primarily of salaries for executive, finance and other administrative
personnel, recruitment expenses, professional fees and other corporate expenses,
including business development.
Our loss from operations was $630,631 for the quarter ended September 30, 2003
as compared to a loss from operations of $285,060 for the quarter ended
September 30, 2002, an increase of $345,571 or 139%. The increase in net loss
from operations was primarily attributable to the issuance of 3,500,000 shares
of common stock to employees and directors and 5,075,968 shares of common stock
to consultants for services. In order to conserve cash, we pay our employees and
our consultants with common stock when feasible, therefore we expect to continue
to recognize this non-cash expense in the future.
Interest expense decreased for the quarter ended September 30, 2003 by $1,856 to
$19 as compared to $1,875 for the quarter ended September 30, 2002. Interest
expense decreased during the quarter ended September 30, 2003 because Corporate
Media Group, Inc. ceased payment of its obligations.
Nine Months Ended September 30, 2003 As Compared To The Nine Months Ended
September 30, 2002
Our revenues from operations for the nine month period ended September 30, 2003
were $924,198 as compared to revenues of $376,796 for the nine month period
ended September 30, 2002, an increase of 146%. Revenues increased during this
period as a result of the increase in the number of titles we have for sale and
from the sale of our audio books through our truck stop program.
Our gross profit from operations for the nine month period ended September 30,
2003 increased to $583,605 as compared to $277,044 for the nine month period
ended September 30, 2002. Our gross margin percent decreased to 63% for the nine
month period ended September 30, 2003 from 74% for the nine month period ended
September 30, 2002. The increase in gross profit from operations is attributable
to our increased sales while the decrease in gross margin percent is
attributable to the sale of our older inventory at discounted prices.
Selling, general and administrative costs increased by $416,678, to $836,813 for
the nine month period ended September 30, 2003 as compared to $420,135 for the
nine month period ended September 30, 2002, a 99% increase. General and
administrative expenses consist primarily of salaries for executive, financial
and other administrative personnel, recruitment expenses, professional fees and
other corporate expenses, including business development. This increase was
primarily the result of our use of common stock to pay consultants and employees
and an increase in our legal expenses. When we are able to do so, we use common
stock to pay consultants and employees in order to conserve cash. Our legal
expenses increased due to the cessation of operations of Corporate Media Group,
Inc. and our increased use of legal services to provide assistance with the
preparation of reports we are required to make to the Securities and Exchange
Commission.
Our loss from operations was $2,203,452 for the nine month period ended
September 30, 2003 as compared to a loss from operations of $1,404,034 for the
nine month period ended September 30, 2002, an increase of $799,418. The
increase in net loss from operations was primarily attributable to the issuance
of common stock to employees and consultants for services rendered. In order to
conserve cash, we pay our employees and our consultants with common stock when
feasible, therefore we expect to continue to recognize this non-cash expense in
the future.
Interest expense decreased for the nine month period ended September 30, 2003 by
$60,472 to $1,333 as compared to $61,805 for the nine month period ended
September 30, 2002. The reduction in interest expense during the nine month
period ended September 30, 2003 resulted from the default by Corporate Media
Group, Inc. on its obligations.
8
Liquidity
Our attainment of profitable operations is dependent upon our ability to fully
implement our business plan, which anticipates the expansion of our business
through the acquisition of other publishers and complementary businesses, such
as a printing business and a heat set web press business, obtaining adequate
financing when we need it and achieving a level of sales adequate to support our
operations. Our sales do not currently support our operations.
Thus far we have financed our operations primarily through various private
financings and from related party loans. During the next fiscal year, in order
to continue our business, we may have to raise additional capital through sales
of our debt or equity securities or from related party loans. We cannot
guarantee that we will be successful in raising additional capital
During 2002, we obtained an asset-based line of credit factoring agreement with
Langsam Borenstein Partnership. Pursuant to this agreement, we sell selected
accounts receivable to Langsam Borenstein Partnership in the face amount of no
less than $5,000 per month. Langsam Borenstein Partnership charges a varying
percentage rate of interest on each invoice sold, depending on the number of
days payment is outstanding. Interest may vary from 4% to 10%.
On April 1, 2002, we signed a securities purchase agreement with a number of
investors who agreed to purchase an aggregate of $480,000 in principal amount of
our 12% senior secured convertible debentures, which were to mature on April
2003. Together with such debentures, the investors were also issued Class A
warrants and Class B warrants. During 2003, we restructured this agreement.
Pursuant to the revised agreement, certain shares of common stock that had been
issued were returned to us. Advantage Fund LLC purchased the Class A Warrants
that had been issued in conjunction with the debentures and exercised them. As a
result of the exercise, we issued 22,142,847 shares of our
restricted common stock to Advantage Fund LLC. The Class B warrants that had
also been issued in conjunction with the 12% debentures were retired, by
agreement of the parties.
As of April 30, 2002, the date that its operations were closed, our subsidiary,
Corporate Media Group, Inc., had outstanding obligations of approximately
$3,600,000. These obligations included a $600,000 line of credit with Volunteer
National Bank and various capital lease agreements. The line of credit was
secured by all of Corporate Media Group, Inc.'s inventory, furniture, fixtures,
equipment and other assets and the capital leases were secured by the equipment
being leased. Corporate Media Group, Inc. defaulted on all of these obligations,
resulting in foreclosure actions by its creditors. Corporate Media Group, Inc.,
sought bankruptcy protection in August, 2003.
At September 30, 2003 we had cash or cash equivalents of $38,434 on hand, as
compared to $0 cash or cash equivalents at December 31, 2002. Our primary source
of cash during the nine month period ended September 30, 2003 consisted of
revenues from sales of our products.
Net cash provided by continuing operating activities was $149,553 for the nine
month period ended September 30, 2003 as compared to net cash used in operating
activities of $76,978 for the nine month period ended September 30, 2002. The
primary uses of cash for the nine month period ended September 30, 2003,
consisted of general operating costs, particularly compensation expense for
employees and consultants which totaled $2,258,962.
There was no cash used by discontinued operating activities during the nine
month period ended September 30, 2003, due to the cessation of operations of
Corporate Media Group, Inc. Cash used by discontinued operating activities
attributable to Corporate Media Group, Inc. for the nine month period ended
September 30, 2003 totaled $14,957.
Net cash used in investing activities consisted of $112,563 for property and
equipment consisting of studio time, talent and masters purchased during the
nine month period ended September 30, 2003. No cash was used in investing
activities during the nine month period ended September 30, 2002.
Net cash used by financing activities consisted of the payment of $48,556 in
notes for the nine month period ended September 30, 2003. 992,500 shares of
common stock were issued to retire these obligations.
During the nine month period ended September 30, 2003, we also paid $1,333 in
interest expense relating to notes.
GOING CONCERN
Our financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. During the years ended December 31, 2002 and
2001, we incurred losses of $2,615,118 and $5,775,333, respectively. In
addition, as of December 31, 2002, our total current liabilities exceeded our
total current assets by $2,793,597, and our shareholders' deficit was
$2,489,083. These factors, among others, raise substantial doubt about our
ability to continue as a going concern.
9
ITEM 3 - CONTROLS AND PROCEDURES
The Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's President and
Chief Executive Officer and the Company's Chief Financial Officer of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of the end of the period covered by this report. The
evaluation was undertaken in consultation with the Company's accounting
personnel. Based on that evaluation, the President and Chief Executive Officer
and the Chief Financial Officer concluded that the Company's disclosure controls
and procedures are effective to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission's rules and
forms.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of their evaluation.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
There have been no material changes in the legal proceedings reported in our
Form 10-KSB for the fiscal year ended December 31, 2002 and no new legal actions
have been filed by or against us during the three month period ended September
30, 2003, other than the filing under Chapter 7 of the United States Bankruptcy
Code by our subsidiary, Corporate Media Group, Inc.
Item 2. Changes in Securities
During the three month period ended September 30, 2003 we issued 14,164,718
shares of our restricted common stock to employees and consultants at an average
price of $0.12 per share for services rendered and in recognition of exceptional
performance. This offering was made pursuant to the exemption provided by
section 4(2) of the Securities Act of 1933.
On September 30, 2003 we sold 992,560 shares of our common stock for $50,000, or
approximately $0.05 per share, to two individual accredited investors, Mr. Greg
Suess and Mr. Benjamin Padnos. This offering was made pursuant to the exemption
provided by section 4(2) of the Securities Act of 1933.
Item 3. Defaults upon Senior Securities
In September, October and November 2001 our director, Jerome Ruther, loaned us
$100,000, $100,000 and $100,000, respectively. Each loan accrues interest at the
rate of 30% per year. Interest is to be paid monthly and principle is to be paid
one year from the date of the loan. This obligation is currently in default, as
no payments of principle or interest have been paid toward this obligation. To
date, no demand for payment or attempt to collect this obligation has been made
by Mr. Ruther. Payment of each of these obligations is secured with 500,000
shares of our common stock.
In December 2001 our Chief Financial Officer and director, Don White, loaned us
$10,000. The loan accrues interest at the rate of 30% per year. Interest is to
be paid monthly and principle is to be paid one year from the date of the loan.
This obligation is currently in default, as no payments of principle or interest
have been paid toward this obligation. To date, no demand for payment or attempt
to collect this obligation has been made by Mr. White. Payment of this
obligation is secured with 100,000 shares of our common stock.
Item 4. Submission of Matters to a Vote of Security Holders
N/A
Item 5. Other Information
N/A
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1(i) - Articles of Incorporation (1)
3.2(ii) - Bylaws (1)
31.1 - Certification Pursuant to Rule 13a-14(a) and 15d-14(a) (2)
31.2 - Certification Pursuant to Rule 13a-14(a) and 15d-14(a) (2)
32 - Certification Pursuant to Section 1350 of Title 18 of the United States Code (2)
- -------------------------------------------------------
(1) Incorporated by references from the Registrant's Form 10-SB filed with
the Securities and Exchange Commission on April 15, 1999.
(2) Filed herewith.
(b) Reports on Form 8-K
On August 15, 2003 a Current Report was filed disclosing that Corporate
Media Group, Inc. filed bankruptcy on August 2, 2003.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Americana Publishing, Inc.
(Registrant)
By: /s/ George Lovato, Jr.
-----------------------------------
Date: November 14,2003 George Lovato, Jr., CEO/Chairman
By: /s/ Don White
-----------------------------------
Don White, Chief Financial Officer
10
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14 AND 15d-14
OF THE SECURITIES EXCHANGE ACT OF 1934
I, George Lovato, Jr., President and Chief Executive Officer of Americana
Publishing, Inc. (the "Company"), certify that:
I have reviewed this quarterly report on Form 10-QSB of Americana
Publishing, Inc.
Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report.
Based on my knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of,
and for, the periods presented in the report.
The Company's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Company and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under my supervision, to
ensure that material information relating to the Company, including its
consolidated subsidiaries, is made known to me by others within those entities,
particularly during the period in which the periodic report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this quarterly report based on such evaluation; and
(c) disclosed in this quarterly report any change in the Company's internal
control over financial reporting that occurred during the Company's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting; and
The Company's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
Company's auditors and to the audit committee of the board of directors (or
persons fulfilling the equivalent function):
(i) all significant deficiencies in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and
report financial information; and
(ii) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's internal
control over financial reporting.
Dated: November 14, 2003
/s/George Lovato, Jr.
George Lovato, Jr.
President and Chief Executive Officer
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULES 13a-14 AND 15d-14
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Don White, Vice President and Chief Financial Officer of Americana
Publishing, Inc. (the "Company"), certify that:
I have reviewed this quarterly report on Form 10-QSB of Americana
Publishing, Inc.
Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report.
Based on my knowledge, the financial statements, and other financial
information included in the report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of,
and for, the periods presented in the report.
The Company's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Company and have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under my supervision, to
ensure that material information relating to the Company, including its
consolidated subsidiaries, is made known to me by others within those entities,
particularly during the period in which the periodic report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this quarterly report based on such evaluation; and
(c) disclosed in this quarterly report any change in the Company's internal
control over financial reporting that occurred during the Company's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting; and
The Company's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
Company's auditors and to the audit committee of the board of directors (or
persons fulfilling the equivalent function):
(i) all significant deficiencies in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and
report financial information; and
(ii) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's internal
control over financial reporting.
Dated: November 14, 2003
/s/Don White
Don White
Chief Financial Officer
Exhibit 32
CERTIFICATION OF OFFICERS
OF AMERICANA PUBLISHING, INC.
PURSUANT TO 18 USC § 1350
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and
(b) of Section 1350, Chapter 63 of Title 18, United States Code) each of the
undersigned officers of Americana Publishing, Inc. (the "Company") does hereby
certify, to such officer's knowledge, that:
The quarterly report on Form 10-QSB for the quarter ended September 30, 2003 of
the Company fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934 and the information contained in the Form
10-QSB fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Dated: November 14, 2003
/s/George Lovato, Jr.___________
George Lovato, Jr., President
and Chief Executive Officer
Dated November 14, 2003
/s/Don White_____________________
Don White,
Chief Financial Officer