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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
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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
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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.
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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
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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.
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(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