-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/UMZHzxJtYz3WTsmsnvCP3dFEwwjq1J1vWbxMP9vxT0VZT9dXH/L/EcXv/VjQUz +G/O4+rVn1OsXnankSMH+Q== 0001011034-98-000102.txt : 19980821 0001011034-98-000102.hdr.sgml : 19980821 ACCESSION NUMBER: 0001011034-98-000102 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980819 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: REDWOOD BROADCASTING INC CENTRAL INDEX KEY: 0001004991 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 840928022 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 033-80321 FILM NUMBER: 98694693 BUSINESS ADDRESS: STREET 1: 7518 ELBOW BEND RD P O BOX 3463 STREET 2: BLDG A STE I CITY: CAREFREE STATE: AZ ZIP: 85377 BUSINESS PHONE: 6024882596 MAIL ADDRESS: STREET 1: 7518 ELBOW BEND RD P O BOX 3463 STREET 2: BLDG A STE I CITY: CAREFREE STATE: AZ ZIP: 85377 FORMER COMPANY: FORMER CONFORMED NAME: INTELLIGENT FINANCIAL HOLDING CORP DATE OF NAME CHANGE: 19951215 10QSB 1 10-QSB FOR 6/30/98 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 1998 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 33-80321 REDWOOD BROADCASTING, INC. ----------------------------------------------------- (Name of Small Business Issuer in Its Charter) Colorado 84-1295270 - ---------------------------- -------------------------- (State or Other Jurisdiction (I.R.S. Employer of Incorporation) Identification No.) 7518 Elbow Bend Road, P.O. Box 3463, Carefree, AZ 85377 ------------------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) Issuer's telephone number, including area code: (602) 488-2596 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK, $.004 PAR VALUE (Title of Class) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]. The number of shares of the registrant's .004 par value Common Stock outstanding as of June 30, 1998 was 1,410,000. INDEX PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Consolidated Balance Sheet as of June 30, 1998 . . . . . . . . 3 Consolidated Statements of Operations for the Three months ended June 30, 1998 and 1997 . . . . . . . . . . 4 Consolidated Statements of Cash Flows for the Three months ended June 30, 1998 and 1997 . . . . . . . . . . 5 Notes to the Consolidated Financial Statements . . . . . . . . 6 Item 2. Management's Discussion and Analysis or Plan of Operation . . . . . . . . . . . . . . . . . . . . . . 7 PART II. OTHER INFORMATION Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 8 Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . 8 Item 3. Defaults Under Senior Securities . . . . . . . . . . . . . . . 8 Item 4. Submission of Matters to a Vote of Security Holders . . . . . 8 Item 5. Other Matters . . . . . . . . . . . . . . . . . . . . . . . . 8 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 8 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 9 REDWOOD BROADCASTING, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
June 30, 1998 (unaudited) ------------- ASSETS CURRENT ASSETS Cash $ 188,801 Accounts receivable, net 72,153 Receivable from related parties 321,893 Notes receivable 141,500 Other current assets 43,736 ------------- Total current assets 768,083 PROPERTY AND EQUIPMENT, net 14,535 INTANGIBLE ASSETS, net 99,166 INVESTMENTS 1,000,000 OTHER ASSETS 203,427 ------------- TOTAL $ 2,085,211 ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 44,756 Payables to related parties 3,290 Current portion of notes payable 62,063 Other current liabilities 12,235 ------------- Total current liabilities 122,344 Total liabilities 122,344 ------------- STOCKHOLDERS' EQUITY Preferred stock, par value $.04; 2,500,000 shares authorized; none issued and outstanding Common stock, par value $.004; 12,500,000 shares authorized; 1,410,000 shares issued and outstanding 5,640 Additional paid-in capital 1,453,506 Retained earnings 548,721 Note receivable from stockholder (45,000) ------------- Total stockholders' equity 1,962,867 ------------- TOTAL $ 2,085,211 =============
See notes to consolidated financial statements. REDWOOD BROADCASTING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Three Months Ended Ended June 30, 1998 June 30, 1997 ------------- ------------- (unaudited) (unaudited) REVENUE Broadcast revenue $ 25,316 $ 373,317 Less agency commissions 1,162 33,399 ------------- ------------- Net revenue 24,154 339,918 ------------- ------------- OPERATING EXPENSE General and administrative 21,645 120,026 Station operating expenses 46,968 191,302 Depreciation and amortization 27,731 28,460 ------------- ------------- Total 96,344 339,788 ------------- ------------- INCOME/(LOSS) FROM OPERATIONS (72,190) 130 ------------- ------------- OTHER INCOME (EXPENSE) Interest expense 7,798 10,960 Other income 6,889 42,751 Gain on sale of assets 83,761 -- Gain on sale of radio stations 1,237,876 -- ------------- ------------- Total other - net 1,320,728 31,791 ------------- ------------- NET INCOME 1,248,538 31,921 ------------- ------------- NET INCOME PER COMMON SHARE $ 0.89 $ 0.03 ============= ============= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 1,410,000 934,523 ============= =============
See notes to consolidated financial statements. REDWOOD BROADCASTING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Three Months Ended Ended June 30, 1998 June 30, 1997 ------------- ------------- (unaudited) (unaudited) OPERATING ACTIVITIES Net Income $ 1,248,538 $ 31,921 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 27,731 28,460 Changes in operating assets and liabilities: Accounts receivable (24,129) (70,506) Accounts receivable - affiliates (188,054) -- Other current assets (123,477) (2,452) Accounts payable and accrued expenses (143,130) (43,810) Accounts payable - affiliates (149,515) -- Other assets (5,079) (66,038) ------------- ------------- Net cash provided by(used in) operating activities 642,885 (122,425) ------------- ------------- INVESTING ACTIVITIES Purchase of radio station assets (100,000) (26,299) Sale of radio station assets 1,074,533 -- ------------- ------------- Net cash provided by (used in) investing activities 974,533 (26,299) ------------- ------------- FINANCING ACTIVITIES Proceeds from borrowings under related party notes -- 45,030 Proceeds from borrowings under notes -- 25,000 Principal payments on notes (694,312) (39,550) Increase in net payable to related parties -- 50,883 Preferred stock redemption (790,000) -- Payments on capital lease obligations -- (3,819) Proceeds from issuance of common stock -- 50,000 ------------- ------------- Net cash provided by (used in) financing activities (1,484,312) 127,544 ------------- ------------- NET INCREASE (DECREASE) IN CASH 133,106 (21,180) CASH, Beginning of period 55,695 40,791 ------------- ------------- CASH, End of period $ 188,801 $ 19,611 ============= ============= SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest $ 7,798 $ 10,960
See notes to consolidated financial statements. REDWOOD BROADCASTING, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. General ------- The consolidated financial statements for the three months ended June 30, 1998 and 1997 are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management's discussion and analysis of financial condition and results of operations, contained in the Company's annual report on Form 10-KSB for the fiscal year ended March 31, 1998. Results of operations for interim periods are not necessarily indicative of results which may be expected for the year as a whole. 2. Disposition of Assets --------------------- During April, 1998, the Company received $90,000 for 497 of its 1,000 shares of Channel 31, Inc., a company founded to acquire a construction permit to build a television station in Pocatello, Idaho. The Company has also granted an option to the acquirer of these shares to purchase the Company's remaining 503 shares of $10,000. The Company recorded a gain of $83,761 associated with this transaction. The gain was net of certain deferred acquisition costs for filing and prosecuting the construction permit application coupled with legal and engineering fees. On October 10, 1997, the Company's wholly-owned subsidiary, Alta California Broadcasting, Inc. ("Alta") entered into an Agreement of Merger (the "Merger") with Regent Communications ("Regent") whereby Alta would be merged into a wholly-owned subsidiary of Regent formed for purposes of completing the Merger. Simultaneously with the companies entering into the Merger, Alta entered into a Time Brokerage Agreement (TBA) with Regent whereby Regent would operate Alta's radio stations being merged during the period leading up to the date of closing of the Merger. Alta was the owner, operator and licensee of radio station KRDG-FM, Shingletown, California. Alta, through its wholly-owned subsidiary Northern California Broadcasting, Inc ("Northern"), operated KNNN-FM, Central Valley, California. Alta also held an option to purchase, prior to the closing date of the Merger, all of the tangible and intangible assets used held by Power Surge, Inc. for use in the operation of KRRX-FM, Burney, California and KNRO-AM, Redding, California. Alta had been operating these two stations under a TBA since March 1997. On June 15, 1998, Alta exercised its option with Power Surge, Inc. and acquired radio stations KRRX-FM and KNRO_AM. Simultaneously with this transaction, Alta sold radio stations KRDG-FM, KNNN-FM, KNRO-AM and KRRX-FM to Regent and received $950,000 in cash and 200,000 shares of Regent's Series B preferred stock. Regent also assumed approximately $1,500,000 of the Company's liabilities. Item 2. Management's Discussion and Analysis or Plan of Operation Overview - -------- The following is a discussion of the consolidated financial condition and results of operations of the Company as of and for the two fiscal periods ended June 30, 1998 and 1997. This discussion should be read in conjunction with the Consolidated Financial Statements of the Company and the Notes related thereto included in the Company's Form 10-KSB for the fiscal year ended March 31, 1998. The forward-looking statements included in Management's Discussion and Analysis of Financial Condition and Results of Operations, which reflect management's best judgement based on factors currently known, involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including but not limited to those discussed herein. Introduction - ------------ On October 10, 1997, the Company's wholly-owned subsidiary, Alta California Broadcasting, Inc. ("Alta") entered into an Agreement of Merger (the "Merger") with Regent Communications ("Regent") whereby Alta would be merged into a wholly-owned subsidiary of Regent formed for purposes of completing the Merger. Simultaneously with the companies entering into the Merger, Alta entered into a Time Brokerage Agreement (TBA) with Regent whereby Regent would operate Alta's radio stations being merged during the period leading up to the date of closing of the Merger. Alta was the owner, operator and licensee of radio station KRDG-FM, Shingletown, California. Alta, through its wholly-owned subsidiary Northern California Broadcasting, Inc ("Northern"), operated KNNN-FM, Central Valley, California. Alta also held an option to purchase, prior to the closing date of the Merger, all of the tangible and intangible assets used held by Power Surge, Inc. for use in the operation of KRRX-FM, Burney, California and KNRO-AM, Redding, California. Alta had been operating these two stations under a TBA since March 1997. On June 15, 1998, Alta exercised its option with Power Surge, Inc. and acquired radio stations KRRX-FM and KNRO-AM. Simultaneously with this transaction, Alta sold radio stations KRDG-FM, KNNN-FM, KNRO-AM and KRRX-FM to Regent and received $950,000 in cash and 200,000 shares of Regent's Series B preferred stock. Regent also assumed approximately $1,500,000 of the Company's liabilities. Liquidity and Capital Resources - June 30, 1998 compared to March 31, 1998 - -------------------------------------------------------------------------- At June 30, 1998 the Company had total assets of $2,085,211 representing a decrease in total assets of $528,419 over total assets at March 31, 1998. Total liabilities decreased significantly from $1,109,301 at March 31, 1998 to $122,344 at June 30, 1998. Total stockholders equity increased $1,248,538 to $1,962,867 at June 30, 1998. Total current assets at June 30, 1998 were $768,083 and consisted of cash of $188,801, net accounts receivable of $72,153, receivables from related parties of $321,893, notes receivable of $141,500 and other current assets of $43,736. Total current liabilities at June 30, 1998 were $122,344 comprised of vendor accounts payable and accrued expenses of $44,756, payables to related parties $3,290, the current portion of notes payable to third parties of $62,063 and other current liabilities of $12,235. Working capital at June 30, 1998 was $645,739 compared to a working capital deficiency at March 31, 1998 of $316,613. This represents an improvement in the Company's working capital position of $962,352. At June 30, 1998 the Company reported total assets of $2,085,211 including property and equipment of $14,535, net intangibles (radio broadcast licenses and non-compete agreements net of related accumulated amortization) of $99,166 attributable to radio station KLXR-AM acquired by the Company in April, 1998, other assets of $203,427 and investments in preferred stock of $1,000,000 attributable to the Company's sale, in June, of a group of four radio stations located in Redding, California to Regent Communications, Inc. Total liabilities at June 30, 1998 are comprised entirely of the current liabilities described above. At June 30, 1998 the Company reported stockholders equity of $1,962,867. This represents an increase of $1,248,538 over March 31, 1998 stockholders equity of $714,329. The increase in stockholders equity is attributable to the earnings posted for the period which was comprised primarily of the gain on sale of the Company's four radio stations located in Redding, California of $1,237,876. Results of Operations - Three Months Ended June 30, 1998 compared to the Three Months Ended June 30, 1997 - --------------------------------------------------------------------------- Net revenues for the three months ended June 30, 1998 were $24,154 compared to net revenues of $339,918 for the same period a year ago. The decrease in revenue for the quarter is attributed to the TBA that Alta entered into with Regent on October 10, 1997. From that date until the closing on June 15, 1998 the Company's advertising revenue inured to the benefit of Regent pursuant to the terms of the TBA. In the prior year comparable period, the Company operated four radio stations providing advertising revenues during the entire quarter. Operating expenses for the three months ended June 30, 1998 were $96,344 comprised of station operating expenses of $46,968, general and administrative expenses of $21,645 and depreciation and amortization of $27,731. Operating expenses for the three month period ended June 30, 1997 were $339,788 comprised of station operating expenses of $191,302, general and administrative expenses of $120,026 and depreciation and amortization of $28,460. The Company recorded other income of $1,237,876 for the three months ended June 30, 1998 compared to other income of $31,791 for the same period a year ago. Other income for the current period was comprised of net interest expense (interest expense offset by interest income) of $7,798 for the quarter ended June 30, 1998 comprised primarily of interest associated with short term notes payable. Offsetting the net interest expense was income associated with a gain on the sale of a portion of the Company's interest in Channel 31, Inc., a company founded to acquire a construction permit to build a television station in Pocatello, Idaho. The Company sold 497 of its 1,000 shares of Channel 31, Inc. for $90,000. The resultant gain is net of deferred acquisition costs associated with filing and prosecuting the construction permit application coupled with legal and engineering fees. Also during the quarter, the Company recorded a gain on the sale of a group of four radio stations in Redding, California of $1,237,876. The Company completed the sale of these stations to Regent Communications on June 15, 1998. As a result of the foregoing, the Company posted net income of $1,248,538 for the three months ended June 30, 1998 or $0.89 per share compared to net income of $31,921 or $0.03 per share for the three months ended June 30, 1997. PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibit No. Exhibit Name 27 Financial Data Schedule (b) None SIGNATURES In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ John C. Power President, Chief Executive 8/19/98 - ---------------------- Officer, Chairman of the ---------- JOHN C. POWER Board of Directors /s/ J. Andrew Moorer Chief Financial Officer 8/19/98 - ---------------------- and Director ---------- J. ANDREW MOORER EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON PAGES 3 AND 4 OF THE COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS MAR-31-1998 JUN-30-1998 188,801 0 72,153 0 0 768,083 14,535 1,068 2,085,211 122,344 0 0 0 5,640 1,453,506 2,085,211 25,316 25,316 1,162 96,344 0 0 7,798 1,248,538 0 1,248,538 0 0 0 1,248,538 0.89 0.89
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