Usaradio Com 10QSB/A 2000 Q1 Quarterly report (small business) (amended)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-QSB/A

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2000

OR

[  ] TRANSITION REPORT UNDER SECTON 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-27053

USARadio.com, Inc.
(Exact name of small business issuer as specified in its charter)

COLORADO	84-1493151
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2290 Springlake Road, Suite 107, Dallas, Texas	75234
(Address of principal executive offices)	(Zip Code)

Issuer's telephone number:      972.484.3900

Former name, former address and former fiscal year, if changed since last report:  N/A

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     [  ]

At April 30, 2000, 13,516,720 shares of common stock were outstanding.

Transitional Small Business Disclosure Format (Check one): Yes     [  ] No     [X]

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PART I.

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

USARadio.com, Inc.

Balance Sheets as of March 31, 2000 (unaudited) and December 31, 1999	2
Unaudited Statements of Operations for the Three Months Ended March 31, 2000 and 1999	3
Unaudited Statements of Cash Flows for the Three Months Ended March 31, 2000 and 1999	4
Notes to Financial Statements	5

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USARadio.com, Inc.
BALANCE SHEETS

ASSETS
			March 31, 2000 (Restated) - ---------------	December 31, 1999 (Restated) - -----------------
CURRENT ASSETS			(unaudited)
	Cash		$   33,638	$    9,225
	Accounts receivable, net of allowance for    doubtful accounts of $11,909 in 1999 and 2000		459,786	611,598
		Prepaid expenses	40,939	45,639
		Total current assets	534,363	666,462
PROPERTY AND EQUIPMENT - AT COST
	Equipment		572,237	570,699
	Furniture and fixtures		18,952	18,952
	Software		23,906	23,906
			615,095	613,557
	Less accumulated depreciation		(448,165)	(434,826)
			166,930	178,731
			$701,293      =======	$ 845,193      =======
LIABILITIES AND STOCKHOLDERS' DEFICIT
			March 31, 2000 (Restated) - ---------------	December 31, 1999 (Restated) - ------------------
CURRENT LIABILITIES
	Current maturities of long-term debt		$   25,569	$  34,461
	Notes payable-bank		125,000	125,000
	Accounts payable and accrued liabilities		604,568	695,477
		Total current liabilities	755,137	854,938
LONG-TERM DEBT, net of current maturities			136,096	139,651
STOCKHOLDERS' EQUITY (DEFICIT)
	Common stock		2,673	2,673
	Additional paid-in capital		211,327	211,327
	Accumulated deficit		(403,940)	(363,396)
			(189,940)	(149,396)
			$ 701,293      =======	$ 845,193      =======

See accompanying notes.

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USARadio.com, Inc.
STATEMENTS OF OPERATIONS
Three months ended March 31,
(unaudited)

				2000 (Restated) - ------------------	1999 (Restated) - ------------------
NET SALES				$   872,190	$    832,400
OPERATING EXPENSES
	Sales expenses			212,370	220,379
	Programming and news service			267,204	321,461
	Administrative and engineering			402,689	432,844
	Depreciation			15,135	16,072
				897,398	990,756
		Operating loss		(25,208)	(158,356)
OTHER EXPENSE
	Interest expense			(15,336)	(13,232)
				(15,336)	(13,232)
			Loss before income taxes	(40,544)	(171,588)
INCOME TAX
	Income tax benefit			--	20,179
				--	20,179
			Net loss	$   (40,544)       ========	$   (151,409)     =========
LOSS PER COMMON SHARE - BASIC AND DILUTED				Nil        ========	$         0.01      =========
WEIGHTED AVERAGE SHARES OUTSTANDING				13,516,720        ========	13,516,720      =========

See accompanying notes.

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USARadio.com, Inc.
STATEMENTS OF CASH FLOWS
Three months ended March 31,
(unaudited)

				2000 (Restated) - ---------------	1999 (Restated) - ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss			$   (40,544)	$(151,409)
	Adjustments to reconcile net loss to net cash   provided by (used in) operating activities    Depreciation and amortization			15,135	16,072
		Provision for deferred income taxes		--	(20,179)
	Decrease in:
		Accounts receivable		151,812	62,676
		Prepaid expenses		4,700	3,344
	Increase (decrease) in:
		Accounts payable and accrued liabilities		(90,909)	62,509
		NET CASH PROVIDED BY (USED IN)    OPERATING ACTIVITIES		40,194	(26,987)
CASH FLOWS FROM INVESTING ACTIVITIES
	Purchases of property and equipment			(3,334)	(2,967)
		NET CASH USED IN INVESTING ACTIVITIES		(3,334)	(2,967)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from notes			--	88,000
	Payments on notes			(12,447)	(61,520)
		NET CASH PROVIDED BY (USED IN)    FINANCING ACTIVITIES		(12,447)	26,480
			NET INCREASE (DECREASE) IN CASH	24,413	(3,474)
CASH - BEGINNING OF PERIOD				9,225	30,226
CASH - END OF PERIOD				$  33,638       =======	$  26,752   ��  =======

See accompanying notes.

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USARadio.com, Inc.
NOTES TO FINANCIAL STATEMENTS
March 31, 2000

1.	Basis of presentation
	The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item  310 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 1999.
2.	Restatement
	The accompanying financial statements have been restated to reflect the proper matching of selling expenses with the related revenue. This restatement resulted in an increase in stockholders' deficit of $46,900 and $64,200 at March 31, 2000 and December 31, 1999, respectively, and had the following effect on operations:

	Three months ended March 31, - ---------------------------------
	2000 - ----------------	1999 - ---------------
Net loss as previously reported	$ (57,844)	$(154,609)
Adjustment	17,300	3,200
Net loss as restated	$ (40,544)    =======	$(151,409)   =======

The restatement had no effect on previously reported loss per share.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     Except for the historical information contained herein, the matters discussed below contain forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The company expressly disclaims any obligation to update this information or publicly release any revision or reflect events or circumstances after the date of this report. Such factors include among others: our ability to obtain additional capital to implement our business plan; our history of losses and negative cash flow; our dependence on the continued demand for radio airtime; our potential inability to manage our airtime inventory; our dependence on the continued popularity of our programs, particularly "Point of View;" the need to maintain and expand our affiliate base; business conditions in the radio industry generally; the impact of market competitors; and such other factors as are more fully described in our Form 10-KSB for the year ended December 31, 1999.

The Company

     USARadio.com, Inc. (also known as USA Radio Network) is a Colorado corporation with principal executive offices located at 2290 Springlake Road, Suite 107, Dallas, Texas 75234. The company's telephone number is 972.484.3900.

     The company will hold its Annual Meeting of Shareholders on May 26, 2000 at the company's principal executive offices. At the meeting, the shareholders of the company will:

*	elect two directors to serve until the 2001 Annual Meeting of Shareholders and until their respective successors shall be elected and qualified; and
*	consider and potentially approve the merger of the company into a wholly-owned subsidiary organized under the laws of the State of Delaware in order to effect the change of the company's state of incorporation from Colorado to Delaware.

An Information Statement, together with the company's Annual Report for the year ended December 31, 1999, were sent to each of the company's stockholders of record as of March 31, 2000 on May 9, 2000 describing in detail both of these proposals.

Overview

     USARadio.com, Inc. is a satellite-delivered radio broadcast network that offers a broad line of programming content to independent radio stations. Our programming includes news, sports, music, and general interest talk programs. Our target market consists of independent radio stations, both AM and FM, that choose not to become affiliated with the 3 major radio networks (ABC Radio, NBC, and CBS Radio Networks). As of May 15, 2000, our network was comprised of approximately 1,200 affiliated radio stations across the nation, including affiliates in 49 of the top 50 Dominant Market Areas (DMAs). Our network includes affiliates in markets that represent approximately 95% of the U.S. population. We simultaneously broadcast select programming over the Internet.

     We do not derive revenues from the sale of our programs to affiliate stations. Instead, we barter with our affiliated radio stations for commercial airtime which is exchanged for our programming content. This commercial airtime is then resold to advertisers with whom we have relationships. We derive additional revenue, although to a much lesser extent, from the sale of our programming to non-commercial radio stations and the rental of time on our channels. We price our advertising time based on a variety of factors including the time of day the advertisement will air, the size of the potential listening audience, the length of the ad and the number of times the advertisement will run. Our revenues are recognized in the accounting period which corresponds with the broadcast of the advertisement. Amounts received in advance of a broadcast are recorded as deferred revenue until the broadcast is aired. Our advertisers and advertising agencies are generally billed monthly.

For the quarter ended March 31, 2000, the following percentage of our revenues were derived from the following sources:

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Revenue Source - -----------------------------------------------------------	% of Revenues During Quarter Ended March 31, 2000 - -----------------------------
News and sports programming	63%
Talk programming	25%
Satellite time	5%
Other revenue	7% - ----------------------------
TOTAL	100%   =================

     Other revenue is derived from a fee charged to non-commercial radio stations unable to air commercial advertising and a fee charged for syndicating services of select network programming.

     Our expenses are comprised of:

*	sales expenses, which consists primarily of compensation and related expenses for our sales and marketing group, together with commission expense, including commissions payable to sales staff;
*	programming costs, which consists primarily of compensation and related expenses for "on air" personalities, production staff and related personnel as well as the actual costs associated with developing programming content;
*	news services, which consists primarily of the variable costs of independent reporters and operational expenses including subscription fees to news services and satellite time;
*	administrative and engineering, which consists primarily of compensation and related expenses for our administrative, accounting and engineering staff, occupancy costs and legal and consulting fees; and
*	depreciation.

     Revenues. Our revenues increased by approximately 5% to $872,000 for the three months ended March 31, 2000 from $832,000 for the three months ended March 31, 1999. This increase in revenue was primarily related to an increase in the rate at which we sell our commercial airtime. This increase took effect in the third quarter of 1999. In addition, revenues were positively affected by a slight increase in our available inventory of commercial spots which occurred as a result of additional programming added in February 2000.

     Operating Expenses. Overall operating expenses decreased by approximately $94,000, or 9%, to approximately $897,000 for the three months ended March 31, 2000 from approximately $991,000 for the first three months of 1999. Approximately $54,000 of this decrease resulted from reduced programming and news service expense stemming from the elimination of one talk-style program. In addition, we experienced a decrease in administrative and engineering expense of approximately $30,000 from a reduction in compensation and related expense associated with redundant employees. The decrease in overall operating expenses was also attributed to a modest decrease (approximately $8,000 or 4%) in sales expenses to approximately $212,000 from $220,000 in the three months ended March 31, 2000 and 1999, respectively.

     Income Tax Benefit. No income tax benefit was recorded for the three months ended March 31, 2000, because, at that date, realization of deferred tax assets is dependent on future taxable income which is uncertain.

     Net Loss. For the three months ended March 31, 2000, our net loss was approximately $41,000 compared with a net loss of approximately $151,000 for the three months ended March 31, 1999.

Liquidity and Capital Resources

     Since inception, we have financed our operations principally from operations. Such funds have historically been supplemented with bank debt and stockholder loans. At March 31, 2000, we had a working capital deficit of approximately $221,000 as compared with a working capital deficit of $188,000 at December 31, 1999. Net cash provided by operating activities for the quarter ended March 31, 2000 was $40,000 and net cash used in operating activities for the like period of 1999 was $27,000 representing an increase of $67,000 in the 2000 period. The increase was due principally to the reduced net loss and reductions in accounts receivables, offset in part by reductions in accounts payable.

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     As of March 31, 2000, certain of our vendors had granted extended payment terms to us relating to an aggregate of approximately $240,000 in payables. At December 31, 1999, we owed approximately $250,000 under extended payment terms. Although we expect that we will be able to remain current with each of these vendors, including with respect to those portions for which we have been granted extended payment terms, no assurances can be made that we will be able to fulfill our obligations under these terms. Failure to repay our obligations to these vendors according to the arranged terms could have a material adverse effect on our business, prospects, financial condition or results of operations. Management expects to be fully current with all of its accounts payable by December 31, 2000.

     During the year ended December 31, 1999, Marlin Maddoux, our Chief Executive Officer and President, advanced $80,000 to us. At December 31, 1999, the outstanding amount of this advance was $76,877. This advance bears interest at 10% per annum with a maturity date of September 1, 2004. These funds were used by us to acquire certain equipment and technology necessary in connection with the upgrade of our command and control center. Specifically, this equipment upgraded our satellite transmission technology from analog to digital.

     Mr. Marlin Maddoux also has advanced a total of $76,057 to us as of December 31, 1999. This advance bears interest at 12% per annum, with a maturity date of June 1, 2001. These funds were used by us for operating and advertising expenses.

     We maintain a note payable to Bank of America which, at March 31, 2000, represented a debt of $22,000. The proceeds from this note were used to develop new talk programming. This note bears interest at the rate of 10% per annum and matures in September 2000. We have secured repayment of this note by substantially all of our assets. Further, Marlin Maddoux has personally guaranteed this note on our behalf, although we did not provide Mr. Maddoux a guarantee fee for doing so.

     We also maintain a credit facility with Bank of America. This credit line is payable upon demand and borrowings are limited to $100,000. Borrowings under this facility bear interest at prime plus 1%, which was 9.75% at March 31, 2000. At March 31, 2000, our outstanding debt under the credit facility was approximately $88,000. The borrowings under this credit facility are collateralized by our assets. We intend to pursue increasing our line of credit with Bank of America during the year 2000.

     In addition to the line of credit referenced above, we also maintain an additional bank line with Bank of America. Borrowings under this bank line are limited to $40,000 and bear interest at prime plus 3.625% (which was approximately 11.125% at March 31, 2000). Borrowings under this bank line are also payable on demand. At March 31, 2000, our outstanding debt under this facility was approximately $37,000.

     Management believes that its available cash, together with operating revenues and other available funds, will be adequate to meet its operating requirements for the immediate term.

     During 2000, we intend to seek additional financing through the issuance of debt, equity, other securities or a contribution thereof. Although there can be no assurances that any additional capital will be raised, any such financing which involves the issuance of equity securities would result in dilution to existing stockholders and the issuance of debt securities would subject us to the risks associated therewith, including the risks that interest rates may fluctuate and our cash flows may be insufficient to pay interest and principal on such indebtedness. There can be no assurances that we will be able to obtain additional financing on terms which are acceptable to us. Our inability to obtain additional acceptable financing could have a significant negative impact on our operations or growth plans.

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PART II.
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     We are not a party to, nor are our properties the subject of, any pending legal proceedings and no such proceedings are known to us to be threatened or contemplated against us.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

                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)	Exhibits
	27.1	Financial Data Schedule
(b)	Reports on form 8-K
	None

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SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on December 19, 2000.

USARadio.com, Inc.

By:    /s/ Mark R. Maddoux                
    Mark R. Maddoux
    Vice President and Chief Financial Officer

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