Usaradio Com 10QSB/A 2000 Q2 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 June 30, 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)

DELAWARE	52-2234827
(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 August 10, 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 June 30, 2000 (unaudited) and December 31, 1999	2
Unaudited Statements of Operations for the Three Months Ended June 30, 2000 and 1999	3
Unaudited Statements of Operations for the Six Months Ended June 30, 2000 and 1999	4
Unaudited Statements of Cash Flows for the Six Months Ended June 30, 2000 and 1999	5
Notes to Financial Statements	6

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USARadio.com, Inc.
BALANCE SHEETS

ASSETS

			June 30,	December 31,
			2000	1999
CURRENT ASSETS			(Restated)	(Restated)
			(unaudited)
	Cash		$ 34,283	$    9,225
	Accounts receivable, net of allowance for   doubtful accounts of $5,475 and   $11,909 in 2000 and 1999		558,593	611,598
	Prepaid expenses		34,900	45,639
		Total current assets	627,776	666,462
PROPERTY AND EQUIPMENT-AT COST
	Equipment		619,956	570,699
	Furniture and fixtures		18,952	18,952
	Software		23,906	23,906
			662,814	613,557
	Less accumulated depreciation		(464,891)	(434,826)
			197,923	178,731
			$  825,699     ========	$ 845,193     =======
			June 30,	December 31,
			2000	1999
			(Restated)	(Restated)
CURRENT LIABILITIES
Current maturities of long-term debt			$ 20,645	$   34,461
Notes payable-bank			125,000	125,000
Accounts payable and accrued liabilities			733,197	695,477
		Total current liabilities
			878,842	854,938
LONG-TERM DEBT, net of current maturities			190,995	139,651
STOCKHOLDERS' DEFICIT
Common stock			2,673	2,673
Additional paid-in capital			211,327	211,327
Retained earnings (accumulated deficit)			(458,138)	(363,396)
		Total stockholders' deficit	(244,138)	(149,396)
			$  825,699     ========	$  845,193     ========

See accompanying notes.

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USARadio.com, Inc.
STATEMENTS OF OPERATIONS
Three months ended June 30,
(unaudited)

			2000	1999
			(Restated)	(Restated)
NET SALES			$ 1,035,676	$  933,756
OPERATING EXPENSES
	Sales expenses		244,700	225,967
	Programming and news service		324,845	347,867
	Administrative and engineering		499,404	418,636
	Depreciation		16,726	16,072
			1,085,675	1,008,542
		Operating loss	(49,999)	(74,786)
OTHER EXPENSE
	Interest expense		(4,199)	(13,243)
		Loss before income taxes	(54,198)	(88,029)
INCOME TAX
	Income tax benefit		-	10,359
		Net loss	$   (54,198)  =========	$  (77,670)  ========
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 OPERATIONS
Six months ended June 30,
(unaudited)

				2000	1999
				(Restated)	(Restated)
NET SALES				$1,907,866	$1,766,156
OPERATING EXPENSES
		Sales expenses		457,070	446,346
		Programming and news service		592,049	669,328
		Administrative and engineering		902,093	851,480
		Depreciation		31,861	32,144
				1,983,073	1,999,298
			Operating loss	(75,207)	(233,142)
OTHER EXPENSE
		Interest expense		(19,535)	(26,475)
			Loss before income taxes	(94,742)	(259,617)
INCOME TAX
	Income tax benefit			-	30,538
			Net loss	$   (94,742)  ========	$  (229,079)  =========
LOSS PER COMMON SHARE-BASIC AND DILUTED				$      (0.01)  ========	$      (0.02)  ========
WEIGHTED AVERAGE SHARES OUTSTANDING				13,516,720   ========	13,516,720   ========��

See accompanying notes.

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USARadio.com, Inc.
STATEMENTS OF CASH FLOWS
Six months ended June 30,
(unaudited)

				2000	1999
				(Restated)	(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss			$ (94,742)	$ (229,079)
	Adjustments to reconcile net loss to net
	cash provided by operating activities
		Depreciation and amortization		31,861	32,144
		Provision for deferred income taxes		-	(30,538)
	Decrease in:
		Accounts receivable		53,005	58,980
		Prepaid expenses		10,739	3,783
	Increase in:
		Accounts payable and accrued liabilities		37,720	254,052
			NET CASH PROVIDED BY
			OPERATING ACTIVITIES	38,583	89,342
CASH FLOWS FROM INVESTING ACTIVITIES
	Purchases of property and equipment			(3,334)	(87,262)
			NET CASH REQUIRED BY
			INVESTING ACTIVITIES	(3,334)	(87,262)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from notes			15,000	125,000
	Payments on notes			(25,191)	108,038
			NET CASH PROVIDED (REQUIRED) BY
			FINANCING ACTIVITIES	(10,191)	16,962
			NET INCREASE IN CASH	25,058	19,042
CASH-BEGINNING OF PERIOD				9,225	30,226
CASH-END OF PERIOD				$  34,283    ========	$    49,268  ========

See accompanying notes.

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USARadio.com, Inc.
NOTES TO FINANCIAL STATEMENTS
June 30, 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 six months ended June 30, 2000 are not necessarily indicative of the results that might 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 $57,200 and $64,200 at June 30, 2000 and December 31, 1999, respectively, and had the following effect on operations:

	Three months ended June 30, - ---------------------------------------		Six months ended June 30, - --------------------------------------
	2000 - -----------------	1999 - -----------------	2000 - -----------------	1999 - -----------------
Net loss as previously reported.......	$  (43,898)	$ (79,370)	$ (101,742)	$ (233,979)
Adjustment......................................	(10,300)	1,700	7,000	4,900
Net loss as restated...........................	$  (54,198)    ========	$  (77,670)    ========	$   (94,742)    ========	$  (229,079)   ========

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 Delaware corporation with principal executive offices located at 2290 Springlake Road, Suite 107, Dallas, Texas 75234. The company's telephone number is 972.484.3900.

       We held our Annual Meeting of Shareholders on May 26, 2000. At this meeting, the stockholders approved both the election of Robert Marlin Maddoux and Mark R. Maddoux as directors to serve a one-year term ending with the 2001 Annual Meeting of Stockholders, and the redomestication of the Company under the laws of the State of 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 the election of directors and the proposed merger to be submitted to a vote of the stockholders. A Current Report on Form 8-K was filed on June 14, 2000 describing in detail the merger and change of the Company's state of incorporation.

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 August 10, 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.

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       For the three months and six months ended June 30, 2000, respectively, the following percentage of our revenues were derived from the following sources:

Revenue Source - ----------------------------------------------------------	% of Revenues During Three-Months Ended June 30, 2000 - --------------------------------	% of Revenue During Six Months Ended June 30, 2000 - -----------------------------------
News and sports programming........................	65%	64%
Talk programming...........................................	23%	24%
Satellite time....................................................	5%	5%
Other revenue..................................................	7% - -----------------------------	7% - --------------------------------
TOTAL....................................................	100% =================	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.

Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999

       Revenues. Our revenues increased by approximately 10% to approximately $1,036,000 for the three months ended June 30, 2000 from approximately $934,000 for the three months ended June 30, 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 increased by approximately $77,000, or 8%, to approximately $1,086,000 for the three months ended June 30, 2000 from approximately $1,009,000 for the comparable period of 1999. This increase resulted primarily from increased administrative and engineering expenses of approximately $81,000 from increases in compensation and related expense associated with the addition of employees. Sales expenses increased modestly by approximately $19,000 (approximately 8%) resulting from increased sales commissions paid as a consequence of additional available inventory. The increase in overall operating expenses was partially offset by a decrease (approximately 7%) in programming and news service expense to approximately $325,000 from approximately $348,000 in the three months ended June 30, 2000 and 1999, respectively, stemming from the elimination of one talk-style program expenses.

        Income Tax Benefit. No income tax benefit was recorded for the three months ended June 30, 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 June 30, 2000, our net loss was approximately $54,000 compared with a net loss of approximately $78,000 for the three months ended June 30, 1999 .

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999

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       Revenues. Our revenues increased by approximately 7% to approximately $1,908,000 for the six months ended June 30, 2000 from approximately $1,766,000 for the six months ended June 30, 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 modestly by approximately $16,000 to approximately $1,983,000 for the six months ended June 30, 2000 from approximately $1,999,000 for the comparable period of 1999. This decrease resulted from reduced programming and news service expense stemming from the elimination of one talk-style program of approximately $77,000 to approximately $592,000 in the six months ended June 30, 2000 from approximately $669,000 for the comparable period of 1999. The decrease in overall operating expenses was partially offset by an increase (approximately 6%) in administrative and engineering expenses to approximately $902,000 from $851,000 in the six months ended June 30, 2000 and 1999, respectively, resulting from increases in compensation and related expense associated with additional employees. The decrease in overall operating expenses was also partially offset by an increase (approximately 2%) in sales expenses to approximately $457,000 from $446,000 in the six months ended June 30, 2000 and 1999, respectively. This increase resulted from an increase in the sales commissions paid as a consequence of additional available inventory.

        Income Tax Benefit. No income tax benefit was recorded for the six months ended June 30, 2000, because, at that date, realization of deferred tax assets is dependent on future taxable income which is uncertain.

       Net Loss. For the six months ended June 30, 2000, our net loss was approximately $95,000 compared with a net loss of approximately $229,000 for the six months ended June 30, 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 June 30, 2000, we had a working capital deficit of approximately $251,000 as compared with a working capital deficit of $188,000 at December 31, 1999. Net cash provided by operating activities for the six months ended June 30, 2000 was approximately $39,000 and net cash provided by operating activities for the like period of 1999 was $89,000 representing a decrease of approximately $50,000 in the 2000 period. The decrease was due principally to the timing of payments to vendors, which mitigated the cash impact of the net loss of approximately $229,000 in the 1999 period.

        As of June 30, 2000, certain of our vendors had granted extended payment terms to us relating to an aggregate of approximately $225,000 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 June 30, 2000, 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 $91,057 to us as of June 30, 2000. This advance includes an advance of $15,000 made to us by Mr. Marlin Maddoux on June  16, 2000. 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 June 30, 2000, represented a debt of $15,745. 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, Mr. Marlin Maddoux has personally guaranteed this note on our behalf, although we did not provide Mr. Maddoux a guarantee fee for doing so.

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        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 June 30, 2000. At June 30, 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 remainder of 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 June 30, 2000). Borrowings under this bank line are also payable on demand. At June 30, 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 the remainder of 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
(a)	We held our Annual Meeting of Stockholders on May 26, 2000. 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 the election of directors and the proposed merger to be submitted to a vote of the stockholders.
(b)	The following two directors were elected to serve a one-year term ending with the 2001 Annual Meeting of Stockholders:

*	Robert Marlin Maddoux
*	Mark R. Maddoux

(c)	The two directors elected received the following votes:
		For	13,136,720
		Against	0
		Abstain	0

Our proposal to approve the merger of the Company into a wholly owned subsidiary organized under the laws of the State of Delaware received the following votes:

For	13,136,720
Against	0
Abstain	0
Broker nonvotes	0

(d)	Not applicable.
ITEM 5.	OTHER INFORMATION
	None
ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K
(a)	Exhibits
	The exhibits listed on the accompanying Index to Exhibits immediately following the signature page are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-QSB.
(b)	Reports on form 8-K

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On June 14, 2000, the Company filed a report on Form 8-K relating to the merger of the Company into a wholly owned subsidiary organized under the laws of the State of Delaware.

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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 January 19, 2001.

USARadio.com, Inc.

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

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INDEX TO EXHIBITS

2.1	Agreement and Plan of Merger, dated April 10, 2000, by and between USARadio.com, Inc., a Colorado corporation and USARadio.com, Inc., a Delaware corporation. (Exhibit 2.1)(1)
3.1	Certificate of Incorporation of USARadio.com, Inc. (Exhibit 3.1)(1)
3.2	Bylaws of USARadio.com, Inc. (Exhibit 3.2)(1)

(1) Incorporated by reference to the exhibit shown in parenthesis in our report on Form 8-K, filed June 14, 2000.

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