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 quarterly period ended March 31, 1999.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to .
Commission file number: I-9418
CYBERAMERICA CORPORATION
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(Exact name of small business issuer as specified in its charter)
Nevada 87-0509512
-------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
268 West 400 South, Salt Lake City, Utah 84101
------------------------------------------------
(Address of principal executive office) (Zip Code)
(801) 575-8073
(Issuer's telephone number)
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 XX No
The number of outstanding shares of the issuer's common stock, $0.001 par
value (the only class of voting stock), as of May 18, 1999 was 3,042,673.
1
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS..................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS..................................4
PART II
ITEM 1. LEGAL PROCEEDINGS....................................................7
ITEM 5. OTHER INFORMATION....................................................7
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.....................................8
SIGNATURES....................................................................9
INDEX TO EXHIBITS............................................................10
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
2
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to CyberAmerica Corporation, a
Nevada corporation, and its subsidiaries and predecessors unless otherwise
indicated. Consolidated, unaudited, condensed interim financial statements
including a balance sheet for the Company as of the quarter ended March 31, 1999
and statements of operations, and statements of cash flows for the interim
period up to the date of such balance sheet and the comparable period of the
preceding year are attached hereto as Pages F-1 through F-8 and are incorporated
herein by this reference.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY.]
3
ITEM 1. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Consolidated Unaudited Condensed Balance Sheet March 31, 1999...............F-2
Consolidated Unaudited Condensed Statements of Operations
March 31, 1999 and 1998 ...............................................F-4
Consolidated Unaudited Condensed Statements of Cash Flows
March 31, 1999 and 1999...................................................F-6
Consolidated Unaudited Condensed Statement of Shareholders' Equity
March 31, 1999............................................................F-7
Notes to Consolidated Unaudited Condensed Financial Statements
March 31, 1999............................................................F-8
F-1
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED UNAUDITED BALANCE SHEETS
March 31, 1999
ASSETS
- ------
CURRENT ASSETS
Cash $ 427,885
Accounts receivable - Trade 341,786
Accounts receivable - Related Parties 301,789
Note receivable - Current Portion 1,144,645
Prepaid expenses 9,186
Securities available for sale 775,067
--------------
TOTAL CURRENT ASSETS 3,000,358
PROPERTY AND EQUIPMENT 8,987,958
OTHER ASSETS
Investment securities at cost 289,856
Notes receivable - net of current portion 312,000
Investments - other 309,166
-------------
TOTAL OTHER ASSETS 911,022
TOTAL ASSETS $ 12,899,338
=============
See notes to consolidated unaudited condensed financial statements.
F-2
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED UNAUDITED BALANCE SHEETS (Continued)
March 31, 1999
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable - trade $ 493,761
Accounts payable - Related Parties 99,865
Accrued liabilities
Interest 97,661
Real estate taxes and assessments 642,876
Payroll and related taxes payable 179,645
EPA liabilities 325,398
Refundable deposits 28,422
Refund to investors 47,986
Other 267,622
Debenture payable 260,000
Current maturities of long-term debt 1,536,485
-------------
TOTAL CURRENT LIABILITIES 3,979,721
-------------
LONG-TERM LIABILITIES
Long-term debt, net of current portion 4,689,746
-------------
TOTAL LONG-TERM LIABILITIES 4,689,746
MINORITY INTEREST 525,360
SHAREHOLDERS' EQUITY
Preferred stock par value $.001; 20,000,000
shares authorized; No shares issued
Common stock par value $.001; 20,000,000
shares authorized; 2,686,571 shares issued 2,867
Additional paid-in capital 15,341,812
Accumulated deficit (11,615,421)
Unrealized loss from securities available for sale (24,747)
-------------
TOTAL SHAREHOLDERS' EQUITY 3,704,511
-------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 12,899,338
============
See notes to consolidated unaudited condensed financial statements.
F-3
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1999 and 1998
Three Months Ended
March 31,
1999 1998
------------ ------------
REVENUE
Sale of property $ 600,000 $ --
Revenue Deferred -- --
Additional gain recognition 10,392 --
Consulting revenue 296,875 41,724
Rental revenue 152,241 116,540
-------- ---------
TOTAL REVENUE 1,059,508 158,264
COSTS OF REVENUE
Cost of sale of property 219,498 --
Costs associated with consulting revenue 201,742 28,764
Costs associated with rental revenue 108,741 35,741
Interest expenses associated with rental revenue 56,885 64,786
-------- --------
TOTAL COSTS OF REVENUE 586,866 129,291
GROSS PROFIT 472,642 28,973
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 216,710 383,171
-------- ---------
OPERATING PROFIT (LOSS) 255,932 (354,198)
OTHER INCOME (EXPENSE):
Interest income 101,267 39,069
Interest expense (99,862) (46,570)
Gain (loss) from sale of investment securities 46,278 -
Other income (expense) 2,865 (4,114)
--------- ---------
TOTAL OTHER INCOME (EXPENSES) 50,548 (11,615)
--------- ---------
INCOME (LOSS) BEFORE
MINORITY INTEREST 306,480 (365,813)
MINORITY INTEREST IN LOSS 16,847 31,054
--------- ---------
See notes to consolidated unaudited condensed financial statements.
F-4
NET PROFIT (LOSS) $ 323,327 $ (334,759)
INCOME (LOSS) PER COMMON SHARE
Income (loss) before minority interest $ 0.11 $ (0.17)
Minority interest in loss (gain) 0.01 0.01
--------- ---------
Net income (loss) per weighted average
common share outstanding $ 0.11 $ (0.16)
========= =========
Weighted average number of common
shares outstanding 2,866,571 2,180,564
========= ==========
See notes to consolidated unaudited condensed financial statements.
F-5
CYBERAMERICA CORPORATION SUBSIDIARIES
CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
Unaudited
-------------------------
1999 1998
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 323,327 $ (334,759)
Adjustments to reconcile net income (loss)
to net cash provided:
(Gain) loss from sale of investments (46,278)
Minority interest in (gain) loss (33,092) (31,054)
Depreciation and Amortization 86,233 55,613
Services paid with common stock - 2,190
Decrease (increase) in assets:
Receivables (204,307) 126,133
Prepaid Expenses and 1,967 1,681
Increase (decrease) in liabilities:
Accounts and notes payable 2,044 7,535
Accrued liabilities (22,148) (152,505)
--------- ----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 107,746 $ (325,166)
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures 8,761 (30,706)
Proceeds from sale of investments 208,493 75,463
--------- ----------
NET CASH FLOWS (USED) IN INVESTING ACTIVITIES $ 217,254 $ 44,757
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long term debt - 640,000
Reduction of long-term debt (43,859) (359,419)
--------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ (43,859) $ 280,581
INCREASE (DECREASE) IN CASH 281,141 172
CASH AT BEGINNING OF PERIOD 146,744 5,906
--------- ----------
CASH AT END OF PERIOD $ 427,885 $ 6,078
========= ==========
See notes to consolidated unaudited condensed financial statements.
F-6
CYBERAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED UNAUDITED STATEMENTS OF
SHAREHOLDERS' EQUITY For the Three
Months Ended March 31, 1999
Net Unrealized
Loss on Securities Total
Common Stock Pain-in Available for Shareholders'
Shares Amount Capital Deficit Sale Equity
Balance at December 31, 1998 2,866,571 $ 2,867 $ 15,341,812 $ (11,938,748) $ (24,747) $ 3,381,184
323,327 323,327
-------------- ------------
Balance at March 31, 1999 2,866,571 $ 2,867 $ 15,341,812 $ (11,611,421) $ (24,747) $ 3,704,511
========= ======= ============ ============== =========== ============
F-7
CYBERAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED UNAUDITED CONDENSED FINANCIAL STATEMENTS
March 31, 1999
1. Basis of Presentation
The accompanying consolidated unaudited condensed financial statements have been
prepared by management in accordance with the instructions in Form 10-QSB and,
therefore, do not include all information and footnotes required by generally
accepted accounting principles and should, therefore, be read in conjunction
with the Company's Annual Report to Shareholders on Form 10-KSB for the fiscal
year ended December 31, 1998. These statements do include all normal recurring
adjustments which the Company believes necessary for a fair presentation of the
statements. The interim operations results are not necessarily indicative of the
results for the full year ended December 31, 1999.
2. Year 2000 Compliance
The Year 2000 problem is a result of computer programs being written using two
digits to define the applicable year. If not corrected, any program or equipment
that have time sensitive components could fail or create erroneous results. The
Company has completed a review of its existing systems and and has upgraded
approximately 25% of its existing system with hardware and software that
purports to be Year 2000 compliant.
The majority of the Company's other software and hardware is not believed to be
Year 2000 compliant. However, the Company has already ordered the necessary
software and hardware to fully upgrade its computer systems to be Year 2000
compliant. The Company is expected to be fully compliant by June 30, 1999. The
cost assiciated with completion of updating the Company's computer systems is
not expected to have a material impact on the financial condition of the
Company. Nonetheless, there can be no assurance that this will be the case.
The Company currently has limited information concerning the Year 2000
compliance status of its clients and associates. However, even if the Company's
clients are not Year 2000 compliant, the company does not anticipate that such
noncompliance will have a material adverse effect on the Company's business,
financial condition, results of operations or cash flow.
3. Additional footnotes included by reference
Except as indicated in Notes above, there have been no other material changes in
the information disclosed in the notes to the financial statements included in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1998.
Therefore, those footnotes are included herein by reference.
F-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
During the first quarter of 1999, CyberAmerica Corporation, a Nevada
corporation and its subsidiaries (hereinafter the "Company" unless the context
indicates otherwise) continued to improve its financial condition. The Company
through its real estate and consulting operations increased its rental and
consulting revenues over the comparable quarter in 1998. As a direct result of
increased revenues for the first quarter of 1999 and the year ended December 31,
1998, the Company's overall financial health significantly improved.
Real Estate Divisions
The Company's operations primarily involve the acquisition, management,
lease and sale of real estate holdings. Over the past six years, the Company has
acquired a wide variety of commercial and residential properties. The Company
owns several real estate holdings in Utah and also owns properties in other
parts of the United States. The Company seeks to locate and acquire primarily
commercial real estate which is believed to be undervalued with little or no
cash down. The Company acquires real estate with a view to resell at substantial
profits upon making improvements to the properties. While the Company is making
improvements to the properties, it generally enters into short term leases to
generate rental income.
The types of properties that the Company generally purchases includes Class
C commercial buildings and raw land. The commercial space generally needs a
nominal to substantial amount of renovation to obtain market rents. Accordingly,
the typical result of purchasing such properties is that the Company usually has
insufficient cash flows from rental revenues to cover the debt service and other
expenses related to the Company's real estate because of below market rents,
short term financing arrangements and no rental revenues from raw land. However,
upon sale of such properties the Company has typically realized substantial
gains. To cover cash shortages, the Company generally uses capital generated
from its consulting division to cover deficits or the Company will issue its
common stock to raise additional capital. The Company's plans to eliminate cash
shortages and losses related to its real estate holdings includes plans to
develop or sell portions of it raw land, increase occupancies, and sell certain
properties that operate at a loss.
The Company made no significant acquisitions of real property during the
quarter ended March 31, 1999. However, the Company disposed of two parcels of
land.
On January 11, 1999, OIHC consummated the sale of a 1/2 interest in 1.450
acres of land to Pienne Chow Sau in exchange for: (1) 31,250 shares of Oasis
Hotel, Resort & Casino - I, Inc., (2) 31,250 shares of common stock of Oasis
Hotel, Resort & Casino - II, Inc. (3) a secured promissory note in the amount of
$160,000, dated February 1, 1996, held by Ms. Chow. The maker of the $160,000
promissory note China Food & Beverage Company has been in default since October
1, 1997. OIHC is in the process of enforcing its rights under the promissory
note. The Company plans to bring legal proceedings against the holder of the
note.
On January 11, 1999, OIHC consummated the sale of 2.145 acres to Oasis
Fields, L.L.C. for $120,000 cash and the execution of a promissory note in the
amount of $480,000. The terms of the promissory note call for the payment of
$480,000 plus accrued interest at a rate of 7% annually due and payable on
January 11, 2000. The note is secured by the 2.145 acres. Oasis Fields, L.L.C.
was formed for the specific purpose of purchasing and improving the 2.145 acres.
Oasis Fields, L.L.C. is considered a high credit risk because it has no
operating history. Consequently, OIHC's probability of having to foreclose upon
the property is very high unless Oasis Fields, L.L.C.'s plans to improve the
2.145 acres are successful.
The Company recorded revenues of $10,392 for payments received pursuant to
a note issued on the sale of the Oasis, Nevada property sold to Oasis Resorts
International, Inc. on May 11, 1998. For more information on the Oasis, Nevada
property, please "Item 2. Description of Property" in the Company's Form 10KSB
for the year ended December 31, 1998.
4
The Company recorded rental revenues of $152,241 from its real estate
operations for the first quarter compared to $116,540 for the same period of
1998. This increase was due to the acquisition of the General Lafayette Motel in
the second quarter of 1998 whose revenues are consolidated with the Company's.
The motel generated approximately $87,800 in revenues and is expected to
increase substantially upon completion of the necessary renovations.
Financial Consulting Divisions
The Company through its wholly owned subsidiaries Canton Financial Services
Corporation and Hudson Consulting Group, Inc. provides a variety of financial
consulting services to a wide range of clients. The primary service performed by
the Company involves assisting clients in structuring mergers and acquisitions.
This includes locating entities suitable to be merged with or acquired by the
Company's clients, as well as providing general advice related to the
structuring of mergers or acquisitions. The Company also assists clients in
restructuring their capital formation and advises with respect to general
corporate problem solving.
The Company has reduced the scope and extent of the financial consulting
services it provides. Although the Company continues to provide financial
consulting services, this is done on a significantly smaller scale than in past
years. The Company has made an effort to limit the types of consulting services
it performs to those which have historically been the most profitable and to
reduce the number of clients retaining the Company's services.
The Company's consulting subsidiaries generate revenues through consulting
fees payable in the client's equity, cash, other assets or some combination of
the three. The primary form of compensation received is the equity securities of
clients. When payment is made in the form of equity, the number of shares to be
paid is dependent upon the price of the client's common stock (if such price is
available) and the extent of consulting services to be provided. The typical
value used to determine the number of shares to be paid is one-half of the
stock's bid price, which accounts for the fact that most of the equity received
as payment by the Company is restricted as to resale. The Company accepts equity
with the expectation that its services will assist in the stock's appreciation,
thus allowing the Company to be compensated and to make a return on the payments
for its services.
The Company generates cash flow by liquidating non-cash assets received as
fees for consulting services. As most fees are paid in the form of equity, the
revenues and cash flows realized by the Company are somewhat tied to the price
of its clients' securities. A decline in the market price of a client's stock
can effect the total asset value of the Company's balance sheet and can result
in the Company incurring substantial losses on its income statement.
Revenues from the Company's financial consulting operations increased
during the quarter ended March 31, 1999. The Company recorded quarterly revenues
of $296,875 from its financial consulting operations as compared to $41,724 for
the same period of 1998. This increase was due to an increase in the number of
clients that retained the Company during the quarter.
Results of Operations
Gross revenues for the quarter ended March 31, 1999 were $1,059,508
compared to $158,264 for the same period in 1998, an increase of $901,244. The
gross revenues for March 31, 1999, were higher than the comparable quarter in
1998 due to sale of property in Oasis, Nevada and significant increase in
consulting revenues. In contrast, the revenues from sale of real estate during
March 31, 1999, totaled $600,000. Rental revenues increased by 31% to $152,241
during the quarter ended March 31, 1999, from $116,540 for the comparable period
in 1998. This increase is attributable to an increase in occupancies and the
revenues generated by the General Lafayette Hotel which was acquired in the
second quarter of 1998.
Costs of revenues were $586,866 for the quarter ended on March 31, 1999,
compared to $129,291 for the comparable period in 1998. The increase/decrease in
the costs of revenues is primarily due to the Company's sale of property in
Oasis, Nevada and an increase operation of the hotel in Baton, Rouge, La. as
well as the addition of new employees.
Gross profit was $472,642 for the quarter ended on March 31, 1999 and
$28,973 for the comparable quarter in 1998. Gross profit as a percentage of
revenues was 55% and 18.3%, respectively.
5
Selling, general, and administrative expenses were $216,710 for the quarter
ended on March 31, 1999 and $383,171 for the comparable period in 1998, an
increase/decrease of $166,461. The primary reason for the decrease was employees
working on consulting projects allocated to costs associated with consulting
revenue.
Operating income was $255,932 during the quarter ended on March 31, 1999,
compared to an operating loss of $354,198 for the comparable quarter in 1998.
The Company's operating gain for the quarter ended March 31, 1999, was primarily
attributable to the sale of Oasis property and an increase in consulting
clients.
During the quarter ended March 31, 1999, the Company earned other income in
the amount of $50,548. During the comparable period in 1998, the Company
incurred other expenses in the amount of $11,615. The primary reason for the
difference is attributable to a $46,278 gain from the sale of investment
securities as opposed to no income from the sale of investment securities during
the first quarter of 1998 and interest income received on property sold on
contract in Oasis, Nevada.
Capital Resources and Liquidity
The Company had a net working capital deficit of $979,363 for the quarter
ended March 31, 1999, as compared to a $1,563,181 deficit at the end of March
31, 1998. The Company has several loans on real property which come due during
1999 totaling approximately $1,287,000. The Company is presently working to
locate suitable long-term financing for these properties.
Net stockholders' equity in the Company was $3,704,511 as of March 31,
1999, compared to $1,865,013 as of March 31, 1998. The increase in net
stockholder's equity is primarily due to a return to profitabilty during the
last 12 months in which the company had $1,067,070 in net income.
Due to the Company's debt service on real estate holdings, willingness to
acquire properties with negative cash flows and acceptance of non-cash assets
for consulting services, the Company experiences occasional cash flow shortages.
To satisfy its cash requirements, including the debt service on its real estate
holdings, the Company must periodically raise funds from external sources. This
often involves the Company conducting exempt offerings of its equity securities.
However, during the first quarter of 1999, the Company did not issue any equity
securities to finance its operations.
Year 2000 Compliance
The Year 2000 problem is a result of computer programs being written using
two digits to define the applicable year. If not corrected, any programs or
equipment that have time sensitive components could fail or create erroneous
results. The Company has completed a review of its existing systems and has
upgraded approximately 25% of its existing system with hardware and software
that purports to be Year 2000 compliant.
The majority of the Company's other software and hardware is not believed
to be Year 2000 compliant. However, the Company has already ordered the
necessary software and hardware to fully upgrade its computer systems to be Year
2000 compliant. The Company is expected to be fully compliant by June 30, 1999.
The cost associated with completion of updating the Company's computer systems
is not expected to have a material impact on the financial condition of the
Company. Nonetheless, there can be no assurance that this will be the case
The Company currently has limited information concerning the Year 2000
compliance status of its clients and associates. However, even if the Company's
clients are not Year 2000 complaint the Company does not anticipate that such
noncompliance will have a material adverse effect on the Company's business,
financial condition, results of operations or cash flows.
Forward Looking Statements
The forward looking statements contained in this Item 2 and elsewhere in
this Form 10-QSB are subject to various risks, uncertainties and other factors
that could cause actual results to differ materially from the results
anticipated in such forward looking statements.
6
PART II
ITEM 1. LEGAL PROCEEDINGS
During the first quarter of 1999, the following material developments
occurred regarding the Company's legal proceedings. For more information please
see the Company's Form 10KSB for the year ended December 31, 1998.
Xeta Corporation vs. The Canton Industrial Corporation - Suit was filed in
the U.S. District Court, in the Central District of Utah, Case Number 95CV218G
on March 8, 1995. Xeta alleged that $116,500 was fraudulently transferred to the
company by ATC II, Inc. a Delaware corporation. Xeta was granted a Summary
Judgment as to the Company only, on appeal that decision was sustained by the
Tenth Circuit Court. On April 14, 1999, the Company settled and resolved all
claims asserted by Xeta through the payment of $116,000, Xeta assigned its
judgment against ATC II, Inc. to the Company as part of the settlement. Orders
of dismissal and joint and mutual releases have been executed and filed in the
appropriate places.
State of West Virginia vs. Canton Tire Recycling West Virginia, Inc.,
Canton Industrial Corporation and CyberAmerica Corporation - Suit was filed on
August 14, 1998 in the Circuit Court of Wood County, Parkersburg, West Virginia
as file no. 98 C 354. The suit sought the completion of clean up procedures for
property owned by Canton Tire Recycling of West Virginia, Inc., located in the
city of Parkersburg. Local counsel was retained, as was local environmental
engineers in an effort to quantify the work demanded by the state. On May 14,
1999 an agreed Consent Order has been filed with the Circuit Court, providing
for the work to be done by the Company and a time frame in which such work is to
be completed. A fine in the amount of $88,000 is provided for with payments
terms over four years from the entry of the Order. The Company has received bids
that estimate the cost of the clean up to be approximately $90,000. The Company
believes that the clean up procedures will be implemented and completed prior to
the end of the third quarter in 1999
ITEM 5. OTHER INFORMATION
Subsequent Events
On May 18, 1999, Diversified Holdings XIX, Inc., a consolidated subsidiary
of the Company, closed on a sale of its real property located near the town of
Cheriton, in Northampton County, Virginia. The property consists of several
buildings and approximately 65 acres. The property was sold to Eastern Shore
Composites, L.L.C. for a total purchase price of $700,000. The terms of the sale
provide for an initial cash payment of $45,000 being credited to the purchase
price, a promissory note, secured by a deed of trust, in the amount of $655,000
bearing interest at the rate of 9% per annum with monthly payments of principal
and interest, with a balloon payment requiring the balance of the note to be
paid in full on May 18, 2002. The new owner has and continues to work to resolve
all environmental issues related to the property without further participation
by the Company. For more information on this property, please "Item 2.
Description of Property" in the Company's Form 10KSB for the year ended December
31, 1998.
On April 2, 1999, IPDC signed an Acquisition Agreement with Diversified
Holdings, I, Inc., a Nevada corporation, which was wholly owned by the Company
("DHI"). Pursuant to the terms of this Acquisition Agreement, IPDC divested
itself of all of its subsidiaries in exchange for 982,528 shares of IPDC common
stock which was previously owned by the Company, and 222,220 shares of DHI. The
effect of this transaction will be that the Company will own 90% of DHI and DHI
will own at least a majority interest in the following entities excepting
Wasatch Capital Corporation of which DHI will own a 20% interest: Canton
Commercial Carpet Corporation, Canton Industrial Corporation of Salt Lake City,
Wasatch Capital Corporation, Oasis International Hotel & Casino, Inc., Oasis
International Corporation, West Jordan Real Estate Holdings, Inc.,Canton
Financial Services Corporation, Hudson Consulting Group, Inc., Canton's Wild
Horse Ranch II, Inc.,CyberLacrosse, Inc., Cyberstudio, Inc., Diversified
Holdings XIX, Inc., Diversified Land & Cattle Company, Golden Opportunity
Corporation, Great Basin Water Corp., Lexington Three Mile East Terrace Mountain
Estates, Inc., Lexington, Four Mile East Terrace Mountain Estates, Inc.,
Lexington One Mile East Little Pigeon Mountain Estates, Inc. and Taylor's
Landing, Inc. The Acquisition Agreement between IPDC and DHI was consummated on
April 15, 1999, and Acquisition of China Mall, Inc. by IPDC is expected to be
consummated by May 31, 1999.
7
The Company's shareholder interestin IPDC is expected to be reduced to
approximately 453,550 shares or less than 5 % of IPDC's issued and outstanding
shares of common stock after it acquires China Mall, Inc.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibits required to be attached by Item 601 of Regulation S-B
are listed in the Index to Exhibits on page 10 of this Form 10-QSB, and
are incorporated herein by this reference.
(b) Reports on Form 8-K. No reports were filed on Form 8-K during the
quarter.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY.]
8
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, this 19th day of May 1999.
CYBERAMERICA CORPORATION
/s/ Ricard Surber
---------------------
Richard Surber May 19, 1999
President, Chief Executive Officer and Director
/s/ Wayne Newton
--------------------
Wayne Newton May 19, 1999
Controller
9
INDEX TO EXHIBITS
EXHIBIT PAGE DESCRIPTION
NO. NO.
3(i) * Articles of Incorporation of the Company (note that
these were amended by the Articles of Merger
constituting Exhibit 2 to this Form 10-KSB)
(incorporated herein by reference from Exhibit No.
3(i) to the Company's Form 10-KSB for the year ended
December 31, 1993).
3(ii) * Bylaws of the Company, as amended (incorporated
herein by reference from Exhibit 3(ii) of the
Company's Form 10 KSB for the year ended December 31,
1995).
MATERIAL CONTRACTS
10(i)(a) * Acquisition Agreement between the Company's majority
owned subsidiary Innovative Property Development Corp
And Diversified Holdings-I, Inc., dated April 2, 1999
(incorporated herein by reference from Exhibit No.
10(i)(a) to the Company's Form 10-KSB for the period
ended December 31, 1998).
10(i)(b) * Real Estate Purchase Agreement between Oasis Interna-
tional Hotel & Casino, Inc.,a consolidated subsidiary
of the Company, and Pienne Chow Sau Har, consummated
on January 11, 1999, regarding the sale of a one-half
interest in 1.45 acres in Oasis, Nevada (incorporated
herein by reference from Exhibit No. 10(i)(b) to
the Company's Form 10-KSB for the period ended
December 31, 1998).
10(i)(c) * Real Estate Purchase Agreement between Oasis Inter-
national Hotel & Casino, Inc., a consolidated subsid-
iary of the Company, and Oasis Fields, L.L.C.,
consummated on January 11, 1999, regarding the sale
of 2.45 acres in Oasis, Nevada (incorporated herein
by reference from Exhibit No.10(i)(c)to the Company's
Form 10-KSB for the period ended December 31, 1998).
* Previously filed as indicated and incorporated herein by reference from
the referenced filings previously made by the Company.
10