SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-83418-LA
CYBERIA HOLDINGS, INC.
(Exact name of Small Business Issuer as Specified in its Charter)
Delaware 93-1138967
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification
Organization) Number)
1531 14th Street
Santa Monica, California 90404
(Address of Principal Executive Offices)
(310) 260-3163
(Issuer's Telephone Number, Including Area Code)
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
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
Common, $.0001 par value per share: 30,000,000
outstanding as of May 1, 2000
PART I - FINANCIAL INFORMATION
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
Index to Financial Information
Period Ended March 31, 2000
(Unaudited)
Item Page Herein
Item 1 - Financial Statements:
Consolidated Balance Sheet 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated
Financial Statements 6
Item 2 - Management's Discussion and
Analysis or Plan of Operation 7
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
March 31, 2000
ASSETS
Current Assets
Cash 258,267
Accounts receivable 374,153
Advances to Employees/Other 3,538
Due from Members 28,326
Due from Affiliates 13,080
Deferred tax asset 18,320
Total current assets 695,685
Non-current assets
Property, plant and
equipment(net) 208,862
Other assets 44,544
Total non-current assets 253,406
Total assets 949,091
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and
accrued expenses 45,683
Due to affiliate 2,420
Accrued payroll and
payroll taxes 62,175
Income tax payable 158,282
Capital Lease Payable
- Current 45,383
Total current liabilities 313,943
Long term liabilities
Capital Lease - Long Term 54,285
Deferred income taxes
- long term 7,144
Total long term liabilities 61,429
Minority Interest 142,310
Stockholders' equity
Common stock 3,000
Additional paid in capital 9,269
Capital -0
Retained earnings 196,677
Net Income 222,463
Total stockholders'
equity 431,409
Total liabilities
& stockholders' equity 949,091
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS
1/1/00 1/1/99
THROUGH THROUGH
3/31/00 3/31/99
Sales $ 1,101,443 $ 675,940
Cost of sales 85,137 71,913
General and
administrative expenses 617,411 355,817
Total expenses 702,548 427,730
Net income
from operations 398,894 248,210
Other income (expense)
Interest income 1,564 210
Other Income - -
Gain/Loss on
Sale of Securities - -
Equity in Earnings
of Med Rev - -
Interest expense (5,460) (4,791)
Total other
income (expense) (3,896) (4,581)
Income from
continuing operations
before taxes 394,998 243,629
Income taxes 130,981 75,462
Net income before
minority interest $ 264,017 $ 168,167
Minority Interest 41,554 3,548
Net income 222,463 164,619
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS
1/1/00 1/1/99
THROUGH THROUGH
3/31/00 3/31/99
Operating Activities:
Net income $ 222,463 $ 164,619
Adjustments to reconcile
net income to net cash
provided by
operating activities
Depreciation and
amortization 24,080 5,882
Minority Interest 34,725 3,548
Fixed Assets
issued as compensation - 2,766
(Increase) decrease in:
Accounts receivable (24,312) (502,356)
Prepaid and
other current assets 9,346 (1,119)
Other assets (1,596) 16,016
Increase (decrease) in:
Accounts payable and
accrued expenses (1,154) 17,473
Book Overdraft (24,863) 46,836
Due to affiliates (152,744) 154,405
Accrued P/R & P/R taxes 37,136 5,508
Income Tax Payable 130,181 75,363
Deferred income (1,500) (1,500)
Net cash provided
by (for)operating activities
- - continuing 251,762 (12,559)
Net cash provided
by (for) operating activities
- - discontinued (811) (84,204)
Investing Activities:
Advances to Employees (3,538) -
Due from Officer (2,225) -
Long Term
Lease Obligations 2,388 -
Current Lease
Obligations (11,749) -
Purchase of
computer equipment (4,997) (8,235)
Net cash provided
by (for) investing activities
- - continued (20,121) (8,235)
Net increase in cash 230,830 (104,998)
Cash, beginning of period 27,437 104,998
Cash, end of period $ 258,267 $ -
CYBERIA HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
1. Presentation of Interim Information
The accompanying unaudited consolidated financial statements have been
prepared in conformity with generally accepted accounting principles for
interim financial information and with Regulation S-B. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all normal, recurring adjustments considered necessary for a fair
presentation have been included. These consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1999. The results of operations for the three months
ended March 31, 2000 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2000.
2. Financial Statements
The consolidated financial statements include the accounts of the
Company and its subsidiary, Media Revolution. All significant intercompany
balances, transactions and stockholdings have been eliminated.
3. Furniture and Equipment
Furniture and equipment at March 31, 2000 (unaudited) consisted of the
following:
Furniture and Fixtures $ 9,292
Computer Equipment 148,021
Office Equipment 20,584
Leasehold Improvements 13,272
Capital Leases 183,501
374,670
Less accumulated depreciation
and amortization 165,808
Total $208,862
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion should be read in conjunction with the
Financial Information and Notes thereto included in this report and is
qualified in its entirety by the foregoing.
Background
The Company was organized under the laws of the State of Delaware on
February 24, 1994 under the name NW Venture Corp. In October 1995, the
Company completed an initial public offering of certain shares of its Common
Stock pursuant to a Registration Statement declared effective by the
Securities and Exchange Commission on June 30, 1995 as a "blank check"
offering subject to Rule 419 of Regulation C under the Securities Act of 1933.
In May 1996, the Company executed an agreement with Cyberia, Inc., a
California corporation ("Cyberia"), and its shareholders to acquire all of the
issued and outstanding shares of capital stock of Cyberia in exchange for
25,500,000 shares of Common Stock of the Company (the "Cyberia Acquisition").
At the time thereof and through December 31, 1998, Cyberia was primarily
involved in the business of creating original music for television and radio
commercials. As of December 26, 1996, and following successful completion of
a reconfirmation offering required pursuant to Rule 419, the Company
consummated the Cyberia Acquisition whereby Cyberia became a wholly-owned
subsidiary of the Company.
During 1996, Cyberia entered into an agreement to form Media
Revolution, LLC ("Media Revolution"), which was organized to design Internet
web sites, computer games and software. The Company owns 80% of this entity
and has control of the day-to-day operations. A non-related party owns the
remaining 20%.
On January 13, 1997, the Company changed its corporate name to Cyberia
Holdings, Inc. to reflect the change of direction and new business of the
Company which resulted from the aforesaid transaction with Cyberia.
On October 6, 1998 a meeting of the Board of Directors and Officers was
held in which it was decided to cease the operations of Cyberia, Inc. as of
December 31, 1998 to allow the Company to focus its resources on the growth
and development of Media Revolution. All existing assets and liabilities at
the close of operations on December 31, 1998 have been transferred to Cyberia
Holdings, Inc. as per the Certificate of Dissolution filed in the Office of
the Secretary of State of California.
Results of Operations for the Three Months Ended March 31, 2000
Net sales for the three month period ended March 31, 2000 were
$1,101,443 as compared to $675,940 for the three month period ended March 31,
1999, an increase of $425,503 or 62%. This increase is primarily due to the
Company's dedication of its resources to further support Media Revolution's
efforts to, in management's opinion, differentiate itself in the Internet
services marketplace. Additionally, the Company has continued its focus on
its defined target sectors and in securing projects with a larger scope.
Cost of sales was $85,137 for the three month period ended March 31,
2000 as compared to $71,913 for the three month period ended March 31, 1999,
an increase of $13,224 or 18%. This increase is primarily due to the addition
of staff members to support the increase in net sales. Additionally, a
restructuring and a streamlining of the production process in the prior year
has assisted in reducing production costs in proportion to net sales.
General and administrative expenses were $617,411 for the three month
period ended March 31, 2000 compared to $355,817 for the three month period
ended March 31, 1999, an increase of $261,594 or 73%. The increase is
primarily due to an increase in rent following the move of Media Revolution
into a new location, the continued search for and hiring of new employees by
Media Revolution, and increased employee benefits needed in order to remain
competitive with other employers in the industry.
Liquidity and Capital Resources
At March 31, 2000, the Company had a working capital surplus of
$381,742. The ratio of current assets to current liabilities was
approximately 2.21 to 1 at March 31, 2000. At March 31, 2000, the Company had
stockholders' equity of $431,409.
To date, the Company has funded its activities principally from cash
flows generated from operations. It is anticipated that the Company's
continuing cash flows from operations will be sufficient to meet its cash and
working capital requirements for the next thirteen months. However, if the
Company's cash flows should be materially less than expected, the Company may
find it necessary to seek additional sources of financing to support its cash
and working capital requirements. Although the Company is hopeful that such
financing can be arranged, there can be no assurance the Company will in fact
be able to obtain such financing at the time, if any, such need arises, or if
obtained, on terms acceptable to the Company.
Year 2000 Issue
The year 2000 issue is the result of computer programs being written
using two digits, rather than four, to define the applicable year. Software
programs and hardware that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a major system failure or miscalculations causing disruptions
of operations, including a temporary inability to engage in normal business
activities.
Prior to the year 2000, the Company determined that its critical
software (primarily widely used software packages) and all of its critical
business systems, were already year 2000 compliant.
As of the date of this report, no significant problems had been
encountered. However, there can be no assurance that this will continue to be
the case, and there are also continuing risks to the Company's operations from
year 2000 failures by third parties such as suppliers. In this regard, the
Company continues to monitor the situation.
The Company previously had initiated communications with third parties
with whom the Company has material direct and indirect business
relationships in order to determine the extent to which the Company's
business is vulnerable to the third parties failure to make their
systems year 2000 compliant. Based upon the information gathered from such
other third parties, the Company is not aware of any material third party year
2000 risks, which have not been resolved. As of the date of this report, the
Company has not experienced any significant year 2000 issues arising from
third parties.
The Company continues to maintain close contact with critical suppliers
with respect to such third parties year 2000 compliance and any year 2000
issues that might arise at a later date.
The Company currently does not have a contingency plan in the event
year 2000 issues arise at a later date. Such a plan will be developed if it
becomes necessary. Although no assurance can be given that there will be no
interruption of operations due to year 2000 issues, the Company has not to
date suffered any significant problems and believes that it has reasonably
assessed all of its systems in order to ensure that the
Company will not suffer any material adverse effect in the future.
The Company has used and will continue to use, if necessary, internal
resources to resolve year 2000 issues. Costs incurred to date by the Company
have not been material. The Company does not anticipate incurring any further
costs.
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) Exhibits.
There are no exhibits applicable to this Form 10-QSB.
(b) Reports on Form 8-K.
Listed below are reports on Form 8-K filed during the
fiscal quarter ended March 31, 2000.
None.
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.
CYBERIA HOLDINGS, INC.
(Registrant)
Dated: May 19, 2000 By: /s/ Jay Rifkin
Jay Rifkin, President
Dated: May 19, 2000 By: /s/ Jay Rifkin
Jay Rifkin, Principal
Financial Officer