U,S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997.
Commission File No. 0-25276
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DIGIMEDIA USA, INC.
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(Exact name of small business issuer in its charter)
Nevada 88-0320364
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2454 NE 13th Ave., Fort Lauderdale, FL. 33305
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(Address of principal executive offices)
(954) 565-8726
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(Issuer's telephone number)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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
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The number of shares of issuer's Common Stock outstanding as of March 31, 1997
was 15,056,225.
WANT & ENDER, CPA, P. C.
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CERTIFIED PUBLIC ACCOUNTANTS
37 East 28th Street 8th Floor
New York, NY l0016
MARTIN ENDER, CPA Telephone (212) 684-2414
STANLEY Z. WANT, CPA, CFP Fax (212) 584-5433
To the Stockholders' and Board of Directors of:
DigiMedia USA, Inc.
2454 NE 13TH AVENUE
FT LAUDERDALE, FL 33305
We have compiled the accompanying balance sheet of DigiMedia USA, Inc. as of
March 31, 1997 and the related income statement for the three months then ended,
in accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting, in the form of financial statements,
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
Management has elected to omit substantially all of the disclosures and the
statement of cash flows required by generally accepted accounting principles. If
the omitted disclosures and statement of cash flows were included in the
financial statements, they might influence the user's conclusions about the
Company's financial position, results of its operations and changes in cash
flows. Accordingly, these statements are not designed for those who are not
informed about such matters.
Want & Ender CPA, P.C.
Certified Public Accountants
New York, NY
June 2, 1997
DIGIMEDIA USA, INC.
(FORMERLY INTERNATIONAL TRAINING & EDUCATION CORP.)
BALANCE SHEET
Current Year Prior Year 1
Mar. 31, 1997 Dec. 31, 1996
(Unaudited)
Assets
Current Assets
Cash - Checking $ 3,576 32,079
Accounts Receivable 57,400 57,400
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Total Current Assets 60,976 89,479
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Fixed Assets
Office Equipment 98,623 98,623
Acc Depr Office Eqpt (59,790) (59,790)
Furniture And Fixtures 25,052 25,052
Acc Depr Furn And Fixt (16,201) (16,201)
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Total Fixed Assets 47,684 47,684
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Other Assets
Organization Costs 52,668 52,668
Acc Amort Org Costs (21,068) (21,068)
Copyright (net) 32,236 32,236
Accu. Amortization Copy (4,298) (4,298)
Security Deposits 1,075 1,075
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Total Other Assets 60,613 60,613
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Total Assets 169,273 197,776
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See Accountants' Compilation Report
DIGIMEDIA USA, INC.
(FORMERLY INTERNATIONAL TRAINING & EDUCATION CORP.)
BALANCE SHEET
Current Year Prior Year I
Mar. 31, 1997 Dec. 31, 1996
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(Unaudited)
Liabilities
Current Liabilities
Accounts Payable $ 26,675 $ 26,675
Accr Expenses 52,276 52,276
Total Current Liabilities 78,951 78,951
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Long Term Liabilities
Morts,Notes,Bonds - l Yr 16,667 16,667
Total Long Term Liabilities 16,667 16,667
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Total Liabilities 95,618 95,618
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Stockholders' Equity
Common Stock 556 556
Convertible Preferred 37,683 37,683
Addtl Paid In Capital 1,457,703 1,457,703
Retained Earnings - Un Ap (1,422,287) (1,393,784)
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Total Equity 73,655 102,158
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Total Liabilities & Equity 169,273 197,776
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See Accountants' Compilation Report
DIGIMEDIA USA, INC.
(FORMERLY INTERNATIONAL TRAINING & EDUCATION CORP.)
INCOME STATEMENT
3 Months Ended 3 Months Ended
Mar. 31, 1997 Mar. 31, 1996
(Unaudited) (Unaudited)
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Revenues $ 0 $ 12,400
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Operating Expenses:
General & Administrative 28,503 2,914
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Total Operating Expenses 28,503 2,914
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Not Profit/(Loss) ($28,503) $ 9,486
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See Accountants' Compilation Report:
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
Basis of Presentation:
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The accompaning unaudited financial statements withstand the intent of Form
10QSB therefore they do not include all information and footnotes necessary for
the presentation of financial reports, results of operating cash flow and
stockholder's equity will conform with GAAP.
Results of Operations
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DigiMedia recorded no revenue for this three month period. DigiMedia continued
to market its product line in an attempt to sign additional contracts during
this period. In addition, DigiMedia diversified its focus and actively sought
mergers candidates with similiar business lines.
Liquidity and Capital Resources
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The Officers and Directors of the Company have waved salaries and benefits
through this filing period.
The Company recorded an decrease in current assets of approximately 26.6% from
$230,664 for stub period, 1996 to $169,273 on March 31, 1997. This is
attributable to reduced cash on hand. The reduced cash on hand is a result of
accumlating operational costs that were not offset by revenues and the
accumulating depreciation of assets.
Total liabilities were reduced by approximately 22.4% from $123,171 to $95,617
over the same period. This was a result of the retirement of some accounts
payable and lease obligations.
In May, 1997, DigiMedia entered into a merger agreement with NITROS FRANCHISE
CORPORATION (NITROS of the COMPANY), a private Nevada Corporation. Under the
terms of the merger, (i) NITROS merged with and into DigiMedia; (ii) DigiMedia
changed its name to NITROS FRANCHISE CORPORATION (the Company); (iii)
DigiMedia's Issued and Outstanding shares were reverse split by a ratio of 7 to
1. The post merger ownership of the Company will be 25% for the pre-merger
DigiMedia shareholders and 75% for the pre-merger NITROS shareholders. In
addition, the Directors and management were changed with Dave Bawarsky, Allan
Kvares, and Jason Sherman elected to the Board and Kirk J. Girrbach resigning as
Chairman, President and CEO and Gene Farmer resigning as Vice President,
Secretary, and Director. This merger was consummated with the Articles of Merger
filed with the Nevada Secretary of State.
Nitros Franchise Corporation (NITROS or the COMPANY) is a start-up franchise
company. NITROS is the first Family-Oriented WebTV Entertainment Eatery
Franchise. The Company is publicly-traded company under the symbol "NITR"
(NASD-OTC).
The Company believes that it has sufficient funds to satisfy its working capital
needs through the effective time of the above merger, however will need to seek
additional financing in order to continue operating.
The Company intends to file Registeration Statements with the SEC under the
Securities Act of 1933. There can be no assurance that once filed the
Registeration Statements will be accepted by the SEC, and if accepted there can
be no assurance that the offering will be successful.
NITROS has no operating history and is a start-up operation in the food service
industry. Consequently, there is no basis for any type of analysis of the
Company, its products and services, and its prospects. The Company's franchise
operation is untested and newly created, and is limited in scope with no revenue
to date. The operations to which NITROS is devoting its resources are in the
early stages of development. There can be no assurance that the Company will be
successful in attracting new customers for its business or in generating
significant revenues or profits from such business. The Company's prospects must
be considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets. To address these risks, NITROS
must, among other things, respond to competitive developments, attract, retain
and motivate qualified product development and marketing personnel, and continue
to upgrade its existing technologies, develop new technologies and commercialize
products and services incorporating such technologies. There can be no assurance
that the Company will be successful in addressing such risks. The Company may
also be required to enter into strategic alliances to effect cooperative
development efforts in order to have the financial and technical resources to
respond to changing market demands on a timely basis. There can be no assurance
that entities with the necessary technical or financial resources will be
willing to enter into such alliances with the Company on acceptable terms or at
all. The Company has incurred and will continue to incur significant costs in
connection with the development of its prototype and franchise marketing plan
which may result in operating losses. There can be no assurance that such
operations will ultimately generate significant revenues for the Company or that
the Company will achieve profitable operations.
PART 11 - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are currently no legal issues pending and/or about which the Company has
knowledge.
ITEM 8. OTHER INFORMATION.
In May, 1997, DigiMedia entered into a merger agreement with NITROS FRANCHISE
CORPORATION (NITROS of the COMPANY), a private Nevada Corporation. Under the
terms of the merger, (i) NITROS merged with and into DigiMedia; (ii) DigiMedia
changed its name to NITROS FRANCHISE CORPORATION (the Company); (iii)
DigiMedia's Issued and Outstanding shares were reverse split by a ratio of 7 to
1. The post merger ownership of the Company will be 25% for the pre-merger
DigiMedia shareholders and 75% for the pre-merger NITROS shareholders. In
addition, the Directors and management were changed with Dave Bawarsky, Allan
Kvares, and Jason Sherman elected to the Board and Kirk J. Girrbach resigning as
Chairman, President and CEO and Gene Farmer resigning as Vice President,
Secretary, and Director. This merger was consummated with the Articles of Merger
filed with the Nevada Secretary of State.
The company incorporates three distinctive proprietary concepts:
A proprietary process for making premium ice cream, from raw ingredients
"In-a-minute". This proprietary process for making premium ice cream, requires
no freezers or inventory of ice cream and can be made in unlimited flavors.
An interactive-environment, accomplished via television monitors located at each
seating-station throughout a NITROS Eatery. The medium is known as WebTV and is
displayed on a traditional television monitor. The WebTV-based system, grants
Internet access to individuals of all age, and computer literacy levels, using a
standard television remote control. Additionally, each seating-station will have
the ability to: explore the World Wide Web; watch satellite TV; play interactive
games with people at the table they are seated at, or at other tables; send
email to patrons at other tables; and order food and refreshments from the
NITROS Menu.
A unique European Style Menu featuring: gourmet-style pre-made sandwiches,
salads, a wide array of deserts, coffees, cappuccino, beer and wine. All
sandwiches are made fresh daily and are available in a variety of combinations.
There will be seasonal and daily specials, as well as other menu-specials,
offered from time-to-time.
The Company is planning on offering two types of Franchise opportunities;
Stand-Alone, Ice Cream-Only Outlets and Entertainment Eateries. Stand-Alone
locations will offer only ice cream, and are most appropriate for venues, such
as, airports, food courts, mobile carts, stands and so forth. The Entertainment
Eatery encompasses not only the ice cream concept but, expanded food and desert
menu in a high-tech interactive environment. All Franchisees will develop the
units based on specifications outlined in the Operations Manual and model
location, which is planned to open in Boca Raton, Florida by year-end 1997
(subject to obtaining financing). All Franchisees, must adhere to the Multi-Unit
Area Development Agreement and any and all other provisions set forth by the
Company.
The Company believes that by offering two distinct types of franchises, it will
in effect protect its proprietary systems from outside competition seeking to
capitalize on one or more facets of the total NITROS Concept.
In February of this year, the Company entered into an agreement and plan of
merger between QUIKLAB MULTIMEDIA CENTERS, INC. (OLAB), a Nevada Corporation and
subsidiary of the Company, with Quiklab Multimedia Centers, Inc. (Quiklab), a
private Florida Corporation. Inc.. The terms of the merger call for each share
of Quiklab to be converted into the right to receive 27 and 3/4 shares of the
common stock of QLAB. It is the expressed intent of the parties that existing
Quiklab shareholders shall own immediately after closing 87.5% of the common
stock of QLAB. It is the intention of both Companies' management that QLAB will
be spun off from DigiMedia and file with the Security Exchange Commission to be
a public company. When this plan of merger is finalized, the Company Quiklab
will cease to exist with QLAB being the surviving corporation. QLAB intends to
file a Regiseration Statement for a public offering under the Security Act of
1933. As of this filing, the merger has not be consummated because management
has been occupied with deciding which type(s) of Registeration Statements should
be filed which will satisfy its intent for the future. There can be no assurance
that once filed the Registeration Statement will be accepted by the SEC, and if
accepted there can be no assurance that the offering will be successful.
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.
DigiMedia USA, Inc.
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(Registrant)
Date: June 5, 1997 /s/ Gene Farmer
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Gene Farmer, Secretary
EXHIBITS:
8-Ks filed to date for 1997.*
Merger Agreement with Quiklab Multimedia Centers, Inc.*
Merger Agreement with NITROS FRANCHISE CORPORATION with Articles of Merger as
filed with the Nevada Secretary of State.
* Incorporated by reverence