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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ______________________
Commission File Number: 0-13113
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Newman Communications Corporation
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(Exact Name of Registrant as Specified in Its Charter)
New Mexico 85-0291974
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
211 West Wall Street, Midland, Texas 79701
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(Address of Principal Executive Officers) (Zip Code)
Registrant's Telephone Number, Including Area Code: (915) 682-1761
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N/A
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Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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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Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
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As of November 12, 1996, the registrant had 2,552,064 shares of its
common stock, no par value, outstanding.
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NEWMAN COMMUNICATIONS CORPORATION
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
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Item 1. Financial Statements - (Unaudited)
Balance Sheet -- September 30, 1996 and December 31, 1995 . . . . . . . . . . 3
Statements of Operations -- Quarters ended September 30, 1996
and September 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Operations - Nine months ended September 30, 1996
and September 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Cash Flows -- Nine months ended September 30, 1996
and September 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . 8
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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ITEM 1. FINANCIAL STATEMENTS - (UNAUDITED)
Newman Communications Corporation
(A Development Stage Company)
Balance Sheet
September 30, 1996 and December 31, 1995
ASSETS
September 30, December 31,
1996 1995
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CURRENT ASSETS
Cash $ 2,794 $ 12,854
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TOTAL ASSETS $ 2,794 $ 12,854
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued liabilities $ 6,034 $ -0-
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Total Liabilities $ 6,034 -0-
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SHAREHOLDERS' EQUITY
Preferred stock, no par value, authorized
2,000,000 shares, 0 issued and outstanding -0- -0-
Common stock, no par value, authorized
8,000,000 shares, 2,552,064 issued and
outstanding at September 30, 1996 and
858,500 issued and outstanding at
December 31, 1995, respectively 1,410,887 1,409,193
Common stock warrants 11,406 11,406
Retained earnings (deficit) (1,392,275) (1,392,275)
Deficit accumulated during the developmental
stage (since November 23, 1993,
reorganization) (33,258) (15,470)
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Total Shareholders' Equity (loss) (3,240) 12,854
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 2,794 $ 12,854
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Newman Communications Corporation
(A Development Stage Company)
Statements of Operations
For the Quarters Ended September 30, 1996 and September 30, 1995
For the Period
November 23, 1993
(Date of Reorgani-
September 30, September 30, zation through
1996 1995 September 30, 1996
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REVENUE $ -- $ -- $ --
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Total Revenue -- -- --
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EXPENSES
Professional fees 4,564 -- 29,286
Regulatory expense -- -- 1,050
Advertising and marketing -- -- 940
Miscellaneous expense 12 30 924
Office supplies -- -- 1,058
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Total Expenses 4,576 30 33,258
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Net income (loss) before taxes (4,576) (30) (33,258)
Provision for income taxes -- -- --
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NET INCOME (LOSS) $ (4,576) $ (30) $ (33,258)
========= ========= =========
PRIMARY EARNINGS PER COMMON SHARES
Net Earnings (loss) NIL NIL (.04)
========= ========= =========
Weighted Average common shares outstanding 1,987,543 840,500 818,754
========= ========= =========
FULLY DILUTED EARNINGS PER COMMON SHARE
Net Earnings (loss) NIL NIL (.04)
========= ========= =========
Weighted Average common shares outstanding 1,987,543 840,500 818,754
========= ========= =========
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Newman Communications Corporation
(A Development Stage Company)
Statements of Operations
For the Nine Months Ended September 30, 1996 and September 30, 1995
For the Period
November 23, 1993
(Date of Reorgani-
September 30, September 30, zation through
1996 1995 September 30, 1996
--------------- --------------- ------------------
REVENUE $ -- $ -- $ --
----------- ----------- -----------
Total Revenue -- -- --
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EXPENSES
Professional fees 16,778 4,451 29,286
Regulatory expense 125 550 1,050
Advertising and marketing -- 608 940
Miscellaneous expense 12 64 924
Office supplies 873 -- 1,058
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Total Expenses 17,788 5,673 33,258
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Net income (loss) before taxes (17,788) (5,673) (33,258)
Provision for income taxes -- -- --
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NET INCOME (LOSS) $ (17,788) $ (5,673) $ (33,258)
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PRIMARY EARNINGS PER COMMON SHARES
Net Earnings (loss) (.01) (.01) (.04)
=========== =========== ===========
Weighted Average common shares outstanding 1,234,848 838,500 818,754
=========== =========== ===========
FULLY DILUTED EARNINGS PER COMMON SHARE
Net Earnings (loss) (.01) (.01) (.04)
=========== =========== ===========
Weighted Average common shares outstanding 1,234,848 838,500 818,754
=========== =========== ===========
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Newman Communications Corporation
(A Development Stage Company)
Statements of Cash Flows
For the Nine Months Ended September 30, 1996 and September 30, 1995
For the Period
November 23, 1993
(Date of Reorgani-
September 30, September 30, zation through
1996 1995 September 30, 1996
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Cash flows from operating activities:
Net income (loss) $ (17,788) $ (5,673) $ (33,258)
Increase in accrued liabilities 6,034 -- 6,034
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Net cash used from
operating activities (11,754) (5,673) (27,224)
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Cash flows from investing activities -- -- --
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Cash flows from financing activities:
Sales of common stock 1,694 -- 1,694
Warrants exercised -- 3,000 14,000
Priority claims payments -- -- (25)
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Total financing activities 1,694 3,000 15,669
Net increase (decrease) in cash (10,060) (2,673) (11,555)
Cash at beginning of period 12,854 6,033 14,349
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Cash at end of period $ 2,794 $ 3,360 $ 2,794
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Newman Communications Corporation ("the Company") is considered to be
in the development stage as defined in Statement of Financial Accounting
Standards No. 7. The Company has had no business operations and no material
assets since it filed a petition (the "Petition") for reorganization under
Chapter 11 of the United States Bankruptcy Code with the United States
Bankruptcy Court for the Western District of Texas (the "Court") in August
1992. The Company's expenses were principally its audit fees and certain other
filing and administrative fees necessary to keep the Company in compliance with
its regulatory requirements.
LIQUIDITY AND CAPITAL RESOURCES
The Company filed with the Court a Plan of Reorganization (the "Plan")
on April 14, 1993, which was confirmed on September 13, 1993. Under the Plan,
the Company's unsecured creditors received either cash or a combination of
Common Stock and Class A, B and C Warrants. In addition, holders of
Pre-petition Common Stock received, at their option and upon payment of a $20
administrative fee to the Company's transfer agent, a combination of Common
Stock and Class A, B and C Warrants. A total of 332,500 shares of Common Stock
and 650,000 each of Class A, B and C Warrants were issued to unsecured
creditors and shareholders under the Plan. In addition, LITCO, the Company's
principal shareholder, contributed $20,000 to the Company and was designated as
a separate class under the Plan. LITCO received 1,000,000 each of Class A, B
and C Warrants. The exercise period for the Class A and B Warrants has
expired, with the exercise period for the Class C Warrants expiring on November
22, 1996.
During the nine months ended September 30, 1996, there was no revenue
or exercise of warrants. However, the Company issued to Halter Financial
Group, Inc. 1,693,564 shares of the Company's common stock in exchange for the
payment of $1,694.00. Certain regulatory and operational expenses were paid in
this period resulting in a loss for the period of $17,788. The Company had
$2,794 in cash as of September 30, 1996 and accrued liabilities of $6,034
related to administrative expenses incurred by LITCO for the benefit of the
Company. Management is unable to estimate the number, if any, of warrants that
will be exercised in the future.
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PART II -- OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On August 12, 1996, the Company entered into an Agreement and
Plan of Merger (the "Merger Agreement") with Index, Inc., a Texas
corporation ("Index"). Under the terms of the Merger Agreement, each
shareholder of the Company will receive one-fourth (1/4) of a share of
Index common stock for each share of the Company's common stock subject
to the merger transaction. The effectiveness of the merger transaction
is subject to the satisfaction of numerous contingencies. A
Registration Statement on Form S-4 has been filed with and declared
effective by the Securities and Exchange Commission for the purpose of
registering the shares of Index common stock issuable to shareholders
of the Company under the Merger Agreement. Upon consummation of the
transactions contemplated in the Merger Agreement, the Company will
become a wholly-owned subsidiary of Index.
Subsequent to the execution of the Merger Agreement, the Company
issued to Halter Financial Group, Inc. 1,693,564 shares of the
Company's common stock in exchange for the payment of $1,694.00.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 - Financial Data Schedule
(b) Form 8-K:
The Company filed no reports on Form 8-K and none were
required to be filed during the quarterly period ended
September 30, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEWMAN COMMUNICATIONS CORPORATION
(Registrant)
Date: November 13, 1996 By: /s/ Glenn A. Little
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Glenn A. Little, President
(Duly Authorized Officer and Principal
Financial and Accounting Officer)
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EXHIBIT INDEX
Exhibit No. Description
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Ex-27 Financial Data Schedule