1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2000
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 0-23111
CABLE LINK, INC. (DBA A NOVO BROADBAND, INC.)
(Name of Small Business Issuer in Its Charter)
OHIO 31-1239657
(State of Incorporation) (I.R.S. Employer Identification No.)
3015 GREENE STREET, HOLLYWOOD, FLORIDA 33020
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number, including area code:
(954) 922-8776
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
The aggregate market value of the voting and non-voting common equity
(which consists solely of shares of Common Stock) held by non-affiliates of the
issuer as of January 31, 2001, computed by reference to the closing sales price
of the issuer's Common Stock on the Nasdaq Bulletin Board on that date, was
approximately $5,046,185.
The number of shares of the issuer's Common Stock outstanding as of
January 31, 2001 was 4,842,002.
Transitional Small Business Disclosure Format. Yes [X] No [ ]
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CABLE LINK, INC, DBA A NOVO BROADBAND, INC.
FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2000
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION (UNAUDITED)
Item 1. Consolidated Balance Sheets at December 31, 2000 and September 30, 2000 3
Consolidated Statements of Operations for the Three Months Ended 5
December 31, 2000 and 1999
Consolidated Statements of Cash Flows for the Three Months ended 6
December 31, 2000 and 1999
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of 9
Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities; Use of Proceeds 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
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CABLE LINK, INC, DBA A NOVO BROADBAND, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(AUDITED)
DECEMBER 31, SEPTEMBER 30,
2000 2000
------------ -------------
CURRENT ASSETS
Cash and cash equivalents.................................. $ 6,569,393 $ 7,104,915
Accounts receivable, net................................... 2,721,934 2,508,590
Inventories, net........................................... 1,516,894 1,481,718
Notes receivable, related parties.......................... 211,982 200,000
Prepaid and other assets................................... 211,928 160,324
Deferred income taxes...................................... 47,000 47,000
------------ ------------
Total current assets..................................... 11,279,131 11,502,547
PROPETY AND EQUIPMENT, net................................... 701,901 701,740
OTHER ASSETS
Notes receivable, related parties.......................... 166,667 200,000
Goodwill, net.............................................. 3,099,552 3,167,411
Deferred income taxes...................................... 597,749 641,000
Other assets............................................... 93,162 28,039
------------ ------------
TOTAL ASSETS $ 15,938,162 $ 16,240,737
============ ============
See accompanying notes to the consolidated financial statements.
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CABLE LINK, INC, DBA A NOVO BROADBAND, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(AUDITED)
DECEMBER 31, SEPTEMBER 30,
2000 2000
------------ -------------
CURRENT LIABILITIES
Current portion of long-term obligations . $ 189,913 $ 192,496
Notes payable - bank ..................... -- 937,569
Accounts payable ......................... 2,456,508 1,911,285
Accrued expenses ......................... 295,521 324,805
------------ ------------
Total current liabilities .............. 2,941,942 3,366,155
------------ ------------
LONG-TERM OBLIGATIONS ...................... 145,834 166,667
------------ ------------
Total liabilities ...................... 3,087,776 3,532,822
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, no par value ............... 13,507,535 13,449,014
Additional paid-in-capital ............... 159,136 159,136
Retained deficit ......................... (816,285) (900,235)
------------ ------------
Total stockholders' equity ............. 12,850,386 12,707,915
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .. $ 15,938,162 $ 16,240,737
============ ============
See accompanying notes to the consolidated financial statements.
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CABLE LINK, INC, DBA A NOVO BROADBAND, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31,
2000 1999
-------------- --------------
Revenues ................................... $ 4,726,400 $ 2,260,213
Cost of sales .............................. 3,391,809 1,127,326
----------- -----------
Gross profit ............................ 1,334,591 1,132,887
Selling, general and administrative expenses 1,310,663 703,264
----------- -----------
Income from operations .................. 23,928 429,623
Interest expense .......................... 7,320 36,527
Interest income ........................... 110,593 --
----------- -----------
Income before income taxes .............. 127,201 393,096
Provision for taxes ....................... 43,251 370,529
----------- -----------
Income from continuing operations ....... 83,950 22,567
Discontinued operations:
Loss from operations of discontinued
division, net of tax benefit of
$0 and $19,000 respectively ......... -- (68,773)
Loss on disposal of division, net of tax
benefit of $0 and $266,000
respectively ........................ -- (982,110)
----------- -----------
Net income (loss) .......................... $ 83,950 $(1,028,316)
=========== ===========
Basic Earnings Per Share
Income from continuing operations ....... $ 0.02 $ 0.01
Loss on discontinued operations ......... -- (0.62)
----------- -----------
Net income (loss) per share ............. $ 0.02 $ (0.61)
=========== ===========
Weighted average shares outstanding ..... 4,759,645 1,695,076
=========== ===========
Diluted Earnings Per Share
Income from continuing operations ....... $ 0.02 $ 0.01
Loss on discontinued operations ......... -- (0.61)
----------- -----------
Net income (loss) per share ............. $ 0.02 $ (0.60)
=========== ===========
Weighted average shares outstanding ..... 5,111,645 1,723,151
=========== ===========
See accompanying notes to the consolidated financial statements.
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CABLE LINK, INC, DBA A NOVO BROADBAND, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31,
2000 1999
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) ....................................... $ 83,950 $ (912,316)
----------- -----------
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization ........................ 140,798 162,355
Loss on disposal of property and equipment ........... -- 7,199
Provision for losses on receivables .................. 14,402 30,583
Provision for inventory obsolescence ................. 24,702 --
Loan to former CEO repaid by bonus.................... 33,333
Deferred income taxes ................................ 43,251 137,001
Loss on disposal of division ......................... -- 982,110
(Increase) decrease in operating assets:
Accounts receivable .............................. (227,746) 281,903
Income tax receivable ............................ -- (30,125)
Inventories ...................................... (59,878) (127,346)
Prepaid and other assets ......................... (116,727) 111,886
Increase (decrease) in operating assets:
Accounts payable ................................. 545,223 (349,562)
Accrued warranty ................................. -- (33,993)
Accrued expenses ................................. (29,284) 48,774
Other ............................................ -- 36,133
----------- -----------
Total adjustments ............................ 433,197 1,256,918
----------- -----------
Net cash provided by operating activities ............... 517,147 228,602
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment ...................... (73,100) (72,169)
Proceeds from disposal of property ...................... -- 7,871
Increase in notes receivable ............................ (11,982) --
Increase in other assets ................................ (65,123) --
----------- -----------
Net cash used in investing activities ................... (150,205) (64,298)
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options and warrants .... 58,521 --
Net payments on obligations ............................. (960,985) (81,763)
----------- -----------
Net cash used in financing activities ................... (902,464) (81,763)
Net increase (decrease) in cash and cash equivalents .... (535,522) 82,541
Cash and cash equivalents at beginning of period ........ 7,104,915 130,572
----------- -----------
Cash and cash equivalents at end of period .............. $ 6,569,393 $ 213,113
=========== ===========
See accompanying notes to the consolidated financial statements.
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CABLE LINK, INC, DBA A NOVO BROADBAND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements, which should be read in
conjunction with the consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-KSB for the period ended
September 30, 2000, are unaudited (except for the September 30, 2000
consolidated balance sheet, which was derived from the Company's audited
financial statements), but have been prepared in accordance with generally
accepted accounting principles for interim financial information. 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 only of normal recurring adjustments)
considered necessary for a fair presentation have been included.
Operating results for the three months ended December 31, 2000 are not
necessarily indicative of the results that may be expected for the entire fiscal
year ending September 30, 2001.
2. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
DECEMBER 31
2000 1999
---------- ----------
NUMERATOR:
Income from continuing operations .... $ 83,950 $ 22,567
========== ==========
DENOMINATOR:
Denominator for basic earnings per share -
Weighted-average shares outstanding ... 4,759,645 1,695,076
Effect of dilutive securities:
Employee stock options ................... 313,575 28,075
---------- ----------
Denominator for diluted earnings per share 5,073,220 1,723,151
========== ==========
Basic earnings per share ................ $ 0.02 $ 0.01
========== ==========
Diluted earnings per share .............. $ 0.02 $ 0.01
========== ==========
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3. NOTES PAYABLE
The Company satisfied an indebtedness to a commercial bank in October 2000,
pursuant to its guarantee of indebtedness of Auro Computer Services (our former
subsidiary whose operations ceased in February 2000), which was reflected as a
liability in our balance sheet as of September 30, 2000.
4. LEASES
The Company has entered into long-term lease agreements for new service centers
in Los Angeles, California and Hollywood, Florida. The lease agreement in Los
Angeles is for a five year term, expiring in November of 2005, and has minimum
lease payments of $978,360. The lease agreement in Hollywood also is for a five
year term, expiring in February 2006, and has minimum lease payments of
$921,000.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and Notes thereto included in the
Company's Transitional Report on Form 10-KSB for Fiscal Periods ended September
30, 2000 (the "2000 Annual Report.") The Company believes that all necessary
adjustments (consisting only of normal recurring adjustments) have been included
in the amounts stated below as necessary to present fairly the following
quarterly information. Quarterly operating results have varied significantly in
the past and can be expected to vary in the future. Results of operations for
any particular quarter are not necessarily indicative of results of operations
for a full year.
OVERVIEW
Cable Link, Inc. ("we" or the "Company") now operates under the name "A
Novo Broadband, Inc." Our decision to change our name reflects a fundamental
change in our business plan with the objective of establishing a comprehensive
equipment servicing business directed to the commercial broadband equipment
market. We are now adapting and expanding our operations to enable us to offer a
range of equipment repair and maintenance services to manufacturers of decoders,
linegear, cable modems and other equipment used in the delivery of broadband
signals and to the operators of the systems in North America that employ this
equipment. We are taking this step in anticipation of a dramatic shift of
broadband transmission services from analog to digital format which has already
begun in the United States and Canada and which has been underway in Europe for
nearly four years. Based on our plan, we believe we can seize a significant
early share of the service and repair market that industry sources estimate will
grow to $1 billion annually in the U.S. alone by the year 2005.
Our plan is based on the introduction of high volume processing
techniques and proprietary information management software that have been
implemented successfully in Europe and are available to us through our new
relationship with the group of companies led by A Novo S.A. We believe that
these resources, in combination with our new management team, expanded capital,
existing skilled labor force, technical knowledge base, and industry
relationships will enable us to become the primary equipment service provider to
an expanded broadband equipment market in North America.
We plan to continue to function as a distributor and marketer of new and
refurbished broadband equipment, primarily in secondary and international
markets. During our fiscal year ending September 30, 2001, we expect to derive a
significant portion of our revenues from these activities. The equipment we
currently sell and service for manufacturers and system operators includes
analog converters and digital decoders, cable and DSL modems, linegear, headend,
power generators and power supplies, and test equipment. Our capabilities to
deal with used equipment should help to foster relationships with many of the
large system operators we will continue to target as customers. Over the next
several years, we anticipate that our relatively low-margin equipment sales
activities will represent a decreasing portion of our total revenues as our
volume in repair and related services increases and these functions come to
provide our principal revenue source.
A primary focus of our efforts to achieve a significant share of the
broadband equipment servicing market will be the capture of digital warranty
service authorizations from manufacturers. We regard it as unlikely that any
manufacturer will enter into warranty service arrangements with more than one or
two established service operations in North America. To encourage manufacturers
to grant us these authorizations, we plan to create comprehensive servicing
arrangements with them and the system operators who use their equipment. We
anticipate that these arrangements will be based upon a core of services
consisting of:
- - screening, testing and profiling new equipment on behalf of manufacturers
prior to initial installation; and
- - calibrating, repairing, upgrading and maintaining the equipment as an
authorized warranty service center on behalf of manufacturers and under
post-warranty arrangements on behalf of system operators.
In conjunction with these core services, we expect to offer a variety of
asset management and logistics functions, including tracking of customer
inventory (by monitoring the warranty and upgrade status of individual
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units of equipment on a real time basis), and receiving, storing, packing and
shipping new and used customer assets to multiple locations.
We are encouraged in our expectations of an expanding market for our
services by outsourcing decisions already made at some of the major equipment
manufacturers. We believe these decisions have been based on the stresses of
meeting current demand for their equipment and on the remote and decentralized
locations of their manufacturing plants. To attract outsourcing business, we
intend to demonstrate a capacity that offers manufacturers and operators
significant efficiencies and economies of scale. This requires, among other
things, that we maintain a network of regional service centers. As a result of
acquisitions and developments since August 2000, we already offer service from
regional service centers in Florida, Ohio, California and Montreal, Canada. We
plan to expand this network as needed by acquiring or opening additional
facilities in other appropriate locations.
We are currently approved as an "In-Warranty Service Center"
- by Scientific Atlanta for digital decoders in Canada and for
advanced analog decoders, analog converters, and remote controls
in Canada and the United States,
- by Motorola for analog decoders, analog converters, remote
controls, linegear and headend equipment in Canada,
- by Lindsay and ANTEC for linegear in Canada,
- by Blonder Tongue for headend in Canada,
- by Alpha Technologies for power supplies in the United States,
- by Powerguard for power supplies in Canada, and
- by Sadelco for test equipment.
Our principal customers among broadband system operators currently
include Adelphia, AT&T Broadband, Ameritech New Media, Cablevision, Charter,
Comcast, Insight Communications, Time Warner and Videotron.
We currently distribute certain power supply and other products for Alpha
Technologies, ADC Telecom, Aegis and Times Fiber to customers outside the United
States.
RECENT DEVELOPMENTS
We have recently signed the following service agreements which confirm
the focus of our new business plan.
VIDEOTRON, LTEE - We have signed a service agreement with Videotron to
provide service for out-of-warranty digital decoders. Under terms of an existing
agreement with Scientific-Atlanta, A Novo is the only authorized service center
in Canada for SA digital decoders in-warranty work. Videotron, based in
Montreal, is the third largest cable television operator in Canada with 1.6
million customers.
ALPHA TECHNOLOGIES, INC. - We have signed a Service Center Agreement with
Alpha to provide service and support throughout the United States, which expands
our activities from the existing Regional arrangement. Alpha, based in
Bellingham, Washington, is the leading manufacturer of power supplies which
provide critical power conditioning and emergency back-up power to cable
television delivery networks. Alpha has nearly one million power installations
worldwide.
ADELPHIA COMMUNICATIONS CORP. - We have signed an Asset Management
Services Agreement with Adelphia to provide asset management and transfer
services, including warehousing, inventory, repair and
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sale of Adelphia analog products. Adelphia, based in Coudersport, Pennsylvania
is a cable system operator with more than 5.5 million residential customers.
AMERITECH NEW MEDIA, INC. - We have signed an exclusive service agreement
with Ameritech New Media, which authorizes us to repair their converters,
headend, power supplies and linegear in the United States. Ameritech, based in
Chicago, Illinois provides cable to more than 300,000 customers in over 100
communities containing 1.9 million households in the Chicago, Cleveland,
Detroit, and Columbus, Ohio metropolitan areas.
FORWARD LOOKING STATEMENTS
Certain statements in this report are forward-looking statements
regarding future events or future financial performance. These statements are
subject to a number of risks and other factors which could cause actual results
to differ materially from those anticipated by the forward-looking statements.
Among such factors are industry development (including delays in the rate at
which digital broadband services are introduced in our markets), competition
(including direct competition by equipment suppliers and broadband system
operators), customer acceptance of and demand for our services, technological
developments which may render our services obsolete or unnecessary, availability
of financing and our ability to expand our facilities and manage growth and
change, general business and economic conditions, and our likely increasing
dependence on new information systems. Reference is made to our 2000 Annual
Report for further information regarding such factors and other risks affecting
our business. Forward-looking statements are necessarily dependent upon
assumptions, estimates and data that are uncertain. No assurance can be given
that the anticipated results will be achieved, and future results may in fact
differ materially from those anticipated.
RESULTS OF OPERATIONS
The following table contains certain amounts, expressed as a percentage
of net sales, reflected in the Company's consolidated statements of income for
the three months ended December 31, 2000 and 1999:
THREE MONTHS ENDED
DECEMBER 31
2000 1999
------- --------
Revenues ................................. 100.0% 100.0%
Cost of revenues ......................... 71.8 49.9
----- -----
Gross profit ............................. 28.2 50.1
Selling, general & administrative
expenses................................ 27.7 31.1
----- -----
Income from operations ................... 0.5 19.0
Interest expense ......................... 0.1 1.6
Interest income .......................... 2.3 0.0
----- -----
Net income before tax .................... 2.7 17.4
Provision for income tax ................. 0.9 16.4
----- -----
Income from continuing operations ........ 1.8 1.0
===== =====
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THREE MONTHS ENDED DECEMBER 31, 2000 RESULTS COMPARED TO THREE MONTHS ENDED
DECEMBER 31, 1999
(Due to the recent change in our fiscal year end to September 30, the
three month period ended December 31, 2000 is the first quarter of our new 2001
fiscal year, while the three months ended December 31, 1999 was the last quarter
of our 1999 fiscal year. For convenience, we refer to the three months of 1999
as the first quarter of our 2000 fiscal year.)
SALES
Our revenues for the first quarter of fiscal 2001 increased $2.4 million,
or 109%, over the same quarter for fiscal 2000. We record our revenues in three
categories: repair and refurbishment, logistics and asset management, and
brokerage and distribution. Repair and refurbishment activities are related by
the process that generates the revenue - our service technicians modify
equipment. The distinction between the two is that we repair equipment owned by
others, we refurbish equipment that we have purchased and intend to resell.
Logistics and asset management are services that we provide manufacturers and
system operators to optimize the deployment of their equipment and to provide
efficient distribution and storage of their equipment. Brokerage and
distribution revenue is generated from the sale of equipment to others. Our
distribution revenue is derived by the sale of new equipment, which we have
purchased and inventoried in anticipation of reselling. Brokerage revenue is
generated by purchase of new or used equipment for which we have an immediate
resale opportunity. Generally, we take title to the equipment, but not
possession of this equipment.
During the 2001 period we generated 66%, or $3.2 million, of our revenues
from brokerage and distribution sales. Brokerage sales during fiscal 2000
were 30%, or $676,000, of our revenue and there were no distribution sales.
Sales from refurbishment and repair during the 2001 quarter were $1.5 million,
or 32% of revenue, compared to $1.6 million and 70% of revenue during the same
period in the prior fiscal year. However, repair revenue, which is the focus of
new operating plan, doubled from $248,000 last year to $462,000 during the
current year's quarter.
Our new business plan is focused on increasing repair revenue generated
by our relationships with the manufacturers of equipment for the broadband
market and the operators that use them. Brokerage and distribution sales are
currently necessary to sustain existing relationships and develop new
relationships with system operators. Additionally, we expect these revenues to
provide needed cash flow to assist in funding our new business plan. Currently,
we are only capable of providing major repair for digital decoders in our
service center in Montreal. We are rapidly duplicating the processes currently
in place in our service center in Montreal in our remaining service centers, to
ensure that we can provide these services at all of our locations by the end of
our current fiscal year.
COST OF GOODS SOLD
The cost of revenues for the first quarter of fiscal 2001 was 72%,
compared to 50% of revenues for fiscal 2000. This decrease in gross margin
percentage is a result of two factors. The gross margin generated by brokerage
and distribution sales is much lower than the gross margin generated by the sale
of refurbished equipment or by revenue from equipment repairs. Sixty six percent
of our revenue in the 2001 quarter was generated by brokerage and distribution
sales, compared to 2000 when we realized 59% of our revenue from refurbished
equipment sales at much higher margins. Adding to this disparity is that fact
that the sales of refurbished equipment during 2000 yielded unusually high
margins for that type of revenue. Comparable results for refurbished equipment
sales would be difficult to achieve in any period.
We have expanded our service capacity by adding service centers in Los
Angeles, Montreal and Hollywood, Florida during the past six months. Direct
labor expenses associated with each of these new locations is recognized in
costs of goods sold for the fiscal 2001 period, although we have not begun to
realize our full service potential at any of these locations.
OPERATING EXPENSES
Operating expenses in the 2001 quarter increased $600,000, or 86%, over
the previous year. This increase is directly attributable to our three new
service centers which generated $615,000 of operating expenses during the
period. Additionally, we have expanded our executive staff in anticipation of
greater needs associated with our new business plan. Operating expenses at our
Columbus location decreased year over year.
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INCOME TAX PROVISION
The effective tax rate on continuing operations was 34% for the 2001
quarter. Due to nonrecurring events and the adjustment of deferred tax assets at
the close on December 31, 1999, the effective tax rate for the quarter ended on
that date was 94%. This anomaly was due largely to the discontinuance of Auro's
operations (see below) which resulted in the write off of goodwill, which was
not deductible for tax purposes.
We have not recorded any valuation allowance against our deferred tax
assets, because it is management's belief that we will realize profits in the
near term that will fully utilize our net operating loss carryforwards.
DISCONTINUED OPERATIONS
In February 2000, we discontinued the business of Auro. We recorded a
charge for the expected loss on disposition of Auro's assets, net of tax
effects, as of the end of the prior fiscal year, which was then December 31,
1999. The assets were written down to their estimated net realizable values. We
do not anticipate any further related adverse impact on our operating results.
Pursuant to an outstanding guarantee, we satisfied Auro's indebtedness to a
commercial bank in October 2000. This indebtedness was reflected as a liability
on our balance sheet as of September 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
For the past three years, we have satisfied our operating cash
requirements principally through cash flow from operations and borrowings under
a line of credit. In the three months ended December 31, 2000, we had available
$481,000 of cash from operations. We spent $73,000 for equipment purchases,
primarily for testing equipment.
We currently have a $1.5 million revolving line of credit with our
commercial bank under an arrangement that expires on September 30, 2001. The
line of credit provides for interest at the bank's prime rate plus 2%. At
September 30, 2000, there was a balance of $937,000 owed to the bank, which was
paid in full in October 2000.
We believe that cash flow from operations, our existing cash resources,
and funds available under our line of credit will be adequate to meet our
working capital and capital expenditure needs for the 2001 fiscal year. We
expect to spend at least $3.0 million on capital expenditures during this fiscal
year, primarily to improve our equipment capabilities for servicing digital
broadband equipment and to provide furniture and fixtures and computer equipment
for our expanded facilities in Hollywood, Los Angeles, and Montreal and an
anticipated move to new facilities in Columbus.
An important element of our business strategy has been, and continues to
be, the acquisition of similar businesses and the integration of such businesses
into our existing operations. Such future acquisitions, if they occur, may
require that we obtain additional funds. We would expect to seek such funds
through private or public sales of additional equity securities or debt
instruments.
CONTINGENCIES
We are a party from time to time to ordinary litigation incidental to our
business, none of which is expected to have a material adverse effect on the
results of operations, financial position or liquidity of the Company.
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CABLE LINK, INC, DBA A NOVO BROADBAND, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities; Use of Proceeds
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
2.1 Articles of Incorporation of the Company. (Filed with the SEC as
an exhibit to the issuer's registration statement on Form 10-SB
(file no. 0-2311).)
2.3 Code of Regulations of the Company. (Filed with the SEC as an
exhibit to the issuer's registration statement on Form 10-SB (file
no. 0-2311).)
b. Reports on Form 8-K
The issuer filed a Current Report on Form 8-K dated November 3, 2000,
reporting under Item 5 the adoption of a proposal to do business under
the assumed name "A Novo Broadband, Inc." and a change in the issuer's
fiscal year end from December 31 to September 30.
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CABLE LINK, INC, DBA A NOVO BROADBAND, INC.
SIGNATURES
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.
Cable Link, Inc, dba A Novo Broadband, Inc.
Date: February 12, 2001 By: /s/ David E. Chisum
----------------------------------------
David E. Chisum
Chief Financial Officer (Duly Authorized
Officer and Principal Financial Officer)
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