U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended _______June 30, 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: 0-26075
American Kiosk Corporation
(Exact name of small business issuer as specified in its charter)
Delaware 59-3452641
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4400 PGA Blvd., suite 500, Palm Beach Gardens, FL 33410
(Address of Principal Executive Office)
(561) 627-9002
(Issuer s Telephone Number)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the Issuer (1) filed all reports required to be filled by Section 13 or15 (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 Yes X No ________
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or
15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes______
No________
Not Applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer s classes of common Equity, as of the latest
practical date:
Common stock $ .0001 par value 5,782,180 shares outstanding as of 8/14/00
Transitional Small Business Disclosure Format (check one) Yes X No ______
Part I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements and documents required by Item 310 ( b ) of Regulation
SB are attached hereto as Exhibits "A - D":
Condensed Balance Sheet As of
June 30, 2000 and December, 31 1999 Exhibit A
Condensed Statements of Changes
In Shareholder s Equity For the
Period from December 31, 1999 through
June 30, 2000 Exhibit B
Condensed Statements of Operations
For the 3 months ended June 30, 2000
And June 30, 1999 and, for the 6 months
ended June 30, 2000 and June 30, 1999 Exhibit C
Condensed Statements of Cash Flows
For the 6 months ended June 30, 2000 Exhibit D
And June 30, 1999
Notes to Condensed Financial Statements
EXHIBIT A
AMERICAN KIOSK CORPORATION
Condensed Balance Sheet as of
June 30, 2000 and December 31, 1999
YEAR END
6/30/00 12/31/99
******************************************************************************************
(UNAUDITED) (AUDITED)
ASSETS
CURRENT ASSETS:
CASH AND EQUIVALENTS $51,615 $141,391
ACCOUNTS RECEIVABLE $38,091 $0
INVENTORIES $0 $0
DEPOSITS & OTHER CURRENT ASSETS $42,127 $78,649
DEFERRED LOAN COSTS $123,060 $123,060
TOTAL CURRENT ASSETS $254,893 $343,100
PROPERTY & EQUIPMENT $92,311 $44,046
NOTE RECEIVABLE $129,805 $57,720
OTHER ASSETS $96,585 $96,277
GOODWILL $622,473 $0
TOTAL ASSETS $1,196,067 $541,143
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE & ACCRUALS $432,185 $327,431
CONVERTIBLE NOTES PAYABLE $809,623 $451,360
DEFERRED FRANCHISE REVENUE $0 $0
TOTAL CURRENT LIABILITIES $1,241,808 $778,791
NOTES PAYABLE - 30 MONTH $1,936,961 $1,936,961
TOTAL LIABILITIES $3,178,769 $2,715,752
SHAREHOLDERS' EQUITY:
COMMON STOCK, $.0001 PAR $578 $428
ADDITIONAL PAID-IN-CAPITAL $2,057,210 $1,307,360
UNEARNED COMPENSATION $0 $0
ACCUMULATED DEFICIT ($4,040,490) ($3,482,397)
TOTAL SHAREHOLDERS' EQUITY ($1,982,702) ($2,174,609)
TOTAL LIABILITIES AND EQUITY $1,196,067 $541,143
EXHIBIT B
AMERICAN KIOSK CORPORATION
Condensed Statement of Changes in Shareholder's Equity
for the six months ended June 30, 2000
(Unaudited)
COMMON ADDITIONAL
STOCK PAID-IN ACCUMULATED UNEARNED SHRHLDR'S
SHARES AMOUNT CAPITAL DEFICIT COMPENSATION EQUITY
BALANCE DECEMBER 31, 1999 4,282,180 $428 $1,307,360 ($3,482,397) $0 ($2,174,609)
Purchase of Zero's Mr.
Submarine Inc 1,500,000 $150 $749,850 $750,000
NET LOSS ($558,093) ($558,093)
BALANCE JUNE 30, 2000 5,782,180 $578 $2,057,210 ($4,040,490) $0 (1,982,702)
EXHIBIT C
AMERICAN KIOSK CORPORATION
Condensed Statement of Operations
(Unaudited)
3 MO ENDED 3 MO ENDED 6 MO ENDED 6 MO ENDED
6/30/00 6/30/99 6/30/00 6/30/99
TOTAL REVENUES $215,520 $12,784 $396,386 $22,583
COST OF GOODS ($70,404) ($9,427) ($108,713) ($22,447)
SELLING, GENERAL & ADMIN EXPENSES ($295,577) ($308,195) ($687,155) ($665,320)
LOSS FROM OPERATIONS ($150,461) ($304,838) ($399,482) ($665,184)
OTHER EXPENSES ($88,981) ($24,768) ($158,611) ($43,569)
NET (LOSS) ($239,442) ($329,606) ($558,093) ($708,753)
NET LOSS PER SHARE ($0.041) ($0.079) ($0.099) ($0.170)
WEIGHTED AVG SHARES OUTSTANDING 5,782,100 4,189,606 5,656,109 4,178,521
EXHIBIT D
AMERICAN KIOSK CORPORATION
Condensed Statement of Cash Flow
(Unaudited)
6 MO ENDED 6 MO ENDED
6/30/00 6/30/99
CASH USED IN OPERATING ACTIVITIES ($411,420) ($1,133,397)
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment ($4,170) ($215,303)
Other $0 $0
Net cash used by investing activities ($4,170) ($215,303)
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes Payable $436,648 $1,152,522
Proceeds from issuance of stock $0 $23,210
Repayment of Notes Receivable ($50,000) $0
Net cash provided by financing activities $386,648 $1,175,732
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($28,942) ($172,968)
CASH AND CASH EQUIV, BEGINNING OF PERIOD $80,557 $350,136
CASH AND CASH EQUIV, AT END OF PERIOD $51,615 $177,168
AMERICAN KIOSK CORPORATION
Notes to Financial Statements
(Unaudited)
Note 1 Financial Statements
In the opinion of the Company s management, the accompanying unaudited condensed financial statements
contain all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial
position of the Company as of June 30, 2000 and the results of operations and the cash flows for the three
months and six months ended June 30, 2000 and 1999. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted accounting principles have been
condensed or omitted. These statements should be read in conjunction with the audited financial statements for
the fiscal year ended December 31, 1999, and notes thereto contained in the Company s Form 10-KSB filed with
the Securities and Exchange Commission on April 14, 2000. The results of operations for the three months and
six months ended June 30, 2000 are not necessarily indicative of operating results to be expected for the full
fiscal year.
Note 2 - Notes Payable and Stock Issuance
During the six months ended June 30, 2000, the Company issued 1,500,000 shares of Common Stock (valued at
$.50 per share) related to the asset purchase of Zero s Mr. Submarine Inc. The Company also received funding
from the issuance of additional private placement units of 12.5% secured notes aggregating $383,623.
ITEM 2. MANAGEMENT S DISCUSSION AND ANALYSIS
BUSINESS
The Company, incorporated in Delaware in May, 1997, has developed and implemented a national brand
franchise system of stand alone, in-line and drive-thru retail outlets to deliver popular food products to
consumers. The Company initially focused primarily on brick oven pizza, however, since the recent asset
purchase of Zero s Mr. Submarine Inc., the franchisor of a 55 unit hot submarine sandwich chain, located in
Virginia Beach, VA, the Company has changed its focus and direction. The Company now intends to focus its
resources on the expansion and improvement of the Zero s chain.
The Company is currently engaged in the sale of franchises to operate fast food outlets from stand
alone, in-line and drive-thru retail units. The Company s outlets sell proprietary hot submarine sandwiches and
other food products.
LIQUIDITY AND CAPITAL RESOURCES
The Company raised no new capital during the last quarter.
REVENUES
Revenues for the three months ended June 30, 2000, were $215,520 as compared to $12,784 for the
three months ended June 30, 1999. Revenues for the six months ended June 30, 2000, were $396,386 as
compared to $22,583 for the six months ended June 30, 1999. The Large increases were attributable to the
franchise fees and royalty fees generated from the recently acquired Zero s Mr. Submarine business.
COST OF GOODS / FRANCHISE FEE AND ROYALTY FEE COMMISSIONS
Franchise fee and royalty fee commissions for the three months ended June 30, 2000, were $70,404 as
compared to cost of goods sold of $9,427 for the same period ending June 30, 1999. Franchise fee and royalty
fee commissions for the six months ended June 30, 2000 were $108,713 as compared to cost of goods sold of
$22,447 for the same period ending June 30, 1999. These increases were attributable to the large increase in
revenue generated through the acquisition of Zero s franchises, as well as the sale of new franchises for the
Zero s chain.
SELLING EXPENSES & ADMINISTRATIVE COSTS
Selling, General and Administrative costs for the three months ended June 30, 2000 were $295,577 as
compared to $308,195 for the same period ending June 30, 1999. Selling, General and Administrative costs for
the
six months ended June 30, 2000 were $687,155 as compared to $665,320 for the same period ending June 30,
1999. The decrease in last quarter s expenses as compared to the same quarter in 1999, was achieved despite the
addition of significant overhead with the purchase of the Zero s chain in January, 2000. A program of cost
savings and reductions brought about this decrease even while revenue was increasing.
NET PROFIT/LOSS
The Company s net loss per share for the three months ended June 30, 2000 was 4.1 cents as compared
to 7.9 cents per share for the three months ended June 30, 1999. The net loss per share for the six months
ended June 30, 2000 was 9.9 cents as compared to 17.0 cents per share for the six months ended June 30, 1999.
This improvement in net loss is attributable to the increase in revenue generated from Zero s and also is affected
by the addition of 1,500,000 shares resulting from the purchase of Zero s assets.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits.
Exhibit No. Description
*27 Financial Data Schedule
*Filed as exhibit to this Report.
Reports on Form 8-K.
The Company filed no reports on Form 8-K during the period.
In accordance with Section 12 (g) of the Securities Exchange Act of 1934, the Registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN KIOSK CORPORATION
By: /s/ Richard J. Michael
-------------------------------------------
Richard J. Michael, President
By: /s/ Larry E. Graybill
------------------------------------------
Larry E. Graybill
Vice-President, Chief Financial Officer
and Principal Accounting Officer