UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 Quarterly Period Ended September 30, 2001
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transitional Period from to
Commission File Number 0-29379
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LEARNCOM, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
NEVADA 87-0622927
(State or other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
220 Technology Dr., Suite 210, Irvine, CA 92618
(Address of Principal Executive Offices)
(800) 824-8889
(Issuer's Telephone Number)
720 Industrial Drive, Bensenville, IL, 60106
(Former Address of Principal Executive Offices)
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Indicate by check mark whether the issuer (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 | |
The number of shares of the registrant's common stock outstanding as of November
14, 2001 was 801,723,898.
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Disclosure Page 1
LearnCom, Inc.
Form 10-QSB
For the Quarterly Period Ended September 30, 2001
Index
PAGE
NO.
-----
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
Condensed Consolidated Balance Sheets as of 3
September 30, 2001 and December 31, 2000
Condensed Consolidated Statements of 4
Operations for the three and nine months ended
September 30, 2001 and 2000.
Condensed Consolidated Statements of Cash 5
Flows for the nine months ended September 30,
2001 and 2000.
Notes to Condensed Consolidated Financial 6-8
Statements
Item 2. Management's Discussion and Analysis of 9-11
Financial Condition and Results of Operations.
PART II OTHER INFORMATION
Item 1. Legal Proceedings. 12
Item 2. Changes in Securities and Use of Proceeds. 12
Item 3. Defaults and Senior Securities. 12
Item 4. Submission of Matters To a Vote of Security Holders. 12
Item 5. Other Information. 12
Item 6. Reports on Form 8-K. 12
SIGNATURE 13
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Disclosure Page 2
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
LearnCom, Inc. and Subsidiary
Condensed Consolidated Balance Sheets - Unaudited
September 30 December 31
2001 2000
-------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 77,913 $ 105,495
Accounts receivable, net 1,060,241 425,410
Inventory 415,368 359,027
Prepaid expenses and other current assets 111,202 147,151
-------------------------------------
Total current assets 1,664,724 1,037,083
Furniture, fixtures and office equipment, net 432,002 370,109
Publishing rights and masters, net 1,129,669 1,265,824
Distribution rights, net 1,109,849 --
Goodwill, net 363,635 --
Deferred financing costs -- 191,667
Other non-current assets 166,195 53,177
-------------------------------------
Total assets $ 4,866,074 $ 2,917,860
=====================================
Liabilities and shareholders' equity (deficit)
Current liabilities:
Accounts payable and accrued expenses $ 1,860,886 $ 841,530
Bank line of credit 450,000 450,000
Note payable--employee 180,295 108,296
Note payable--related party -- 50,000
Bridge loan payable-related party 600,000 350,000
Note payable-distribution rights 90,000 120,000
Current portion of purchase consideration payable
100,000 125,000
Current portion of note payable 772,500 260,000
-------------------------------------
Total current liabilities 4,053,681 2,304,826
-------------------------------------
Long-term liabilities:
Note payable-employee 39,363 --
Subordinated bridge loans payable-related parties 1,000,000 --
Note payable, net of current portion -- 597,500
-------------------------------------
Total Long-term liabilities 1,039,363 597,500
-------------------------------------
Shareholders' equity (deficit):
Common stock 801,724 757,500
Additional paid in capital 1,073,517 402,000
Common stock subscribed 12,500 125,000
Accumulated deficit (2,114,711) (1,268,966)
-------------------------------------
Total shareholders' equity (deficit) (226,970) 15,534
-------------------------------------
Total liabilities and shareholders' equity (deficit) $ 4,866,074 $ 2,917,860
=====================================
See accompanying notes.
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Disclosure Page 3
LearnCom, Inc. and Subsidiary
Condensed Consolidated Statements of Operations - Unaudited
Three Months Ended Nine Months Ended
September 30 September 30
2001 2000 2001 2000
----------------------------------------------------------------------------
Net sales $ 1,929,561 $ 1,090,651 $ 4,327,476 $ 3,477,840
Cost of sales 1,017,521 417,984 2,281,350 1,393,644
----------------------------------------------------------------------------
Gross profit 912,040 672,667 2,046,126 2,084,196
Selling, marketing, general and
administrative expenses 844,329 929,366 2,219,531 2,296,082
----------------------------------------------------------------------------
Operating income (loss) 67,711 (256,699) (173,405) (211,866)
----------------------------------------------------------------------------
Other income (expenses):
Interest expense (50,702) (45,859) (153,724) (127,497)
Other income (expense), net (65,756) 41,608 (518,616) 41,829
----------------------------------------------------------------------------
Total other (expenses) (116,458) (4,251) (672,340) (85,668)
----------------------------------------------------------------------------
Income (loss) before taxes (48,747) (260,950) (845,745) (297,554)
Income tax provision - - -
----------------------------------------------------------------------------
Net income (loss) $ (48,747) $ (260,950) $ (845,745) $ (297,554)
============================================================================
Basic and diluted loss per share -- -- -- --
============================================================================
-- --
Weighted-average shares outstanding 801,723,898 751,042,000 790,488,399 611,458,000
============================================================================
See accompanying notes.
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Disclosure Page 4
LearnCom, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows - Unaudited
Nine Months Ended
September 30
2001 2000
-------------------------------------------
Operating activities
Net (loss) income $ (845,745) $ (297,554)
Adjustments to reconcile net (loss) income to net cash
used in operating activities:
Depreciation expense 64,413 50,083
Amortization expense 462,034 258,854
Changes in operating assets and liabilities
Accounts receivable (257,787) 113,514
Inventory (2,167) 2,520
Prepaid expenses and other assets (158,378) (201,581)
Accounts payable and accrued expenses 671,324 176,163
-------------------------------------------
Net cash provided (used) by operating activities (66,306) 101,999
-------------------------------------------
Investing activities
Purchases of property and equipment (110,866) (87,956)
Payments for publishing rights and masters (11,179) (184,930)
Payments for distribution rights agreements (1,124,938) --
Proceeds from sale of marketable securities 593,250 --
Business acquisitions, net of cash acquired (516,902) --
-------------------------------------------
Net cash (used) provided by investing activities (1,170,635) (272,886)
-------------------------------------------
Financing activities:
Issuance of common stock 125,000 125,000
Proceeds from revolving line of credit -- 75,000
Proceeds from notes payable - employee -- 120,000
Proceeds from notes payable - related party 250,000 --
Proceeds from bridge notes payable 1,200,000 --
Principal payment on bridge notes payable (200,000) --
Principal payment on notes payable (110,000) (227,805)
Principal payment on notes payable - employee and related
party (55,641) --
-------------------------------------------
Net cash provided by financing activities 1,209,359 92,195
-------------------------------------------
Net increase (decrease) in cash and cash equivalents (27,582) (78,692)
Cash at beginning of period 105,495 79,167
-------------------------------------------
Cash at end of period $ 77,913 $ 475
===========================================
See accompanying notes.
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Disclosure Page 5
1. Nature of Business
LearnCom operates in a single business segment producing and distributing
proprietary video programs and courses, and related consulting services, for use
in human resource and safety compliance training, and management development.
The programs and consulting contracts are sold to corporations, professional
organizations, government agencies and financial institutions, primarily in
North America.
2. Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. 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
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three- and nine-month periods ended
September 30, 2001 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2001.
The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
For further information, refer to the consolidated financial statements and
footnotes thereto included in LearnCom's consolidated financial statements
included in LearnCom's Annual Report on Form 10-KSB for the year ended December
31, 2000.
Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board (FASB) issued Statement
No. 141, "Business Combinations" and Statement No. 142 "Goodwill and Other
Intangible Assets." Statement 141 improves the transparency of the accounting
and reporting for business combinations by requiring that all business
combinations are accounted for under a single method, the purchase method. Use
of pooling-of-interests method is no longer permitted. Statement 141 requires
that the purchase method be used for all business combinations initiated after
June 30, 2001. Statement 142 requires that goodwill no longer be amortized to
earnings, but instead be reviewed for impairment. This change provides investors
with greater transparency regarding the economic value of goodwill and its
impact on earnings. The amortization of goodwill ceases upon adoption of
Statement 142, which for LearnCom will be January 1, 2002. Goodwill amortization
amounted to $5,444 during the nine month period ended September 30, 2001.
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Disclosure Page 6
3. Loss Per Share
Basic and diluted income (loss) per common share amounted to less than $0.01 for
all periods presented and are based upon the weighted average number of shares
of common stock outstanding, giving retroactive effect of the reverse
acquisition discussed in Notes 6. LearnCom has excluded all outstanding stock
options from the calculation of diluted income (loss) per share because they
would have an anti-dilutive effect.
4. Acquisitions
Videolearning Systems, Inc.
On January 24, 2001, LearnCom, Inc., an Illinois subsidiary of LearnCom
(LearnCom-Illinois) purchased 100% of the outstanding common stock of
Videolearning Systems, Inc. (VLS) for $533,000 in cash, a note payable to the
seller in the amount of $67,000 and 26,666,667 shares of LearnCom common stock
with an estimated market value on the date of purchase of $400,000. VLS
distributes a range of training media from producers and publishers and offers
management guidance in the selection of programs for management, leadership,
change, supervision, customer service, harassment, diversity and other employee
development topics. The acquisition of VLS was accounted for as a purchase. The
consolidated statements of operations of LearnCom include the results of
operations of VLS for the period subsequent to the effective date of
acquisition.
The consolidation was accounted for as a purchase business combination under
generally accepted accounting principles. Accordingly, the purchase price was
allocated to VLS tangible assets acquired and liabilities assumed based on their
estimated fair values. The determination of fair values of the tangible and
intangible assets acquired is currently in process and estimates were used for
excess in fair market value of the purchase price over the net tangible assets
of VLS and is being amortized over a 15-year period. The preliminary purchase
price allocation will be adjusted as the fair value of the assets acquired and
liabilities assumed in finalized.
The pro forma unaudited consolidated results of operations for the nine months
ended September 30, 2000, assuming the consummation of the acquisition of VLS as
of January 1, 2000, would have been as follows:
Total revenue $5,413,826
Net loss $(169,538)
Basic and diluted net loss per share --
TrainSeek, Inc.
On March 16, 2001, LearnCom entered into an agreement to purchase certain assets
of TrainSeek, Inc. for $200,000 in cash and 57,500,000 shares of unregistered
common stock with a value on such date of $862,000. In addition, the agreement
provided for an additional 42,500,000 shares of unregistered common stock to be
issued based upon certain performance goals attained by LearnCom using the
assets purchased. TrainSeek, Inc. was an on-line distributor of training
resources operating under the "trainseek.com" website.
The agreement was contingent upon creditor approval, which was negotiated on
TrainSeek's behalf by LearnCom. While the majority of creditors accepted the
settlement offered by LearnCom on TrainSeek's behalf, several creditors demanded
100% settlements, threatened legal action or were out of line with the offer.
Accordingly, on September 20, 2001, in accordance with the agreement, LearnCom
aborted the transaction with TrainSeek and agreed to return all assets,
including the website, customer lists and related materials.
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Disclosure Page 7
5. Provant Media, Inc.
On June 30, 2001, LearnCom entered into a 10-year license and exclusive
distribution agreement with Provant Media, Inc. (PMI) to provide master
distribution services for PMI's line of 300 videos and CD-ROM products and use
the Provant Media, Inc. Trademark. PMI and its predecessor, American Media, Inc.
(AMI), had developed one of the most comprehensive distributor networks in the
training media market. The network includes 168 domestic distributors and 75
international distributors operating out of 100 countries. The license fee paid
by LearnCom included $1,000,000 in cash and 250,000 shares of unregistered
common stock with an estimated market value on the date of the transaction of
$12,500. The cost of the distribution rights will be amortized over the term of
the agreement.
In the year prior to LearnCom's acquisition of the distribution rights, revenues
for the PMI master distributor channel were approximately $4 million.
6. Reverse Acquisition
In May 2000, LearnCom-Illinois entered into an Agreement and Plan of
Reorganization with Smokey Hill Services, Inc., a Nevada corporation
incorporated in 1985, whereby Smokey Hill acquired 100% of the issued and
outstanding stock of LearnCom in exchange for approximately 66% interest in its
common stock. In contemplation of the merger, Smokey Hill: 1) increased its
authorized common shares from 50,000,000 shares to 2,000,000,000 shares; 2)
received 14,000,000 shares that were returned and cancelled from its parent
company, VIP Worldnet, Inc.; and 3) completed a 125-for-1 split of its stock,
increasing its outstanding Common Stock from 2,060,000 shares to 257,500,000
shares.
7. Financing Arrangements
On April 30, 2001, LearnCom entered into a loan and security agreement with
American National Bank, whereby the maturity dates of the note payable ($772,500
outstanding at September 30, 2001) and the $500,000 revolving line of credit
($450,000 outstanding at September 30, 2001) were extended to April 28, 2002.
Based on the new agreement, substantially all of the assets of LearnCom,
including BNA Communications, Inc. and VLS, are pledged to secure the borrowings
owed to American National Bank. In addition, the line of credit is subject to a
borrowing base formula of eligible receivables. The new agreement also provides,
among other things, for the maintenance of collateral and places limits on
dividends, capital expenditures and other transactions. Certain shareholders of
LearnCom have guaranteed the amounts outstanding under the American National
Bank financing arrangements.
In July 2001, LearnCom entered into a loan agreement with related parties to
borrow $750,000, bearing interest of 8% per annum. The loan is considered
subordinate to the American National Bank loan and line of credit described
above.
In July 2001, LearnCom entered into four loan agreements to borrow a total of
$450,000 from non-related parties. The loans bear interest at 12.5% annum,
mature July 2006 and are subordinate to the American National Bank loan and line
of credit described above.
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Disclosure Page 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following information should be read in conjunction with the financial
statements and the notes thereto.
In order to keep LearnCom's stockholders informed of its future plans and
objectives, this Quarterly Report on Form 10-QSB and other reports and
statements issued by LearnCom from time-to-time contain, among other things,
certain statements concerning LearnCom's future plans, objectives, performance,
intentions and expectations that are or may be deemed to be "forward-looking
statements". For example, the words "believe," "expect," "anticipate," "project"
and similar expressions in connection with a statement of future events should
alert you to a forward-looking statement. Forward-looking statements speak only
as of the date the statement is made. LearnCom's ability to use forward-looking
statements has been fostered by the Private Securities Litigation Reform Act of
1995, which provides a "safe harbor" for forward-looking statements to encourage
companies to provide prospective information so long as those statements are
accompanied by meaningful cautionary statements identifying important factors
that could cause actual results to differ materially from those discussed in the
statement.
Although LearnCom believes that its expectations are based on reasonable
assumptions, its forward-looking statements are subject to a number of known and
unknown risks and uncertainties that could cause LearnCom's actual results,
performance and achievements to differ materially from those described or
implied in the forward-looking statements. These factors include among others,
LearnCom's ability to complete new products at planned costs and on planned
schedules, LearnCom's ability to attract and retain strategic partners and
consummate acquisitions, LearnCom's ability to leverage intangible assets in its
technology, and LearnCom's ability to maintain a sufficient level of financing
for its business strategy. Additional factors that are beyond LearnCom's control
and could influence results include market acceptance of LearnCom's products and
services and adoption of the Internet as a medium of commerce and communication.
OVERVIEW
LearnCom is a leading provider of human resource, management and safety
training courseware and consulting services to large and small businesses and
organizations. LearnCom offers over 6,000 programs and courses, both proprietary
and distributed, that encompass a wide array of management skills and business
topics typically characterized as "soft skills." Its courseware and consulting
services have traditionally been delivered over a variety of channels, including
film, videotape, compact disk, e-learning, textbooks and workbooks, and internal
customer workshops.
As with other training products and services companies, LearnCom has been
adversely affected by the slowdown in the economy. This has been particularly
apparent with LearnCom's HR Consulting and Training unit, which offers turnkey
solutions for companies in the area of sexual harassment prevention, diversity
and employment law.
The impact of the terrorist attacks of September 11 on the business is still
not fully assessable. LearnCom's September 2001 results were moderate and
relatively close to our short-term forecast. Sales in October 2001, however,
were down over $100,000 from LearnCom's expectations.
In response to the slowdown in demand for video-based training products,
LearnCom continues vigorous cost reduction, particularly in its overhead
structure. LearnCom has streamlined/flattened its organization, eliminated five
Vice-Presidents and cost reduced payroll by over 1/3.
Concurrently, LearnCom is expanding its sales operations in Des Moines,
Iowa. LearnCom has hired a Director of Sales & Marketing in Des Moines who was
Vice President of Sales & Marketing for AMI prior to its sale to Provant in
1998. LearnCom has also hired a new Sales Coach in De Moines. LearnCom's goal is
to increase revenues by $150,000 per month by developing personal sales goals,
improving focus and increasing process numbers (calls, previews and etc.). The
Des Moines Sales Center will include the existing distributor channel group plus
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Disclosure Page 9
a new team of direct sales people. The Des Moines direct sales team is expected
to include 12 new salespeople by December 31, 2002.
Reported results of operations for all periods prior to January 1, 2001 do
not reflect the results of VLS or PMI. Consequently, the results prior to these
dates are not reflective of LearnCom's operations and financial position as
presently constituted.
NET SALES
Net sales increased for the three and nine months ended September 30, 2001,
compared to the three and nine months ended September 30, 2000 due to the
inclusion of VLS and PMI in the 2001 periods. Without giving effect to the net
sales of VLS or PMI, LearnCom's net sales have decreased by $600,940 and
$1,662,495 for the three- and nine-months ended September 30, 2001 compared to
similar periods of 2000, respectively, primarily as a result of adverse market
conditions for business education and training solutions that is highly
competitive, constantly evolving and subject to rapidly emerging technologies.
COST OF SALES
The total cost of sales as a percentage of revenues fluctuated from year to
year for both the three and nine month periods ended September 30, 2001 and 2000
as a result of significant differences in the product composition of sales prior
to the VLS acquisition in January 2001 and the PMI distribution rights agreement
in July 2001. Cost of sales for the three months ended September 30, 2001 were
$1,017,521, or 53% of net sales, compared to $417,984, or 38% of sales for the
three months ended September 30, 2000. The results for the three months ended
September 30, 2001 included VLS and PMI cost of sales, which were substantially
higher than those of LearnCom's other operating units because the majority of
VLS sales were distributor sales in which VLS costs average 60% and PMI's cost
of sales average approximately 55%. Cost of sales for the nine months ended
September 30, 2001 were $2,281,350 or 53% of sales compared to $1,393,644 or 40%
of sales for the nine months ended September 30, 2000. Management is attempting
to improve the cost of sales for VLS by improving distributor commission rates
and acquiring additional exclusive distributor rights.
SALES AND MARKETING
Sales and marketing expenses consist primarily of salaries, commissions,
advertising, trade show expenses and costs of marketing materials. The 2001
amounts included the sales and marketing expenses of VLS from January 1, 2001
and PMI as of July 1, 2001, whereas the 2000 amounts do not include VLS or
expenses associated with the PMI distribution rights agreement.
Sales and marketing expenses were $354,848 for the three months ended
September 30, 2001 compared to $321,494 for the same period in 2000. Sales and
marketing expenses were $830,392 for the nine months ended September 30, 2001
compared to $882,027 for the nine months ended September 30, 2000. The
percentage of sales and marketing expenses to net sales has decreased from 2000
to 2001 as a result of the cost reduction plan LearnCom put into place during
the second quarter of 2001. Management plans to increase its marketing
investment to generate more leads and improve per person sales performance.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses consist primarily of personnel related
costs, occupancy costs and professional service fees. The amounts for the 2001
periods included the general and administrative expenses of the combined
companies for the entire three- and nine-month periods presented, whereas the
2000 amounts do not include VLS or expenses associated with the PMI distribution
agreement.
General and administrative expenses were $489,481 for the three months
ended September 30, 2001 compared to $607,872 for the three months ended
September 30, 2000. General and administrative expenses were $1,389,139 for the
nine months ended September 30, 2001 compared to $1,414,055 for the nine months
ended September 30, 2000. The results for the nine months ended September 30,
2001 do no fully reflect the general and administrative expense reductions that
were put in place during the second quarter.
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Disclosure Page 10
AMORTIZATION
Amortization expenses increased for the nine months ended September 30, 2001
compared to the nine months ended September 30, 2000 primarily due to the
amortization of a one-year distribution agreement and amortization of financing
costs. The 2001 expenses include approximately $64,413 of depreciation on fixed
assets, $264,923 of amortization of publishing rights and masters and $191,667
amortization of financing costs. The 2000 expenses included $50,093 of
depreciation on fixed assets, $258,854 related to the amortization of
capitalized publishing rights and masters and $38,333 amortization of financing
costs.
INTEREST EXPENSE
Interest expense increased from period to period for both the three and nine
months ended September 30, 2001 compared to similar periods in 2000 due to
additional interest expense resulting from a bridge loan by a related party.
Interest expense was $153,724 for the nine months ended September 30, 2001
compared to $127,497 for the nine months ended September 30, 2000.
NET LOSS
The decrease in the net loss for the three month period ended September 30,
2001 compared to September 30, 2000 is attributable to a significant increase in
sales and decreased expenses as a result of a cost reduction strategy put into
place in the second quarter of 2001. The 2001 amount included net sales and
expenses of the combined companies for the entire three- and nine-month periods
ended September 30, 2001, whereas the 2000 amounts did not include VLS or PMI.
LIQUIDITY AND CAPITAL RESOURCES
Since inception LearnCom's operations have been financed primarily through
private placements of equity and debt instruments.
Net cash used by operating activities was $66,306 for the nine-month period
ended September 30, 2001.
Net cash used by investing activities for the nine-month period was
$170,635. This represented cash proceeds from the sale of marketable securities
of $593,250; cash used to purchase computers and office equipment in the amount
of $110,866; expenditures for the development of publishing rights, masters and
distribution rights agreements in the amount of $136,117; and cash paid for
business acquisitions in the amount of $516,902.
Net cash provided by financing activities for the nine-month period was
$209,359 consisting of additional borrowings on LearnCom's bridge loan with a
shareholder of LearnCom in the amount of $250,000; cash received for the
subscription of common stock in the amount of $124,997; reduction in notes to
related parties in the amount of $53,490; and the reduction of LearnCom's term
debt used in the acquisition of BNAC in the amount of $110,000.
To meet immediate liquidity concerns, during 2001 LearnCom extended its
lending agreement with American National Bank until April 28, 2002 and has
converted outstanding debt to related party lenders to subordinated debt. To
further strengthen its financial position, LearnCom is attempting to raise a
total of $5 million, including $2 million of subordinated debt and $3 million in
equity through a private placement. Both the subordinated debt infusion and the
capital infusion are anticipated to be completely funded by the end of the year,
although there can be no assurance that LearnCom will be successful in raising
funds within such timeframe, if at all.
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Disclosure Page 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and 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. Reports on Form 8-K.
(a) Exhibits
10.1 - The Armand Group, Inc. Demand Promissory Note
10.2 - Note Assignment Participation Agreement
10.3 - Keith Kichun Choe Subordinated Promissory Note**
10.4 - Keith Kichun Choe Warrant**
10.5 - Byung Sun Min Subordinated Promissory Note**
10.6 - Byung Sun Min Warrant**
10.7 - John I. Ohk Subordinated Promissory Note**
10.8 - John I. Ohk Warrant**
10.9 - Min Byung Kil Subordinated Promissory Note**
10.10- Min Byung Kil Warrant**
(b) None
** The registrant hereby undertakes to furnish supplementary a copy of any
omitted schedule to this Report to the Securities and Exchange
Commission upon request.
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Disclosure Page 12
LEARNCOM, INC.
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LEARNCOM, INC.
Date: November 14, 2001 By: /s/ Lloyd W. Singer
--------------------------
Lloyd W. Singer
Chief Executive Officer
By: /s/ Robert R. Redwitz
--------------------------
Robert R. Redwitz
Chief Financial Officer
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Disclosure Page 13