<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10--Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September30, 1997.
COMMISSION FILE NUMBER 0-21225
VISCORP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-0101953
(STATE OF INCORPORATION) (I.R.S. EMPLOYER ID NO.)
4764 PARK GRANADA, SUITE 110, CALABASAS, CALIFORNIA 91302
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(818) 225-0000
(REGISTRANT'S PHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
(TITLE OF CLASS)
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
THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUERS CLASSES OF COMMON
STOCK WAS 16,400,000 SHARES OF COMMON STOCK, PAR VALUE $0.01, OUTSTANDING AS
OF September 30, 1997
<PAGE>
VISCORP
(A Development State Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEET
For period For period
ending ending
30-Sep-97 31-Dec-96
- -------------------------------------------------------------------------------
CURRENT ASSETS
Cash and Cash Equivalents 50,452 8,654
Trade Accounts Receivable 166,089 0
Recievable From Stockholders 25,400 20,000
Inventory 235,307 0
Pre-paid Airtime 106,500 0
Other Prepaid expenses 36,446 30,478
- -------------------------------------------------------------------------------
Total Current Assets 620,194 59,132
- -------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT
Total Property and Equipment,
Net 186,494 90,789
- -------------------------------------------------------------------------------
OTHER ASSETS
Investment - Ednet 50,000 0
Investment - First Internet Capital 75,000 0
Investment - Skysite Communications 1,031,039 0
Intangible assets (Net of accumulated
amortization) 76,088 86,628
Other 1,500 5,753
- -------------------------------------------------------------------------------
Total Other Assets 1,233,627 92,381
- -------------------------------------------------------------------------------
TOTAL ASSETS 2,040,315 242,302
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable 1,716,411 1,439,283
Accrued expenses 46,614 132,728
Customer Airtime Deposits 115,300 0
Stockholder loans including accrued interest 883,453 652,953
Other notes payable 3,331 116,837
Due to former officer and consultant 203,522 203,522
- -------------------------------------------------------------------------------
Total Current Liabilities 2,968,631 2,545,323
- -------------------------------------------------------------------------------
NOTES PAYABLE (Net of current portion) 29,865 29,865
MINIMUM ROYALTY OBLIGATION 0 450,000
- -------------------------------------------------------------------------------
Total Liabilities 2,998,496 3,025,188
- -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 160,400 221,280
Preferred stock 20,318 0
Additional paid-in capital (common) 15,846,133 15,096,123
Additional paid-in capital (preferred) 3,027,430 0
Divident cost (preferred) (174,940) 0
Deferred compensation for grant stock option (3,713,542) (3,713,542)
Deficit accumulated during the development
stage (16,123,980) (14,386,747)
- -------------------------------------------------------------------------------
Total Stockholder's Equity (Deficit) (958,181) (2,782,886)
- -------------------------------------------------------------------------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 2,040,315 242,302
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
VISCORP
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ending Nine Months Ending
30 September 30 September
----------------------- ----------------------
1997 1996 1997 1996
- ---------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C> <C>
SALES OF PRODUCTS AND SERVICES 349,950 0 349,950 0
OPERATING EXPENSES
Cost of Goods Sold 303,014 0 303,014 0
Sales and Marketing 246,729 0 246,729 0
Research and development 0 315,931 43,098 1,124,236
Travel and entertainment 36,547 101,648 131,229 335,738
Legal fees 65,186 407,955 246,944 665,750
Consulting 72,500 80,486 281,517 312,934
Other general and administrative 193,046 264,277 735,895 741,619
- ---------------------------------------------------------------------------------- -------------------------
Total Operating Expenses 917,022 1,170,297 1,988,426 3,180,277
- ---------------------------------------------------------------------------------- -------------------------
OPERATING INCOME (LOSS) (567,072) (1,170,297) (1,638,476) (3,180,277)
- ---------------------------------------------------------------------------------- -------------------------
OTHER INCOME (EXPENSE)
Interest expense - Stockholder debt (12,488) (11,124) (43,464) (17,126)
Interest expense - Other (29,513) 0 (34,537) 0
Depreciation and Amortization (10,606) (3,294) (30,267) (84,862)
Interest and misc. income 7,319 841 21,393 6,321
Fund raising fees for preferred stock 0 0 (346,502) 0
Forgiven debts 500,000 0 500,000 0
- ---------------------------------------------------------------------------------- -------------------------
Total Other Income (Expense), Net 454,712 (13,577) 66,623 (95,667)
- ---------------------------------------------------------------------------------- -------------------------
NET INCOME (LOSS) (112,360) (1,183,874) (1,571,853) (3,275,944)
- ---------------------------------------------------------------------------------- -------------------------
- ---------------------------------------------------------------------------------- -------------------------
AVERAGE SHARES OUTSTANDING (COMMON) 16,400,000 21,728,000 16,400,000 21,728,000
AVERAGE SHARES OUTSTANDING (PREFERRED) 2,031,832 0 2,031,832 0
INCOME (LOSS) PER SHARE (0.01) (0.05) (0.10) (0.15)
</TABLE>
<PAGE>
VISCORP
(A Development Stage Enterprise)
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
For Nine
Months
ending
30-Sep-97
- ------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (1,571,853)
Adjustments to reconciled net loss to net
cash used in operating activities
Depreciation and amortization 30,267
Interest on stockholder loans 43,464
Interest on nonstockholder loans 34,537
Fund raising fees for preferred stock 346,502
Forgiven debts 500,000
(Increase) in accounts receivable (171,489)
(Increase) decrease in inventory (235,307)
(Increase) decrease in prepaid expenses (112,468)
Increase (decrease) in Accounts Payable 277,128
Increase (decrease) in Accrued Expenses 29,186
- ------------------------------------------------------------------
Net Cash Used in Operating Activities (830,033)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment - Ednet (50,000)
Investment - First Internet Capital (75,000)
Investment - Skysite Communications (1,800,392)
Capital expenditures (61,028)
- ------------------------------------------------------------------
Net Cash used in Investing Activities (1,986,420)
CASH FLOW FROM FINANCING ACTIVITIES
Net borrowings from stockholders 20,000
Principal payments under notes payable (4,793)
Loan from WinCap 100,000
Proceeds from issuance of preferred stock 3,047,748
Fund raising fees for preferred stock (346,502)
- ------------------------------------------------------------------
Net Cash Provided by Financial Activities 2,816,453
Net (Decrease) Increase in Cash and Equivalents 41,798
CASH & CASH EQUIVALENTS, BEG OF YEAR 8,654
CASH & CASH EQUIVALENTS, END OF PERIOD 50,452
<PAGE>
VisCorp
4764 Park Granada
Suite 110
Calabasas, CA 91302
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1997 Compared to Nine Months Ended September
30, 1996.
The company's subsidiary Skysite Communications, Inc. derived its
revenue from the sale of Satellites and Telephone Equipment.
Research and Development Expenses decreased to $43,098 for the third
quarter of 1997 from $1,124,236 for the third quarter of fiscal 1996, a
decrease of $1,081,138. This is due to abandoning the development of the ED
and UITI devices.
Travel and entertainment expenses decreased to $131,229 for the
third quarter of fiscal 1997 from $335,738 for the third quarter of fiscal
1996, a decrease of $204,509. This is due to the overall reduction in the
number of employees, the discontinuation of the development of the ED and
UITI devices as well as a tightened travel policy begun by management.
Consulting expenses decreased to $281,517 for the third quarter of 1997
from $312,934 for the third quarter of fiscal 1996, a decrease of $31,417.
This decrease is due to the reduced use of consultants during the period.
Legal fees for litigation decreased to $53,947 for the third quarter of
fiscal 1997 from $368,337 for the third quarter of fiscal 1996, a decrease
of $314,390. Legal fees for other activities decreased to $192,997 for
the third quarter of fiscal 1997 from $297,413 for the third quarter of
fiscal year 1996 a decrease of $104,416. The decrease in litigation expenses
is largely due to the negotiation of an out of court settlement in the
Serlin/Lerch lawsuit. The rise in other legal expenses is due to the
relocation of the offices to California and a brief period when new counsel
was retained before the dismissal of Chicago counsel.
<PAGE>
Other General and Administrative expenses decreased to $735,895
for the third quarter of 1997 from $741,619 for the third quarter of fiscal
1996, a decrease of $5,724. This decrease is due primarily to implementation
of cost cutting measures.
<PAGE>
VisCorp
4764 Park Granada
Calabasas, California 901302
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.
VisCorp
Date: NOVEMBER 20, 1997 LAWRENCE D. SIEGEL
------------------------ ------------------------------------
Lawrence D. Siegel
(President, Chief Executive Officer
and Director (Principal Executive
Officer))
Date: November 20, 1997 HUGH A. JENCKS
------------------------ ------------------------------------
Hugh A. Jencks
Vice President, Secretary and Chief
Operating Officer (Principal
Financial and Accounting Officer))
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 50,452
<SECURITIES> 0
<RECEIVABLES> 191,489
<ALLOWANCES> 0
<INVENTORY> 235,307
<CURRENT-ASSETS> 620,194
<PP&E> 186,494
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,040,315
<CURRENT-LIABILITIES> 2,968,631
<BONDS> 0
0
20,318
<COMMON> 160,400
<OTHER-SE> 18,873,563
<TOTAL-LIABILITY-AND-EQUITY> 2,040,315
<SALES> 349,950
<TOTAL-REVENUES> 349,950
<CGS> 303,014
<TOTAL-COSTS> 549,743
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 78,001
<INCOME-PRETAX> (1,571,853)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,571,853)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,571,853)
<EPS-PRIMARY> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
