<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- ---------------
Commission File No. 0-28002
ICON SYSTEMS, INC.
(Name of Small Business Issuer in its Charter)
NEVADA 87-0565018
------ ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
4848 Highland Drive, #353
Salt Lake City, Utah 84117
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (801) 278-2805
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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.
(1) Yes X No (2) Yes No X
--- --- --- ---
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
February 25, 1997
5,027,563
---------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management, and commence on the
following page, together with Related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Registrant.
<PAGE>
<TABLE>
ICON SYSTEMS, INC.
(Formerly Tompkins Environmental Corporation)
(A Development Stage Company)
Balance Sheets
<CAPTION>
ASSETS
December 31, June 30,
1996 1996
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 9,603 $ -
Total Current Assets 9,603 -
TOTAL ASSETS $ 9,603 $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 4,844 $ -
Accrued interest 201 -
Note payable - related
party (Note 2) 10,000 -
Total Current Liabilities 15,045 -
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 10,000,000
preferred shares at $0.001 par
value authorized; -0- outstanding
Common stock authorized: 100,000,000 - -
common shares at $0.001 par value;
at December 31, 1996 and June 30,
1996; 5,027,563 and 27,563
shares issued and
outstanding, respectively 5,027 27
Capital in excess of par value 356,038 344,438
Deficit accumulated during the
development stage (366,507) (344,465)
Total Stockholders'
Equity (Deficit) (5,442) -
TOTAL LIABILITIES, AND
STOCKHOLDERS EQUITY (DEFICIT) $ 9,603 $ -
</TABLE>
<TABLE>
ICON SYSTEMS, INC.
(Formerly Tompkins Environmental Corporation)
(A Development Stage Company)
Statements of Operations
(Unaudited)
<CAPTION>
For the For the From Inception
Three Months Three Months on August 26,
Ended Ended 1987 Through
December 31, December 31, December 31,
1996 1995 1996
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES
General and
administrative (15,191) - (21,841)
OTHER INCOME
(EXPENSES)
Interest expenses (201) - (201)
Total Other Income
Income (Expenses) (201) - (201)
Income (Loss) From
Continuing Operations (15,392) - (22,042)
Income (Loss) From
Discontinued
Operations - - (344,465)
NET LOSS $ (15,392) $ - $ (366,507)
LOSS PER SHARE $ (0.00) $ (0.00)
WEIGHTED AVERAGE
NUMBER OF SHARES 5,027,563 22,859
</TABLE>
<TABLE>
ICON SYSTEMS, INC.
(Formerly Tompkins Environmental Corporation)
(A Development Stage Company)
Statements of Operations
(Unaudited)
<CAPTION>
for the Six for the Six
Months Ended Months Ended
December 31, December 31,
1996 1995
<S> <C> <C>
REVENUES $ - $ -
EXPENSES
General and
Administrative (21,841) -
OTHER INCOME
(EXPENSES)
Interest expenses (201) -
Total Other Income
Income (Expenses) (201) -
Income (Loss) From
Continuing Operations (22,042) -
Income (Loss) From
Discontinued
Operations - (12,000)
NET LOSS $(22,042) $(12,000)
LOSS PER SHARE $ (0.01) $ (0.53)
WEIGHTED AVERAGE
NUMBER OF SHARES 2,527,563 22,859
</TABLE>
<TABLE>
ICON SYSTEMS, INC.
(Formerly Tompkins Environmental Corporation)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<CAPTION>
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
<S> <C> <C> <C> <C>
Balance at inception
on August 26, 1987 - $ - $ - $ -
Issuance of 12 shares
of common stock to an
officer for cash valued
at approximately $83.33
per share 12 - 1,000
Net loss from inception
on August 26, 1987
through June 30, 1988 - - - (914)
Balance, June 30, 1988 12 - 1,000 (914)
Net loss for the year
ended June 30, 1989 - - - (2,299)
Balance, June 30, 1989 12 - 1,000 (3,213)
Issuance of 85 shares of
common stock for cash,
valued at approximately
$48.46 per share 65 - 3,150 -
Issuance of 125 shares of
common stock to shareholder
for office equipment and
stock of Alco Investment
Corporation and cash of
$750 125 - 7,840 -
Net loss for the year
ended June 30, 1990 - - - (3,245)
Balance, June 30, 1990 202 $ - $11,990 $(6,458)
Contribution of non-marketable
securities by officer - - 750 -
Contribution and
cancellation of shares
by officer (106) - - -
Issuance of 6 shares for
cash valued at
approximately $333.33
per share 6 - 2,000 -
Issuance of 246 shares of
common stock to
shareholder and 500
shares of common stock
to QBC Holding Corp.
for $600 in cash 747 1 599 -
Expenses paid on behalf
of the Company by
shareholder - - 1,636 -
Net loss for the year
ended June 30, 1991 - - - (10,518)
Balance, June 30, 1991 849 1 16,975 (16,976)
Shares contributed to the
Company and canceled by
the shareholders (788) (1) 1 -
Purchase of subsidiary
for the issuance of
12,569 shares of common
stock valued at
approximately $25.10
per share 12,569 10 315,479 -
Net loss for the year
ended June 30, 1992 - - - (276,103)
Balance,
June 30, 1992 12,630 $ 10 $332,455 $(293,079)
Net loss for the year
ended June 30, 1993 - - - (39,386)
Balance,
June 30, 1993 12,630 10 332,455 (332,465)
Net loss for the year
ended June 30, 1994 - - - -
Balance,
June 30, 1994 12,830 10 332,455 (332,465)
Net lose for the year
ended June 30, 1995 - - - -
Balance,
June 30, 1995 12,630 10 332,455 (332,465)
Issuance of 14,933
shares of common
stock for services
rendered valued at
approximately $0.80
per share 14,933 17 11,983 -
Net loss for the year
ended June 30, 1996 - - - (12,000)
Balance,
June 30, 1996 27,563 $ 27 $344,438 $(344,465)
Issuance of 3,000,000
shares of common stock
for cash valued at
approximately
$0.0033
per share 3,000,000 3,000 7,000 -
Issuance of 2,000,000
shares of common stock
for services rendered
valued at $0.0033
per share 2,000,000 2,000 4,600 -
Net loss for the
six months ended
(unaudited)
December 31, 1996 - - - (22,042)
Balance,
December 31, 1996 5,027,563 5,027 $356,038 $(366,507)
</TABLE>
<TABLE>
ICON SYSTEMS, INC.
(Formerly Tompkins Environmental Corporation)
(A Development Stage Company)
Statements of Cash Flows
<CAPTION>
For the For the From Inception
For the Six For the Six Three Months Three Months on August 26,
Months Ended Months Ended Ended Ended 1987 Through
December 31, December 31, December 31, December 31, December 31,
1996 1995 1996 1995 1996
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $(22,042) $(12,000) $(15,392) $ - $(366,507)
Depreciation - - - - 59,907
Stock issued
for services 6,600 12,000 - - 18,600
Loss on
disposition of
assets - - - - 9,352
(Increase) decrease
in prepaid
expenses and
other assets - - 2,500 - -
Increase (decrease)
in accounts
payable 4,844 - 4,844 - 4,844
Increase (decrease)
in accrued
interest 201 - 201 - 201
Cash Provided (Used)
by Operating
Activities (10,397) - (7,847) - (273,603)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Purchase of
equipment - - - - (13,368)
Sale of equipment - - - - 7,090
Cash Provided (Used)
by Investing
Activities - - - - (6,278)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from
notes payable 10,000 - 10,000 - 160,000
Payment on notes
payable - - - - (43,764)
Payment of loan
from officer - - - - (61,884)
Issuance of
common stock 10,000 - - - 158,382
Proceeds of loan
from officer - - - - 76,750
Cash Provided (Used)
by Financing
Activities $20,000 $ - $ 10,000 $ - $ 289,484
NET INCREASE
(DECREASE) IN
CASH $ 9,603 $ - $ 2,153 $ - $ 9,603
CASH AT
BEGINNING OF
PERIOD - - 7,450 - -
CASH AT END
OF PERIOD $ 9,603 $ - $ 9,803 $ - $ 9,603
Cash Payments For:
Income taxes $ - $ - $ - $ - $ -
Interest $ - $ - $ - $ - $ -
Non Cash Financing Activities:
Stock issued
for services $ 6,600 $12,000 $ - $ - $18,600
Stock issued
for equipment$ - $ - $ - $ - $ 7,214
Stock issued
for
subsidiary $ - $ - $ - $ - $315,489
</TABLE>
ICON SYSTEMS, INC.
(Formerly Tompkins Environmental Corporation)
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1996 and June 30, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Icon Systems, Inc. (formerly
Tompkins Environmental Corporation). The Company was incorporated as Loki
Holding Corporation under the laws of the State of Utah on August 26, 1987 and
on August 4, 1988 changed its name to Quazon Investment Corporation. On April
15, 1988 the Company became a wholly-owned subsidiary of Loki Holding
Corporation (formerly Dynamic Video, Inc.). On May 25, 1990 the Company was
"spun off" in a partial liquidating dividend. In June of 1990 the Company
acquired Alco Investment Corporation. On January 7, 1991 the Company sold Alco
Investment Corporation to a company owned by a mayor shareholder. On September
24,1996, the Company changed its name to Icon Systems, Inc. and changed its
State of incorporation to Nevada.
On August 15, 1991 the Company acquired all of the shares of Tompkins
Environmental Corporation (Tompkins) in exchange for 10,000,000 pre-split
shares of the Company's authorized but previously unissued common stock (See
Note 2). The Company's name was changed to Tompkins Environmental Corporation.
The Company was engaged in disaster cleanup operations. On October 25, 1995,
Tompkins was involuntarily dissolved and abandoned. All operations associated
with Tompkins have been accounted for as discontinued operations.
Currently the Company is seeking new business opportunities believed to hold a
potential profit or to merge with an existing company.
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has adopted a June 30 year end.
c. Income (Loss) Per Share
The computations of income (loss) per share of common stock are based on the
weighted average number of shares issued and outstanding at the date of the
financial statements.
d. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statement and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
f. Provision for Taxes
At December 31, 1996, the Company had a net operating loss carryforward
totaling approximately $366,000 that may be offset against future taxable
income through 2011. No tax benefit has been reported in the financial
statements, because the potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance of the same amount.
NOTE 2 - RELATED PARTY TRANSACTIONS
In October, 1996, a shareholder loaned the Company $10,000 to cover operating
expenses. The note payable is due on demand and accrues interest at 10%
annually. The amount due to the shareholder at December 31, 1996 was $10,000
with accrued interest of $201.
On October 24, 1995, the Company issued 12,442 to officers and directors of
the Company for services rendered valued at $0.0033 per share (See Note 5).
On September 14, 1996, the Company issued 3,000,000 post-split shares of
restricted common stock for cash to a company owned by an officer for total
consideration of $10,000.
On October 10, 1996, the Company issued 2,000,000 post-split shares of
restricted common stock to officers and directors of the Company for services
valued at $0.0033 per share.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
It is the intent of the Company to seek a merger with an existing, operating
company. In the interim, shareholders of the Company have committed to meeting
its minimal operating expenses.
NOTE 4 - REVERSE STOCK SPLIT
On September 14, 1996, the shareholders of the Company approved a 1 -for-1,000
reverse stock split while retaining the authorized shares at 100,000,000 and
retaining the par value at $0.001. This change has been applied to the
financial statements on a retroactive basis back to inception. The Company
provided that no shareholder would be reduced below 50 shares, accordingly,
5,413 postsplit fractional shares were issued. These shares have been
allocated pro-rata to previous stock issuances.
NOTE 5 - ISSUANCES OF COMMON STOCK
At the Company's inception, the Board of Directors authorized the issuance of
12 restricted shares of its common stock to an executive officer who may be
deemed to have been a promoter or founder of the Company for the total
consideration of $1,000.
On September 27, 1989, the Company became authorized to do business in the
State of Utah as Quazon International Corporation and changed its business
purpose to consulting in mergers and acquisitions. On September 28, 1989 the
Company issued 65 shares of restricted common stock to Loki Holding
Corporation (formerly Dynamic Video, Inc.) for $3,150 cash.
In June of 1990 the Company issued 125 shares of common stock to an officer
for equipment recorded at its depreciated cost of $7,090 and cash of $750. On
September 28, 1990 the officer contributed back to the Company 108 shares.
In September of 1990 the Company issued 8 shares of restricted common stock to
a shareholder for $2,000 in cash.
In January of 1991 the Company issued 747 shares of restricted common stock to
a shareholder for $600 in cash, and 500 shares of restricted common stock to
QBC Holding Corp. recorded at predecessor cost of $0.
In the year ended 1992 a shareholder contributed back to the Company 788
shares of restricted common stock.
On August 15, 1991 the Company issued 12,569 shares of restricted common stock
valued at predecessor cost of $25.10 per share for the purchase of Tompkins
Environmental Corporation.
On October 24, 1995, the Company issued 14,933 shares of restricted common
stock for services rendered valued at $0.80 per share.
On September 14, 1996, the Company issued 3,000,000 shares of restricted
common stock for cash of $0.0033 per share or total consideration of $10,000.
On October 10, 1996, the Company issued 2,000,000 shares of restricted common
stock for services rendered valued at $0.0033 per share.
NOTE 5 - SUBSEQUENT EVENT
In January 1997 the Company received a contribution of capital from a
shareholder. The contribution was in the form of marketable securities which
the Company was able to sell for net proceeds of $28,155.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------
Plan of Operation.
- ------------------
The Company has not engaged in any material operations
since its inception or during the quarterly period ended December 31, 1996.
During this period, the Company received revenues totaling $0. During the
same period, total expenses were $15,392 and net loss totaled $15,392.
The Company's plan of operation for the next 12 months is
to continue to seek the acquisition of assets, properties or
businesses that may benefit the Company and its stockholders.
Management anticipates that to achieve any such acquisition, the
Company will issue shares of its common stock as the sole
consideration for such acquisition.
During the next 12 months, the Company's only foreseeable
cash requirements will relate to maintaining the Company in good
standing or the payment of expenses associated with reviewing or
investigating any potential business venture, which may be advanced by
management or principal stockholders as loans to the Company. Because the
Company has not identified any such venture as of the date of this Report, it
is impossible to predict the amount of any such loan. However, any such loan
will not exceed $25,000 and will be on terms no less favorable to the Company
than would be available from a commercial lender in an arm's length
transaction. As of the date of this Report, the Company has not begun seeking
any acquisition,
Results of Operations.
- ----------------------
During the quarterly period ended December 31, 1996, the
Company had no business operations. During this period, the Company
received total revenues of $0 and had a net loss of $15,392.
Liquidity.
- ----------
At December 31, 1996, the Company had total current assets of
$9,603, with total current liabilities of $15,045.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
- ----------------------------
None; not applicable.
Item 2. Changes in Securities.
- --------------------------------
The Board of Directors of the Company unanimously resolved on
October 10, 1996, to issue 500,000 "unregistered" and "restricted" post-split
shares of common stock to each of the following persons for services rendered:
Diane Reed; Michelle Wheeler; Jeff Taylor; and Steven D. Moulton. The Board
of Directors further resolved that the Company borrow $5,000 from QBC Holding
Corporation, doing business as Wasatch Consulting Group, the Company's
majority stockholder, in exchange for a promissory note, payable on demand,
and bearing interest at the rate of 10% per annum. On October 29, 1996, the
amount of the loan was increased to $10,000. See Part I, Item 1 of the
Company's Registration Statement on Form 10-SB, which was filed with the
Securities and Exchange Commission on December 19, 1996. See the Exhibit
Index, Item 6 of this Report.
Item 3. Defaults Upon Senior Securities.
- ------------------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
- --------------------------------------------------------------
None; not applicable.
Item 5. Other Information.
- ----------------------------
On October 28, 1996, the Company filed with the Secretary of State
of the State of Nevada a Certificate of Amendment clarifying an inadvertent
inconsistency in its Articles of Incorporation which had authorized the
issuance of 100,000,000 shares of common stock and 10,000,000 shares of
preferred stock, with the subsequent statement that "all stock of the
[Company] shall be of the same class and shall have the same rights and
preferences." The Certificate of Amendment corrected this inconsistency by
deleting this clause from the Company's Articles of Incorporation. A copy of
the Certificate of Amendment was filed as an exhibit to the Company's
Registration Statement on Form 10-SB and was incorporated therein by
reference. See the Exhibit Index, Item 6 of this Report.
In January 1997, which is subsequent to the period covered by this
Report, the Company received a contribution of capital from a stockholder. The
contribution was in the form of marketable securities which the Company was
able to sell for net proceeds of $28,155.
Item 6. Exhibits and Reports on Form 8-K.
- -------------------------------------------
(a) Exhibits.*
Financial Data Schedule.
Registration Statement on Form 10-SB,
filed December 19, 1996.**
(b) Reports on Form 8-K.
None.
* Summaries of all exhibits contained in this Report
are modified in their entirety by reference to these
Exhibits.
** This document and related exhibits has
previously been filed with the Securities and
Exchange Commission and is incorporated
herein by reference.
<PAGE>
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.
ICON SYSTEMS, INC.
Date: 3/03/97 By /s/ Michelle Wheeler
-------------- -------------------------------------
Michelle Wheeler
Director and President
Date: 3/3/97 By /s/ Steven D. Moulton
-------------- -------------------------------------
Steven D. Moulton
Director and Secretary/Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0001029263
<NAME> ICON SYSTEMS, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 9,603
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,603
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,603
<CURRENT-LIABILITIES> 15,045
<BONDS> 0
0
0
<COMMON> 5,027
<OTHER-SE> (10,469)
<TOTAL-LIABILITY-AND-EQUITY> 9,603
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 21,841
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 201
<INCOME-PRETAX> (22,042)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,042)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
