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 September 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 0-23505
INNOVACOM, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 88-0308568
-------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3400 Garrett Drive
Santa Clara, CA 94054
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(408) 727-2447
---------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(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 requirements for the past 90 days. Yes [X] No [ ]
Number of shares of common stock outstanding as of September 30, 2000 was
37,986,198 Transitional Small Business disclosure format Yes [ ] No [X]
<PAGE>1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INNOVACOM, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
CONDENSED CONSOLIDATED BALANCE SHEET
(In Thousands)
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SEPTEMBER 30,
ASSETS 2000
------ ------------------
(Unaudited)
CURRENT ASSETS:
Cash $ 457
Accounts receivable,
less: allowance for doubtful accounts of $10,000 366
Other receivables 9
Inventory, net 355
Prepaid expenses and other 89
Deferred offering costs 177
------------------
Total current assets 1,453
PROPERTY AND EQUIPMENT, net 91
Deposits 37
------------------
Total Assets $ 1,581
==================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Notes payable - related parties $ 95
Secured promissory notes 7,100
Convertible debentures 4,750
Advance from shareholder 100
Accounts payable 1,475
Accrued liabilities 3,524
Liabilities in excess of assets of discontinued operations 63
------------------
Total current liabilities 17,107
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.001 par value, 150,000,000 shares
Authorized, 37,986,198 shares issued and outstanding 38
Warrants 3,307
Additional paid-in capital 29,728
Deficit accumulated during development stage (48,599)
------------------
Total stockholders' deficit (15,526)
------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 1,581
==================
See accompanying notes to these condensed consolidated financial statements
</TABLE>
<PAGE>2
INNOVACOM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands except per share amounts)
(Unaudited)
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FOR THE THREE MONTHS FOR THE NINE MONTHS MARCH 3, 1993
ENDED ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
----------------------- ------------------------- --------------
1999 2000 1999 2000 2000
--------- --------- --------- --------- --------------
Revenues $ 75 $ 465 $ 172 $ 851 $ 1,615
--------- --------- --------- --------- --------------
COSTS AND EXPENSES:
Costs of goods sold 57 204 136 500 1,383
Research and development 359 560 1,095 1,538 13,860
Selling, general and administrative 780 857 2,409 2,608 21,548
Impairment loss on property and
equipment -- -- -- -- 937
--------- --------- --------- --------- --------------
Total costs and expenses 1,196 1,621 3,640 4,646 37,728
--------- --------- --------- --------- --------------
Operating Loss (1,121) (1,156) (3,468) (3,795) (36,113)
--------- --------- --------- --------- --------------
OTHER INCOME (EXPENSE):
Interest expense, net of interest income (655) (616) (2,531) (2,348) (11,148)
Debt conversion expense -- -- -- -- (261)
Gain on settlement, net -- 378 -- 378 378
Other income -- -- -- -- 2
--------- --------- --------- --------- --------------
Total other income (expense) (655) (238) (2,531) (1,970) (11,029)
--------- --------- --------- --------- --------------
Loss From Continuing Operations Before
Income Tax Expense, Discontinued Operations
and Extraordinary item (1,776) (1,394) (5,999) (5,765) (47,142)
Income Tax Expense -- -- 2 2 10
--------- --------- --------- --------- --------------
Loss From Continuing Operations (1,776) (1,394) (6,001) (5,767) (47,152)
--------- --------- --------- --------- --------------
</TABLE>
Continued
<PAGE>3
INNOVACOM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
(Continued)
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MARCH 3, 1993
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
-------------------------------- ---------------------------------- ---------------
1999 2000 1999 2000 2000
---------------- -------------- --------------- ---------------- ---------------
Loss on disposal of discontinued -- -- -- -- (1,159)
operations
Loss from operations of discontinued
operation, net of income tax expense -- -- -- -- (1,131)
---------------- -------------- --------------- ---------------- ---------------
LOSS FROM DISCONTINUED OPERATIONS -- -- -- -- (2,290)
EXTRAORDINARY ITEM:
GAIN ON EXTINGUISHMENT OF LIABILITIES
27 - 207 35 843
---------------- -------------- --------------- ---------------- ---------------
Net Loss $ (1,749) $ (1,394) $ (5,794) $ (5,732) $ (48,599)
================ ============== =============== ================ ===============
Basic and Diluted Net Loss Per Share:
Continuing operations $ (.07) $ (.04) $ (.24) $ (.16)
Discontinued operations -- -- -- --
Extraordinary item -- -- .01 --
---------------- -------------- --------------- ----------------
Basic and diluted net loss per share $ (.07) $ (.04) $ (.23) $ (.16)
================ ============== =============== ================
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 25,181 36,571 25,063 34,757
================ ============== =============== ================
</TABLE>
<PAGE>4
INNOVACOM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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MARCH 3, 1993
FOR THE NINE MONTHS ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ---------------
1999 2000 2000
---------- ---------- --------------
Cash Flows From Operating Activities:
Net loss from continuing operations $ (6,001) $ (5,767) $(47,152)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 111 89 962
Provision for inventory obsolescence -- 45 85
Provision for doubtful accounts 4 -- 20
Amortization of discount on long-term debt -- -- 2,346
Loss on sale of fixed assets -- -- 25
Impairment loss on property and equipment -- -- 937
Interest related to beneficial conversion feature
and warrants issued in connection with notes
payable and convertible debentures 1,234 893 4,290
Compensation recognized upon issuance of
stock and stock options 31 292 6,129
Shares canceled from default judgement -- -- (250)
Contribution of product license -- -- 1,275
Write down of purchased incomplete
research and development -- -- 500
Write-off acquisition costs -- -- 68
Gain on extinguishment of liabilities 207 35 843
Debt conversion expense -- -- 261
Write-off of related party receivable -- -- 140
Loss on disposal of assets 28 -- --
Changes in operating assets and liabilities:
Accounts receivable (13) (217) (376)
Other receivables (12) (2) (19)
Inventory (357) (189) (440)
Prepaid expenses (13) 20 (29)
Deposits -- -- (37)
Accounts payable (537) 266 1,899
Accrued liabilities 1,402 1,245 4,848
---------- ---------- --------------
Net cash used in operating activities from
continuing operations (3,916) (3,290) (23,675)
---------- ---------- --------------
Net loss from discontinued operations -- -- (2,290)
Loss on disposal of assets -- -- 49
Write-down of film rights and film costs inventory -- -- 250
Write-down of goodwill -- -- 848
Change in liabilities in excess of assets of
discontinued operations -- -- 63
---------- ---------- --------------
Net cash (used in) operating activities
from discontinued operations -- -- (1,080)
---------- ---------- --------------
</TABLE>
(Continued)
<PAGE>5
INNOVACOM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
(Continued)
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MARCH 3, 1993
FOR THE NINE MONTHS ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- --------------
1999 2000 2000
------------ ---------- -------------
Cash Flows From Investing Activities:
Cash received in acquisition of Sierra Vista Entertainment $ -- $ -- $ 2,917
Cost incurred for organization of joint venture -- -- (68)
Advance to related party (4) -- (140)
Purchases of property and equipment (10) (36) (2,236)
Proceeds from sale of assets 1 -- 4
------------ ---------- -------------
Net cash provided by (used in) investing activities (13) (36) 477
------------ ---------- -------------
Cash Flows From Financing Activities:
Proceeds from notes payable 3,315 -- 4,865
Proceeds from secured promissory notes -- 2,900 7,100
Advance from shareholder -- 100 100
Net proceeds from sale of convertible debentures with
detachable warrants 750 -- 9,358
Principal payments on notes payable-related party (103) (5) (314)
Proceeds from sale of common stock, net of offering costs -- 242 3,140
Deferred offering costs -- (177) (177)
Proceeds from exercise of stock options and warrants 1 420 422
Proceeds from settlements 78 -- 241
------------ ---------- -------------
Net cash provided by financing
Activities 4,041 3,480 24,735
------------ ---------- -------------
Net Increase (Decrease) in Cash and Cash
Equivalents 112 154 457
Cash and Cash Equivalents, beginning of
Period 34 303 --
------------ ---------- -------------
Cash and Cash Equivalents, END OF PERIOD $ 146 $ 457 $ 457
============ ========== =============
See accompanying notes to these consolidated financial statements
</TABLE>
<PAGE>6
INNOVACOM, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2000
1. 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 pursuant to the rules and regulations
of the Securities and Exchange Commission. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. For further
information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-KSB for the fiscal year
ended December 31, 1999.
In the opinion of management, the unaudited condensed consolidated
financial statements contain all adjustments considered necessary to
present fairly the Company's financial position at September 30, 2000,
results of operations for the three and nine months ended September 30,
1999 and 2000, and the period from March 3, 1993 (inception) to September
30, 2000, and the cash flows for the nine months ended September 30, 1999
and 2000, and the period from March 3, 1993 (inception) to September 30,
2000. The results for the period ended September 30, 2000, are not
necessarily indicative of the results to be expected for the entire fiscal
year ending December 31, 2000.
2. SECURED PROMISSORY NOTES:
During the nine months ended September 30, 2000, the Company entered into
promissory note agreements totaling $2,900,000 that are due on demand and
accrue interest at 13% per annum. The notes are secured by substantially
all of the Company's assets. As part of the issuance of the notes, the
Company issued to the note holder five-year warrants to purchase 1,450,000
shares of common stock at prices ranging from $0.26 to $1.00.
3. CONVERTIBLE DEBENTURES:
During the nine months ended September 30, 2000, the holders of the
December 31, 1997 debentures converted $4,690,000 in principal and $723,063
in accrued interest into 8,349,249 shares of common stock.
4. EQUITY FINANCING FACILITY:
On June 19, 2000, as amended on July 26, 2000, the Company entered into a
common stock purchase agreement and related agreements with Jashell
Investments Limited (Jashell), a private equity fund. Subject to the
fulfillment of certain conditions, the agreements provide the Company with
an equity financing facility through which the Company may sell up to a
total of $10,000,000 worth of shares of common stock, at their option, to
Jashell periodically over a 24 month period. The Company's ability to
request a draw down under the facility is subject to the continued
effectiveness of a resale registration statement filed with the Securities
and Exchange Commission to cover the shares to be issued. The amount of
common stock to be sold at each draw down will not be less than $250,000
nor more than $1,000,000. The Company has agreed to sell the shares to
Jashell at a price equal to the then current market price of the common
stock during the draw down period, less a discount of 21% or 24%,
specifically determined based upon a formula. The number of shares the
Company may sell to Jashell varies depending on certain factors, including
the market price of the common stock and the then current ownership
interest of Jashell. In connection with each draw down, the Company
<PAGE>7
granted Jashell a warrant to purchase up to 50% of the number of shares
acquired in a draw down at an exercise price equal to the purchase price of
the common stock acquired pursuant to the draw down. The warrant will
expire 22 business days after its issuance.
In connection with the Common Stock purchase agreement, the Company issued
to the investor warrants to purchase 100,000 shares of common stock at an
exercise price or $0.70 per share. In addition, 10,000 shares of common
stock were issued on September 18, 2000 as a finder's fee.
During September 2000, the Company completed the first of two tranches of
its first draw down of $250,000, less the amortization of deferred offering
costs totaling $7,675 for a net proceeds of $242,325 issuing 790,314 shares
of common stock at an average price during the draw down period of $0.32
per share. In addition, the Company issued to the investor a warrant to
purchase 395,157 shares of common stock at an exercise price of $0.32. The
warrant was exercised immediately.
During October 2000, the Company completed the second tranche to its first
draw down for proceeds net of expenses of $187,500 issuing 756,298 shares
of common stock at an average price during the draw down period of $0.25
per share. In addition, the Company issued to the investor a warrant to
purchase 3,702 shares of common stock at an exercise price of $0.25. The
warrant was exercised immediately.
Also, during October 2000, the Company completed the first of two tranches
of its second draw down, with a threshold price of $0.25 per share,
receiving proceeds of $109,091 issuing 498,227 shares of common stock at an
average price during the draw down period of $0.22 per share. Further,
pursuant to the common stock purchase agreement, the Company agreed to pay
the purchaser an additional $33,333 for each of the initial six puts.
5. STOCKHOLDERS' EQUITY:
During the nine months ended September 30, 2000, outstanding options to
purchase 437,627 shares of common stock were exercised in non-cash
transactions. In addition, outstanding warrants to purchase 907,601 shares
of common stock were also exercised in non-cash transactions.
Also, during the nine months ended September 30, 2000, options to purchase
1,135,517 shares of common stock were exercised with prices ranging from
$0.23 to $0.26 per share with proceeds received of $294,829.
In connection with the favorable settlement of a lawsuit, the company
issued 150,000 shares of common stock at a market price of $0.40 per share
for legal services incurred.
The company also issued 26,134 shares of common stock for services at
market prices ranging from $0.50 to $0.5625 per share.
<PAGE>8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
With the exception of historical facts stated herein, the matters discussed
in this report are "forward looking" statements that involve risks and
uncertainties that could cause actual results to differ materially from
projected results. Such "forward looking" statements include, but are not
necessarily limited to, statements regarding anticipated levels of future
revenues and earnings from operations of the Company. Factors that could
cause actual results to differ materially include, in addition to other
factors identified in this report, lack of revenues, substantial losses,
need for additional capital and limited operating history, and other risk
factors detailed in the Company's Securities and Exchange Commission
("SEC") filings including the risk factors set forth in the Company's
Registration Statement on Form SB-2, SEC File No. 333-42766 filed August 1,
2000 and "Certain Considerations" section in the Company's Form 10-KSB for
the year ended December 31, 1999. Readers of this report are cautioned not
to put undue reliance on "forward looking" statements which are, by their
nature, uncertain as reliable indicators of future performance. The Company
disclaims any intent or obligation to publicly update these "forward
looking" statements, whether as a result of new information, future events,
or otherwise.
Revenues
Revenues were approximately $465,000 and $851,000 for the three and
nine-month periods ended September 30, 2000, as compared to approximately
$75,000 and $172,000 for the same periods in 1999. This represents a
revenue increase of 520% for the three month and 395% for the nine-month
periods ending September 30, 2000 as compared to the same periods in 1999.
Revenues in 2000 and 1999 were from the sale of the Company's standard
transmission products. Revenue for the three months ended September 30,
2000 also included revenue from the first shipments of the Company's new
TransPEG Server product.
Cost of goods sold
Cost of goods sold was approximately $204,000 and $500,000 for the three
and nine-month periods ended September 30, 2000 as compared to
approximately $57,000 and $136,000 for the same periods in 1999. The
product margins for all periods presented in these statements are not
necessarily indicative of those that the Company might experience at such
time, if any, that standard products begin to be shipped in full-production
quantities for installation by end-users.
Research and development
Research and development expense increased to approximately $560,000 and
$1,538,000 in the three and nine-month periods ended September 30, 2000
from approximately $359,000 and $1,095,000 in the same periods in 1999. The
increase in R&D expenditure represents the Company's ongoing program to
develop its products to meet market opportunities.
Selling, general and administrative
Selling, general and administrative expense increased to approximately
$857,000 and $2,608,000 in the three and nine-month periods ended September
30, 2000 from approximately $780,000 and $2,409,000 in the same periods in
1999. In the current quarter, selling expenses increased for both the
<PAGE>9
quarter and nine months ended September 30, 2000, by 50% and 28%
respectively, as compared to the same periods in 1999, reflecting the
Company's continuing expansion of its world-wide selling and marketing
presence. G&A expenses decreased for both the quarter and nine months ended
September 30, 2000, by 12% and 5% respectively, as compared to the same
periods in 1999, with the single biggest decrease due to a reclass of
production period costs in 1999 from cost of sales to G&A that was not
required in 2000.
Interest expense, net of interest income
Interest expense decreased to approximately $616,000 and $2,348,000 in the
three and nine-month periods ended September 30, 2000 from approximately
$655,000 and $2,531,000 in the same periods in 1999. This reduction was the
net result of a lower balance in outstanding convertible debentures and the
cessation of penalty interest charges resulting from Convertible Debentures
and Demand Notes not being registered with the SEC. This non-compliance
condition was corrected with the Company filing with the SEC an SB-2
Registration Statement on August 1, 2000.
OTHER INCOME (EXPENSE)
As a result of a settlement in the Company's favor of a previously existing
lawsuit, the Company received a one-time gain on settlement in the
approximate amount $378,000 as reflected in the three and nine months
period ended September 30, 2000. The Company does not have a similar gain
on settlement for the same periods in 1999.
Loss from continuing operations
As a result of the financial results explained above, loss from continuing
operations decreased to approximately $1,394,000 in the three months ended
September 30, 2000, from approximately $1,776,000 in the same period in
1999, a reduction of about 22%. For the nine months ended September 30,
2000, the loss from continuing operations decreased $234,000 or about 4%,
to approximately $5,767,000 from approximately $6,001,000 in the same
period in 1999.
Liquidity and Capital Resources
Since inception, the Company has funded its operations primarily through
the sale of stock and placement of debt. On September 30, 2000, the Company
had a cash balance of approximately $457,000 and a working capital deficit
of approximately $15,654,000. This compares with cash of approximately
$303,000 and a working capital deficit of approximately $17,309,000 at
December 31, 1999. The decrease in working capital deficit is largely a
result of the conversion of $4,690,000 of convertible debentures to equity
less an increase in secured promissory notes and other liabilities of
approximately $2,900,000.
On July 11, 2000, the Company borrowed $425,000 from an investor in the
form of a note. The note bears interest at 13% and is due on demand. In
conjunction with this note, the Company issued five year warrants to
purchase up to 212,500 shares of Common Stock at $.30 per share.
On August 9, 2000, the Company borrowed $100,000 from an investor in the
form of a note. The note bears interest at 13% and is due on demand. In
conjunction with this note, the Company issued five year warrants to
purchase up to 50,000 shares of Common Stock at $.26 per share.
<PAGE>10
On August 31, 2000, the Company borrowed $100,000 from an investor in the
form of a note. The note bears interest at 13% and is due on demand. In
conjunction with this note, the Company issued five year warrants to
purchase up to 50,000 shares of Common Stock at $.26 per share.
On June 19, 2000, as amended on July 26, 2000, the Company entered into a
common stock purchase agreement and related agreements ("the Equity Line")
with Jashell Investments Limited (Jashell), a private equity fund. Subject
to the fulfillment of certain conditions, the agreements provide the
Company with an equity financing facility through which the Company may
sell up to a total of $10,000,000 worth of shares of common stock, at their
option, to Jashell periodically over a 24 month period. The Company's
ability to request a draw down under the facility is subject to the
continued effectiveness of a resale registration statement filed with the
Securities and Exchange Commission to cover the shares to be issued. The
amount of common stock to be sold at each draw down will not be less than
$250,000 or more than $1,000,000. The Company has agreed to sell the shares
to Jashell at a price equal to the then current market price of the common
stock during the draw down period, less a discount of 21% or 24%,
specifically determined based upon a formula. The number of shares the
Company may sell to Jashell varies depending on certain factors, including
the market price of the common stock and the then current ownership
interest of Jashell. In connection with each draw down, the Company granted
Jashell a warrant to purchase up to 50% of the number of shares acquired in
a draw down at an exercise price equal to the purchase price of the common
stock acquired pursuant to the draw down. The warrant will expire 22
business days after its issuance. In connection with the Common Stock
purchase agreement, the Company issued to the investor three year warrants
to purchase 100,000 shares of common stock at an exercise price or $0.70
per share. In addition, 10,000 shares of common stock were issued on
September 18, 2000 as a finder's fee. The resale of the shares acquired
pursuant to the equity financing facility are included in the Form SB-2
Registration Statement filed with the U.S. Securities and Exchange
commission on August 1, 2000.
During September 2000, the Company completed the first of two tranches of
its first draw down of $250,000, less the amortization of deferred offering
costs totaling $7,675 for a net proceeds of $242,325 issuing 790,314 shares
of common stock at an average price during the draw down period of $0.32
per share. In addition, the Company issued to the investor a warrant to
purchase 395,157 shares of common stock at an exercise price of $0.32. The
warrant was exercised immediately.
During October 2000, the Company completed the second tranche to its first
draw down for proceeds net of expenses of $187,500 issuing 756,298 shares
of common stock at an average price during the draw down period of $0.25
per share. In addition, the Company issued to the investor a warrant to
purchase 3,702 shares of common stock at an exercise price of $0.25. The
warrant was exercised immediately.
Also, during October 2000, the Company completed the first of two tranches
of its second draw down, with a threshold price of $0.25 per share,
receiving proceeds of $109,091 issuing 498,227 shares of common stock at an
average price during the draw down period of $0.22 per share. Further,
pursuant to the Common Stock Purchase Agreement, the Company agreed to pay
the purchaser an additional $33,333 for each of the initial six puts.
Management projects that the Company will not be able to internally
generate the cash that will be required to fund its operations and to pay
off the liabilities incurred in prior periods until at least the end of
<PAGE>11
calendar year 2002. Accordingly, the Company will require additional
funding to finance its operations. Since December 1997, the Company has
financed its operations through the issuance of convertible debentures and
demand notes to two investment funds that are affiliated with each other
and the sale of common stock under an Equity Line Agreement, but no
assurance can be given that these investors will continue to provide funds
to the Company. In this event, the Company will need to secure additional
financing from alternative sources. The Company is already actively
pursuing alternative funding sources. There can be no assurance that
additional funding will be available on terms favorable to the Company.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
During the quarter ending September 30, 2000, the Company received a cash
payment as the result of a favorable settlement of a previously existing
lawsuit, which the Company had initiated as plaintiff.
Item 2. Changes in Securities and Use of Proceeds.
(c) On August 15, 2000, the Company entered into three agreements to
issue 26,134 shares in the aggregate of the Company's common stock in
exchange for past services at market price ranging from $0.50 to
$0.5625 per share. No commissions were paid. The transactions were
exempt from registration in reliance upon Section 4(2) of the
Securities Act.
Item 3. Defaults Upon Senior Securities. - Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders. - Not Applicable
Item 5. Other Information. - Not Applicable
Item 6. Exhibits and Reports on Form 8-K - Not Applicable
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
INNOVACOM, INC.
(Registrant)
/s/ FRANK J. ALIOTO
Date: November 9, 2000 --------------------------------------------------
Frank J. Alioto, Chief Executive Officer and
President
Date: November 9, 2000 /s/ JAMES D. CASEY
--------------------------------------------------
James D. Casey, Chief Financial Officer
