UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
-------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________
Commission File Number 0-28351
---------------------------------------------------------
KOLORFUSION INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-1317836
--------------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
14510 East Fremont Ave., Englewood, CO 80112
-------------------------------------------------------------
(Address of principal executive offices)
(303) 690-2910
-------------------------------------------------------------
(Registrant's telephone number, including area code)
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 ___
19,158,144 Common Shares were outstanding as of November 15, 2000
----------------
<PAGE>
KOLORFUSION INTERNATIONAL, INC.
I N D E X
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Balance Sheets
September 30, 2000 (Unaudited) and
June 30, 2000 1
Statements of Operations
Three months ended September 30, 2000 and 1999 (Unaudited) 2
Condensed Statements of Cash Flows
Three months ended September 30, 2000 and 1999 (Unaudited) 3
Selected Notes to Condensed Financial
Statements (Unaudited) 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II. OTHER INFORMATION 6-7
<PAGE>
Part I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
KOLORFUSION INTERNATIONAL, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, June 30,
ASSETS 2000 2000
------------ ------------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,341 $ 10,785
Trade accounts receivable 77,317 22,956
Inventories 114,750 102,750
------------ ------------
Total current assets 197,408 136,491
OTHER ASSETS:
Patents, net 1,907,341 1,969,341
Other 1,270 1,270
------------ ------------
1,908,611 1,970,611
LEASEHOLD IMPROVEMENTS AND EQUIPMENT, net 162,614 180,404
------------ ------------
$ 2,268,633 $ 2,287,506
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 162,703 $ 181,502
Current obligation on payable to individual 1,861,008 1,861,008
Current portion of long-term debt 12,599 14,881
Payable to stockholders 960,000 780,000
Accrued interest payable 385,406 385,406
------------ ------------
Total current liabilities 3,381,716 3,222,797
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock 19,098 18,957
Additional paid-in capital 7,748,689 7,674,100
Accumulated deficit (8,880,870) (8,628,348)
------------ ------------
(1,113,083) (935,291)
------------ ------------
$ 2,268,633 $ 2,287,506
============ ============
</TABLE>
Note: The balance sheet at June 30, 2000 has been taken from the audited
financial statements at that date, and has been condensed.
See Notes to Condensed Financial Statements.
1
<PAGE>
KOLORFUSION INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30
------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Revenues $ 165,046 $ 67,227
Expenses:
Cost of sales 178,445 120,808
Selling, general and administrative 238,901 271,111
Other income (expense) (222) (6,437)
------------ ------------
Net loss $ (252,522) $ (331,129)
============ ============
Loss per common share $ (.01) $ (.02)
============ ============
Loss per common share assuming dilution $ (.01) $ (.02)
============ ============
Weighted average outstanding shares 19,012,894 18,981,561
============ ============
</TABLE>
See Notes to Condensed Financial Statements.
2
<PAGE>
KOLORFUSION INTERNATIONAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30
------------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (252,522) $ (331,129)
Depreciation and amortization 82,000 81,300
Change in:
Accounts receivable (54,361) 29,016
Inventories (12,000) (1,470)
Accounts payable (18,799) (6,958)
Other accrued expenses -- 46,500
------------ ------------
Net cash used in operating activities (255,682) (182,741)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of leasehold improvements and equipment (2,210) (2,470)
Decrease in other assets -- 1,270
------------ ------------
Net cash used in investing activities (2,210) (1,200)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 74,730 80,000
Proceeds from payable to stockholder 180,000 --
Payments on long-term debt (2,282) (1,021)
------------ ------------
Net cash provided by financing activities 252,448 78,979
------------ ------------
Net decrease in cash (5,444) (104,962)
Cash and cash equivalents:
Beginning of period 10,785 118,867
------------ ------------
End of period $ 5,341 $ 13,905
============ ============
</TABLE>
See Notes to Condensed Financial Statements.
3
<PAGE>
KOLORFUSION INTERNATIONAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Condensed Financial Statements:
The condensed balance sheet as of September 30, 2000, the statement
of operations for the periods ended September 30, 2000 and 1999, and
the condensed statement of cash flows for the periods then ended
have been prepared by the Company, without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and changes in cash flows at September 30,
2000 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is
suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto included
in the Company's June 30, 2000 audited financial statements. The
results of operations for the period ended September 30, 2000 are
not necessarily indicative of the operating results for the full
year.
Note 2. Stockholders' Equity:
During the three months ended September 30, 2000, stockholders'
equity changed for net loss of $(252,522) and for the issuance of
common stock for $74,730.
4
<PAGE>
KOLORFUSION INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations 3 months
Revenues increased to $165,046 in 2000 from $67,227 in 1999. Costs of
sales increased in 2000 to $178,445 from $120,808 in 1999. Operating expenses
decreased in 2000 to $238,901 from $271,111 in 1999.
The result was a net loss of $252,522 for the first 3 months of 2000
compared to a net loss of $331,129 in the first 3 months of 1999. The net loss
per share decreased to $.01 per share in 2000 from $.02 in 1999. The net loss
moved shareholder equity to a deficit of $1,113,083 from a deficit at June 30,
2000 of $935,291.
The increased sales, accompanied by lower operating expenses, led to
the decreased deficit and decreased per share deficit in the quarter.
5
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is the plaintiff in a lawsuit pending in Araphoe County
District Court against its former Vice President Mark Poole and
Lazart, Inc. The Company seeks yet to be determined damages related
to misappropriation of Company information, trade secrets and breach
of fiduciary duties. The Company feels that the case will be tried
or resolved in 2001.
The Company's primary patent has been placed for re-examination by
the U.S. Patent Trademark Office at the request of Valmont, Inc. The
Company believes that its patents will be continued as valid, and
will contest any present or future claims as they may arise against
the Company's intellectual property currently owned or later
developed.
Item 6. Exhibits and Reports on Form 8-K
(b) No reports on Form 8-K were filed during the three months ended
September 30, 2000.
6
<PAGE>
SIGNATURE
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.
KOLORFUSION INTERNATIONAL, INC.
Date: 11/8/00 By: /s/ Steve Nagol
-------------------------------------
Chairman of the Board and Director
President
7
