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<PAGE>
SECURITIES AND EXCHANGE COMMISSIONGFB UserFinancial Printing Group
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission File No.
0-2532
FIFTH DIMENSION INC.
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(Exact Name of Small Business Issuer as Specified in its Charter)
New Jersey 21-0717490
- ------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
801 New York Avenue, Trenton, New Jersey 08638
- --------------------------------------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
Issuer's Telephone Number, Including Area Code: (609) 393-8350
--------------
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 No X
------- -------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
As of March 31, 1998 the Registrant had outstanding, 1,093,636 shares of
Common Stock $.33 1/3 par value.
<PAGE>
FIFTH DIMENSION INC.
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TABLE OF CONTENTS
-----------------
PERIOD ENDED MARCH 31, 1997
---------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART 1 - FINANCIAL INFORMATION
- ------------------------------
Item 1 - Financial Statements
-----------------------------
Balance Sheet..................................... 1
Statement of Operations and Retained Earnings..... 2
Statement of Cash Flows........................... 3
Notes to Financial Statements..................... 4
Item 2- Management's Discussions and Analysis of Financial
----------------------------------------------------------
Conditions and Results of Operations...................... 5
------------------------------------
</TABLE>
<PAGE>
FIFTH DIMENSION INC.
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BALANCE SHEET
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(UNAUDITED)
-----------
<TABLE>
<CAPTION>
MARCH 31,
1998
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<S> <C>
ASSETS
------
CURRENT ASSETS:
Cash and Short-Term Investments $ 94,760.
Accounts Receivable - Net 245,860.
Inventories 398,158.
Prepaid Expenses $ 26,060.
------------
Total Current Assets $ 764,838.
------------
PROPERTY, PLANT AND EQUIPMENT - Net of Accumulated
Depreciation $ 485,663.
------------
PATENT COSTS, LESS ACCUMULATED AMORTIZATION $ 26,053.
------------
TOTAL ASSETS $ 1,276,554.
------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Notes Payable - Current Portion $ 49,514.
Accounts Payable 397,992.
Accrued Expenses 57,834.
Accrued Compensation and Vacation 143,274.
------------
Total Current Liabilities $ 648,614.
------------
LONG TERM LIABILITIES:
Notes payable - Long Term Portion $ 998,389.
Subordinate Related Party Debt 305.000.
------------
Total Long-Term Liabilities 1,303,389.
------------
TOTAL LIABILITIES $ 1,952,003
------------
STOCKHOLDERS' EQUITY:
Common Stock - ($.33 1/3 Par Value) 364,936.
Additional Paid-In Capital 403,663.
Treasury Stock - At Cost. (604.)
Retained Earnings Deficit (1,443,444.)
------------
TOTAL STOCKHOLDERS' EQUITY DEFICIT (675,449.)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY DEFICIT $ 1,276,554.
------------
</TABLE>
-1-
<PAGE>
FIFTH DIMENSION INC.
--------------------
STATEMENT OF OPERATIONS AND RETAINED EARNINGS
---------------------------------------------
(UNAUDITED)
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<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1998 1997
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<S> <C> <C>
NET SALES $ 370,261. $ 366,486.
COST OF SALES 425,909. 609,390.
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GROSS PROFIT (LOSS) ON SALES (55,648.) (242,904.)
OPERATING EXPENSES 125,637. 224,290.
INTEREST EXPENSE 38,551. 5,462.
------------ -----------
OPERATING INCOME (LOSS) (219,836.) (472,656.)
OTHER INCOME (EXPENSE) - 2,549.
------------ -----------
INCOME (LOSS) BEFORE TAXES (219,836.) (470,107.)
PROVISION FOR INCOME TAXES (BENEFIT) - (183,107.)
------------ -----------
NET INCOME (LOSS) (219,836.) (287,000.)
RETAINED EARNINGS (DEFICIT) AT (1,223,685.) 936,685.
-----------
BEGINNING OF PERIOD
RETAINED EARNINGS (DEFICIT) AT (1,443,444.) 649,685.
------------ -----------
END OF PERIOD
NET INCOME (LOSS) PER COMMON SHARE $ (.20) $ (.26)
------------ -----------
WEIGHTED AVERAGE OF COMMON 1,093,636. 1,093,636.
------------ -----------
SHARES OUTSTANDING
</TABLE>
-2-
<PAGE>
FIFTH DIMENSION, INC.
---------------------
STATEMENT OF CASH FLOWS
-----------------------
(UNAUDITED)
-----------
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
- ------------------------------------
Net Income (Loss) $(219,836.) $(287,000.)
---------- ----------
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET
- -------------------------------------------------
CASH PROVIDED BY OPERATING ACTIVITIES:
- -------------------------------------
Depreciation Expense 24,985. 28,950.
(Increase) Decrease in Accounts Receivable 12,303. (150,737.)
(Increase) Decrease in Inventory (2,303.) 29,696.
(Increase) Decrease in Prepaid Expenses and Taxes 14,381. (3,225.)
Increase (Decrease) in Accounts Payable (11,911.) 24,891.
Increase (Decrease) in Accrued Expenses and Compensation 70,450. 52,993.
Increase (Decrease) in Accrued/Deferred Income Taxes - (183,107.)
---------- ----------
107,905. (200,539.)
---------- ----------
Net Cash Provided (Used) by Operating Activities (111,931.) (487,539.)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Capital Expenditures
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Proceeds from Loans 190,000. 250,000
Reduction in Notes Payable (7,268.) ( 12,500.)
---------- ----------
Net Cash Provided (Used) by Financing Activities 182,732. 237,500.
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 70,801. (250,039.)
- ------------------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 23,959. 296,777.
- ------------------------------------------------ ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 94,760. $ 46,738.
- ------------------------------------------ ---------- ----------
</TABLE>
-3-
<PAGE>
FIFTH DIMENSION INC.
--------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
MARCH 31, 1998
--------------
NOTE #1 INVENTORIES
-----------
On an interim basis, the cost of goods sold and resulting inventory
valuation is calculated using the gross profit method. A physical inventory
is taken December 31 of each year and a distribution into raw materials, work
in process and finished goods is only available at that time.
-4-
<PAGE>
FIFTH DIMENSION INC.
--------------------
PERIOD ENDED MARCH 31, 1998
---------------------------
PART 1 - ITEM 2
- ---------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATIONS
- ----------
The Registrant reported a net loss of $219,836 for the first quarter of 1998 on
sales revenue of $370,261. This compares with a 1997 first quarter loss of
$287,000 on sales revenue of $366,468. This decline in operating loss is a
result of overhead reductions instituted during 1997. The sales levels and
gross profit margins did not provide adequate coverage of manufacturing overhead
incurred during the first quarter thus resulting in the gross profit deficit.
The Company reduced operating expenses by 56% during the first quarter of 1998
versus the first quarter of 1997. This reduction was primarily the result of
lower personnel costs although various other overheads were reduced in response
to the lower sales and production levels. Interest costs were significantly
higher during the current quarter based on additions to outstanding debt
balances. Income tax benefits were accrued during the first quarter of 1997
based on the projected future tax reductions anticipated to result from
carryover of the first quarter 1997 operating loss. This accrual of tax
benefits was not made in 1998 due to the uncertainty of the future use of the
carryover losses.
The financial condition of the Registrant was stable during the quarter as
borrowing from private sources financed operating losses. The Company
anticipates continued financing requirements during the second quarter of 1998
as operating deficits are projected for the balance of 1998. Settlements on the
Kearfott and the ACALA contracts are expected during the second quarter of 1998
which should improve the cash position of the Registrant. The Company
anticipates that sales of new and existing products will enable the Company to
return to profitable operating levels during 1999. The Registrant purchased no
fixed assets during the quarter, while charging $24,985 against income for
depreciation purposes.
The Registrant filed for protection under Chapter 11 on January 6, 1998. This
enabled the Company to delay payment on approximately $400,000 of current vendor
accounts payable.
No other changes have occurred which would have a material affect on liquidity,
financial condition or results of operations of the Registrant.
-5-
<PAGE>
FIFTH DIMENSION INC.
--------------------
SIGNATURES
----------
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIFTH DIMENSION INC.
- --------------------
(Registrant)
Dated: May 29, 1998 By: /s/ Craig Ebner
------------ ---------------
Craig Ebner
President
-6-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 94,760
<SECURITIES> 0
<RECEIVABLES> 245,860
<ALLOWANCES> 0
<INVENTORY> 398,158
<CURRENT-ASSETS> 764,838
<PP&E> 485,663
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,276,554
<CURRENT-LIABILITIES> 648,614
<BONDS> 0
0
0
<COMMON> 767,995
<OTHER-SE> (1,443,444)
<TOTAL-LIABILITY-AND-EQUITY> 1,276,554
<SALES> 370,261
<TOTAL-REVENUES> 370,261
<CGS> 425,909
<TOTAL-COSTS> 425,909
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,511
<INCOME-PRETAX> (219,836)
<INCOME-TAX> 0
<INCOME-CONTINUING> (219,836)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,223,685)
<EPS-PRIMARY> (.20)
<EPS-DILUTED> (.20)
</TABLE>
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