UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarter Ended September 30, 1997
Commission File Number 0-3125
GENERAL DEVICES, INC.
(Exact name of Registrant as specified in charter)
New Jersey 21-0661726
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) number)
215 W. Church Road, Room 202, King of Prussia, PA 19406
(Address of principal executive offices)
Registrant's telephone number, including area code:
610-992-1455
Not Applicable
Former name, address and former fiscal year, if changed since last year.
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 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 issuer's classes of
common stock, as of September 30, 1997:
Common Stock
$.01 Par Value
Shares Outstanding: 4,076,623
II-2
GENERAL DEVICES, INC.
INDEX
Page
Number
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheet
September 30, 1997 (unaudited) and
December 31, 1996 (unaudited) II-4
Consolidated Statement of Operations for
Three months and Nine months ended
September 30, 1997 and 1996 (unaudited) II-5
Condensed Consolidated Statement of
Changes in Financial Position Nine
months ended September 30, 1997 and
1996 (unaudited) II-6
Notes to Condensed Consolidated
Financial Statements (unaudited) II-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations II-8
Part II - Other Information
Item 1. Legal Proceedings II-9
Item 2. Changes in Securities II-9
Item 5. Other Information II-9
Item 6. Exhibits and Reports on Form 8-K II-9
II-3
GENERAL DEVICES, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30 December 31
1997 1996
ASSETS
Current assets:
Cash 8 15
Accounts Receivable - -
Total current assets 8 15
Total assets 8 15
LIABILITIES & SHAREHOLDER EQUITY
Pre-petition Liabilities 2,179,210 2,179,210
Current liabilities:
Current portion of long-term debt - -
Accounts payable - -
Other accrued liabilities 5,171 670
Total current liabilities 5,171 670
Long term debt:
Other Liabilities - -
Total liabilities 2,184,381 2,179,880
Shareholders equity:
Common stock $.01 par value: authorized
10,000,000 shares. issued 4,076,623 40,766 40,766
Capital in excess of par value 1,998,255 1,998,255
Retained earnings (4,161,915) (4,157,610)
(2,122,894) (2,118,386)
Less:
Treasury stock at cost, 20,300 shares ( 61,479) ( 61,479)
Total shareholders equity (deficit) (2,184,373) (2,179,865)
Total liabilities and stockholder
equity (deficit) 8 15
Note: The balance sheet of December 31, 1996 has been taken from the
unaudited financial statements at that date and condensed.
II-4
GENERAL DEVICES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
Net Sales $ - $ - $ - $ -
Operating expenses
Cost of sales - - - -
Selling, general and
administrative (1,362) (8,784) (4,040) (12,642)
Operating Gain (Loss) (1,362) (8,784) (4,040) (12,642)
Other income and (expense)
Interest expense - (90,957) - (90,957)
Miscellaneous income - - 352
Gain (loss) from
continuing operations (1,362) (99,741) (4.040) (103,247)
Net gain (loss) per share (0.0003) (0.025) (0.001) (0.025)
Dividends None None None None
Average weighted number of
shares outstanding 4,076,623 4,076,623 4,076,623 4,076,623
The accompaning notes are an integral part of the financial statements.
II-5
GENERAL DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
Unaudited)
Nine Months Ended
September 30
1997 1996
Cash flow from operating activities:
Net income (loss) $( 1,362) $(103,247)
Depreciation and amortization - -
Changes in assets and liabilities:
(Increase) decrease in accounts - -
receivable
(Increase) decrease in other assets - -
Increase (decrease) in accounts
payable and accrued expenses 1,336 (88,341)
Increase (decrease) in other
liabilities - 191,867
Total adjustments 1,336 103,526
Net cash provided (used) by operations (26) 279
Net increase (decrease) in cash
and cash equivalents (26) 279
Cash and cash equivalents - beginning 32 20
Cash and cash equivalents - end 8 299
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest -0- -0-
Income Taxes -0- -0-
II-6
GENERAL DEVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Condensed Consolidated Financial Statements
The condensed consolidated balance sheet as of September 30, 1997,
the condensed consolidated statement of operations for the three
and nine months ended September 30, 1997 and 1996 and the condensed
consolidated statement of cash flow for the nine months ended,
have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include normal recurring adjustments)
necessary to present fairly the financial position at September 30, 1997
and for all periods presented have been made.
Certain information and footnote disclosure normally included in
financial statements in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's
December 31, 1996 Form 10K. The results of operations for the period
ended September 30, 1997 are not necessarily indicative of the operating
results for the full year.
2. Shareholders Equity
During the nine months ended September 30, 1997 shareholders equity
decreased due to the following items: net loss of $4,040 on operations.
II-7
Management's Discussion and Analysis of
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of operations
Sales
As in last year's third quarter there were no operational sales or revenue
in the third quarter. There is nothing at all to compare to the same
period last year or the year before.
Operating Cost and Expenses
There are very few administrative expenses. There is no administrative
payroll. There are no paid employees of the Company. Administrative
activities need to be accomplished in order to perform the duties of a
Debtor in Possession and are handled by the Treasurer and the President
without pay to enable an orderly administration. The S.E.C. reports and
any tax filings have all been done on a timely basis. The monthly
operating reports required by the Court have all been done in a timely
manner as well as the payment of the Quarterly Fee to the U. S. Trustee
each quarter.
Interest Expenses
We had no operational developed receivables in 1997 so far, as we had none
in 1996. There was no interest paid or accrued during this period.
Income Taxes
There were no provisions made for taxes on income in the first 9 months of
1997.
At December 31, 1996, the Company had net operating carryforwards for
federal income tax purposes of approximately $2,600,000 and general
business credit carryforwards of approximately $100,000. These losses and
credits are available to reduce future income taxes, and will expire in
various years through 2006.
Liquidity and Capital Reserves
At September 30, 1997 the Company had negative working capital of
($2,184,372) versus a negative working capital of ($2,180,335) at December
31, 1996, an additional decrease of $4,037 in working capital. Net income
(loss) for the first 9 months of 1997 amounted to ($4,040). The further
decrease in working capital resulted primarily from loss from operations.
Working capital is negative at both December 31, 1996 and September 30,
1997. Since the date of the petition filing, August 23, 1996, all current
liabilities at that date are now considered non-current liabilities and
listed accordingly on the balance sheet.
II-8
At September 30, 1997, the Company had no outstanding borrowing with banks.
Prompted by the fact that profits in our Search and Placement business all
but dried up at the end of 1991 and we could no longer depend on that
subsidiary for cash flow help, the Company was forced to arrange other
financing. As reported earlier the impractability of arranging high cost
"factoring" financing for our small amount of accounts receivable
encouraged management to accept the offer of a principal of the Company,
the President, to make loans to the Company on an accounts receivable
factoring basis through a company owned by him, but at least one half the
cost as any of the concerns the Company had investigated would charge.
This financing arrangement was used through 1992 and still was in place up
until the filing of the petition on August 23, 1996.
As mentioned in previous reports, further infusion of long term capital
would be necessary if the Company was to continue in business 1n 1996 and
beyond. It was doubtful that the Company could continue as a going concern
without some outside help or reorganization. The Company filed a petition
for Chapter 11 Reorganization on August 23, 1996.
Our long term objective was to stay in business, even though we had no
revenues, no assets or employees . We have had very little operating
overhead. We have made all our reports both SEC and IRS and are still in
business, but are an inactive concern that has filed for Chapter 11
Reorganization. The Company is in the process of awaiting approval and
confirmation of our Plan of Reorganization.
Part II - Other Information
Item 1. - Legal Proceedings
None
Item 2. Change in Securities
None
Item 5. - Other Information
None
Item 6. - Exhibits and Reports on Form 8K
(a) An Exhibit 27, Financial Date Schedule, is attached as an
exhibit
(b) A Form 8K was filed on September 6, 1996 noting our filing
for Chapter 11 Reorganization on August 23, 1996.
II-9
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereto duly
authorized.
GENERAL DEVICES, INC.
Dated: October 24, 1997 By:(S)
Theodore A. Raymond
President
II-10
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