SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Nine Months Ended September 30, 1997
Commission file number:2-85175W
ELECTRO-KINETIC SYSTEMS, INC.
(Name of small business issuer in its charter)
PENNSYLVANIA 22-1954716
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
270 Rocky Run Road, Glen Gardner New Jersey 08826
(Address of principal executive offices) (Zip Code)
Issuer's telephone number 908-537-4378
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act:
Class A Common Stock
(Title of class)
Check whether issuer (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 ___.
Number of shares of Class A Common Stock, no par value, issued as of
September 30, 1997: 30,166,069 (Common Stock outstanding 20,431,069 and to be
issued 9,735,000)
Transitional Small Business Disclosure Format
Yes ___ No _X_.
<PAGE>
ELECTRO-KINETIC SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997
ASSETS
SEPTEMBER DECEMBER
30, 1997 31, 1996
------------- -------------
Current Assets:
Cash $ 0 $ 0
Other Receivables 0 0
Equipment Held for Sale 9,000 9000
-------- --------
Total Current Assets $ 9,000 $ 9,000
Other Assets
Excess of Cost over Net Assets Acquired,
Less Accumulated Amortization 16,641 18,036
Investment and Advances to 50% Owned
Affiliate 123,439 160,939
Organization Costs 300 300
-------- --------
Total Other Assets $140,380 $179,275
Total Assets $149,380 $188,275
======== ========
F-1
<PAGE>
ELECTRO-KINETIC SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997
LIABILITIES AND SHAREHOLDERS' EQUITY
SEPTEMBER DECEMBER
30, 1997 31, 1996
------------- -------------
Current Liabilities
Accounts Payable $ 63,568 $ 59,968
Accrued Exp and other Current 20,420 17,920
Notes Payable 46,614 44,881
Due to Officer 61,781 0
----------- -----------
Total Current Liabilties $ 192,383 $ 122,769
----------- -----------
Long-Term Liabilities
Due to Officer $ 0 $ 56,314
----------- -----------
Total Long-Term Liabilities $ 0 $ 56,314
----------- -----------
Total Liabilities $ 192,383 $ 179,083
Stockholders' Equity
Class "A" Common Shares, No Par Value; $ 3,446,308 $ 3,446,308
Authorized - 90,000,000 shares Issued
and to be issued - 30,166,069 in 1997
28,086,098 in 1996
Additional Paid-In-Capital $ 52,293 52,293
Accumulated Deficit ($3,541,604) (3,489,409)
----------- -----------
Total Shareholders' Equity ($ 43,003) $ 9,192
Total Liabilities & Shareholders' Equity $ 149,380 $ 188,275
=========== ===========
F-2
<PAGE>
ELECTRO-KINETIC SYSTEMS INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
<TABLE>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Equity in Earnings of
Unconsolidated Affiliate ($ 12,500) ($ 9,560) ($ 37,500) ($ 28,680)
------------ ------------ ------------ ------------
($ 12,500) ($ 9,560) ($ 37,500) ($ 28,680)
Selling, General & Admin
Expenses $ 2,100 $ 821 $ 6,100 $ 64,304
Depreciation/Amortization 465 155 $ 1,395 $ 155
------------ ------------ ------------ ------------
$ 2,565 $ 976 $ 7,495 $ 64,459
Net Loss From
Continuing Operations ($ 15,065) ($ 10,536) ($ 44,995) ($ 93,139)
------------ ------------ ------------ ------------
Other income (expense)
Interest Expense (2,500) (725) (7,200) (5,197)
Reduction of Previously
Recorded Liability $ 10,000
Forgiveness of Debt
------------ ------------ ------------ ------------
($ 2,500) ($ 725) ($ 7,200) $ 4,803
------------ ------------ ------------ ------------
Operating Loss ($ 17,565) ($ 11,261) ($ 52,195) ($ 88,336)
Loss Per Class A Common
Share
Net Loss ($ 0.001) ($ 0.000) ($ 0.002) ($ 0.003)
============ ============ ============ ============
Weighted Average Number
of Common Shares
Outstanding 29,126,069 28,086,069 29,126,069 28,086,069
============ ============ ============ ============
</TABLE>
F-3
<PAGE>
ELECTRO-KINETIC SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Nine Months Ended
September 30
1997 1996
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income ($52,195) ($88,336)
Adjustments to Reconcile Net Loss
to Net Cash Used in Operating Activities
Equity in Earnings of Unconsolidated
Subsidiary $ 37,500 $ 28,680
Depreciation and Amortization $ 1,395
Provision for Uncollectible Advances $ 40,000
(Increase) Decrease in Assets
Other Receivables ($ 1,000)
Deposits and Other Assets $ 155
Increase (Decrease) in Liabilities
Accounts Payable - Trade $ 3,600 $ 1,703
Accrued Expenses and Other Current
Liabilities $ 2,500 ($ 4,479)
Notes Payable $ 1,733 $ 6,337
-------- --------
Total Adjustments $ 46,728 $ 71,396
-------- --------
Net Cash Provided/Used in Operating
Activities ($ 5,467) ($16,940)
Cash Flows From Financing Activities
Loans - Officers $ 5,467 $ 3,860
-------- --------
Net Cash Provided by Financing Activities $ 5,467 $ 3,860
-------- --------
Net Increase (Decrease) in Cash $ 0 ($13,080)
Cash - Beginning of Year $ 0 $ 13,147
-------- --------
Cash - September 30 $ 0 $ 67
======== ========
</TABLE>
F-4
<PAGE>
ELECTRO-KINETIC SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS END FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
<TABLE>
SEPTEMBER 30, 1997
Common Shares
And Paid In
Common Shares Capital Deficit Total
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Balance at 30,166,069 $3,498,601 ($3,489,409) $9,192
January 1, 1997
Net Loss - - (52,195) (52,195)
----------- ------------- ------------ -------------
Balance at 30,166,069 $3,498,601 ($3,541,604) ($43,003)
September 30, 1997
Balance at
January 1, 1996 28,086,069 $3,472,801 ($3,359,492) $113,309
Net loss (88,336) ($88,336)
------------ ------------- ------------ -------------
Balance at
Sept. 30, 1996 28,086,069 3,472,801 (3,447,828) $24,973
</TABLE>
F-5
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion should be read in conjunction with the
selected financial data and the financial statements appearing elsewhere in
this report.
Management Report
General
Following the bankruptcy of its principal distributor in March 1995, the
Company suspended all operations related to radon testing and analysis of
environmental hazards. In 1996, the Company abandoned its efforts in the
magazine publishing field.
Results of Operations
The only recurring item of income (loss) is the Company's equity in its
50% owned subsidiary, Printone Media.
Liquidity and Capital Resources
Working capital declined as a result of operating expenses for the nine
months ended September 30, 1997 in the amount of $13,300 and from the
reclassification of the amounts due to officers of $56,314 from long term to
current liabilities.
For the Company to become a viable entity, it must operate profitably and
raise sufficient capital to fund its operations. The Company is making
continuing efforts in this regard but there is no assurance of success.
The Company previously acquired certain preliminary designs for potential
developments of computer decision models for trading securities and in the
fields of medical compliance and book publishing. It is currently seeking
financing to continue the developments as well as to enter into strategic
partnerships with other companies in these and related fields. There is no
assurance of success in these endeavors.
<PAGE>
PART 11 - OTHER INFORMATION
Item 1: Legal Proceedings:
NONE
Item 2: Changes in Securities:
There have been no instruments defining the rights of any holder of any
class of any registered security which has been materially modified.
Item 3: Defaults upon Senior Securities:
NONE
Item 4: Submission of matters to a vote of Security Holders:
NONE
Item 5: Other Information:
NONE
Item 6: Exhibits and reports of form 8-K:
See Reports filed on 01/03/96 and 01/11/96.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 ( d ) 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:
ELECTRO-KINETIC SYSTEMS, INC.
Dated : __________________ By:__________________________
Julius Cherny, PhD., President
Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following person(s) on behalf
of the Registrant and in the capacities indicated and on the Dates indicated.
SIGNATURE CAPACITY DATED
_____________________________ Chairman of the ___________
Julius Cherny, PhD. Board, Director (DATE)
