SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1998
Commission File No 2-97278-NY
INTERCOM TECHNOLOGIES CORP.
----------------------------------------------
(Name of small business issuer in its charter)
New York 13-2932511
- -------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
195 Tenth Avenue, New York, New York 10011
- --------------------------------------- ----------
(Address of principal executive offices (Zip Code)
Issuer's Telephone Number (212) 924-7597
Securities registered under Section 12(b) of the Act: NONE
----------
Securities registered under Section 12(g) of the Act: NONE
----------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained herein, and no disclosure will be contained to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
The Issuer's revenues for its fiscal year ended September 30, 1998 were
$490,180.
The average bid and asked price of the Company's stock as of February 1, 1999
was $4.50 bid, $4.50 ask.
<PAGE>
The number of shares outstanding of the registrant's common stock, as of
September 30, 1997, was 128,311,223, and the number of shares of the
registrant's common stock outstanding as of September 30, 1998 was 120,239, all
of one class of Common Stock, $.0001 par value.
DOCUMENTS INCORPORATED BY REFERENCE See "Item 13."
Transitional Small Business Disclosure Format Yes No X
<PAGE>
PART I
Item 1. Description of Business
Intercom Technologies Corp. (the "Company") was incorporated in October
1977 under the name L.J. L. Intercom Services Corp. The Company was formed to
acquire certain assets and rights to the name of L.J. Loeffler Inc., which had
filed a petition for bankruptcy. L.J. Loeffler Inc. had been a manufacturer of
signaling and telephone systems for apartment houses since 1898. The Company
changed its name to Intercom Technologies Corp. in April 1985.
The Company's business to date has consisted of servicing and installing
intercom systems and signaling devices manufactured by the Company and other
manufacturers. The intercom systems and signaling devices are installed and
serviced by the Company in residential and commercial buildings. During the past
fiscal year, the Company's primary activity consisted of servicing and
installing the Loeffler line of products. The Company's primary market is the
New York Metropolitan Area.
The Company, which presently has 8 employees, is greatly dependent upon the
active participation of Mr. Dominick Pope, Chairman of the Board, President,
Treasurer, principal stockholder and founder of the Company.
Product Line
The Company's product line consists of intercom systems, signaling
communication devices, and security signaling devised for use primarily in
multiple family dwellings and commercial establishments. However, the Company
also manufactures and installs customized intercom systems to meed customers
special requirements.
The Company manufactures a variety of apartment intercom units (also
referred to as "suite stations"), including the "Loud Talker," watchcase
receiver and suspended handset models. Each type of intercom is available with a
variety of modification, including bell, buzzer or tone signals, and may be
adapted to respond to more than one location.
<PAGE>
"Loud Talker" System
"Loud Talker" systems and suite stations are telephonic units that enable
users to have two-way conversations by depressing one button, and open an
electrically operated door by depressing another button. The system consists of
a vestibule entry panel, power supply, electric door release and remote
apartment suite stations. Most components are manufactured by the Company,
except for the electric door release, speakers, transformers, telephone handsets
and watchcase receivers, which according to management of the Company, have been
readily obtained from many sources. There can be no assurance, however that such
components will continue to be readily obtainable in the future.
The Loud Talker system can be modified in a number of ways, including the
following:
Handset suite stations: The handset suite stations are similar to the basic Loud
Talker except that a telephone receiver replaces the buttons on each station. A
security guard, concierge, doorman or switchboard operator announces a caller.
Similarly, a tenant alerts the lobby attendant or switchboard operator to
request services. Switchboards allow multiple channels of communication. For
example, a tenant may contact the garage attendant, superintendent or doorman
for services.
Watchcase receiver suite stations: Users of this type of system listen to
callers from a telephone receiver earpiece and speak into a plate. This system
may be modified to call a switchboard or, with the addition of a pushbutton,
release an electric door opener.
Security Systems
The Company manufactures two lines of security systems, the Guardsman Alarm
System, a central alarm system, and the Tenant Controlled Security System.
The Guardsman Alarm System is a supervisory controlled system located at
the concierge or doorman's station, whereby a tenant of a multiple dwelling
informs the doorman that he is leaving and the doorman then activates the
electronically controlled Guardsman Alarm System. When the doorman does so, a
light bulb representing each apartment will be lit on a panel. If the light
becomes very bright, and aloud beep is heard, it indicates to the doorman that
an intruder is tampering with the door.
<PAGE>
The Tenant Controlled Security System allows a tenant to set the alarm
device in his apartment by key and has an indicator lamp to indicate that the
system has been activated. The system is connected to a panel, usually kept at a
supervisory location such as a superintendent's station. The alarm will be heard
both in the apartment and at the supervisory location if the door is tampered
with.
In addition, the Company has been requested by an electrical contractor to
make special signaling panels, which indicate, with signal lamps and auditory
signals, every entry and departure from specified doors in large multiple
dwellings and private and commercial buildings.
Closed Circuit Television
The Company has installed and serviced many closed circuit television
systems manufactured by others. Such systems consist of a television monitor
connected to a camera that covers a specific location, for example, a service
area, elevator, basement, laundry room, garage level, and entrance or exit
locations, which images are displayed on the television screen in a supervisory
location to be seen by a doorman or guard. The Company purchases the components
of these systems from a variety of suppliers.
Video Intercom Systems
The Company presently services video intercom systems manufactured by other
companies. These systems employ a camera, usually concealed behind a vestibule
entryway, that shows a visitor on a monitor which is located in each apartment
of the building. Each tenant can see and hear visitors when they signal the
apartment by the entry panel, or when the tenant activates the system. The
visitor cannot see the tenant.
The Booster Amplifier
The Company believes that is the sole manufacturer of an in-line booster
amplifier utilized to increase volume from the apartment to the vestibule entry
area of the Loud Talker system. The Company has installed amplifiers in existing
installations thereby revitalizing the existing system and saving the cost and
inconvenience of a new installation. The Company intends to apply its marketing
capabilities to increasing the number of installations of this device as well as
to the expansion of the sales of this device nationwide.
<PAGE>
Competition
The intercom and signaling device industry is highly competitive. The
Company competes with a large number of companies which manufacture, install
and/or service intercom and signaling devices. Many of the Company's competitors
are larger and have greater manufacturing capacity, experience and financial
resources than the Company. Although many of the Company's principal competitors
produce modular design units for the intercom market, to management's knowledge,
the Company is the only one in the Greater New York City market which
manufactures, distributes, installs and services its product line. In addition,
to management's knowledge, the Company is the only one in its market which is
engaged in the manufacture of custom installations.
Suppliers
Raw materials required in the manufacture of the Company's principal
products are presently readily available from a variety of sources and the
Company is not presently dependent on any one supplier for more than 10% of its
raw material.
Customers
The Company is not dependent on any one or a few major customers.
Government Regulation
Intercom and security systems use low voltage wiring and are subject to
applicable local building codes. Although no assurance can be given, the Company
management does not believe that such regulation will materially affect the
Company's business. The extent of potentially adverse governmental regulations
which might arise from future legislation or administrative action cannot be
predicted.
Employees
The Company presently has 8 employees, of which 2 are executive and sales
personnel, 1 is a clerical employee, 4 are engaged in service and installation
work, and 1 is engaged in production work.
<PAGE>
Item 2. Properties
The Company presently leases approximately 2,250 square feet at 195 Tenth
Avenue, New York, New York 10011. The rental is presently $1,750 per month plus
utilities. The Company believes the facilities are adequate for the foreseeable
future. The lease expires December 31, 1999. The Company has an option for an
additional five year lease at $2,000 per month.
Item 3. Legal Proceedings
There are currently no material legal proceedings pending against the
Company.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held a Special Meeting of Shareholders on October 3, 1997,
pursuant to Notice thereof, for the purpose of voting on the proposed 3,400
share for 1 share reverse split of the Company's outstanding shares. The reverse
split was approved by a vote of 80,936,126 in favor, 464,500 shares opposed and
21,500 shares abstained.
<PAGE>
PART II
Item 5. Market Information
The Company's Common Stock $.0001 par value is traded on the
over-the-counter market (OTC Bulletin Board Symbol ICTM).
A. There was no trading of the Company's common stock for the past two full
years until October 1998, when limited trading in the Company's common stock
commenced on a sporadic basis. The following table sets forth the range of high
ask and low bid prices for the Company's Common Stock on a quantity basis for
the past two full years, as reported by the National Quotation Bureau (which
reflect inter-dealer prices, without retail mark-up, mark-down, or conversion,
and may not represent actual transactions). The foregoing and following
information should not be taken as an indication of the existence of an
established public trading market for the Company's Common Stock.
Common Stock High Ask Low Bid
------------ -------- -------
Period - Fiscal Year 1996
First Quarter ending March 31, 1996 No trading occurred
Second Quarter ending June 30, 1996 No trading occurred
Third Quarter ending September 30, 1996 No trading occurred
Fourth Quarter ending December 31, 1996 No trading occurred
Period - Fiscal Year 1997
First Quarter ending March 31, 1997 No trading occurred
Second Quarter ending June 30, 1997 No trading occurred
Third Quarter ending September 30, 1997 No trading occurred
Fourth Quarter ending December 31, 1997 No trading occurred
Period - Fiscal Year 1998
First Quarter ending March 31, 1998 No trading occurred
Second Quarter ending June 30, 1998 No trading occurred
Third Quarter ending September 30, 1998 No trading occurred
Fourth Quarter ending December 31, 1998 5-1/2 3/8
<PAGE>
B. Holders The approximate number of record holders of the Company's Common
Stock as of January 31, 1999 was 750 inclusive of those brokerage firms and/or
clearing houses holding the Company's common shares for their clientele (with
each such brokerage house and/or clearing house being considered as one holder).
The aggregate number of shares of Common Stock outstanding as of January 31,
1999 was 120,239 shares.
The following unregistered securities of the Company have been issued in
the past three years:
(a) On December 12, 1997, the Company sold 20,000 restricted shares of
common stock for consideration of $2,000 to a non-affiliate;
(b) On December 12, 1997, the Company sold 30,000 restricted shares of
common stock for consideration of $3,000 to a non-affiliate;
(c) On December 12, 1997, the Company sold 30,000 restricted shares of
common stock for consideration of $3,000 to a non-affiliate;
(d) On December 1997, the Company sold 2,500 restricted shares of common
stock for consideration of $250 to a director.
C. The Company has not paid or declared dividends upon its common stock to
date, and it does not anticipate paying dividends in the foreseeable future.
<PAGE>
Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
A. 1998 Fiscal Year Compared to 1997 Fiscal Year:
The Company experienced net loss from operations of $871 during fiscal
year 1998 compared to net loss from operations of $21,269 in fiscal year 1997.
Sales of $490,180 in fiscal year 1998 represent an increase of $19,612 or 4%
over the prior fiscal year. The sales increase is the result of increased sales
efforts.
The Company's gross profit margin was 59.8% in fiscal 1998, an increase of
1.4% over fiscal 1997. The increase in gross profit margin in fiscal 1998
resulted primarily from increased sales.
General and administrative expenses decreased in fiscal 1998 by 1.4%.
B. 1997 Fiscal Year Compared to 1996 Fiscal Year:
The Company experienced net loss from operations of $21,269 during fiscal
year 1997 compared to net income from operations of $19,813 in fiscal year
1996. Sales of $470,568 in fiscal year 1997 represent an decrease of $42,433 or
9% over the prior fiscal year. The sales decrease is the result of general
business conditions and failure to close as many sales as in previous years.
The Company's gross profit margin was 58.4% in fiscal 1997, a decrease of
4.7% over fiscal 1996 The decrease in gross profit margin in fiscal 1997
resulted primarily from decreased sales.
General and administrative expenses increased in fiscal 1997 by 1.2%.
C. 1996 Fiscal Year Compared to 1995 Fiscal Year:
The Company experienced net income from operations of $19,813 during fiscal
year 1996 compared to net income from operations of $7,600 in fiscal year 1995.
Sales of $513,001 in fiscal year 1996 represent a decrease of $21,001 or 3.9%
over the prior fiscal year. The sales decrease is the result of general business
conditions and failure to close as many sales as previously.
<PAGE>
The Company's gross profit margin was 63.1% in fiscal 1996, an increase of
.7% over fiscal 1995. The increase in gross profit margin in fiscal 1996
resulted primarily from increased sales.
General and administrative expenses decreased in fiscal 1996 by 5.7%.
Liquidity and Capital Resources
A. 1998 Fiscal Year:
In fiscal year 1998, the Company realized a net loss of $871 and
experienced an increase in working capital of $18,306. The increase in working
capital resulted primarily from increase in accounts receivable and inventory.
B. 1997 Fiscal Year:
In fiscal 1997, the Company realized a net loss of $21,269 and experienced
a decrease in working capital of $33,558. The decrease in working capital
resulted primarily from decreased sales.
C. 1996 Fiscal Year:
In fiscal 1996, the Company realized a net increase of $19,813 and
experienced an increase in working capital of $73,594. The increase in working
capital resulted primarily from decreased costs and increased cash and
inventory.
<PAGE>
Item 7. Selected Financial Data
The following financial data is derived from the Company's audited
financial statements for the fiscal years ended September 30, 1997 and September
30, 1998. This selected financial data should be read in conjunction with the
financial statements of the Company and the related notes thereto included
elsewhere in the financial statements.
Operating data: Year Ended September 30
- --------------- ------------------------
1997 1998
-------- ---------
Revenues ............................. $ 470,568 $ 490,180
Income (Loss) before provision
for income taxes ................ (18,919) (71)
Net income (loss) .................... (21,269) (871)
Earnings per share ................... (.00017) (.0072)
Condensed Balance Sheet Data: September 30
- ----------------------------- -------------------------
1997 1998
--------- ---------
Current assets ....................... $ 95,228 $100,676
Total assets ......................... 224,930 219,451
Current liabilities .................. 35,059 22,201
Stockholders' equity ................. 189,871 197,250
Item 8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
NONE
Item 9. Directors and Executive Officers of the Registrant
The term of each director is one year or until his successor is elected and
shall have qualified. The term of each officer is at the discretion of the Board
of Directors.
The officers and directors of the Company are set forth below:
Name Age Office
- ------------- --- --------------------------------
Dominick Pope 67 President, Chairman of the Board
of Directors and Treasurer
David Lutzker 43 Secretary & Director
Marvin Sands 71 Director
Dominick Pope has served as President and Chairman of the Board of
Directors of the Company since 1977 and as Treasurer since March 1985. Mr. Pope
purchased the L.J. Loeffler, Inc. trade name and certain material assets of that
firm in 1997, after L.J. Loeffler Inc. had filed a petition for bankruptcy. The
assets were subsequently assigned to the Company. In 1975, Mr. Pope became Vice
President and Sales Manager of L.J. Loeffler Inc., when American Intercom
Distributors, a Company Mr. Pope founded in 1972, merged with L.J. Loeffler Inc.
Mr. Pope attended the Baruch School of Business at the City University of New
York. Mr. Pope may be deemed a founder of the Company.
<PAGE>
David Lutzker has served as Secretary of the Company since 1984, and has
been a director of the Company since 1998. Prior to joining the Company, Mr.
Lutzker served, from 1982 until 1984, as office manager for Bruno Kaiser Corp.,
a supplier of plastic monofilaments and resins to the brush and commercial
fishing industry. From 1980 until 1982, Mr. Lutzker served as purchasing agent
for Sunny Suzy & Co. Inc., an import company and supplier of dried fruit and
nuts. Mr. Lutzker received a Bachelor of Arts degree from the State University
of New York at Albany in 1977.
Marvin Sands has served as a director of the Company since 1983. Mr. Sands
was President of Sand Supply Company from 1949 to 1977, and has served as
President of its successor, Bilmar Products Corporation from 1977 to the
present. Bilmar Products Corporation is in the commercial hardware business,
specializing in custom designed products built to customer specifications. Mr.
Sands received a Bachelor of Science degree in accounting from New York
University in 1949.
Item 10. Executive Compensation
The following table shows all the cash compensation paid by the Company as
well as certain other compensation paid during the fiscal years indicated, to
the Chief Executive Officer for such period in all capacities in which he
served. No other Executive Officer received total annual salary and bonus in
excess of $100,000. LONG TERM COMPENSATION
<TABLE>
<CAPTION>
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Name Annual Restricted Underlying All other
and Compen- stock Options/ LTIP compen-
Principal sation Awards(s) SARs(#) Payouts sation
Position Year Salary($) Bonus($) ($) ($) ($) ($)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dominick Pope 1998 65,000 N/A N/A N/A N/A N/A N/A
</TABLE>
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners
and Management
The following table sets forth, as of January 1, 1999, the number and
percentage of shares of the Company's Common Stock beneficially held by each
officer and director of the Company, by each person known by the Company to own
in excess of five (5%) percent of the Company's Common Stock and by all
executive officers and directors as a group.
Amount and Nature
of Beneficial Percentage
Name and Address Ownership (1) of Class
- ---------------- ----------------- ----------
Dominick Pope 21,365 (2) 17.77
144 Voorhis Avenue
New Milford, N.J. 07646
David Lutzker 2,500 2.08
327 West 21st Street
New York, NY 10011
Marvin Sands 530 *
117 East 26th Street
New York, New York 10010
All officers and directors
As a Group (3 persons) 24,395 19.86
* Less than .005%
- -------------------
(1) To the Company's knowledge, ownership consists of sole voting and
investment power unless otherwise indicated
(2) Includes 5,295 shares issued to Mr. Pope's wife and 2,649 shares issued to
Mr. Pope's children. Dominick Pope may be deemed a founder and parent of
the Company.
Item 12. Certain Transactions and Related Transactions
NONE.
<PAGE>
Part IV
Item 13. Exhibits and Reports on Form 8-K
(a) 3.a Certificate of Incorporation of the Company (3)
3.d By-Laws of the Company (3)
(b) There were no reports filed on Form 8-K during the last quarter of the
period covered by this report.
- --------------------
(3) Previously filed as an Exhibit to the Registration Statement on Form S-18
File No. 2-97278-NY filed with the Commission and declared effective by the
Commission on August 1, 1995.
<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.
INTERCOM TECHNOLOGIES CORP.
By: \s\ Dominick Pope
-----------------------------------
Dominick Pope, Principal Executive,
Accounting and Financial Officer
and Chairman of the Board
Dated: March 3, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 3, 1999 By: \s\ Dominick Pope
---------------------------------
Dominick Pope, Director
Date: March 3, 1999 By: \s\ David Lutzker
---------------------------------
David Lutzker, Director
Date: March 3, 1999 By: \s\ Marvin Sands
---------------------------------
Marvin Sands, Director
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.
No annual report has been sent to the registrant's security holders
covering the registrant's last fiscal year.
<PAGE>
Intercom Technologies Corp.
Audited Financial Statements
September 30, 1998
<PAGE>
Table of Contents
Independent Auditor's Report ......................... 1
Balance Sheet ........................................ 2
Income Statement ..................................... 3
Statement of Cash Flows............................... 4
Statement of Changes to Stockholders Equity .......... 5
Notes to Financial Statements ........................ 6-10
<PAGE>
[Logo]
Nelson, Mayoka & Company, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
551 5th Avenue
New York, New York
10176-0001
Tel. (212) 697-7979
Fax (212) 697-8997
DIRECT LINE
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors and Shareholders
Intercom Technologies Corp.
We have audited the accompanying balance sheet of Intercom Technologies
Corp. as of September 30, 1998, and the related statements of income, cash flows
and statement of changes to stockholder's equity for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
Except as discussed in the following paragraph we conducted our audit in
accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
We did not observe the taking of the physical inventories at September 30,
1997 and 1998 (stated at $30,707 and $31,640 respectively). We were unable to
satisfy ourselves about inventory quantities by means of other auditing
procedures.
In our opinion, except for the effects of such adjustments, if any, as
might have been determined to be necessary had we been able to observe the
physical inventories taken as of September 30, 1997 and 1998, the financial
statements referred to in tile first paragraph present fairly, in all material
respects, the financial position of Intercom Technologies Corp., as of September
30, 1998, and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.
Nelson, Mayoka & Company
CERTIFIED PUBLIC ACCOUNTANT'S
New York, New York
February 4, 1999
1
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
BALANCE SHEET
-------------
SEPTEMBER 30, 1998
------------------
CURRENT ASSETS:
Cash ...................................................... $ 22,013
Accounts receivable net of allowance
for doubtful accounts ..................................... 47,023
of $9,000
Inventory ................................................. 31,640
TOTAL CURRENT ASSETS ...................................... 100,676
---------
PROPERTY AND EQUIPMENT ............................................ 3,108
OTHER ASSETS ...................................................... 115,667
---------
$ 219,451
=========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable and accrued expenses ..................... $ 22,201
STOCKHOLDER'S EQUITY
Common stock - Par value $.OOO1; 250,000,000
shares authorized 120,239 shares issued and outstanding ... $ 14,304
Treasury stock ............................................ (2,500)
Paid - in capital ......................................... 373,299
Accumulated Deficit ....................................... (187,853)
---------
TOTAL STOCKHOLDER'S EQUITY ............................. 197,250
---------
$ 219,451
=========
The Accompanying Notes are an Integral Part of These Financial Statements
2
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
INCOME STATEMENT
----------------
FOR THE YEAR ENDING SEPTEMBER 30,1998
-------------------------------------
Sales ...................................................... $ 490,180
Cost of sales .............................................. 196,982
---------
Gross profit ....................................... 293,198
Selling general and administration ......................... 304,529
Other income (expense) net ................................. 11,260
Net income (loss) before taxes ............................. (71)
Provision for income taxes ................................. 800
---------
Net income (loss) .................................. $ (871)
=========
Net income (loss) per share ................................ (0.0072)
---------
Average number of shares outstanding ....................... 120,239
---------
The Accompanying Notes are an Integral Part of These Financial Statements
3
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
STATEMENT OF CASH FLOWS
-----------------------
FOR THE YEAR ENDING SEPTEMBER 30,1998
-------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss) ........................................ $ (871)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation ......................................... 1,458
Changes in assets and liabilities
Decrease (increase) in accounts receivable ........... (3,126)
Decrease (increase) in inventory ..................... (933)
Decrease (increase) in other assets .................. 10,575
Increase (Decrease) in accounts payable............... (12,858)
---------
CASH PROVIDED (USED) BY OPERATING ACTIVITIES ............. (5,755)
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ..................................... (1,106)
---------
CASH PROVIDED (USED) BY INVESTING ACTIVITIES ............. (1,106)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock ................................. 8,250
---------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES ............. 8,250
---------
NET INCREASE (DECREASE) IN CASH 1,389
CASH AT BEGINNING OF YEAR ........................................ 20,624
---------
CASH AT END OF YEAR .............................................. 22,013
=========
The Accompanying Notes are an Integral Part of These Financial Statements
4
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
STATEMENT OF CHANGES TO STOCKHOLDERS EQUITY
-------------------------------------------
SEPTEMBER 30,1998
-----------------
<TABLE>
<CAPTION>
Common stock
------------------------ Additional
Number of Treasury paid in Accumulated
shares Amount stock capital (deficit) Total
--------- --------- ------------ --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance - October 1, 1997 ... 128,311,223 $ 14,296 $ (2,500) $ 365,057 $ (186,982) $ 189,871
Net Income .................. 8 8,242 (871) 7,379
Reverse 3400 to 1 Stock Split (128,273,234)
Shares Issued ............... 82,250
----------- ------------ ------------ ------------ ------------ ------------
Balance - September 30, 1998 120,239 $ 14,304 (2,500) $ 373,299 (187,853) $ 197,250
=========== ============ ============ ============ ============ ============
</TABLE>
The Accompanying Notes are an Integral Part of These Financial Statements
5
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1998
------------------
1 -ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION On October
10, 1977 L.J.L. Intercom Services Corp. was incorporated under the laws of
New York State, to engage in the business of Manufacturing and Installing
Intercom systems and to provide maintenance and repair to existing Intercom
systems.
2 -CHANGE IN CORPORATE NAME
On March 31, 1985, the board of directors of L.J.L. Intercom Services Corp.
adopted a resolution to change the corporate name to Intercom Technologies
Corp. (The Company) The stockholders of the Company approved this change on
April 22, 1985.
SIGNIFICANT ACCOUNTING POLICIES
A. Cash and Cash Equivalents
The Company considers all instruments with maturities of three months or
less to be cash and cash equivalents.
B. Accounts Receivable
Accounts receivable is represented net of an allowance for bad debt of
$9,000.
C. Inventory
Inventory is stated at the lower of cost or market using the first-in
first-out method.
6
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1998
------------------
D. Property and equipment
Property and equipment are carried at cost. The Company provides for
depreciation base on estimated useful lives of the assets. Depreciation is
provided principally on the straight-line method. Maintenance and repair
costs are charged to expense as incurred. Cost of replacements and
improvements are generally capitalized. The range of estimated useful lives
used for depreciation is as follows:
Years
Machinery and Equipment ................................. 3-10
Furniture and Fixtures ................................ 5-10
Leasehold Improvements .................................. 5
3 -INVENTORY
Inventory consists of the following:
Parts .................................................... $26,640
Finished Goods ........................................... 5,000
-------
Total .................................................... $31,640
=======
4 -PROPERTY AND EQUIPMENT
Property and equipment consists of:
Shop equipment .............................................. $ 6,284
Furniture & fixtures ........................................ 3,785
Show room ................................................... 7,957
Leasehold improvements ...................................... 2,779
Auto ........................................................ 3,250
-------
Total cost ............................................... $24,055
Accumulated depreciation 20,947
-------
Total ............................................................ $ 3,108
=======
7
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1998
------------------
5 - OTHER ASSETS
Other assets include loans to related parties in the amount of $115,667
bearing interest at 8% and IO% respectively.
6 - COMMITMENTS AND CONTINGENCIES
The Company leases its office space under a five-year lease with monthly
payments. The Company also has operating leases for an automobile with a
duration's of four years.
Minimum annual rentals under these leases are:
September 30
1999 29,370
2000 11,100
--------
Total $ 40,470
========
Rent expense for the year ended September 30, 1998 amounted to $20,250.
7 -Stockholders Equity
On October 3, 1997 the Board of Directors of The Company approved a reverse
split of 3,400 to 1, so that each 3,400 shares issued and outstanding
became one share, and that any fractional shares be rounded up to the
nearest whole share.
<TABLE>
<CAPTION>
Issued and outstanding Issued and outstanding
Shares prior to 3,400 to 1 reverse stock split. Shares post reverse stock split
<S> <C> <C>
128,311,223 37,989*
*All fractional shares were rounded up to the nearest share.
</TABLE>
(Continued)
8
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1998
------------------
On December 12, 1997 the Directors of Intercom Technologies Corp.
Unanimously consented to authorizing the issuance of 82,500 shares of
restricted common stock under Rule 144, to the following individuals for an
aggregate consideration of $8,250.
Sapphire Consultants Inc. 20,000 shares
RCA Trading Co., Inc. ... 30,000
TLT (Investments) Ltd. .. 30,000
David Lutzker ........... 2,500
------
Total ................... 82,500
8 - NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share of common stock are based on the shares
outstanding as of the balance sheet date of 120,239.
Net Income (Loss) ...................... $ (871)
Shares outstanding at balance sheet date 120,239
Net (Loss) per share ................... $ (0.0072)
9
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1998
------------------
9 - INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred
taxes related primarily to differences between the recorded book basis and
tax basis of assets and liabilities for financial and income tax reporting.
The deferred tax assets and liabilities represent the future tax return
consequences of those differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled.
Deferred taxes are also recognized for operating losses that are available
to offset future taxable income and tax credits that are available to
offset federal income taxes.
Due to the Company's net operating losses in excess of $150,000 there are
no income taxes currently due. As of September 30, 1998 the company has a
deferred tax asset of $ 0. Due to recurring losses the company has a zero
valuation allowance.
10 - SUBSEQUENT EVENTS
The Company as of the report date has not entered into any significant
business transactions which would impair the balance sheet.
<PAGE>
Intercom Technologies Corp.
Audited Financial Statement
September 30, 1997
<PAGE>
Table of Contents
Independent Auditor's Report 1
Balance Sheet 2
Income Statement 3
Statement of Cash Flows 4
Statement of Changes to Stockholders Equity 5
Notes to Financial Statements 6-10
<PAGE>
[Logo]
Nelson, Mayoka & Company, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
551 5TH Avenue
New York, New York
10176-0001
Tel. (212) 697-7979
Fax (212) 697-8997
DIRECT LINE
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors and Shareholders
Intercom Technologies Corp.
We have audited the accompanying balance sheet of Intercom Technologies
Corp. as of September 30, 1997, and the related statements of income, cash flows
and statement of changes to stockholder's equity for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
Except as discussed in the following paragraph we conducted our audit in
accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
We did not observe the taking of the physical inventories at September 30,
1996 and 1997 (stated at $22,257 and $30,707, respectively). We were unable to
satisfy ourselves about inventory quantities by means of other auditing
procedures.
In our opinion, except for the effects of such adjustments, if any, as
might have been determined to be necessary had we been able to observe the
physical inventories taken as of September 30, 1996 and 1997, the financial
statements referred to in the first paragraph present fairly, in all material
respects, the financial position of Intercom Technologies Corp., as of September
30, 1997, and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.
Nelson, Mayoka & Company
CERTIFIED PUBLIC ACCOUNTANT'S
New York, New York
February 4, 1999
1
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
BALANCE SHEET
SEPTEMBER 30, 1997
ASSETS
CURRENT ASSETS:
Cash ............................................................ $ 20,624
Accounts receivable net of allowance for doubtful accounts ...... 43,897
of $9,000
Inventory ....................................................... 30,707
TOTAL CURRENT ASSETS ......................................... 95,228
---------
PROPERTY AND EQUIPMENT ............................................ 3,460
OTHER ASSETS ...................................................... 126,242
---------
$ 224,930
=========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable and accrued expenses ........................... $ 35,059
STOCKHOLDER'S EQUITY
Common stock - Par value $.0001; 250,000,000 shares authorized
128,311,223 shares issued and outstanding ....................... $ 14,296
Treasury stock .................................................. (2,500)
Paid - in capital ............................................... 365,057
Accumulated Deficit ............................................. (186,982)
TOTAL STOCKHOLDER'S EQUITY ................................... 189,871
---------
$ 224,930
=========
The Accompanying Notes are an Integral Part of These Financial Statements
2
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
INCOME STATEMENT
----------------
FOR THE YEAR ENDING SEPTEMBER 30, 1997
--------------------------------------
Sales $ 470,568
Cost of sales 195,593
-------------
Gross profit 274,975
Selling general and administration 308,973
Other income (expense) net 15,079
Net income (loss) before taxes (18,919)
Provision for income taxes 2,350
-------------
Net income (loss) $ (21,269)
=============
Net income (loss) per share $ (0.00017)
-------------
Average number of shares outstanding 128,311,223
-------------
The Accompanying Notes are an Integral Part of These Financial Statements
3
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
STATEMENT OF CASH FLOWS
-----------------------
FOR THE YEAR ENDING SEPTEMBER 30, 1997
--------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss) $ (21,269)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 6,310
Changes in assets and liabilities
Decrease (Increase) in accounts receivable (14,491)
Decrease (Increase) in inventory (8,450)
Decrease (Increase) in other assets 12,650
Increase (Decrease) in accounts payable 12,266
----------
CASH PROVIDED (USED) BY OPERATING ACTIVITIES (12,984)
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,250)
----------
CASH PROVIDED (USED) BY INVESTING ACTIVITIES (1,250)
----------
NET INCREASE (DECREASE) IN CASH (14,234)
CASH AT BEGINNING OF YEAR 34,858
----------
CASH AT END OF YEAR $ 20,624
==========
The Accompanying Notes are an Integral Part of These Financial Statements
4
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
STATEMENT OF CHANGES TO STOCKHOLDERS EQUITY
-------------------------------------------
SEPTEMBER 30, 1997
------------------
<TABLE>
<CAPTION>
Common stock
-------------------------- Additional
Number of Treasury paid in Accumulated
shares Amount stock capital (deficit) Total
----------- ---------- ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance - October 1, 1996 128,311,223 $ 14,296 $ (2,500) $ 365,057 $(165,713) $ 211,140
Net Loss (21,269) (21,269)
----------- --------- -------- --------- --------- ---------
Balance - September 30, 1997 128,311,223 $ 14,296 (2,500) $ 365,057 $(186,982) $ 189,871
</TABLE>
The Accompanying Notes are an Integral Part of These Financial Statements
5
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1997
------------------
1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
On October 10, 1977 L.J.L. Intercom Services Corp. was incorporated under
the laws of New York State, to engage in the business of Manufacturing and
Installing Intercom systems and to provide maintenance and repair to
existing Intercom systems.
2 - CHANGE IN CORPORATE NAME
On March 31, 1985, the board of directors of L.J.L. Intercom Services Corp.
adopted a resolution to change the corporate name to Intercom Technologies
Corp. (The Company) The stockholders of the Company approved this change on
April 22, 1985.
SIGNIFICANT ACCOUNTING POLICIES
A. Cash and Cash Equivalents
The Company considers all instruments with maturities of three months or
less to be cash and cash equivalents.
B. Accounts Receivable
Accounts receivable is represented net of an allowance for bad debt of
$9,000.
C. Inventory
Inventory is stated at the lower of cost or market using the first-in
first-out method.
6
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1997
------------------
D. Property and equipment
Property and equipment are carried at cost. The Company provides for
depreciation based on estimated useful lives of the assets. Depreciation is
provided principally on the straight-line method. Maintenance and repair
costs are charged to expense as incurred. Cost of replacements and
improvements is generally capitalized. The range of estimated useful lives
used for depreciation is as follows:
Years
Machinery and Equipment .............................. 3-10
Furniture and Fixtures ............................... 5-10
Leasehold Improvements ............................... 5
3 - INVENTORY
Inventory consists of the following:
Parts ............................................ $10,133
Finished Goods ................................... 20,574
-------
Total ....................................... $30,707
=======
4 - PROPERTY AND EQUIPMENT
Property and equipment consists of:
Shop equipment ................................... $ 7,021
Furniture & fixtures ............................. 1,922
Show room ........................................ 7,957
Leasehold improvements ........................... 2,799
Auto ............................................. 3,250
-------
Total cost .................................. $22,949
Accumulated depreciation ......................... 19,489
-------
Total ....................................... $ 3,460
=======
7
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1997
------------------
5 - OTHER ASSETS
Other assets include loans to related parties in the amount of $126,242
bearing interest at 8% and 10% respectively.
6 - COMMITMENTS AND CONTINGENCIES
The Company leases its office space under a five-year lease with monthly
payments. The Company also has two operating leases for automobiles with
duration's of three and four years.
Minimum annual rentals under these leases are:
September 30
1998 28,279
1999 29,370
2000 11,100
--------
Total $ 68,749
========
Rent expense for the year ended September 30, 1997 amounted to $17,250.
7 - NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share of common stock are based on the shares
outstanding as of the balance sheet date of 128,311,223.
Net Income (Loss) $ (21,269)
Shares outstanding at balance sheet date 128,311,223
Net (Loss) per share $ (0.00017)
8
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1997
------------------
8 - INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred
taxes related primarily to differences between the recorded book basis and
tax basis of assets and liabilities for financial and income tax reporting.
The deferred tax assets and liabilities represent the future tax return
consequences of those differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled.
Deferred taxes are also recognized for operating losses that are available
to offset future taxable income and tax credits that are available to
offset federal income taxes. Due to the Company's net operating losses in
excess of $150,000 there are no income taxes currently due. As of September
30, 1998 the company has a deferred tax asset of $ 0. Due to recurring
losses the company has a zero valuation allowance.
9 - SUBSEQUENT EVENTS
On October 3, 1997 the Shareholders of The Company approved a reverse split
of 3,400 to 1, so that each 3,400 shares issued and outstanding became one
share, and that any fractional shares be rounded up to the nearest whole
share.
<TABLE>
<CAPTION>
Issued and outstanding Issued and outstanding
Shares prior to 3,400 to 1 reverse stock split. Shares post reverse stock split
<S> <C> <C>
128,311,223 37,989*
</TABLE>
*All fractional shares were rounded up to the nearest share.
(Continued)
9
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(Formerly L.J.L. Intercom Services Corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1997
------------------
On December 12, 1997 the Directors of Intercom Technologies Corp.
Unanimously consented to authorizing the issuance of 82,500 shares of
restricted common stock under Rule 144, to the following individuals.
Sapphire Consultants Inc. ........................ 20,000 shares
RCA Trading Co., Inc. ............................ 30,000
TLT (Investments) Ltd. ........................... 30,000
David Lutzker .................................... 2,500
Shares were issued in consideration of $8,250.
10
<PAGE>
MATATIA, MAYOKA & COHEN
----------------------------
Certified Public Accountants
Joseph V. Matatia CPA, JD
Mark L. Mayoka CPA, JD Tel: (212) 758-7400
Itzhak, Cohen CPA, NLBA Fax: (212) 697-8997
551 Fifth Avenue, Suite 1120, New York, New York 10176
- --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
August 1, 1997
To The Stockholder
Intercom Technologies Corp.
New York, New York
We have audited the accompanying balance sheet of Intercom Technologies
Corp. as of September 30, 1996, and the related statements of income, cash flows
and statement of changes to stockholder's equity for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
Except as discussed in the following paragraph we conducted our audit in
accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
We did not observe the taking of the physical inventories at September 30,
1996 and 1995 (stated at $22,257 and $19,917, respectively), since those dates
were prior to the time we were initially engaged as auditors for the Company. We
were unable to satisfy ourselves about inventory quantities by means of other
auditing procedures.
In our opinion, except for the effects of such adjustments, if any, as
might have been determined to be necessary had we been able to observe the
physical inventories taken as of September 30, 1996 and 1995, the financial
statements referred to in the first paragraph present fairly, in all material
respects, the financial position of Intercom Technologies Corp., as of September
30, 1996, and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.
Matatia, Mayoka & Cohen
CERTIFIED PUBLIC ACCOUNTANT'S
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(formerly L.J.L. intercom services corp.)
-----------------------------------------
BALANCE SHEET
-------------
SEPTEMBER 30, 1996
------------------
<TABLE>
<CAPTION>
ASSETS
------
CURRENT ASSETS:
<S> <C>
Cash .......................................................... $ 34,858
Accounts receivable net ....................................... 59,405
Inventory ..................................................... 22,257
---------
TOTAL CURRENT ASSETS ..................................... 116,520
PROPERTY MACHINERY AND EQUIPMENT ...................................... 8,520
OTHER ASSETS .......................................................... 127,914
---------
252,954
=========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable and accrued expenses ......................... $ 22,793
STOCKHOLDER'S EQUITY
Common stock - Par value $.OOO 1; 250,000,000 shares authorized
142,957,634 shares issued and outstanding ..................... $ 14,296
Treasury stock ................................................ (2,500)
Paid - in capital ............................................. 365,057
Retained earnings ............................................. (146,692)
---------
TOTAL STOCKHOLDER'S EQUITY ............................... 230,161
---------
$ 252,954
=========
</TABLE>
The Accompanying Notes are an Integral Part of These Financial Statements
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(formerly L.J.L. intercom services corp.)
-----------------------------------------
STATEMENT OF INCOME
-------------------
YEAR ENDED SEPTEMBER 30, 1996
-----------------------------
Sales ..................................................... $ 513,001
Cost of sales ............................................. 189,065
------------
Gross profit ...................................... 323,936
Selling general and administration ........................ 305,343
Other income (expense) net ................................ 2,590
Net income (loss) before taxes ............................ 21,183
Provision for income taxes ................................ 1,370
------------
Net income (loss) ................................. $ 19,813
============
Net income (loss) per share ............................... $ 0.000139
------------
Average number of shares outstanding ...................... 142,957,634
------------
The Accompanying Notes are an Integral Part of These Financial Statements
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(formerly L.J.L. intercom services corp.)
-----------------------------------------
STATEMENT OF CASH FLOWS
-----------------------
YEAR ENDED SEPTEMBER 30, 1996
-----------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss) .................................. $ 19,813
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation .................................. 4,208
Changes in assets and liabilities
Decrease (Increase) in accounts receivable .... 9,321
Decrease (Increase) in inventory .............. (2,340)
Decrease (Increase) in other assets ........... (3,888)
Increase (Decrease) in accounts payable ....... (3,196)
--------
CASH PROVIDED (USED) BY OPERATING ACTIVITIES ....... 23,918
--------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ............................... -
--------
CASH PROVIDED (USED) BY INVESTING ACTIVITIES ....... -
--------
CASH FLOWS FROM FINANCING ACTIVITIES: -
--------
CASH PROVIDED (USED) BY FINANCING ACTIVITIES ...... -
--------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT ....... 23,918
CASH AT BEGINNING OF YEAR ................................. 10,940
--------
CASH AT END OF YEAR ....................................... $ 34,858
========
SUPPLEMENT DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid during the year for:
Interest ..................................... $ 235
========
Taxes ........................................ $ 1,370
========
The Accompanying Notes are an Integral Part of These Financial Statements
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(formerly L.J.L. intercom services corp.)
-----------------------------------------
STATEMENT OF CHANGES TO STOCKHOLDER'S EQUITY
--------------------------------------------
YEAR ENDED SEPTEMBER 30, 1996
-----------------------------
<TABLE>
<CAPTION>
Common stock
------------------------ Additional Retained
Number of Treasury paid in earnings
shares Amount stock capital (deficit) Total
------ ------ --------- -------- --------- -----
<S> <C> <C> <C> <C> <C>
Balance - October 1, 1994 *********** $ 14,296 $ (2,500) $ 365,057 $ (166,505) $ 210,348
Net Income 19,813 19,813
----------- -------- --------- --------- ---------- ---------
Balance - September 30, 1995 *********** $ 14,296 (2,500) $ 365,057 $ (146,692) $ 230,161
=========== ======== ========= ========= ========== =========
</TABLE>
The Accompanying Notes are an Integral Part of These Financial Statements
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(formerly L.J.L. intercom services corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1996
------------------
1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Cash and Cash Equivalents
The Company considers all instruments with maturities of three months or
less to be cash and cash equivalents.
B. Accounts Receivable
Accounts receivable are represented net of allowance for bad debt.
C. Inventory
Inventory is stated at the lower of cost or market using the first-in
first-out method.
D. Property and equipment
Property and equipment are carried at cost. The Company provides for
depreciation based on estimated useful lives of the assets. Depreciation is
provided principally on the straight-line method. Maintenance and repair
costs are charged to expense as incurred. Cost of replacements and
improvements is generally & capitalized. The range of estimated useful
lives used for depreciation is as follows:
Years
Machinery and Equipment ................................. 3-10
Furniture and Fixtures .................................. 5-10
Leasehold Improvements .................................. 5
2 - CHANGE IN CORPORATE NAME
On March 31, 1985, the board of directors of L.J.L. Intercom Services Corp.
adopted a resolution to change the corporate name to Intercom Technologies
Corp. The stockholders of the Company approved this change on April 22,
1985.
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(formerly L.J.L. intercom services corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1996
------------------
3 - INVENTORY
Inventory consists of the following:
Parts ........................................... $ 7,500
Finished Goods .................................. 14,757
-------
Total ........................................... $22,257
=======
4 - PROPERTY AND EQUIPMENT
Property plant and equipment consists of
Shop equipment ..................................... $12,788
Furniture & fixtures ............................... 7,836
Show room .......................................... 7,957
Leasehold improvements ............................. 2,779
Auto ............................................... 2,400
-------
Total cost ......................................... $33,760
Accumulated depreciation ........................... 25,240
-------
Total .............................................. $ 8,520
=======
5 - OTHER ASSETS
Other assets include a loan to related parties in the amount of $ 119,927
6 - COMMITMENTS AND CONTINGENCIES
The Company leases its office space under a five year lease with monthly
payments. The Company also has two operating leases for automobiles with
durations of three and four years.
<PAGE>
INTERCOM TECHNOLOGIES CORP.
---------------------------
(formerly L.J.L. intercom services corp.)
-----------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
SEPTEMBER 30, 1996
------------------
Minimum annual rentals under these leases are:
September 30 97.................. $ 27,951
98.................. 28,279
99.................. 29,370
100.................. 11,100
--------
Total $ 96,700
========
Rent expense for the years ended September 30, 1995 amounted to $14,250.
7 - NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share of common stock is based on the weighted
average number of shares outstanding.
8 - SUBSEQUENT EVENTS
On July 1997 the Company entered into negotiations, with Megastar S.A.
Panama "MEGA", to purchase all of the shares of MEGA, through the issuance
of 35,000,000 shares of the Company on a post split basis.
Prior to the acquisition the Company will have a reverse split of 3,400
shares to one, and will spin off all of it's assets and liabilities, to the
Company's president and majority stock holders.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Form 10KSB for Intercom Technologies Corp.
for year end 9-30-98
</LEGEND>
<CIK> 0000728422
<NAME> Intercom Technologies Corp.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 22,013
<SECURITIES> 0
<RECEIVABLES> 56,023
<ALLOWANCES> 9,000
<INVENTORY> 31,640
<CURRENT-ASSETS> 100,676
<PP&E> 3,108
<DEPRECIATION> 0
<TOTAL-ASSETS> 219,451
<CURRENT-LIABILITIES> 22,201
<BONDS> 0
0
0
<COMMON> 14,304
<OTHER-SE> 370,799
<TOTAL-LIABILITY-AND-EQUITY> 219,457
<SALES> 490,180
<TOTAL-REVENUES> 501,440
<CGS> 196,982
<TOTAL-COSTS> 304,529
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (71)
<INCOME-TAX> 800
<INCOME-CONTINUING> (871)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (871)
<EPS-PRIMARY> (.007)
<EPS-DILUTED> (.007)
</TABLE>
