U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-14919
VIDEOPLEX, INC.
(Exact name of small business issuer as specified in its charter)
New Jersey 22-2485230
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5882 South 900 East, Suite 202, Salt Lake City, Utah 84121
(Address of principal executive offices)
(801) 269-9500
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has 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 issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as November 13, 2000: 9,860,245
shares of common stock.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
Transitional Small Business Format: Yes [ ] No [ X ]
Documents incorporated by reference: None
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FORM 10-QSB
VIDEOPLEX, INC.
INDEX
Page
PART I. Financial Information 3
Unaudited Condensed Balance Sheets, 3
September 30, 2000 and
June 30, 2000
Unaudited Condensed Statements of Operations, 4
for the three months ended September 30,
2000 and 1999 and from the re-entering of
development stage on July 1, 1994 through
September 30, 2000
Unaudited Condensed Statements of Cash 5
Flows, for the three months ended September 30,
2000 and 1999 and from the re-entering of
development stage on July 1, 1994 through
September 30, 2000
Notes to Unaudited Condensed Financial 6
Statements
Management's Plan of Operation 10
PART II. Other Information 11
Signatures 12
2
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PART I. FINANCIAL INFORMATION
VIDEOPLEX, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEET
[Unaudited]
ASSETS
September 30, June 30,
2000 2000
___________ ___________
CURRENT ASSETS $ - $ -
___________ ___________
Total Current Assets - -
___________ ___________
$ - $ -
____________ ____________
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES:
Accounts payable - related party $ 15,062 $ -
Accounts payable - 3,540
Liabilities of discontinued operations 105,275 107,275
___________ ___________
Total Current Liabilities 120,337 110,815
___________ ___________
STOCKHOLDERS' (DEFICIT):
Common stock, $.001 par value, 10,000,000
shares authorized, 9,860,245 shares issued
and outstanding 9,860 9,860
Capital in excess of par 2,545,029 2,545,029
Retained deficit (2,691,299) (2,691,299)
Earnings accumulated during the development stage
16,073 25,595
___________ ___________
Total Stockholders' (Deficit) (120,337) (110,815)
___________ ___________
$ - $ -
____________ ____________
Note: The balance sheet at June 30, 2000 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
financial statements.
3
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VIDEOPLEX, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
Cumulative from
the Re-entering of
For the Three Development Stage
Months Ended on July 1,
September 30, 1994 through
______________________ September 30,
2000 1999 2000
__________ __________ ___________
REVENUE: $ - $ - $ -
__________ __________ __________
Total Revenue - - -
__________ __________ __________
EXPENSES:
General and administrative 9,522 - 48,477
__________ __________ __________
Total Expenses 9,522 - 48,477
__________ __________ __________
LOSS FROM OPERATIONS (9,522) - (48,477)
CURRENT INCOME TAXES - - -
DEFERRED INCOME TAX - - -
__________ __________ __________
LOSS BEFORE EXTRAORDINARY
ITEM: (9,522) - (48,477)
__________ __________ __________
EXTRAORDINARY ITEM:
Gain on settlement of liabilities
related to discontinued operations - - 64,550
__________ __________ ___________
NET INCOME (LOSS) $(9,522) - $ 16,073
__________ __________ ___________
EARNINGS (LOSS) PER SHARE:
Loss from continuing operations
$ (.00) $ - $ (.01)
Gain from extraordinary item - - .01
__________ __________ ___________
Total Earnings (Loss) Per
Share $ (.00) $ - $ .00
__________ __________ ___________
The accompanying notes are an integral part of these unaudited
financial statements.
4
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VIDEOPLEX, INC.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited]
Cumulative from
the Re-entering of
For the Three Development Stage
Months Ended on July 1,
September 30, 1994 through
_____________________ September 30,
2000 1999 2000
__________ __________ __________
Cash Flows From Operating Activities:
Net income $ (9,522) $ - $ 16,073
Adjustments to reconcile net loss to
net cash used by operating activities:
Extraordinary gain on settlement of debt
operations liabilities - - (64,550)
Changes in assets and liabilities:
Increase in accounts
payable - related party 15,062 - 64,017
(Decrease) in accounts payable (3,540) - (3,540)
(Decrease) in liabilities of discontinued
operations (2,000) - (12,000)
________________________________
Net Cash (Used) by
Operating Activities - - -
________________________________
Cash Flows From Investing Activities:
- - -
________________________________
Net Cash (Used) by
Investing Activities - - -
________________________________
Cash Flows From Financing Activities:
- - -
________________________________
Net Cash Provided by
Financing Activities - - -
________________________________
Net Increase in Cash - - -
Cash at Beginning of the Year - - -
________________________________
Cash at End of the Year $ - $ - $ -
________________________________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For three months ended September 30, 2000:
None
For three months ended September 30, 1999:
None
The accompanying notes are an integral part of these unaudited
financial statements.
5
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VIDEOPLEX, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Videoplex, Inc. (the Company) was organized under
the laws of the State of New Jersey on August 29, 1983. The
Company was formed to engage in the marketing and sales of the
"Videoplex" single screen multi-presentation machine. During
1994, Management determined it was in the best interest of the
Company to discontinue its previous operations. The Company is
considered to have re-entered into a new development stage on
July 1, 1994.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at
September 30, 2000 and 1999 and for the periods then ended have
been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's June 30, 2000 audited financial
statements. The results of operations for the periods ended
September 30, 2000 are not necessarily indicative of the
operating results for the full year.
Development Stage - The Company is considered a development stage
company as defined in SFAS no. 7.
Loss Per Share - The computation of loss per share of common
stock is based on the weighted average number of shares
outstanding during the periods presented, in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" [See Note 8].
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles required
management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimated by management.
6
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VIDEOPLEX, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 136, "Transfers of Assets to a
not for profit organization or charitable trust that raises or
holds contributions for others", SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133.)," SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities - and
Amendment of SFAS No. 133", SFAS No. 139, "Recission of SFAS No.
53 and Amendment to SFAS No 63, 89 and 21", and SFAS No. 140,
"Accounting to Transfer and Servicing of Financial Assets and
Extinguishment of Liabilities", were recently issued SFAS No.
136, 137, 138, 139 and 140 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
NOTE 2 - DISCONTINUED OPERATIONS
Included in liabilities are $105,275 of judgements and taxes
payable related to the former operations of the Company,
discontinued in July, 1994.
NOTE 3 - COMMON STOCK
During 1989 the board of directors approved the issuance of
92,697 shares of common stock in payment of interest expense on
debt. Although the Company previously accounted for the stock as
issued, it was in fact never issued. During August, 2000 the
Board of Directors resolved to not issue the shares and to adjust
the books to match the shares actually issued and outstanding.
The financial statements at September 30, 2000 and June 30, 2000
reflect the cancellation of the shares. The Board of Directors
also resolved to adjust the books by 8,628 shares of common
stock. With these adjustments, the books now reflect the actual
shares issued and outstanding. These adjustments were reflected
in the June 30, 2000 financial statements.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" which requires the liability approach for the
effect of income taxes.
The Company has available at September 30, 2000, unused operating
loss carryforwards of approximately $2,600,000, which may be
applied against future taxable income and which expire in various
years through 2020. If certain substantial changes in the
Company's ownership should occur, there could be an annual
limitation on the amount of net operating loss carryforward which
can be utilized. The amount of and ultimate realization of the
benefits from the operating loss carryforwards for income tax
purposes is dependent, in part, upon the tax laws in effect, the
future earnings of the Company and other future events, the
effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the loss carryforwards
the Company has established a valuation allowance equal to the
tax effect of the loss carryforwards (approximately $884,000) at
September 30, 2000 and, therefore, no deferred tax asset has been
recognized for the loss carryforwards. The change in the
valuation allowance is approximately $3,200 and $0 for the three
months ended September 30, 2000 and 1999, respectively.
7
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VIDEOPLEX, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - RELATED PARTY TRANSACTIONS
Management Compensation - During the periods presented, the
Company did not pay any compensation to its officers and
directors.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his home as a mailing address, as needed, at no
expense to the Company.
Expenses Paid - Certain expenses of the Company have been paid
by a shareholder or an entity related to a shareholder of the
Company, totaling $45,415. During June, 2000 the Company
issued 1,500,000 shares of common stock in payment of the
$45,415 which had been advanced.
At September 30, 2000 the Company had a payable to a related
party of $15,062. These funds were used to fund operations
and pay debts of the Company.
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplate continuation of the Company as a going concern.
However, the Company has no on-going operations and has incurred
losses since its inception. Further, the Company has current
liabilities in excess of assets and has no working capital to pay
its expenses. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. In this
regard, management is proposing to raise any necessary additional
funds not provided by operations through loans or through sales
of its common stock or through a possible business combination
with another company. There is no assurance that the Company
will be successful in raising this additional capital or
achieving profitable operations. The financial statements do not
include any adjustments that might result from the outcome of
these uncertainties.
NOTE 7 - CONTINGENCIES
During 1994, the Company discontinued all of its previous
operations. Management believes that the Company is not liable
for any existing liabilities related to its former operations but
the possibility exists that creditors and others seeking relief
may include the Company in claims and suits. The Company is not
currently named in any such suits nor is it aware of any
threatened suits. It is the belief of Management and their
Counsel that the Company would be successful in defending against
any such claims and that no material negative impact on the
financial position of the Company would occur. Management and
Counsel further believe that with the passage of time the
likelihood of any such claims being raised is becoming more
remote and that various Statutes of Limitations should provide
adequate defenses for the Company. Consequently, the financial
statements do not reflect any accruals or allowances for any such
claims.
8
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VIDEOPLEX, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 8 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing earnings
(loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock for
the three months ended September 30, 2000 and 1999 and for the
period from the re-entering of development stage on July 1, 1994
through September 30, 2000:
Cumulative from
the Re-entering of
For the Three Development Stage
Months Ended on July 1,
September 30, 1994 through
_____________ September 30,
2000 1999 2000
___________________________________
Loss from continuing operations available
to common stockholders (numerator) $ (9,522) $ - $ (48,477)
____________________________________
Gain from extraordinary items available
to common stockholders (numerator) $ - $ - $ 64,550
____________________________________
Weighted average number of
common shares outstanding
used in earnings per share
during the period (denominator) 9,860,245 8,444,314 8,515,828
____________________________________
Dilutive earnings per share was not presented, as the Company had
no common equivalent shares for all periods presented that would
effect the computation of diluted earnings (loss) per share.
NOTE 9 - SUBSEQUENT EVENTS
The board of directors has proposed a change of domicile to a
Nevada corporation. The shareholder meeting is scheduled for
October 16, 2000. Management expects the change to be ratified.
9
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF OPERATION
Three Months Ended September 30, 2000 and 1999
The Company had no revenue from continuing operations for the
three-month period that ended September 30, 2000 and 1999.
General and administrative expenses for the three month-periods
that ended September 30, 2000 and 1999 were $9,522 and $0,
respectively. These expenses consisted of general corporate
administration, legal and professional expenses, plus accounting
and auditing costs.
As a result of the foregoing factors, the Company realized a net
loss of $9,522 for the three months ended September 30, 2000, as
compared to no losses for the same period in 1999.
Liquidity and Capital Resources
At September 30, 2000, the Company had a working capital deficit
of approximately $120,337, as compared to a working capital
deficit of $110,815 at June 30, 2000. This decrease in the
working capital is attributable to the first quarter's general
and administrative expenses without any increase in cash. The
Company is currently in negotiations to settle other outstanding
judgments found under the subtitle "legal proceedings" of this
report.
The Company does not have sufficient cash to meet its operational
needs for the next twelve months. Management, like in the past,
will attempt to raise capital for its current operational needs
through debt financing, equity financing or a combination of
financing options. However, there are no existing
understandings, commitments or agreements for such an infusion;
nor can there be assurances to that effect. Moreover, the
Company's need for capital may change dramatically if and during
that period, it acquires an interest in a business opportunity.
Unless the Company can obtain additional financing, its ability
to continue as a going concern is doubtful.
The Company's current operating plan is to (i) handle the
administrative and reporting requirements of a public company,
and (ii) search for potential businesses, products, technologies
and companies for acquisition. At present, the Company has no
understandings, commitments or agreements with respect to the
acquisition of any business venture, and there can be no
assurance that the Company will identify a business venture
suitable for acquisition in the future. Further, there can be no
assurance that the Company would be successful in consummating
any acquisition on favorable terms or that it will be able to
profitably manage any business venture it acquires.
Forward-Looking Statement Notice
When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend," and
similar expressions are intended to identify forward-looking
statements within the meaning of Section 27a of the Securities
Act of 1933 and Section 21e of the Securities Exchange Act of
1934 regarding events, conditions, and financial trends that may
affect the Company's future plans of operations, business
strategy, operating results, and financial position. Persons
reviewing this report are cautioned that any forward-looking
statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may
differ materially from those included within the forward-looking
statements as a result of various factors. Such factors are
discussed under the headings "Item 1. Description of Business,"
and "Item 6. Management's Discussion and Analysis of Financial
10
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Condition and Results of Operations," and also include general
economic factors and conditions that may directly or indirectly
impact the Company's financial condition or results of
operations.
PART II -OTHER INFORMATION
Legal Proceedings
The Company has several outstanding judgments on which it is
attempting to negotiate settlements. The judgments are as
follows:
World Fair Associates $11,299.42
Di-Tech, Inc. $2,620,47
Anixter Cable TV $28,588.20
Hudson United Bank $20,125.45
Copelco Credit Corporation $6,205.76
Additionally, the Company is negotiating a settlement with the
Internal Revenue Service and has an Offer in Compromise filed for
$2,000. The Internal Revenue Services has not yet responded to
the offer.
Submission of Matters to a Vote of Securities Holders
The Company held a Special Meeting of Shareholders on October 16,
2000. The following proposal was voted upon by the shareholders:
To approve the plan of merger whereby the Company will merge with
MTN Holdings, Inc., ("MTN"), a Nevada corporation, thus changing
the domicile of the Company to Nevada, changing the name of the
Company to MTN Holdings, Inc., and increasing the authorized
common stock of the Company to 50,000,000 shares of common stock,
par value $0.001.
There were 4,972,318 shares voted for the proposal, 2,500 shares
abstained and 3,200 shares voted against the proposal.
Other Information
The Company has submitted the Articles of Merger to the states of
Nevada and New Jersey for filing. Upon an effective filing date
from both Nevada and New Jersey, the Company will announce the re-
domicile and name change of the Company.
Reports on Form 8-K: None
Exhibits
Exhibit SEC Ref. Title of Document Location
No. No.
1 (2) Plan of Merger Incorporated by Reference*
2 (3)(i) Articles of Incorporation of MTN
Holdings, Inc. Attached
3 (3)(ii) By-Laws of MTN Holdings, Inc. Attached
4 (27) Financial Data Schedule Attached
*The Plan of Merger is incorporated herein by reference to the Company's
Definitive Proxy Statement filed with the SEC on September 18, 2000.
11
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SIGNATURES
In accordance with the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
VIDEOPLEX, INC.
Date: November 14, 2000 By:/s/John Chymboryk
John Chymboryk
President and Director
Date: November 14, 2000 By:/s/Kip Eardley
Kip Eardley
Secretary/Treasurer and Director
12
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