U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Three Months Ended: September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from:_______________to:________________
Commission file Number 0-14039
AMERICAN GENERAL VENTURES, INC.
-------------------------------
(Exact Name of Registrant as Specified in its Charter)
NEVADA 11-2712721
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(State or Other Jurisdiction of I.R.S. Employer
Incorporated or Organization) Identification No.
3650 Austin Bluffs Parkway-Suite 138 Colorado Springs, Colorado 80918
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(Address of Principal Executive Offices)
(719) 548-1616
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(Registrant's Telephone Number)
Check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check mark whether the issuer has filed all documents and reports required to be
filed by Sections 2, 12, or 15 (d) of the Securities Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes__ No__
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each issuer's classes
of common stock, as of the latest practicable date.
Common Stock $.001 par value, 11,681,268
- ----------------------------- ----------
(title of class) (Shares outstanding at
September 30, 1998)
<PAGE>
AMERICAN GENERAL VENTURES, INC.
FORM 10-QSB
FOR THREE MONTHS ENDED SEPTEMBER 30, 1998
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
PAGE
Balance Sheet as of
September 30, 1998 & September 30,1997 3
Income Statements for quarters ending
September 30, 1998 & 1997 4
Statement of Cash Flows for three months ended
September 30, 1998 & 1997 5
ITEM 2 - Management Discussion and Analysis 6
PART II - OTHER INFORMATION
ITEMS 1-6 7
SIGNATURE PAGE 8
2
<PAGE>
AMERICAN GENERAL VENTURES, INC
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1998 & SEPTEMBER 30, 1997
(UNAUDITED)
ASSETS 9-30-98 9-30-97
- ------ ------- -------
Current Assets:
Cash 61,781 17,073
Accounts Receivable, trade 21,466 66,472
Inventory 177,057 276,000
Other Current Assets -0- -0-
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Total Current Assets 260,304 359,545
Net Prop,Plant,Equip, net 27,292 70,118
Of accumulated depreciation
of $46,391
Goodwill, net of 20,794 29,971
amortization of $26,974
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Total Assets 308,390 459,634
========== ==========
LIABILITIES and STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Notes Payable-Shareholders 172,215 -0-
Accounts Payable 116,287 188,478
Other Current Liabilities 11,054 7,433
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Total Current Liabilities 299,556 195,911
Long Term Liabilities:
Long Term Debt -0- 35,945
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Total Liabilities 299,556 231,406
Stockholders' Equity:
Common Stock, $001 par value 11,681 9,200
11,681,268 shares issued
and outstanding
Paid in Capital 2,430,788 1,702,099
Accumulated Deficit (1,588,400) (1,478,265)
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Shareholder's equity 8,834 228,228
(deficit)
Total Liabilities & Equity 308,390 459,634
========== ==========
3
<PAGE>
AMERICAN GENERAL VENTURES, INC.
CONSOLIDATED INCOME STATEMENT
QTRS ENDING SEPTEMBER 30, 1998 & 1997
(UNAUDITED)
3RD QTR 3RD QTR
1998 1997
---- ----
REVENUES 385,961 109,385
Cost and Expenses:
Cost of Sales 300,792 86,414
Sell & General Admin 44,326 73,372
Interest 4,987 -0-
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Total Cost & Expenses 350,105 159,786
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Income (Loss) from Operations 35,856 (50,401)
Interest Income -0- -0-
Net Income (Loss) Before Taxes 35,856 (50,401)
Income Tax Expense -0- -0-
Net Income (Loss) 35,856 (50,401)
Net Income Per Common Share .00 .00
Weighted Average Common Shares 11,318,734 9,200,000
Outstanding
========== ==========
4
<PAGE>
AMERICAN GENERAL VENTURES, INC.
CONSOLIDATED CASH FLOW
FOR THREE MONTHS ENDING SEPTEMBER 30, 1998 & 1997
(UNAUDITED)
1998 1997
---- ----
Cash Flow from Operating Activities
Net Income (Loss) 35,856 (50,401)
Adjustments to Reconcile Net Income
to Net Cash:
Inc (Dec) in Accounts Receivable 21,466 162,256
Inc (Dec) in Inventory 177,057 (27,600)
Inc (Dec) in Other Assets 198 (2,479)
Inc (Dec) in Accounts Payable (116,287) (75,567)
Inc (Dec) in Payroll Tax Payable (819) -0-
Inc (Dec) in Sales Tax Payable (980) -0-
-------- --------
Net Cash Provided by (Used In)
Operating Activities 80,635 56,610
Cash Flow from Investing Activities:
Inc (Dec) in Marketable Sec -0- -0-
Plant and Equipment -0- -0-
-------- --------
Net Cash Provided by (Used in)
Investing Activities -0- -0-
Cash Flow from Financing Activities:
Inc (Dec) in Notes Payable -0- -0-
Inc (Dec) in Notes Pay-Walker -0- -0-
-------- --------
Net Cash Provided by (Used in)
Financing Activities -0- 6,209
-------- --------
Inc (Dec) in Cash 80,635 6,209
Cash (Beginning) 61,781 17,073
Cash (Ending) 18,854 23,282
5
<PAGE>
AMERICAN GENERAL VENTURES, INC.
FORM 10-QSB
FOR THE THREE MONTHS ENDED SEPTEMBER, 1998
ITEM 2 - MANAGEMENT DISCUSSION AND ANALYSIS
Results of Operations
During the period from July 1, 1998 through September 30, 1998 the Company
revenues were $385,961 compared with $109,385 for the same period in 1997. The
increase in revenues was due to the Company's subsidiary ACI Micro Systems, Inc.
restructuring its strategy by concentrating on online sales. In addition to
selling its products through Wal-Mart Online, the Company developed its own web
site offering its branded computers at extremely competitive price points. The
combination of sales through Wal-Mart Online and the Company's web site
increased it computer sales by more than 350 percent.
Net income for this period was $35,856 compared to a loss of ($50,401) for the
same period in 1997. The increase in income was due to the increase in sales
generated through Wal-Mart Online and the Company's web site. During this
current period Wal-Mart Online introduced the Company's build to order (BTO)
computer. The BTO accounted for an eighty percent increase in sales generated by
Wal-Mart Online.
The increase in profits was also due to the Company reducing its costs incurred
by returns from Wal-Mart retail outlets. The company's strategy of marketing its
product solely through the internet has proven effective in reducing returns.
The Company's sales through its own web site were nearly sixty percent of its
revenues. The Company's success in online sales is directly correlated to its
banner ads that ran on Hotmail, the world's largest free e-mail company that was
recently acquired by Microsoft. The Company continues to use Hotmail to
advertise its products, but plans to expand its banner ads on additional web
site promoters and expects that the additional exposure will result in increased
revenues and profits.
Working Capital and Capital Resources
Working capital at September 30, 1998 (current assets less current liabilities)
totaled $8,834 compared to $163,634 at June 30, 1997. The decrease in working
capital was due to a decrease in inventory and an increase in short term debt to
6
<PAGE>
its President Steven H. Walker. In 1997, Dr. Walker converted $500,000 of the
Company's debt owed to him to equity. He accepted the Company's common stock at
$1.00 per share to reduce the debt. In 1998, Dr. Walker deferred his salary and
loaned the company additional funds to pay off debts owed to vendors reducing
the Company's accounts payable to vendors by more than $80,000.
The Company has adopted a "just in time" method of inventory that has resulted
in the need for using capital to purchase products before they are sold. This
strategy allows the Company to increase its cash position and reduces the cost
of inventory that depreciates rapidly in the computer industry.
The Company has determined that its working capital is sufficient to continue
operations and that no significant adjustments were necessary during this
current quarter.
PART II OTHER INFORMATION
Item 1 Legal Proceedings
The Company's subsidiary, ACI Micro Systems, Inc. suit by Cal IC was settled
with no judgement against the Company. The settlement resulted in a reduction of
$20,000 claimed by Cal IC.
The Company was also successful in reducing the amount of a debt claimed by
Worldnet from $110,000 to $32,000. Worldnet has been paid and the claim has been
satisfied.
Two other suppliers have recently made demands for payment. Daytek alleges
$27,000 is due and Altura PC Systems claims $21,350. Both claims are in dispute
and negotiations will likely result in settlement of both at reduced amounts.
The Denver Regional office of the FCC has fined ACI Micro Systems, Inc. $10,000
for not complying with rules and regulations that are no longer applicable to
computer manufacturers and resellers. ACI Micro Systems, Inc. denies that they
were in violation and have appealed the action to the FCC in Washington, D.C.
The fine was imposed more than five years ago and no litigation by the FCC has
been pursued.
Item 2 Changes in Securities - None
Item 3 Defaults Upon Senior Securities - None
Item 4 Submission of Matters to a Vote of Securities Holders - The
shareholders elected three directors to the Company's Board of
Directors. Steven H. Walker was elected as a Director and Chair of the
Board. Adrian Belinne and Christopher Walker were also elected as
directors to the Board of Directors.
Item 5 Other Information - None
Item 6 Exhibits and Reports on Form 8-K - None
7
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
AMERICAN GENERAL VENTURES, INC.
By: /s/ Steven H. Walker
----------------------------------
Steven H. Walker, President/CEO
Date: October 19, 1998
8
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 61,781
<SECURITIES> 0
<RECEIVABLES> 21,466
<ALLOWANCES> 0
<INVENTORY> 177,057
<CURRENT-ASSETS> 260,304
<PP&E> 20,794
<DEPRECIATION> 0
<TOTAL-ASSETS> 308,390
<CURRENT-LIABILITIES> 299,556
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 308,390
<SALES> 385,961
<TOTAL-REVENUES> 385,961
<CGS> 300,792
<TOTAL-COSTS> 350,105
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 35,856
<INCOME-TAX> 0
<INCOME-CONTINUING> 35,856
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,856
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
