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: June 30, 1998
[ X ] 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
(State or Other Jurisdiction of I.R.S. Employer
Incorporated or Organization) Identification No.
3650 Austin Bluffs Parkway-Suite 138
Colorado Springs, Colorado
--------------------------
(Address of Principal Executive Offices)
(719) 548-1616
--------------
(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, 11,671,268
- ----------------------------- ----------
(title of class) (Shares outstanding at
June 30, 1998)
<PAGE>
AMERICAN GENERAL VENTURES, INC.
FORM 10-QSB
FOR THREE MONTHS ENDED June 30, 1998
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements PAGE
Balance Sheet as of June 30, 1998 & June 30,1997 3
Income Statements for quarters ending
June 30, 1998 & 1997 4
Statement of Cash Flows for three months ended
June 30, 1998 & 1997 5
ITEM 2 - Management Discussion and Analysis 6
PART II - OTHER INFORMATION
ITEMS 1-5 7
SIGNATURE PAGE 8
2
<PAGE>
AMERICAN GENERAL VENTURES, INC
CONSOLIDATED BALANCE SHEET
JUNE 30, 1998 & JUNE 30, 1997
(UNAUDITED)
ASSETS 6-30-98 6-30-97
---------- ----------
Current Assets:
Cash (35,589) 3038
Marketable Securities -0- -0-
Accounts Receivable 14,653 73,880
Inventory 151,870 295,783
Other Current Assets -0- -0-
---------- ----------
Total Current Assets 168,918 375,047
Net Prop,Plant,Equip 70,118 70,118
Other Assets 24,971 24,971
---------- ----------
Total Assets 226,023 470,136
========== ==========
LIABILITIES and STOCKHOLDERS' EQUITY
Current Liabilities:
Notes Payable-Officer 18,052 -0-
Accounts Payable 138,516 290,931
Other Current Liabilities 108,929 142,722
---------- ----------
Total Current Liabilities 265,497 433,653
Long Term Liabilities:
Notes Payable-Officer 115,215 501,151
Long Term Debt -0- 35,495
---------- ----------
Total Liabilities 380,712 970,299
Stockholders' Equity:
Common Stock 11,671 9,200
Paid in Capital 1,702,099 1,702,099
Accumulated Deficit (2,750,134) (2,211,462)
---------- ----------
Total Equity (157,689) (500,163)
---------- ----------
Total Liabilities & Equity 538,401 470,136
========== ==========
3
<PAGE>
AMERICAN GENERAL VENTURES, INC.
CONSOLIDATED INCOME STATEMENT
QTRS ENDING JUNE 30, 1998 & 1997
(UNAUDITED)
2ND QTR 2ND QTR
1998 1997
----------- -----------
REVENUES 120,318 310,727
Cost and Expenses:
Cost of Sales 111,918 245,143
Sell & General Admin 51,299 97,591
Interest -0- -0-
----------- -----------
Total Cost & Expenses 163,217 342,734
----------- -----------
Net Income (Loss) Before Taxes (42,899) (32,007)
Income Tax Expense -0- -0-
Net Income (Loss) (42,899) (32,007)
Net Income Per Common Share .00 .00
Weighted Average Common Shares 11,200,843 9,200,000
Outstanding
=========== ===========
4
<PAGE>
AMERICAN GENERAL VENTURES, INC.
CONSOLIDATED CASH FLOW
FOR THREE MONTHS ENDING JUNE 30, 1998 & 1997
(UNAUDITED)
1998 1997
------- --------
Cash Flow from Operating Activities
Net Income (Loss) (42,899) (32,007)
Adjustments to Reconcile Net Income
to Net Cash:
Inc (Dec) in Accounts Receivable 249,300 (151,429)
Inc (Dec) in Inventory (49,249) (13,280)
Inc (Dec) in Other Assets 22,245 (2,479)
Inc (Dec) in Accounts Payable (258,937) 98,137
Inc (Dec) in Payroll Tax Payable (2,940) 1,330
Inc (Dec) in Sales Tax Payable (1,148) (565)
-------- --------
Net Cash Provided by (Used In)
Operating Activities (40,729) (68,286)
Cash Flow from Investing Activities:
Inc (Dec) in Marketable Sec -0- -0-
Plant and Equipment (30)
-------- --------
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 122,691 113,124
Inc (Dec) in Long Term Debt 35,495 (1,998)
-------- --------
Net Cash Provided by (Used in)
Financing Activities 158,186 111,126
-------- --------
Inc (Dec) in Cash 74,558 10,803
Cash (Beginning) (51,888) (8,029)
Cash (Ending) 22,670 2,774
5
<PAGE>
AMERICAN GENERAL VENTURES, INC.
FORM 10-QSB
FOR THE THREE MONTHS ENDED JUNE, 1998
ITEM 2 - MANAGEMENT DISCUSSION AND ANALYSIS
Results of Operations
During the period from April 1, 1998 through June 30, 1998 the Company revenues
were $120,318 compared to $310,727 for the same period in 1997. The decrease in
revenues was due to decreased orders for computers and accessories from Wal-Mart
Stores, Inc. taken by the Company's subsidiary ACI Micro Systems, Inc. ACI
terminated its sales to Wal-Mart retail stores since it was issued a second
vendor number from Wal-Mart Online. The Company is now marketing its products
through Wal-Mart's Internet store and not to Wal-Mart's physical retail stores.
The Company presently offers seven pre-configured computer systems on Wal-Mart
Online and expects to have a "build to order" (BTO) desktop and notebook
computer online in August 1998. The BTO computer has been very successful with
Dell Computers and Gateway 2000. The Company expects that by partnering with
Wal-Mart it will capture a percentage of Dell's and Gateway's market share. This
quarter's revenues are up 64% from last quarter's revenues and the Company
expects to exceed this trend of increased revenues. In addition to having an
exclusive agreement with Wal-Mart Online to manufacture its BTO computers, the
Company is developing its own Internet web site. The Company has an advertising
agreement with Microsoft's 16 million member e-mail service, Hotmail, Inc. Early
indications suggest that revenues for the third quarter will more than double
from this quarter's revenues.
Since the Company has changed its strategy to sell its product through Wal-Mart
Online, its losses have significantly decreased. The Company losses in 1997 were
less than half of the losses in 1996. The Company expects to show a profit for
1998.
Working Capital and Capital Resources
Working capital at June 30, 1998 (current assets less current liabilities)
totaled ($39,474) compared to ($58,606) at June 30, 1997. The reduction in the
working capital deficit was primarily due to a decrease in accounts payable. The
Company was able to reduce a debt of $110,000 to $32,000.
The Company will use the "just in time" inventory method for sales through it
web site. This will reduce the need for operating capital for its own web site
because these customers pay in advance by credit card. Also reducing the need
for additional working capital is due to the Company establishing terms with its
primary vendor to exceed the length of time of Wal-Mart payables to the Company.
The Company recognizes the need for marketing and continues to seek additional
capital for these expenses.
6
<PAGE>
PART II OTHER INFORMATION
Item 1 Legal Proceedings
The Company's subsidiary, ACI Micro Systems, Inc. has been sued by California IC
for $27,500 for goods and services. ACI has answered generally and specifically
that the plaintiff refused to accept returned merchandise. The matter has been
dormant since February 1998 and until recently the court ordered some action or
the case will be dismissed. No settlement negotiations have been held but should
be fruitful if initiated by plaintiff.
Two other suppliers have recently made demands for payment. Daytek alleges
$27,000 is due and Altura PC Systems claim $21,350. Both claims are in dispute.
Negotiations will likely result in settlement of both at reduced amounts The
Company's subsidiary, ACI Micro Systems, Inc. has been sued by California IC for
$27,500 for goods and services. ACI has answered generally and specifically that
the plaintiff refused to accept returned merchandise. The matter has been
dormant since February 1998 and until recently the court ordered some action or
the case will be dismissed. No settlement negotiations have been held but should
be fruitful if initiated by plaintiff.
Item 2 Changes in Securities - 465,425 shares of restricted common stock were
issued to private investors. 5,000 shares of free trading shares were
issued to the Chief Technology Officer. 1,648,500 warrants were issued
to private investors, consultants and key employees.
Item 3 Defaults Upon Senior Securities - None
Item 4 Submission of Matters to a Vote of Securities Holders - None
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
-------------------------------
President/CEO
Date: August 15, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> (35,589)
<SECURITIES> 0
<RECEIVABLES> 14,653
<ALLOWANCES> 0
<INVENTORY> 151,870
<CURRENT-ASSETS> 168,918
<PP&E> 70,118
<DEPRECIATION> 0
<TOTAL-ASSETS> 226,023
<CURRENT-LIABILITIES> 265,497
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 538,401
<SALES> 120,318
<TOTAL-REVENUES> 120,318
<CGS> 111,918
<TOTAL-COSTS> 163,217
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (42,899)
<INCOME-TAX> 0
<INCOME-CONTINUING> (42,899)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (42,899)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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