UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1998
Commission file Number 2-98176NY
Instructivision, Inc.
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(Exact name of registrant as specified in its charter)
New Jersey 22-2386359
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3 Regent Street, Livingston, NJ 07039
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(973) 992 9081
- --------------
Indicate by 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 for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
As of March 31, 1998 there were 3,350,000 shares of Common
Stock, par value less than $.001 per share, outstanding.
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<PAGE>
Part I. - FINANCIAL INFORMATION
Note: The following unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-QSB and Regulation S-B. Accordingly,
they do not include all of the information and footnotes
required by generally accepted accounting principles for
complete financial statements. In the opinion of management,
all adjustments necessary for a fair presentation have been
included. Operating results for the six months ended March 31,
1998 are not necessarily indicative of the results that may be
expected for the year ended September 30, 1998. For further
information refer to the financial statements and footnotes
thereto included in the Company's annual report on Form 10-KSB
for the year ended September 30, 1997.
Page 2
<PAGE>
<TABLE>
<CAPTION>
INSTRUCTIVISION, INC
BALANCE SHEETS
March 31, 1998
(unaudited)
March 31,
1998
-----------
ASSETS
<S> <C>
Current assets
Cash $ 10,551
Investments 936,718
Accounts receivables 246,587
Inventory 198,238
Prepaid expenses 9,459
Deferred income taxes 10,000
-----------
Total current assets 1,411,553
Property and equipment at cost, less
accumulated depreciation 290,802
Other assets
Capitalized software - net of amortization 175,046
Deposits 13,125
Deferred income taxes 15,984
-----------
Total other assets 494,957
-----------
Total assets $ 1,906,510
===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current liabilities
Accounts payable $ 51,280
Accrued expenses 26,613
Notes payable - current portion 11,635
-----------
Total current liabilities 89,528
Notes payable, less current portion 5,726
-----------
Total liabilities 95,254
-----------
Stockholder's equity
Common Stock, $.001 par value, 10,000,000 shares
authorized, 3,350,000 shares, issued & outstanding 3,350
Additional paid-in capital 1,425,218
Accumulated surplus 333,915
Unrealized gain on investments, net of income tax 48,773
-----------
Total stockholder's equity 1,811,256
-----------
Total liabilities and stockholders equity $ 1,906,510
===========
</TABLE>
[FN]
See accompanying notes to financial statements
Page 3
<PAGE>
<TABLE>
<CAPTION>
INSTRUCTIVISION, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 1998 and 1997
(unaudited)
March 31, March 31,
1998 1997
------------ ------------
Revenues
<S> <C> <C>
Net sales
Products $ 199,579 $ 199,326
Services - unaffiliated 450,625 299,527
Services - affiliated -- 38,124
----------- ------------
Total sales 650,204 536,977
Investment Income 49,314 39,226
----------- -----------
Total Revenues 699,518 576,203
Costs and expenses
Cost of sales
Products 114,044 169,183
Services - unaffiliated 345,278 202,581
Services - affiliated -- 25,038
----------- -----------
Total cost of sales 459,322 396,802
General and administrative expenses 226,304 258,910
Interest expenses 1,989 7,790
----------- -----------
Total costs and expenses 687,615 663,502
----------- -----------
Income (loss) before income taxes 11,903 (87,299)
Provision for income taxes -- (18,000)
----------- -----------
Net income (loss) $ 11,903 $ (69,299)
=========== ===========
Earnings per share $ .01 $(.02)
=========== ===========
</TABLE>
[FN]
See accompanying notes to financial statements
Page 4
<PAGE>
<TABLE>
<CAPTION>
INSTRUCTIVISION, INC.
STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
March 31, March 31,
1998 1997
---------- ----------
Revenues
<S> <C> <C>
Net sales
Products $ 106,923 $ 106,133
Service - unaffiliated 239,771 200,092
- affiliated -- 13,486
---------- ----------
TotaL sales 346,694 319,711
Investment income 5,157 4,342
---------- ----------
Total revenues 351,851 324,053
Costs and expenses:
Cost of sales
Products 58,053 76,786
Services - unaffiliated 217,554 117,643
- affiliated -- 3,992
---------- ----------
Total cost of sales 275,607 198,421
General and administrative expenses 106,932 136,099
Interest expenses ( 56) 2,322
---------- ----------
Total costs and expenses 382,483 336,842
Income(loss) before income taxes (30,632) (12,789)
Provision for income taxes (18,750) (2,000)
---------- ----------
Net loss $ (11,882) $ (10,789)
========== ==========
Earnings (loss) per share $ (.01) $ (.01)
========== ==========
<FN>
See accompanying notes to financial statements
</TABLE>
Page 6
<PAGE>
<TABLE>
<CAPTION>
INSTRUCTIVISION, INC.
STATEMENT OF CASH FLOWS
For the Six Months Ended March 31, 1998 and 1997
(Unaudited)
March 31, March 31,
1998 1997
---------- -----------
<S> <C> <C>
Operating activities
Net income $ 11,903 $ (69,299)
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 53,244 56,613
Amortization of capitalized software 21,882 26,280
Deferred income taxes 12,016 (18,000)
Changes in operating assets and liabilities:
(In)decrease in accounts receivable
- unaffiliated 110,249 (45,198)
- affiliated -- (24,224)
De(In)crease in inventory and prepaid
expenses (2,344) 68,537
Decrease in accounts payable and
accrued expenses (74,313) (31,835)
----------- -----------
Net cash provided by operating activities 132,637 (37,126)
Investing Activities
Additions to Investments (26,330) (856,754)
Additions to capitalized software (16,066) (12,504)
Purchases of property, plant & equipment (54,807) (37,498)
----------- -----------
Net cash utilized in investing activities (97,203) (906,756)
Financing activities
Payment from shareholder advances (2,000) --
Principal payment on credit lines,notes
payable and capital lease obligations (24,520) (61,899)
----------- -----------
Net cash utilized by financing activities (26,520) (61,899)
Decrease in cash 8,914 (1,005,781)
Cash at beginning of year 1,637 1,007,906
----------- -----------
Cash at end of year $ 10,551 $ 2,125
=========== ===========
<CAPTION>
Supplemental disclosure of cash flow information:
March 31, March 31,
1998 1997
---------- ----------
Cash paid during the year for
<S> <C> <C>
Interest $ 1,989 $ 7,790
Income taxes 175 30,000
</TABLE>
[FN]
See accompanying notes to financial statements
Page 5
<PAGE>
INSTRUCTIVISION, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
March 31, 1998
Note 1. Basis of Presentation
The financial statements included herein are unaudited. However,
such information reflects all adjustments consisting of normal recurring
adjustments which are, in the opinion of management, necessary for a
fair presentation of the statements for the interim periods.
The results of operations for the six months ended March 31, 1998
are not necessarily indicative of the results to be expected for the
full year.
Note 2. Earnings Per Share
Earnings per share is based on the weighted average number of common
share outstanding. The weighted average number of common shares was
3,350,000 for the periods ended March 31, 1998 and 1997.
Page 7
<PAGE>
Part II - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
-----------------------------------------------------------
1. Material Changes in Financial Condition:
The working capital ratio as of March 31, 1998 was 6.3 : 1 as
compared to 7 : 1 as of March 31, 1997.
2. Material Changes in Results of Operations:
For the six months ended March 31, 1998, the Company had revenues
of $699,518 as compared to $576,203 for the same period ended March
1997 and $543,512 in 1996. Pre-tax earning (loss) for each of the six
months ended March 31, 1998, 1997, and 1996 were $11,903, $(69,299),
and $(66,514), respectively. The Company's sales backlog was approx-
imately $165,000 on March 31, 1998, principally from video production
orders, as compared to $155,000 for the quarter ended March 31, 1997.
The Company incurred a loss of $11,882 for the quarter ending
March 31, 1998, as compared to a loss of $10,789 on March 31, 1997 and
$14,501 in 1996. Management attributes the loss to higher video
production expenses.
Total revenues for the quarter ended March 1998 increased 8% over
the same quarter in 1997. The increase was attributable to the increase
in corporate video production, while sales to schools remained at the
same level as the previous year. Cost of sales on products have decreased
from 85% of sales in 1997 to 57% of sales in 1998. At the same time
cost of operating the video production services increased from 67% to 76%
of revenues. Management believes that it will incur lower video
production costs in the future due to its recent purchase of new
video equipment to eliminate the need for equipment rental. Capital
equipment purchases were $54,000 for the quarter ended March 31,1998.
A mild winter produced lower utilities, snow removel and related
seasonal expenses, which helped reduce G & A expenses by 20% from the same
period last year.
Page 8
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of
1934, the registrant has duly cause this report to be signed on its
behalf by the undersigned thereunto duly authorized.
INSTRUCTIVISION, INC.
May 15, 1998 Rosemary Comras
President and
Chief Accounting Officer
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<PAGE>
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<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 10551
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<CURRENT-ASSETS> 1411553
<PP&E> 1543935
<DEPRECIATION> 1253133
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</TABLE>
