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 June 30, 1998
Commission file Number 0-14411
Instructivision, Inc.
-------------------------------------------------------
(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 June 30, 1998 there were 3,350,000 shares of Common
Stock, par value less than $.001 per share, outstanding.
Page 1
<PAGE>
INDEX
Page
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Part I: Financial Statement
Balance Sheets at June 30, 1998 4
Statement of Operations for the nine 5
months ended June 30, 1998 and 1997
Statement of Operations for the three 6
months ended June 30, 1998 and 1997
Statement of Cash Flows for the nine 7
months ended June 30, 1998 and 1997
Notes to interim Financial Statements 8
Part II: Management's discussions and analysis 9
of financial condition and results of
operations.
Signature 10
Page 2
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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 nine months ended June 30, 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 3
<PAGE>
<TABLE>
<CAPTION>
INSTRUCTIVISION, INC
BALANCE SHEETS
June 30, 1998
(unaudited)
June 30,
ASSETS 1998
-----------
<S> <C>
Current assets:
Cash $ 25,309
Investments 861,625
Accounts receivables 306,131
Inventory 184,444
Prepaid expenses 10,188
Deferred income taxes 10,000
-----------
Total current assets 1,397,697
Property and equipment at cost, less
accumulated depreciation 271,476
Other assets
Capitalized software - net of amortization 184,129
Deposits 13,125
Deferred income taxes 39,252
-----------
Total other assets 236,506
-----------
Total assets $1,905,679
===========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current liabilities:
Accounts payable $ 73,237
Accrued expenses 44,220
Notes payable - current portion 7,418
-----------
Total current liabilities 129,875
Notes payable, less current portion 7,955
-----------
Total liabilities 124,875
-----------
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 285,319
Unrealized gain on Investments 58,962
-----------
Total stockholder's equity 1,772,849
-----------
Total liabilities and stockholders equity $1,905,679
===========
<FN>
See accompanying notes to financial statements
Page 4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSTRUCTIVISION, INC.
STATEMENT OF OPERATIONS
For the Nine Months Ended June 30, 1998 and 1997
(unaudited)
June 30, June 30,
1998 1997
----------- ------------
Revenues
<S> <C> <C>
Net sales
Products $ 269,190 $ 287,499
Services - unaffiliated 676,149 472,538
Services - affiliated -- 71,100
----------- ------------
Total sales 945,339 831,137
Investment Income 67,797 43,735
----------- ------------
Total Revenues 1,013,318 874,872
Costs and expenses
Cost of sales
Products 192,902 235,595
Services - unaffiliated 526,851 330,571
Services - affiliated -- 31,238
----------- ------------
Total cost of sales 719,753 597,404
General and administrative expenses 352,147 381,420
Interest expenses 2,111 9,404
----------- ------------
Total costs and expenses 1,074,011 988,228
----------- ------------
Income (loss) before income taxes (60,693) (113,356)
Provision for income taxes (24,000) (25,000)
----------- ------------
Net income (loss) $ (36,693) $ (88,356)
=========== ============
Earnings per share $ ( .01) $ ( .03)
=========== ============
<FN>
See accompanying notes to financial statements
Page 5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSTRUCTIVISION, INC.
STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 1998 and 1997
(unaudited)
June 30, 1998 June 30, 1997
------------- -------------
Revenues
Net sales
<S> <C> <C>
Products $ 69,611 $ 88,173
Services - unaffiliated 225,524 173,011
Services - affiliated -- 32,976
----------- ------------
Total Sales 295,135 294,160
Investment income 18,665 4,509
---------- ------------
Total revenues 313,800 298,669
Costs and expenses
Cost of sales
Products 78,858 66,412
Services - unaffiliated 181,573 127,990
Services - affiliated 6,200
----------- -----------
Total cost of sales 260,431 200,602
General and administrative expenses 125,843 122,510
Interest expenses 122 1,614
----------- -----------
Total costs and expenses 386,396 324,726
----------- -----------
Income (loss) before income taxes (72,596) (26,057)
Provision for income taxes (24,000) (7,000)
---------- -----------
Net income (loss) (48,596) (19,057)
=========== ===========
less than
Earnings per share (.01) (.01)
=========== ===========
<FN>
See accompanying notes to financial statements
Page 6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INSTRUCTIVISION, INC.
STATEMENT OF CASH FLOWS
For the Nine Months Ended June 30, 1998 and 1997
(Unaudited)
June 30, June 30,
1998 1997
----------- ------------
<S> <C> <C>
Operating activities
Net income $ (36,693) $ (88,356)
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 78,120 85,197
Amortization of capitalized software 29,758 39,286
Deferred income taxes (11,252 (25,000)
Changes in operatg.assets and liabilities:
(In)decrease in accounts receivable
- unaffiliated 50,705 (32,706)
- affiliated -- (5,125)
De(In)crease in inventory & prepaid expenses 10,721 63,010
Decrease in accounts payable and accrued
expenses (34,749) (59,197)
---------- -----------
Net cash provided by operating activities 86,610 (22,891)
Investing Activities
Decrease(Additions) to Investments 58,952 (827,264)
Additions to capitalized software (33,025) (12,504)
Purchases of property, plant & equipment (60,357) (69,901)
---------- -----------
Net cash utilized in investg. activities (34,430) (909,669)
Financing activities
Proceeds from shareholder advances (2,000) --
Principal payment on credit lines,notes
payable and capital lease obligations (26,508) (73,085)
---------- -----------
Net cash (utilized) provided by
financing activities (28,508) (73,085)
Decrease in cash 23,672 (1,005,645)
Cash at beginning of period 1,637 1,007,906
----------- ------------
Cash at end of period $ 25,309 $ 2,261
=========== ============
<CAPTION>
Supplemental disclosure of cash flow information:
June 30, June 30,
1998 1997
--------- ---------
Cash paid during the year for
<S> <C> <C>
Interest $ 2,111 $ 9,404
Income taxes -- 30,000
Page 7
</TABLE>
<PAGE>
INSTRUCTIVISION, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
June 30, 1998
(unaudited)
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 nine months ended
June 30, 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 shares outstanding. The weighted average number of
common shares was 3,350,000 for the period ended June 30, 1998
and 1997.
Page 8
<PAGE>
Item II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
- --------------------------------------------------------------------
For the nine months ended June 30, 1998, the Company had revenues
of $1,013,318 as compared to $874,872 for the same period ended
June 30, 1997 and $829,923 for 1996. Revenues from video production
services have experienced an increase in each of the three previous
quarters. The Company recorded a net loss of $36,693, or $.01 per
share, for the nine months ended June 30, 1998 compared to a loss of
$88,356 or $.03 per share in the prior year.
Revenues from school products were $69,611 for the quarter
ended June 30, 1998 compared to $88,173 for the quarter ended
June 30, 1997 and $120,017 for the same quarter in 1996. The Company
attributes the drop in sales to the elimination of the New Jersey
Early Warning Test and High School Proficiency Test. The tests are
being replaced in 1999 with new tests called Grade 8 Proficiency
Assessment (GEPA) and High School Proficiency Assessment (HSPA),
respectively. The Company is developing new test preparation material
for GEPA and HSPA, which are expected to be ready for shipment in the
Fall of 1998.
During the quarter ended June 30, 1998 the Company experienced a
25% increase in video production revenue over the same quarter in 1997.
Pending orders for video production services on June 30, 1998 were
approximately $90,000. Revenues from educational sales for the quarter
ending June 30, 1998 were 20% below the same period in 1997.
Cost of sales for the three months ended June 30, 1998 were
$260,431 as compared to $200,602 in 1997 and $203,006 in 1996.
The Company reported a loss before taxes of 12% of revenues for the
nine months ended June 30, 1998. Net loss before taxes for the nine
month period was $60,693 compared to $113,356 in the same period in 1997
and $97,919 in June 1996.
The Company's current lines of educational software products
are not date sensitive and will therefore not be adversely affected when
the year 2000 arrives. The Company is working to resolve any potential
impact of the year 2000 on its computerized record keeping system to
ensure continued accurate information processing. Management believes
that the cost of addressing and correcting the issue will not have a
material impact on the Company's operation or finances and will be
resolved in a timely manner.
Page 9
<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.
August 10, 1998 Rosemary Comras
President
Page 10
<PAGE>
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