SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter year ended: Commission file number:
October 31, 1999 0-14200
- --------------------------- ------------------------
CompuSonics Video Corporation
(Exact name of Registrant as specified in its charter)
Colorado 84-1001336
- ------------------------------ -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7001 Orchard Lake Road - Suite 424
West Bloomfield, MI 48322-3608
- ------------------------------------- -------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(248) 851-5651
Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, $.001 Par Value
-----------------------------
(Title of Class)
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 and, (2) has been subject to such filing requirements
for the past 90 days: Yes X No
--- ---
As of December 1, 1999, a total of 160,006,250 shares of common stock, $.001 par
value, were outstanding.
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COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
Form 10-Q Filing for the Quarter Ended October 31, 1999
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Consolidated Balance Sheets
October 31, 1999 (Unaudited) and July 31, 1999 3
Consolidated Statements of Operations (Unaudited)
Three months ended October 31, 1999
and 1998 4
Consolidated Statements of Cash Flows (Unaudited)
Three months ended October 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
Signature Page 8
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<TABLE>
<CAPTION>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<S> <C> <C>
------------------------------
10/31/99 07/31/99
----------- -----------
Current Assets
Cash $ 32,463 $ 48,563
Accounts Receivable - Related Parties 34,753 30,254
Interest Receivable 5,384 1,603
Notes Receivable - Related Party 150,000 150,000
Prepaid Assets 440 614
Marketable Equity Securities Available
For Sale 64,069 88,984
----------- -----------
Total Current Assets $ 287,109 $ 320,018
Other Assets
Equipment 45,896 45,896
Less Accumulated Depreciation (40,103) (39,510)
----------- -----------
5,793 6,386
Total Other Assets
----------- -----------
Total Assets $ 292,902 $ 326,404
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Notes Payable to Related Entities $ 552,440 $ 552,440
Notes Payable - Other 20,100 20,100
Accounts Payable and Accrued Liabilities 53,081 66,807
Accounts Payable - Related Entities 322,040 307,741
----------- -----------
Total Liabilities 947,661 947,088
----------- -----------
Stockholders' Deficit
Preferred Stock - Series A Convertible Stock
$.001 Par Value, 75,000,000 Shares
Authorized, -0- Shares Issued and Outstanding -0- -0-
Common Stock $.001 Par Value, 300,000,000
Shares Authorized, 160,006,250 Shares
Issued and Outstanding in 1999 and 1998 160,006 160,006
Additional Paid-In Capital 680,879 680,880
Retained Earnings
Unrealized Gain on Available for Sale Securities 39,034 63,949
Accumulated Deficit (1,534,678) (1,525,519)
----------- -----------
Total Stockholders' Deficit (654,760) (620,684)
----------- -----------
Total Liabilities and Stockholders' Deficit $ 292,902 $ 326,404
=========== ===========
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3
<PAGE>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended October 31,
-------------------------------------
1999 1998
-------------------------------------
Consulting Fee Income $ 49,832 $ 25,000
---------------- ---------------
General and Administrative Expenses
Staff Salary 36,354 16,500
Professional Fees 2,386 1,168
Management Fees - Related Party 1,640 750
Patent Fees -0- -0-
All Other General and Administrative
Expenses 7,562 4,114
---------------- ---------------
47,942 22,532
---------------- ---------------
Income (Loss) From Operations 1,890 2,468
---------------- ---------------
Other Income (Expense)
Interest Income 3,781 -0-
Interest Expense (14,830) (10,974)
---------------- ---------------
(11,049) (10,974)
---------------- ---------------
Net Loss Before Income Taxes (9,159) (8,506)
Income Tax Benefit -0- -0-
---------------- ---------------
Net Loss $ (9,159) $ (8,506)
================ ===============
Weighted Average Number
of Common Shares 160,006,250 160,006,250
================ ===============
Net Loss Per Common Share $ (0.00) $ (0.00)
================ ===============
See notes to Financial Statements
4
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<TABLE>
<CAPTION>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(Unaudited)
<S> <C> <C>
For the three months ended October 31,
-----------------------------------------
1999 1998
-----------------------------------------
Cash Flows From Operating Activities
Net Loss $ (9,159) $ (8,506)
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities
Depreciation 593 -0-
Increase (Decrease) In:
Accounts Receivable and Accrued
Assets (8,107) -0-
Increase (Decrease) In:
Accounts Payable and Accrued
Liabilities 1,691 (996)
Accounts Payable
Related Entity (1,119) 10,592
---------- -----------
Total Adjustments (6,941) 9,596
---------- -----------
Net Cash (Used For) Operations (16,100) 1,089
---------- -----------
Cash Provided by (Used For) Investing Activities -0- -0-
---------- -----------
Net Cash Provided by Investing Activities -0- -0-
---------- -----------
Cash Provided by (Used For) Financing Activities
Proceeds From Notes Payable - Related -0- 4,000
---------- -----------
Net Cash Provided by (Used For) Financing Activities -0- 4,000
---------- -----------
Increase (Decrease) in Cash (16,100) 5,089
Balance at Beginning of Period 48,563 77
---------- -----------
Balance at End of Period $ 32,463 $ 5,167
========== ===========
See notes to financial statements
5
</TABLE>
<PAGE>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
PART I. FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
The accompanying consolidated financial statements of CompuSonics Video
Corporation and Subsidiaries have been prepared by the company without audit. In
the opinion of the company's management, the financial statements reflect all
adjustments necessary to present fairly the results of operations for the
three-month period ended October 31, 1999; the company's financial position at
October 31, 1999 and July 31, 1999; and the cash flows for the three-month
period ended October 31, 1999 and 1998. Certain notes and other information have
been condensed or omitted from the interim financial statements presented in
this Quarterly Report on Form 10-Q. Therefore, these financial statements should
be read in conjunction with the company's July 31, 1999 Form 10-K.
The results for the three-month period ended October 31, 1999 are not
necessarily indicative of future financial results.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The net loss for the three-month period ended October 31, 1999 was $653 more
than that for the three-month period ended October 31, 1998. This was due mainly
to the increase in consulting fee income of $24,832, and offset by the staff
salary expense of $19,854, an increase in professional fees of $1,218 and an
increase of $890 in management fees.
Working capital decreased by $33,481 from July 31, 1999 to October 31, 1999, due
to the net loss of $9,159, a decrease in unrealized gain on investments of
$24,915 and depreciation expense of $593. In the past, the Registrant has relied
on a related company to provide the working funds it has required but there is
no assurance that this will continue in future years.
The Registrant has the following marketable securities:
Williams Controls, Inc. 28,475 Common Shares
Cost - $25,035
Market Value at 10/31/99 - $64,069
These shares are used as collateral against the notes payable.
<PAGE>
Ethan Matyas is the Company's Director of Professional Services. His
responsibilities with the Company are to oversee it's internet web site
development and maintenance business, and to formulate a plan and pursue actions
against those parties believed to be violating the patents owned by the Company.
No violators have been identified at this time, and the Company continues to
pursue was to identify such violators, but at this time, the Registrant does not
have the funds available to pursue these potential violators.
During the first quarter, the Registrant had two employees to carry out the
Registrants web site development and maintenance business. The Company currently
has two clients, who generate most of the Company's revenue, and it is pursuing
the adding of new clients.
At the present time, the Company has a temporary arrangement with two third
party companies, whereby the Registrant provides internet consulting and is paid
a monthly fee from each company for these services. There is no assurance that
this will continue in the future.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
None
(b) Reports on Form 8-K
None
<PAGE>
COMPUSONICS VIDEO CORPORATION
Form 10-Q
For the quarter ended October 31, 1999
Signature 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.
COMPUSONICS VIDEO CORPORATION
-----------------------------
(Registrant)
By /s/ Robert R. Hebard
------------------------------------
Robert R. Hebard, Chief Executive Officer
& Chairman of the Board
Date Signed: December 14, 1999
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<NAME> CompuSonics Video Corporation
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<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Jul-31-2000
<PERIOD-START> Aug-01-1999
<PERIOD-END> Oct-31-1999
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