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:
January 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 March 15, 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 January 31, 1999
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Consolidated Balance Sheets
January 31, 1999 (Unaudited) and July 31, 1998 3
Consolidated Statements of Operations (Unaudited)
Three and Six months ended January 31, 1999
and 1998 4
Consolidated Statements of Cash Flows (Unaudited)
Six months ended January 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
------------------------------
01/31/99 07/31/98
----------- -----------
<S> <C> <C>
Current Assets
Cash $ 11,446 $ 77
Accounts Receivable 4,846 -0-
Prepaid Expenses 401 -0-
Marketable Equity Securities Available
For Sale 81,866 80,086
----------- -----------
$ 98,559 $ 80,163
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current Liabilities
Notes Payable to Related Entities $ 402,440 $ 398,440
Notes Payable - Other 20,100 20,100
Accounts Payable and Accrued Liabilities 46,906 48,010
Accounts Payable - Related Entities 285,332 264,818
----------- -----------
754,778 731,368
----------- -----------
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 160,006 160,006
Additional Paid-In Capital 680,880 680,880
Retained Earnings
Unrealized Gain on Available for Sale
Securities 56,830 55,051
Accumulated Deficit (1,553,935) (1,547,141)
----------- -----------
Total Stockholders' Deficit (656,218) (651,204)
----------- -----------
Total Liabilities and Stockholders'
Deficit $ 98,559 $ 80,163
=========== ===========
See notes to financial statements
3
</TABLE>
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<TABLE>
<CAPTION>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended January 31 For the six months ended January 31,
---------------------------------------------------------------------------
1999 1998 1999 1998
------------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Consulting Fee Income $ 42,708 $ -0- $ 67,708 $ -0-
--------------- ---------------- ---------------- ---------------
General and Administrative Expenses
Staff Salary 21,000 -0- 37,500 -0-
Professional Fees 881 1,172 2,049 1,907
Management Fees - Related Party 750 300 1,500 600
Patent Fees 3,212 -0- 3,212 2,945
All Other General and Administrative
Expenses 4,200 95 8,314 131
--------------- ---------------- ---------------- ---------------
30,043 1,567 52,575 5,583
--------------- ---------------- ---------------- ---------------
Loss From Operations 12,666 (1,567) 15,134 (5,583)
--------------- ---------------- ---------------- ---------------
Other Income (Expense)
Interest Expense (10,955) (10,795) (21,929) (21,489)
--------------- ---------------- ---------------- ---------------
Net Income (Loss) before Income Taxes 1,711 (12,363) (6,795) (27,073)
Income Tax Benefit -0- -0- -0- -0-
--------------- ---------------- ---------------- ---------------
Net Income (Loss) $ 1,711 $ (12,363) $ (6,795) $ (27,073)
=============== ================ ================ ===============
Weighted Average Number
of Common Shares 160,006,250 160,006,250 160,006,250 160,006,250
=============== ================ ================ ===============
Net Loss Per Common Share $ 0 $ (0) $ (0) $ (0)
=============== ================ ================ ===============
See notes to Financial Statements
4
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<TABLE>
<CAPTION>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(Unaudited)
For the six months ended January 31,
- -------------------------------------------------------------------------------
1999 1998
----------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Loss $ (6,795) $ (27,073)
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities
Change in Assets and Liabilities
(Increase) Decrease In:
Accounts Receivable and Accrued
Assets (5,248) -0-
Increase (Decrease) In:
Accounts Payable and Accrued
Liabilities (1,104) 4,714
Accounts Payable
Related Entity 20,515 20,425
--------- ---------
Total Adjustments 14,164 25,139
--------- ---------
Net Cash (Used For) Operations 7,369 (1,932)
--------- ---------
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 4,000 1,850
--------- ---------
Net Cash Provided by (Used For) Financing Activities 4,000 1,850
--------- ---------
Increase (Decrease) in Cash 11,369 (83)
Balance at Beginning of Period 77 153
--------- ----------
Balance at End of Period $ 11,446 $ 71
========= =========
See notes to financial statements
5
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<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 six-month period ended
January 31, 1999; the company's financial position at January 31,
1999 and July 31, 1998; and the cash flows for the six-month period
ended January 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 1998 Form 10-K.
The results for the six-month period ended January 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 from operations for the six-month period ended January
31, 1999 was $18,567 less than that for the six-month period ended
January 31, 1998. This was due mainly to the increase in consulting
fees of $67,708 offset by the staff salary expense of $37,500.
Working capital decreased by $5,015 from July 31, 1998 to January
31, 1999, due to the net loss of $6,795 and an increase in
unrealized gain on investments of $1,780. 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 1/31/99 - $81,866
These shares are used as collateral against the notes payable.
6
<PAGE>
On August 14, 1998, the Company signed an offer of employment with
Ethan J. Matyas to be the Company's Director of Professional
Services. As of January 31, 1999, Mr. Matyas was the Company's only
full-time employee and was previously employed as the president of
WebStyles, LLC, a company engaged in the business of internet
website development and maintenance. Mr. Matyas' responsibilities
with the Company will be to pursue actions against those believed to
be violating the patents of the Company, as well as doing internet
consulting.
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
7
<PAGE>
COMPUSONICS VIDEO CORPORATION
Form 10-Q
For the quarter ended January 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: March 16, 1999
8
<PAGE>
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<S> <C>
<PERIOD-TYPE> 6-Mos
<FISCAL-YEAR-END> Jul-31-1999
<PERIOD-START> Nov-30-1998
<PERIOD-END> Jan-31-1999
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