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:
April 30, 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 June 8, 1999, a total of 160,006,250 shares of common stock, $.001
par value, were outstanding.
<PAGE>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
Form 10-Q Filing for the Quarter Ended April 30, 1999
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.
Consolidated Balance Sheets
April 30, 1999 (Unaudited) and July 31, 1998 3
Consolidated Statements of Operations (Unaudited)
Three and Nine months ended April 30, 1999
and 1998 4
Consolidated Statements of Cash Flows (Unaudited)
Nine months ended April 30, 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
<PAGE>
<TABLE>
<CAPTION>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
------------------------------
04/30/99 07/31/98
----------- -----------
<S> <C> <C>
Current Assets
Cash $ 17,052 $ 77
Accounts Receivable 16,120 -0-
Prepaid Expenses 402 -0-
Marketable Equity Securities Available
For Sale 67,771 80,086
----------- -----------
Total Current Assets 101,345 80,163
----------- -----------
Other Assets
Equipment 43,232 38,774
Less: Accumulated Depreciation (38,962) (38,774)
----------- -----------
Total Other Assets 4,270 -0-
----------- -----------
Total Assets $ 105,615 $ 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 47,788 48,010
Accounts Payable - Related Entities 295,776 264,818
----------- -----------
766,104 731,368
----------- -----------
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 42,735 55,051
Accumulated Deficit (1,544,110) (1,547,141)
----------- -----------
Total Stockholders' Deficit (660,489) (651,204)
----------- -----------
Total Liabilities and Stockholders' Deficit $ 105,615 $ 80,163
=========== ===========
See notes to financial statements
3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended April 30, For the nine months ended April 30,
------------------------------------- -----------------------------------
1999 1998 1999 1998
------------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Consulting Fee Income $ 63,542 $ -0- $ 131,250 $ -0-
--------------- ---------------- ---------------- ---------------
General and Administrative Expenses
Staff Salary 26,225 -0- 63,725 -0-
Professional Fees 1,695 572 3,743 2,479
Management Fees - Related Party 1,250 300 2,750 900
Patent Fees 3,360 -0- 6,572 2,945
All Other General and Administrative
Expenses 10,579 29 18,893 161
--------------- ---------------- ---------------- ---------------
43,108 901 95,683 6,485
--------------- ---------------- ---------------- ---------------
Loss From Operations 20,434 (901) 35,567 (6,485)
--------------- ---------------- ---------------- ---------------
Other Income (Expense)
Interest Expense (10,608) (10,494) (32,537) (31,983)
--------------- ---------------- ---------------- ---------------
Net Income (Loss) Before Income Taxes 9,825 (11,395) 3,030 (38,468)
Income Tax Benefit -0- -0- -0- -0-
--------------- ---------------- ---------------- ---------------
Net Income (Loss) $ 9,825 $ (11,395) $ 3,030 $ (38,468)
=============== ================ ================ ===============
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(Unaudited)
For the nine months ended April 30,
-----------------------------------------
1999 1998
-----------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ 3,030 $ (38,468)
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities
Depreciation 188
Change in Assets and Liabilities
(Increase) Decrease In:
Accounts Receivable and Accrued
Assets (20,981) -0-
Increase (Decrease) In:
Accounts Payable and Accrued
Liabilities (222) 5,803
Accounts Payable
Related Entity 30,958 30,703
--------- -----------
Total Adjustments 9,944 36,506
--------- -----------
Net Cash (Used For) Operations 12,974 (1,962)
--------- -----------
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 16,974 (112)
Balance at Beginning of Period 77 153
--------- -----------
Balance at End of Period $ 17,053 $ 41
========= ===========
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 nine-month period ended
April 30, 1999; the company's financial position at April 30, 1999
and July 31, 1998; and the cash flows for the nine-month period
ended April 30, 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 nine-month period ended April 30, 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 income from operations for the nine-month period ended April
30, 1999 was $3,030 compared to the net loss of $38,468 for the
nine-month period ended April 30, 1998. This was due mainly to the
increase in consulting fees of $131,250 in the nine-month period
ended April 30, 1999 from $0 in the nine-month period ended April
30, 1998. 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.
During the nine-month period ended April 30, 1999, there was an
increase in staff salary expense of $63,725, an increase in patent
fees of $3,627, and an increase in other general & administrative
expenses of $18,732 compared to the nine-month period ended April
30, 1998.
Working capital decreased by $9,286 from July 31, 1998 to April 30,
1999, due to the decrease in unrealized gain on investments of
$12,316, offset by the net gain of $3,030. 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.
6
<PAGE>
The Registrant has the following marketable securities:
Williams Controls, Inc. 28,475 Common Shares
Cost - $25,035
Market Value at 4/30/99 - $67,771
These shares are used as collateral against the notes payable.
On August 14, 1998, the Company signed an offer of employment with
Ethan J. Matyas to be the Company's Director of Professional
Services. Mr. Matyas 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 are to oversee it's internet website 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.
During the third quarter, the Registrant hired two additional
employees to help with website development and maintenance. The
company currently has two clients which generate most of the
company's revenue, and it is pursuing the adding of new clients at
this time.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
None
(b) Reports on Form 8-K
On May 6, 1999, the Registrant filed a Form 8-K regarding the
extension of the Class A and Class B warrants from May 15,
1999 to May 15, 2000.
7
<PAGE>
COMPUSONICS VIDEO CORPORATION
Form 10-Q
For the quarter ended April 30, 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: June 11, 1999
8
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000777844
<NAME> CompuSonics Video Corporation
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Jul-31-1999
<PERIOD-START> Feb-01-1999
<PERIOD-END> Apr-30-1999
<EXCHANGE-RATE> 1
<CASH> 17,052
<SECURITIES> 67,771
<RECEIVABLES> 16,120
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 101,345
<PP&E> 43,232
<DEPRECIATION> (38,962)
<TOTAL-ASSETS> 105,615
<CURRENT-LIABILITIES> 766,104
<BONDS> 0
0
0
<COMMON> 160,006
<OTHER-SE> (820,495)
<TOTAL-LIABILITY-AND-EQUITY> 105,615
<SALES> 0
<TOTAL-REVENUES> 131,250
<CGS> 0
<TOTAL-COSTS> 76,790
<OTHER-EXPENSES> 18,893
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,537
<INCOME-PRETAX> 3,030
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,030
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
