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 ended: Commission file number:
October 31, 2000 0-14200
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CompuSonics Video Corporation
(Exact name of Registrant as specified in its charter)
Colorado 84-1001336
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
32751 Middlebelt Road, Suite B
Farmington Hills, MI 48334
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(248) 851-5651
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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
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(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, 2000, 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, 2000
INDEX
Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Interim Financial Statements. 3
Consolidated Balance Sheets
October 31, 2000 (Unaudited) and July 31, 2000 4
Consolidated Statements of Operations (Unaudited)
Three months ended October 31, 2000
and 1999 5
Consolidated Statements of Cash Flows (Unaudited)
Three months ended October 31, 2000 and 1999 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
Signature Page 8
2
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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, 2000; the company's financial position at October 31,
2000 and July 31, 2000; and the cash flows for the three-month
period ended October 31, 2000 and 1999. 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, 2000 Form 10-K.
The results for the three-month period ended October 31, 2000 are
not necessarily indicative of future financial results.
3
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COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
10/31/00 07/31/00
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Current Assets
Cash $ 7,500 $ 274
Accounts Receivable - Related Parties 0 225
Prepaid Assets 0 219
Marketable Equity Securities Available for Sale 34,702 43,601
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Total Current Assets 42,202 44,318
Other Assets
Investments - Related Party 159,000 159,000
Equipment 1,509 1,509
Less Accumulated Depreciation (776) (650)
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Total Other Assets 159,733 159,858
Total Assets $ 201,935 $ 204,176
============ ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Notes Payable to Related Entities $ 547,240 $ 547,240
Notes Payable - Other 24,000 24,000
Accounts Payable and Accrued Liabilities 49,421 48,786
Accounts Payable - Related Entities 383,252 367,262
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Total Liabilities 1,003,913 987,288
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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 2000 160,006 160,006
Additional Paid-In Capital 680,880 680,880
Retained Earnings
Other Comprehensive Income 7,146 16,045
Accumulated Deficit (1,650,011) (1,640,043)
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Total Stockholders' Deficit (801,978) (783,112)
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Total Liabilities and Stockholders' Deficit $ 201,935 $ 204,176
============ ==========
The accompanying notes are an integral part of this financial statement
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended October 31,
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2000 1999
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Consulting Fee Income $ 0 $ 49,832
Licensing Income 10,000 0
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10,000 49,832
General and Administrative Expenses
Staff Salary 0 36,354
Professional Fees 2,313 2,386
Management Fees - Related Party 1,150 1,640
Patent Fees 681 -0-
All Other General and Administrative
Expenses 350 7,562
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4,493 47,942
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Income (Loss) From Operations 5,507 1,890
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Other Income (Expense)
Interest Income 0 3,781
Interest Expense (15,473) (14,830)
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(15,473) (11,049)
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Net Loss Before Income Taxes (9,967) (9,159)
Income Tax Benefit 0 0
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Net Loss $ (9,967) $ (9,159)
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Weighted Average Number
of Common Shares 160,006,250 160,006,250
============== ================
Net Loss Per Common Share $ (0.00) $ (0.00)
============== ================
The accompanying notes are an integral part of this financial statement.
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<CAPTION>
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COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended October 31,
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2000 1999
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Cash Flows From Operating Activities
Net Loss $ (9,967) $ (9,159)
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities
Depreciation 126 593
Increase (Decrease) In:
Accts Receivable and Accrued Assets 444 (8,107)
Increase (Decrease) In:
Accounts Payable and Accrued Liabilities 635 1,691
Accounts Payable - Related Entity 15,988 (1,119)
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Total Adjustments 17,193 (6,941)
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Net Cash (Used For) Operations 7,226 (16,100)
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Cash Provided by (Used For) Investing Activities 0 0
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Net Cash Provided by Investing Activities 0 0
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Cash Provided by (Used For) Financing Activities
Proceeds From Notes Payable - Related 0 0
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Net Cash Provided by (Used For) Financing Activities 0 0
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Increase (Decrease) in Cash 7,226 (16,100)
Balance at Beginning of Period 274 48,563
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Balance at End of Period $ 7,500 $ 32,463
========== ==========
The accompanying notes are an integral part of this financial statement.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The net loss of $9,967 for the three-month period ended October 31,
2000 was $808 more than that for the three-month period ended
October 31, 1999. This was due mainly to the decrease in consulting
fee income of $49,832, and offset by the decrease in staff salary
expense of $36,354, a decrease in professional fees of $73, a
decrease of $490 in management fees, and an increase of $10,000 in
miscellaneous income due to royalties received.
Working capital decreased by $18,740 from July 31, 2000 to October
31, 2000, mainly due to the net loss of $9,967, and a decrease in
unrealized gain on investments of $8,898. 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 10/31/00 - $34,702; these shares are used as collateral against
the notes payable.
On April 28, 2000, the company announced that it would begin
pursuing companies who might have an interest in licensing its
technology covered by the Company's patents. On August 11, 2000, the
Company announced that it had signed a licensing agreement with
Interactive Digital Media Corporation (IDMC) for the use of
technology related to the company's patent portfolio. This was the
company's first licensing agreement since announcing in April 2000
that it would focus its business activities on the licensing of the
technology represented in the patents. Under the licensing
agreement, the Company granted a non-exclusive, royalty bearing
license for the Company's patented audio and video digital recording
and playback system technology to IDMC for the System 7 and other
products that IDMC may produce now and in the future. Terms of the
license were structured so as to provide for an upfront payment, a
note payable to the Company for the remainder of the licensing fee,
and an ongoing royalty payments based on the sales of units covered
by the license. The note receivable has not been executed at the
time of this filing and will not be identified as an asset of the
Company until such time. The Company has not signed any other
license agreements at this time. During the quarter ended October
31, 2000, the Company continued to renew and maintain its patents in
the U.S. and key foreign countries.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
None
(b) Reports on Form 8-K
None
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COMPUSONICS VIDEO CORPORATION
Form 10-Q
For the quarter ended October 31, 2000
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
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(Registrant)
By s\ Robert R. Hebard
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Robert R. Hebard,
Chief Executive Officer
& Chairman of the Board
Date Signed: December 14, 2000
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