<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.. 20549
FORM 10-KSB A1
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1998
[ ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 33-2775-A
TECHNICAL VENTURES INC.
(Exact name of registrant as specified in its charter)
New York State 13-3296819
(State or other Jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
3411 McNicoll Avenue, Unit 11
Scarborough, Ontario, Canada M1V 2V6
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (416) 299-9280
Securities registered pursuant to Section 12 (b) of the Act: NONE
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, $.01 Par Value
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 ___
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB [ ]
State Issuer's revenues for its most recent fiscal year, $1,185,091
The appropriate aggregate market value of the voting stock of the Registrant
held by non-affiliates of the Registrant as of June 30, 1998 (based upon
the average bid and asked prices as reported by the National Association of
Securities Dealers Automatic Quotation System) was approximately $2,678,558.
The number of shares outstanding of the Registrant's common stock, as of June
30, 1998 is 14,711,341.
Exhibit index is located on page 16 of this Annual Report on Form 10-KSB.
Page 1 of 22
<PAGE>2
FORM 10-KSB A
Fiscal Year Ended June 30, 1998
ITEM Table of Contents PAGE
Explanation regarding issuance of 3
Form 10-KSB A1
PART IV
Item 13. Exhibits, Financial Statement Schedules and F1 - F17
Reports on Form 8K
Signatures 22
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<PAGE>3
The Registrant's balance sheet as of June 30, 1998, and its statements of
operations, statements of stockholders' equity and statements of cash flow for
each of the years in the two year period ended June 30, 1998 had been audited
by the Registrant's independent auditors. The Independent Audits' Report on
these financial statements, which was included in the Registrant's original
filing on Form 10-KSB for the year ended June 30,1998, inadvertently omitted
reference to the audits of the statement of operations, statements of
stockholders' equity and statements of cash flow for the period ended June 30,
1997. The auditors' report which accompanies this amendment properly
identifies the financial statements which were subject to their audits.
-3-
<PAGE>4
TECHNICAL VENTURES INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1998
<PAGE>5
TECHNICAL VENTURES INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
PAGE
Independent Auditors' report F-2
Technical Ventures Inc. and Subsidiaries
Consolidated Financial Statements:
Balance sheet:
June 30, 1998 F-3
Statement of Operations:
Years ended June 30,1998 and 1997 F-4
Statement of Changes in Shareholders' Deficiency:
Years ended June 30,1998 and 1997 F-5
Statement of Cash Flows:
Years ended June 30,1998 and 1997 F-6 & F-7
Notes to Consolidated Financial Statements F-8 - F-17
F-1
<PAGE>6
Schwartz Levitsky Feldman
Chartered Accountants
Toronto, Ottawa, Montreal
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stocholders of
Technical Ventures Inc.
We have audited the acompanying consolidated balance sheet of Technical
Ventures Inc. (incorporated in New York State) as of June 30, 1998 and 1997
and the related consolidated statements of income, cash flows and changes in
stockholders' equity for the year ended June 30, 1998 and 1997. These
consolidated financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Technical
Ventures Inc. as of June 30, 1998 and 1997 and the results of its operations
and its cash flows for the year ended June 30, 1998, in conformity with
generally accepted accounting principles in the United States of America.
Toronto, Ontario /s/Schwartz Levitsky Feldman
September 30,1998 Chartered Accountants
F-2
<PAGE>7
TECHNICAL VENTURES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30
1998
ASSETS
CURRENT ASSETS
Cash $17,605
Accounts Receivable 118,140
Inventory (Note 2) 34,663
Other Current Assets
Advances 35,904
Deposits 26,931
TOTAL CURRENT ASSETS 233,244
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation of $510,118 at June 30,1998
(Note 3,6,10) 171,231
INTANGIBLE ASSETS, net of accumulated amortization of
$5,119 at June 30,1998 965
$411,440
LIABILITIES AND STOCK HOLDERS DEFICIENCY
CURRENT LIABILITIES
Current Portion of long term debt (Note 6):
Notes Payable (Note 11) $120,538
Capital lease obligations 77,594
Other 376,296
Loans & advances:
Private Lenders (Note 10) 170,668
Shareholders, unsecured interest free 147,653
Accounts payable and accrued expenses 384,889
TOTAL CURRENT LIABILITIES 1,277,637
LONG-TERM DEBT, net of current portion (Note 6):
Shareholder 330,022
Other 52,891
MINORITY INTEREST (Note 6) 0
COMMITMENTS AND CONTINGENCIES (Note 5,7,9)
SHAREHOLDERS' DEFICIENCY: (NOTE 8)
Common stock, $.01 par value, 15,000,000 shares authorized:
Issued and outstanding, 14,711,341 shares at
June 30, 1998 $147,113
Additional Paid in capital: 4,056,744
Deficit (5,759,538)
Foreign currency translation adjustment 306,571
Total Shareholders' deficiency (1,249,110)
$411,440
See notes to consolidated financial statements.
F-3
<PAGE>8
TECHNICAL VENTURES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended June 30,
1998 1997
NET SALES $1,185,091 $1,414,062
COST OF SALES 984,899 1,229,902
GROSS MARGIN 200,192 184,160
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Administration 146,789 137,373
Financial
Interest & Other 106,801 119,456
Research & Development 94,874 82,225
Selling 71,790 61,949
Gain From Disposal (3,486)
416,768 401,003
LOSS BEFORE INCOME TAX RECOVERY & GAIN
ON TRANSFER OF TECHNOLOGY RIGHTS (216,576) (216,843)
Gain From Transfer of Technology Rights 693,415
INCOME AFTER GAIN ON TRANSFER OF TECHNOLOGY RIGHTS 476,839
Income Tax Recovery 42,755 20,521
NET INCOME [LOSS] $519,594 ($216,843)
NET INCOME [LOSS] PER COMMON SHARE $0.04 ($0.01)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 14,676,752 14,586,341
See notes to consolidated financial statements.
F-4
<PAGE>9
<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
<S> <C> <C> <C> <C> <C>
Common Stock Additional Cumulative
Issued and Outstanding Paid In Translation
Shares Amount Capital Deficit Adjustment
Year Ended June 30, 1997:
Balance, beginning of year 14,586,341 $145,863 $4,048,994 ($6,082,810) $199,256
Net Loss (196,322)
Cumulative Translation Adjustment 22,709
Balance, end of year 14,586,341 $145,863 $4,048,994 ($6,279,132) $221,844
Year Ended June 30, 1998
Issued In Exchange For Services 125,000 1,250 7,750
Net Income $519,594
Cumulative Translation Adjustment $84,727
Balance, end of year 14,711,341 $147,113 $4,056,744 ($5,759,538) $306,571
See notes to consolidated financial statements
F-5
</TABLE>
<PAGE>10
TECHNICAL VENTURES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended June 30, 1988 1997
1998 1997
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income [Loss] $519,594 ($196,322)
Adjustment to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 10,874 33,832
Gain On Transfer of Technology Rights (682,278)
Issue of Stock For Services 8,999
Net Change in non-cash operating assets
and liabilities (53,749) 107,070
Net Cash used by operating activities (196,560) (55,420)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property & Equipment Acquisition (8,035) (2,586)
Net cash used by Investing Activities (8,035) (2,586)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (repayment of) loans,
notes and advances:
Bank Note (14,692) (5,152)
Line of Credit (11,150) (33,686)
Long-term debt 32,576 20,310
Private lenders 81,298 36,221
Shareholders 121,483 51,615
Net Cash Provided by Financing Activities 209,515 69,308
EFFECT OF EXCHANGE RATE ON CASH (11,088) 4,918
Change in Cash Balance for the year ($6,168) $16,220
Cash Balance:
Beginning of year 23,772 7,552
End of Year $17,605 $23,772
See notes to condensed consolidated financial statements.
F-6
<PAGE>11
TECHNICAL VENTURES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
SUPPLEMENTARY CASH FLOW INFORMATION
Year Ended June 30,
1998 1997
Non-Cash Financing and Investing Activities:
Payments made during the year for interest $15,203 $19,751
$15,203 $19,751
Net change in non-cash operating assets and liabilities:
Decreases (increases) in operating assets
and increases (decreases) in operating
liabilities:
Accounts Receivable $38,765 ($57,025)
Inventory (610) 34,940
Other assets (16,477) (6,813)
Accounts Payable and accrued expenses (75,427) 135,968
($53,749) $107,070
$107,070 ($118,131)
See notes to condensed consolidated financial statements.
F-7
<PAGE>12
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Summary of significant accounting policies:
Principals of Consolidation:
The consolidated financial statements include the accounts of Technical
Ventures Inc.("the Company") and its majority-owned subsidiaries, Mortile
Industries Ltd. ("Mortile"),Fam Tile Restoration Services Ltd. and MPI Perlite
Ltd. All material intercompany transactions and balances have been eliminated.
Organization and Operations:
Mortile, a Canadian corporation, which was organized on February 12,1985, is
involved primarily in the development and manufacture of plastic compounds.
On April 14, 1986, the Company acquired all of the issued and outstanding
shares of common stock of Mortile.
Inventory:
Inventory is stated at the lower of cost or market. Cost is determined by the
first-in, first out method.
Property and Equipment:
Property and equipment are recorded at cost and are depreciated or amortized
over their estimated useful lives or related lease terms using the straight
line and accelerated methods.
Investment Tax Credits:
Refundable foreign investment tax credits related to research and development
activities are recognized as income in the year they are received.
Income [Loss] Per Share:
Income per share is computed based on the weighted average number of common
shares outstanding during the period.
Convertible debt was not considered in the computation as the effect on
earnings per share would be anti-dilutive.
Intangible Assets:
Cost of intangible assets are being amortized using the straight-line method
over periods ranging from 5 to 17 years.
F-8
<PAGE>13
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates
Foreign Currency Translation:
The financial statements of Canadian subsidiaries have been translated into
US. dollars as follows:
(a) Assets and Liabilities at the rate of exchange in effect at the balance
sheet date.
(b) Revenues and expenses at the average exchange rate during the period.
Exchange gains or losses arising from the translation are deferred and
included as a separate component of shareholders' equity (deficiency).
All amounts presented in these financial statements are expressed in US.
dollars unless otherwise stated.
Fair Value Presentation
The Company has financial instruments, none of which are held for trading
purposes. The Company estimates that the fair value of all financial
instruments at June 30, 1998, does not differ materially from the aggregate
carrying values of its financial instruments recorded in the accompanying
balance sheet. The estimated fair value amounts have been determined by the
Company using available market information and appropriate valuation
methodologies. Considerable judgement is necessarily required in
interpreting market data to develop the estimates of fair value accordingly,
the estimates are not necessarily indicative of the amounts that the Company
could realize in a current market exchange.
F-9
<PAGE>14
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Inventory:
Inventory at June 30,1998 is comprised entirely of raw materials inventory.
Note 3 - Property and Equipment:
Property and equipment at June 30,1998 is comprised as follows:
Equipment:
Under Capitalized Leasing Arrangements $204,981
Other 442,819
Furniture & Fixtures 35,341
Leasehold Improvements 4,208
687,349
Less Accumulated Depreciation & Amortization 510,118
$177,231
Note 4 - Foreign Operations:
The following table summarizes certain information regarding the Company's US.
and Canadian operations:
U.S. Canadian Consolidated
Year Ended June 30, 1998
Revenue from unaffiliated customers $ 1,185,091 $ 1,185,091
Loss From Operations $(46,220) $ 565,814 $ 519,594
Identifiable assets at end of year $411,440 $411,440
Year Ended June 30, 1997
Revenue from unaffiliated customers $ 1,414,062 $ 1,414,062
Income (Loss) From Operations $(40,178) $ (156,144) $ (196,322)
Identifiable assets at end of year $505,776 $505,776
F-10
<PAGE>15
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 - Income Taxes:
During the year ended June 30,1998, the Company received $19,681 (Canadian)
resulting from research and development refundable tax credit claims filed for
the year ended June 30,1996. A claim for approximately $34,000 (Canadian)
had been submitted for 1997, the Company having received notice from the tax
department that the claim had been approved and the amount would be remitted
shortly, the approved amount has been recognized as income tax recovery in
fiscal 1998. A claim for approximately $35,000 (Canadian) will be filed for
1998. It is anticipated that claims for 1998 will be subject to audits and
there can be no assurance that they will be honoured and if they are, the
amount of the refunds may be substantially less than the claim amounts.
Recovery of Income taxes for the year ended June 30,1998 consists entirely of
a current recovery of Canadian income taxes resulting from a reduction in the
Company's deferred tax asset valuation allowance. The aforementioned tax
refund was the primary factor contributing to the decrease in the valuation
allowance.
The following is a summary of the tax effects of significant temporary
differences which comprise the Company's deferred tax asset at June 30, 1998:
US Federal State & Local Foreign(1)
Loss Carry Forwards $306,000 $81,000 $664,840
Credit Carry Forwards:
Non Refundable Credits 61,903
Refundable credits 35,000
Depreciation and amortization
Valuation allowance (306,000) (81,000) (761,743)
$0 $0 $0
Aggregate net operating loss carry forwards and tax credit carry forwards and
their expirations are summarized as follows:
Net Operating Loss Carry Forward
Expiring June 30, US Federal State & Local Foreign(1) Foreign Research
& Development
Tax Credits(1)
1999 $ 80,105 $56,073
2000 229,975 2,932
2001 3,000 3,000 232,155
2002 225,000 225,000 1,218
2003 21,000 21,000 39,642 1,680
Thereafter 651,000 649,000 82,963
TOTAL $900,000 $898,000 $ 664,840 $ 61,903
(1) Converted to US dollars based on conversion rate at June 30, 1998.
F-11
<PAGE>16
<TABLE>
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<S> <C> <C> <C>
Note 6 - Long Term Debt:
At June 30, 1998, long-term debt consists of the following:
Notes & Loans
Unsecured shareholder notes, loans and other payable balances: CURRENT NON-CURRENT TOTAL
Subordinate to notes payable to Cooper Financial Corp. and
I.O.C., interest at the greater of prime or 10% $ 23,870 $23,870
Subordinate to note payable, I.O.C. :
Interest 15 % 10,230 10,230
Interest free:
Notes and loans 147,653 52,200 199,853
Accrued Interest 88,668 88,668
Accrued compensation 155,053 155,053
$147,653 $330,021 $477,674
Other:
Dow Chemical Canada, Inc. (Dow), Re-Capitalization of Line
of Credit and Accrued Interest to April 30, 1996. Payable
in monthly installments of $6,011.14 (Canadian) including
interest at a rate of 10.75% (1) $35,297 $35,297
Innovation Ontario Corp. (I.O.C.), outstanding balance of
$249,999 (Canadian) at June 30, 1995 plus $250,000 (Canadian)
received in July 1995, are payable in quarterly installments
of $30,315 (Canadian), including interest at 8% beginning
December 1995, through September 2000. At June 30, 1998
the Company was in default and the entire balance past due (2) 340,999 340,999
Liabilities Subordinate To I.O.C. Note Payable:
Unsecured loans, private investor, interest at 10% 26,736 26,736
Unsecured loans, private investor
Note payable customer, interest at prime plus 1%, repayment
based on volume of materials processed by the Company on
behalf of the customer 26,155 26,155
$ 376,296 $52,891 $429,187
Leasing Liabilities
Obligations under capitalized leasing arrangements payable
in monthly installments of:
$9,981 net of amount representing interest of $2,790, at
June 30th the Company was in default and the entire balance
past due (3); $76,993 $76,993
$297(Canadian) through September 1998, net of amount
representing interest of $11.79 (Canadian). 601 601
$77,594 $77,594
</TABLE>
F-12
<PAGE>17
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) In June, 1998 the Company reached an agreement with Dow Chemical of
Canada to repay the outstanding principal of $51,755 (Canadian) on the
Company's line of credit. This repayment, was integrated in a transfer of
technology rights to Dow Chemical of Canada and Dow Chemical which pertained
to the repayment of another of the Company's loans with Dow; the obligation
in regard of the outstanding line of credit was fulfilled in August 1998.
(2) In accordance with the I.O.C. loan provisions, I.O.C. acquired a 15%
interest in Mortile In March 1995 and an additional 15% interest in July
1995. Mortile had previously been a wholly owned subsidiary of the Company.
I.O.C. investment in Mortile is reflected in the financial statements as a
minority interest, Mortile has the option to repurchase the shares at a
price equal to the amount of the original loan principal times 1.02, times
the number of months the debt is outstanding (but not less than 12), less the
amount of principal and interest payments made by Mortile to I.O.C. This
repurchase option expired in March 1997 and the Company failed to exercise
this option. The Company has been unable to meet payments in respect of this
loan. Accordingly the outstanding balance at June 30,1998 is reflected as
a current liability in these financial statements. The I.O.C. note is
collateralized by all previously unsecured assets of the Company.
Negotiations are currently underway to eliminate this loan by means of paying
the loan accrued interest in full, or, in exchange for an equity position in
the Company.
(3) At June 30, 1998, the Company was in default on this capital lease
arrangement and the entire balance was past due. Although the lessor has not
called the lease, it is payable on demand. Accordingly the outstanding
balance at June 30, 1998, is reflected in these financial statements as a
current liability.
F-13
<PAGE>18
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 6 - Long-term debt: (continued)
Long-Term debt matures as follows:
Year Ending June 30, Shareholders Other Total
1999 $376,296 $376,296
After 2003 330,022 52,891 382,913
$330,022 $429,187 $759,209
The Company's obligations under capitalized leasing arrangements are payable
in fiscal 1999.
Payments of long-term debt and capitalized lease obligations under agreements
expressed in Canadian dollars, have been converted to U.S. dollars based on
the exchange rate at June 30,1998.
F-14
<PAGE>19
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Going concern:
The Company has sustained significant operating losses since its inception
and there is doubt as to the Company's ability to continue as a going
concern. The Company's continued existence is dependent upon its ability to
generate sufficient cash flow to meet its obligations on a timely basis. It
is not expected that cash flows from operations in the immediate future will
be sufficient to meet the Company's requirements. As a result the Company is
in need of additional financing. Liquidation value of the Company's assets
approximate carrying value. Accordingly, no adjustment has been made to the
value of the Company's assets in consideration of its financial condition.
With expected increases in sales levels in the next fiscal year, it is
anticipated that cash flows required to fund operations will be reduced.
A Canadian income tax claim for approximately $34,000 (Canadian) was submitted
for the fiscal year 1997, additionally a claim for fiscal 1998 will be
submitted for approximately $35,000 (Canadian). Tax claims for 1997 have
been accepted by the federal tax department and notice of payment has been
received in the amount of $26,000 (Canadian). This amount, therefore, has
been accounted for in the month of June 1998. The provincial portion of this
claim remains in audit with that tax department and has not been accounted for
in June 1998. The provincial portion of the claim approximates a further
$8,000 (Canadian). Even if the tax claims are accepted and the funds are
received, they would only be sufficient to satisfy the Company's immediate
cash flow requirements and are not sufficient for the Company to sustain it's
operations and meet current debt service requirements. Accordingly additional
sources of funds are necessary. The Company continues to assess completing a
private or public stock offering. In order for the Company to raise
significant funds through the sale of common stock, stock purchase warrants or
convertible securities, the number of authorized common shares must be
increased. Therefore a special meeting of shareholders was held July 22, 1998
for the purpose of amending the Corporation's New York State, Certificate of
Incorporation. All of the amendments passed; one of which increased the
authorized issue of shares from fifteen million to fifty million common shares.
This amendment will enable the Corporation to act on obtaining funding through
private or public stock offering[s].
F-15
<PAGE>20
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8 - Shareholders' deficiency:
Restricted Common Shares reserved for convertible debt and stock purchase
options:
For convertible debt 50,000
For common stock purchase options at:
$.50 per share; without expiration 50,000
100,000
Note 9 - Leases:
At June 30, 1998, under a real property lease classified as an operating
lease which expires in March 1999 and June 1999, the Company's future minimum
rental payments (excluding real estate taxes) are $32,303. In July 1997 the
Company doubled its existing facility to accomodate a European Specialty
Compounding client. Minimum rental payments in foreign currency have been
converted into US dollars using the exchange rate at June 30, 1998.
Rent expense was $58,061 and $46,833 for 1998 and 1997 respectively.
Note 10 - Loans and Advances At June 30,1998:
Private Investors:
Equipment financing:
Interest at 10% $11,833
Unsecured Demand Loans:
Interest Free 85,000
Interest at 10%, convertible in 50,000
shares of common stock 25,000
Interest at 15% 48,835
$170,668
F-16
<PAGE>21
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11 - Note Payable Financial Institution
At June 30,1998 the Company had a note payable balance of $120,538 due on
demand to Cooper Financial Corp. This obligation, which had previously been
payable to the Federal Deposit Insurance Corporation, as receiver for another
financial institution, is guaranteed by a shareholder of the Company.
At June 30, 1997, the Company had received tentative agreement from Cooper
Financial of their willingness to refinance the promissory note. The new
payment schedule of the note is based on 57 months at a fixed interest rate
of 10 %. A re-financing charge was assessed increasing the principal to
$143,000 US at July 1,1997.
The term of the new promissory note is 24 months, with a balloon payment of
$91,207.97 due June 30, 1999.
The note is shown as a current liability on the Company balance sheet at
June 30, 1998. The Company is current with it's obligation under this new
agreement.
Note 12 - Major Customers:
One customer accounted for 41% and 51% of the Company's consolidated revenues
for fiscal 1998 and 1997, respectively. Another customer accounted for 18%
and 44% of consolidated revenues for these respective periods. A new
customer accounted for 16% of consolidated revenues for fiscal 1998.
The loss of one or more of these customers would have a detrimental effect on
the Company's operating results.
Note 13 - Forward Looking Statements:
This Form 10-KSB contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21B of the Securities
Exchange Act of 1934. The Company's actual results could differ materially
from those set forth in the forward looking statements.
F-17
<PAGE>22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TECHNICAL VENTURES INC.
Dated: October 13,1998 By:/s/Frank Mortimer
Frank Mortimer, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Dated: October 13,1998 By:/s/Frank Mortimer
Frank Mortimer, President
Principal Executive Officer
and Director
Dated: October 13,1998 By:/s/Bryan Carter
Bryan Carter,
Vice President, Director
Dated: October 13,1998 By:/s/Larry Leverton
Larry Leverton, Secretary
Treasurer and Principal
Accounting Officer and
Director
-22-
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE BALANCE SHEET AND INCOME STATEMENT INCLUDED IN PART II, ITEM 7 OF
THE REGISTRANT'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
JUNE 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 17,605
<SECURITIES> 0
<RECEIVABLES> 118,140
<ALLOWANCES> 0
<INVENTORY> 34,663
<CURRENT-ASSETS> 233,244
<PP&E> 687,349
<DEPRECIATION> 510,118
<TOTAL-ASSETS> 411,440
<CURRENT-LIABILITIES> 1,277,637
<BONDS> 0
<COMMON> 147,113
0
0
<OTHER-SE> (1,249,110)
<TOTAL-LIABILITY-AND-EQUITY> 411,440
<SALES> 1,185,091
<TOTAL-REVENUES> 1,185,091
<CGS> 984,899
<TOTAL-COSTS> 984,899
<OTHER-EXPENSES> 416,768
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 106,801
<INCOME-PRETAX> (216,576)
<INCOME-TAX> 42,755
<INCOME-CONTINUING> (173,821)
<DISCONTINUED> 0
<EXTRAORDINARY> 693,415
<CHANGES> 0
<NET-INCOME> 519,594
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
