<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.. 20549
FORM 10-KSB A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1997
[ ] 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, $1,414,062
The appropriate aggregate market value of the voting stock of the Registrant
held by non-affiliates of the Registrant as of September 30, 1997 (based upon
the average bid and asked prices as reported by the National Association of
Securities Dealers Automatic Quotation System) was approximately $1,997,201.
The number of shares outstanding of the Registrant's common stock, as of June
30, 1997 is 14,586,341.
Exhibit index is located on page 12 of this Annual Report on Form 10-KSB.
Page 1 of 20
<PAGE>2
FORM 10-KSB A
Fiscal Year Ended June 30, 1997
ITEM Table of Contents PAGE
PART IV
Item 13. Exhibits, Financial Statement Schedules and F1 - F17
Reports on Form 8K
Signatures 20
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<PAGE>3
TECHNICAL VENTURES INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1997
<PAGE>4
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, 1997 F-3
Statement of Operations:
Years ended June 30, 1997 and 1996 F-4
Statement of Changes in Shareholders' Deficiency:
Years ended June 30, 1997 and 1996 F-5
Statement of Cash Flows:
Years ended June 30, 1997 and 1996 F-6 & F-7
Notes to Consolidated Financial Statements F-8 - F-17
F-1
<PAGE>5
Schwartz Levitsky Feldman
Chartered Accountants
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stocholders of
Technical Ventures Inc.
We have audited the acompanying consolidated balance sheets of Technical
Ventures Inc. as of June 30, 1997 and 1996 and the related consolidated
statements of income, cash flows and changes in stockholders' equity for the
years ended June 30, 1997 and 1996. 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, 1997 and 1996 and the results of its operations
and its cash flows for the years ended June 30, 1997 and 1996, in conformity
with generally accepted accounting principles in the United States of America.
Toronto, Ontario Schwartz Levitsky Feldman
Chartered Accountants
F-2
<PAGE>6
TECHNICAL VENTURES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30
1997
ASSETS Audited
CURRENT ASSETS
Cash $23,772
Accounts Receivable 166,660
Inventory (Note 2) 36,170
Other Current Assets
Advances 38,374
Deposits 10,866
TOTAL CURRENT ASSETS 275,841
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation of $520,622 at June 30, 1997
(Note 3,6,10) 200,925
INTANGIBLE ASSETS, net of accumulated amortization of
$15,098 at June 30, 1997 29,009
$505,776
LIABILITIES AND STOCK HOLDERS DEFICIENCY
CURRENT LIABILITIES
Current Portion of long term debt (Note 6):
Notes Payable $135,230
Capital lease obligations 79,638
Other 1,146,569
Loans & advances:
Private Lenders (Note 10) 109,203
Shareholders, unsecured interest free 23,543
Accounts payable and accrued expenses 484,955
TOTAL CURRENT LIABILITIES 1,979,138
LONG-TERM DEBT, net of current portion (Note 6,10 & 11):
Shareholder 337,407
Capital lease obligations 480
Other 51,181
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, 14,586,341 shares at
June 30, 1996 $145,863
Additional Paid in capital: 4,048,994
Deficit (6,279,132)
Foreign currency translation adjustment 221,844
Total Shareholders' deficiency (1,862,431)
$505,776
See notes to consolidated financial statements.
Information with respect to the June 30, 1997 Balance Sheet is audited
F-3
<PAGE>7
TECHNICAL VENTURES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Year Ended June30,
1997 1996
Audited Audited
NET SALES $1,414,062 $1,504,339
COST OF SALES 1,229,902 1,273,337
GROSS MARGIN 184,160 231,002
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Administration 137,373 145,899
Financial
Interest & Other 119,456 136,080
Research & Development 82,225 62,523
Selling 61,949 53,776
401,003 398,278
LOSS BEFORE INCOME TAX RECOVERY (216,843) (167,275)
INCOME TAX RECOVERY 20,521 40,139
NET LOSS ($196,322) ($127,137)
NET LOSS PER COMMON SHARE ($0.01) ($0.01)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 14,586,341 14,586,341
Information with respect to the June 30, 1997 AND 1996 Statement of
Operations, is audited
See notes to consolidated financial statements.
F-4
<PAGE>8
<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
AUDITED
<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 ($5,955,673) $206,965
Net Profit (127,137)
Cumulative Translation Adjustment (7,709)
Balance, end of year 14,586,341 $145,863 $4,048,994 ($6,082,810) $199,256
Year Ended June 30, 1996
Net Loss ($196,322)
Cumulative Translation Adjustment $22,588
Balance, end of year 14,586,341 $145,863 $4,048,994 ($6,279,132) $221,844
See notes to consolidated financial statements
Information with respect to the June 30, 1997 and 1996 financial statements are audited
F-5
</TABLE>
<PAGE>9
TECHNICAL VENTURES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended June 30,
1997 1996
Audited Audited
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss ($196,322) ($127,136)
Adjustment to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 33,832 55,580
Net Change in non-cash operating assets
and liabilities (107,070) (118,131)
Net Cash used by operating activities (55,420) (189,687)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property & Equipment Acquisition (2,586) (554)
Net cash used by Investing Activities (2,586) (554)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (repayment of) loans,
notes and advances:
Bank Note (5,152) (3,797)
Line of Credit (33,686) 18,403
Long-term debt 20,310 180,385
Private lenders 36,221 (16,848)
Shareholders 51,615 16,705
Net Cash Provided by Financing Activities 69,308 194,488
EFFECT OF EXCHANGE RATE ON CASH 4,918 825
Change in Cash Balance for the year $16,220 $ 5,072
Cash Balance:
Beginning of year 7,552 2,480
End of Year $23,772 $7,552
Information with respect to the June 30, 1997 and 1996 financial statements
is audited.
See notes to condensed consolidated financial statements.
F-6
<PAGE>10
TECHNICAL VENTURES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
SUPPLEMENTARY CASH FLOW INFORMATION
Year Ended June 30,
1997 1996
Audited Audited
Non-Cash Financing and Investing Activities:
Liabilities re-classified as long term debt (Note 11)
Dow Credit Line $65,997
Accrued Interest:
Dow Credit Line 25,256
$0 $91,253
Payments made during the year for interest $19,751 $5,298
Net change in non-cash operating assets and liabilities:
Decreases (increases) in operating assets
and increases (decreases) in operating
liabilities:
Accounts Receivable ($57,025) ($1,298)
Inventory 34,940 1,526
Other assets (6,813) (5,741)
Accounts Payable and accrued expenses 135,968 (112,618)
$107,070 ($118,131)
$107,070 ($118,131)
Information with respect to the June 30, 1997 and 1996 financial statements
is audited.
See notes to condensed consolidated financial statements.
F-7
<PAGE>11
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.
Loss Per Share:
Loss per share is computed based on the average number of common shares
outstanding during the period.
Outstanding warrants and convertible debt were not considered in the
computation as their 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>12
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, 1997, 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>13
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Inventory:
Inventory at June 30, 1997 is comprised entirely of raw materials inventory.
Note 3 - Property and Equipment:
Property and equipment at June 30,1997 is comprised as follows:
Equipment:
Under Capitalized Leasing Arrangements $261,022
Other 415,614
Furniture & Fixtures 41,528
Leasehold Improvements 3,383
721,547
Less Accumulated Depreciation & Amortization 520,622
$200,925
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, 1997
Revenue from unaffiliated customers $ 1,414,062 $ 1,414,062
Loss From Operations $(40,178) $ (156,144) $ (196,322)
Identifiable assets at end of year $505,776 $505,776
Year Ended June 30, 1996
Revenue from unaffiliated customers $ 1,504,339 $ 1,504,339
Income (Loss) From Operations $(36,743) $ (90,394) $ (127,137)
Identifiable assets at end of year $497,855 $497,855
F-10
<PAGE>14
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 - Income Taxes:
During the year ended June 30, 1997, the Company received $24,439 (Canadian)
resulting from research and development refundable tax credit claims filed for
the year ended June 30, 1995. A claim for approximately $19,490 (Canadian)
has been submitted for 1996 and that a claim for approximately $30,000
(Canadian) will be filed for 1997. It is anticipated that claims for 1996
and 1997 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, 1997 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, 1997:
US Federal State & Local Foreign(1)
Loss Carryforwards $290,000 $77,000 $504,639
Credit Carry Forwards:
Refundable credits 190,582
Non Refundable credits 35,725
Depreciation and amortization 0
Valuation allowance (290,000) (77,000) (730,946)
$0 $0 $0
Aggregate net operating loss carryforwards and tax credit carryforwards and
their expirations are summarized as follows:
Net Operating Loss Carryforward
Expiring June 30, US Federal State & Local Foreign(1) Foreign Research
& Development
Tax Credits(1)
1998 $0 $0 $347,596 $64,093
1999 235,638 66,786
2000 415,357 3,492
2001 3,000 3,000 273,912
2002 225,000 225,000 276,510 1,079
Thereafter 626,000 624,000 221,072 2,002
TOTAL $854,000 $852,000 $1,770,085 $137,452
(1) Converted to US dollars based on conversion rate at June 30, 1997
F-11
<PAGE>15
<TABLE>
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<S> <C> <C> <C>
Note 6 - Long Term Debt:
At June 30, 1997, 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% $ 25,354 $25,354
Subordinate to note payable, I.O.C. :
Interest 15 % 10,866 10,866
Interest free:
Notes and loans 52,900 52,900
Accrued Interest 83,594 83,594
Accrued compensation 164,692 164,692
$0 $337,407 $337,407
Other:
Dow Chemical Canada, Inc. (Dow), Interest at prime plus 2%,
payable in (2) installments of $25,490 (Canadian), thereafter
in monthly installments of $19,657 (Canadian) through March
1999, at which time the entire unpaid balance becomes due.
At June 30, 1996 the Company was in default and the entire
balance past due (1). $735,035 $735,035
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% (4) 49,334 49,334
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
December1995, through September 2000. At June 30, 1996
the Company was in default and the entire balance past due (2) 362,199 362,199
Liabilities Subordinate To I.O.C. Note Payable:
Unsecured loans, private investor, interest at 10% 18,583 18,583
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 32,598 32,598
$1,146,569 $51,181 $1,197,750
Leasing Liabilities
Obligations under capitalized leasing arrangements payable
in monthly installments of:
$9,981 net of amount representing interest of $4,241, at
June 30th the Company was in default and the entire balance
past due (3); $77,052 $77,052
$297(Canadian) through September 1998, net of amount
representing interest of $704 (Canadian). 2,586 480 3,066
$79,638 $ 480 $80,118
</TABLE>
F-12
<PAGE>16
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) During the current fiscal year the Company was unable to meet payments on
it's refinanced consolidated note and corresponding accrued interest with
Dow. Accordingly the outstanding balance at June 30, 1997 is reflected as a
current liability in these financial statements. Negotiations with Dow are
taking place in which it is hoped that agreement can be reached in the second
quarter of fiscal 1998. These negotiations are towards a settlement which may
eliminate all or part of the Company's obligation to repay this debt. However
the Company may have to grant Dow a fully paid up license to practice the
technology. Payment fee for this license was to be completed through the
payment of royalty payments to the Company within the terms of the license
agreement.
(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, 1997 is reflected as
a current liability in these financial statements. Through ongoing
discussions with I.O.C., the Company feels that I.O.C. is amenable to not
demanding the loan be paid and to the Company's re-purchase of the Mortile
interest.
(3) At June 30, 1997, 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, 1997, is reflected in these financial statements as a
current liability.
(4) In May, 1996 the Company reached an agreement with Dow Chemical of
Canada to recapitalize the outstanding principal of $90,000 (Canadian) and
accrued interest of $34,442 (Canadian) on the Company's line of credit.
Additionally, the new debt instrument bears interest of 10.75%. Monthly
payments of $6,011.14 commenced in May 1996 and are payable through March
1998. The Company is current with payments to June 1997 under the new
arrangements. Negotiations currently taking place with Dow encompass this
arrangement as well and Dow Chemical has not demanded the payments be
brought to date nor demanded the loan be paid.
Both the Dow and I.O.C. notes are collateralized by all previously unsecured
assets of the Company. The I.O.C. collateral position is subordinate to
that of Dow.
F-13
<PAGE>17
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
1998 $1,000,468 $1,000,468
2002 337,407 18,583 355,990
$337,407 $1,019,051 $1,356,458
The Company's obligations under capitalized leasing arrangements are payable
as follows:
Year Ended June 30,
1998 $ 82,430
1999 645
$ 83,075
Less amount representing interest 2,957
$ 80,118
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 30,1997.
F-14
<PAGE>18
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 $19,490 (Canadian) has been
submitted for the fiscal year 1996, additionally a claim for fiscal 1997 will
be submitted for approximately $30,000 (Canadian). Even if these 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 or the number of issued and
outstanding shares must be decreased. Either of the actions would require
approval of the majority of the Company's stockholders. Management is
confident such approval can be obtained if necessary.
F-15
<PAGE>19
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, 1997, under a real property lease classified as an operating
lease which expires in March and June 1998, the Company's future minimum
rental payments (excluding real estate taxes) are $65,880. 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, 1997.
Rent expense was $46,833 and $42,367 for 1997 and 1996 respectively.
Note 10 - Loans and Advances At June 30, 1997:
Private Investors:
Equipment financing:
Interest at 10% $12,568
Unsecured Demand Loans:
Interest Free 25,000
Interest at 10%, convertible in 50,000
shares of common stock 25,000
Interest at 15% 46,635
$109,283
F-16
<PAGE>20
TECHNICAL VENTURES INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11 - Note Payable Financial Institution
At June 30, 1997 the Company had a note payable balance of $135,230 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 was in default of the loan provisions, however,
the Company has been maintaining monthly payments of $2,500 US representing
current interest charges. A portion of this monthly payment is now being
credited to the loan principal and as such the outstanding principal balance
reflects the amount which has been paid against outstanding principal during
fiscal 1997.
In June 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 long term liability on the Company balance sheet at
June 30, 1997. The Company is current with it's obligation under this new
agreement.
Note 12 - Major Customers:
One customer accounted for 51% and 67% of the Company's consolidated revenues
for fiscal 1997 and 1996, respectively. Another customer accounted for 44%
and 19% of consolidated revenues for these respective periods. The loss of
either 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>21
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: May 27, 1998 By: 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: May 27, 1998 By: Frank Mortimer
Frank Mortimer, President,
Principal Executive Officer and
Director
Dated: May 27, 1998 By: Bryan Carter
Bryan Carter, Vice President
Director
Dated: May 27, 1998 By: Larry Leverton
Larry Leverton, Secretary
Treasurer and Principal
Accounting Officer and Director
-20-
<PAGE>22
<TABLE> <S> <C>
<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 A FOR THE YEAR ENDED
JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 23,772
<SECURITIES> 0
<RECEIVABLES> 166,660
<ALLOWANCES> 0
<INVENTORY> 36,170
<CURRENT-ASSETS> 275,841
<PP&E> 721,547
<DEPRECIATION> 520,622
<TOTAL-ASSETS> 505,776
<CURRENT-LIABILITIES> 1,979,138
<BONDS> 0
<COMMON> 145,863
0
0
<OTHER-SE> (1,862,431)
<TOTAL-LIABILITY-AND-EQUITY> 505,776
<SALES> 1,414,062
<TOTAL-REVENUES> 1,414,062
<CGS> 1,229,902
<TOTAL-COSTS> 1,229,902
<OTHER-EXPENSES> 401,003
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 119,456
<INCOME-PRETAX> (216,843)
<INCOME-TAX> (20,521)
<INCOME-CONTINUING> (196,322)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (196,322)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
