<PAGE>1
Form 10 -QSB A1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
Commission File Number 33-2775-A
TECHNICAL VENTURES INC.
_____________________________________________________________________________
(Exact Name of small business issuer as specified in its charter)
New York 13-3296819
_____________________________________________________________________________
(State or other jurisdiction of (I.R.S Employer
incorporation of organization) identification No.)
3411 McNicoll Avenue, Unit 11, Scarborough, Ontario, Canada M1V 2V6
____________________________________________________________________________
(Address of Principal Executive Offices, Zip Code)
Issuer's Telephone Number, Including Area Code (416) 299-9280
______________________________________________________________________________
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last
Report)
Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities 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
Indicate the number of shares outstanding for each of the issuer's classes of
common stock, as of September 30, 1999.
23,248,011 shares of common stock, $.01 par value
______________________________________________________________________________
Page 1 of 11 Pages
<PAGE>2
TECHNICAL VENTUES INC.
FORM 10-QSB A
Fiscal Quarter Ended September 30, 1999
The Registrant is filing this amendment for the purpose of addressing certain
deficiencies in its financial statements included in Report 10 QSB, filed for
the financial quarter ending September 30, 1999.
The purpose of this amendment is to submit revised consolidated financial
statements.
The Registrant would ask that the reader refer to Note 1 of the Revised
Consolidated Financial Statements, which gives in more detail, the reasons
for revision of these financial statements.
(2)
<PAGE>3
TECHNICAL VENTURES INC. AND SUBSIDIARIES
REVISED CONSOLIDATED BALANCE SHEETS
September 30 September 30
1999 1998
NOT AUDITED NOT AUDITED
ASSETS
CURRENT ASSETS
Cash $10,368
Accounts Receivable $146,590 65,680
Inventory (Note 2) 40,982 37,510
TOTAL CURRENT ASSETS 187,572 113,558
OTHER ASSETS
Advances To Shareholders 62,319 36,407
Deposits 13,607 10,902
Prepaid Expenses 6,346 704
PROPERTY AND EQUIPMENT, at cost, net of
accumlated depreciation of $498,846 at
Sept. 30,1999 and $449,943 at
Sept. 30, 1998 147,148 162,496
INTANGIBLE ASSETS, net of accumulated
amortization of $5,517 at Sept. 30, 1999
and $4,979 at Sept. 30, 1998 563 847
TOTAL ASSETS $417,556 $324,914
<PAGE>4
TECHNICAL VENTURES INC. AND SUBSIDIARIES
REVISED CONSOLIDATED BALANCE SHEETS
September 30 September 30
1999 1998
NOT AUDITED NOT AUDITED
LIABILITIES
CURRENT LIABILITIES
Bank Overdraft $5,527
Accounts payable and accrued expenses 384,003 $286,276
Current Portion Of Notes Payable 370,773 440,597
Capital lease obligations 77,052 77,052
Notes From Private Lenders 61,824 101,339
Current Portion of Loans From
Shareholders, Unsecured, Interest free. 183,923 172,745
TOTAL CURRENT LIABILITIES 1,083,102 1,078,008
LONG-TERM LIABILITIES, net of current
portion:
Convertible Debentures 220,490
Notes Payable 61,256
Shareholders 307,232 299,304
Other 26,717 47,692
615,695 346,996
MINORITY INTEREST 0 0
STOCKHOLDERS' DEFICIENCY
Common stock, $.01 par value, 50,000,000
shares authorized:
Issued and outstanding, 23,248,011 at
September 30, 1999 and 19,798,011 shares
at September 30, 1998 $232,480 $197,980
Additional Paid in capital: 4,881,294 4,485,140
^
ACCUMULATED OTHER COMPREHENSIVE INCOME 313,757 347,256
Deficit (6,708,772) (6,130,466)
Total Shareholders' deficiency (1,281,241) (1,100,090)
$417,556 $324,914
See Notes To Condensed Consolidated Financial Statements
(3)
<PAGE>5
TECHNICAL VENTURES INC. AND SUBSIDIARIES
REVISED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(NOT AUDITED)
THREE MONTHS ENDED
SEPTEMBER
1999 1998
SALES $288,411 $240,990
COST OF SALES 237,554 186,389
GROSS MARGIN 50,857 54,601
EXPENSES
Administration 43,838 39,090
Interest And Other 21,904 20,694
Research & Development 17,104 21,936
Selling 33,963 17,194
TOTAL GENERAL EXPENSES 116,810 98,914
LOSS BEFORE THE UNDERNOTED (65,953) (44,313)
Compensation and Finance Charges 180,338 326,830
Contingent Related Legal Expense 74,353
LOSS BEFORE INCOME TAX RECOVERY (320,644) (371,143)
Income Tax Recovery 215
NET INCOME (LOSS) (320,644) (370,928)
BASIC INCOME (LOSS) PER COMMON SHARE ($0.01) ($0.02)
FULLY DILUTED INCOME (LOSS) PER COMMON SHARE ($0.01) ($0.02)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING FOR THE PERIOD 22,734,424 15,512,864
See notes to condensed consolidated financial statements.
(4)
<PAGE>6
<TABLE>
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
(Amounts Expressed In U.S. Dollars)
Not Audited
<S> <C> <C> <C> <C> <C>
Common Stock Additional Cumulativ
Issued and Outstanding Paid In Translati
Shares Amount Capital Deficit Adjustmen
$ $ $ $
Balance, June 30, 1998 14,711,341 147,113 4,056,744 (5,759,538) 306,571
Issued In Exchange For Services 2,900,000 29,000 229,823
Issued For Cash 66,670 667 9,333
Issued For Debt Reduction 2,120,000 21,200 189,240
Net Loss (370,928)
Cumulative Translation Adjustment 40,685
Balance, September 30, 1998 19,798,011 197,980 4,485,140 (6,130,466) 347,256
Balance June 30, 1999 22,198,011 221,980 4,702,463 (6,388,128) 313,319
Issued In Exchange For Services 1,050,000 10,500 180,338
Additional Costs For Issuance of
Convertible Debentures & Warrants (1,507)
Net Loss (320,644)
Cumulative Translation Adjustment 438
Balance, September 30, 1999 23,248,011 232,480 4,881,294 (6,708,772) 313,757
See notes to consolidated financial statements
(5)
</TABLE>
<PAGE>7
REVISED CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts Expressed in U.S. Dollars)
Not Audited
THREE MONTHS ENEDED
September 30,
1999 1998
CASH FLOW FROM OPERATING ACTIVITIES:
Net [Loss] Income ($320,644) (370,928)
Adjustment to reconcile net [loss] income
to net cash used by operating activities:
Depreciation and amortization 8,259 7,785
Compensation & Finance Charges (Note 18) 180,338 326,830
Issue of Restricted Common Stock For Services 10,500 20,201
(Increase) Decrease in accounts receivable (22,520) 47,454
(Increase) Decrease in inventory 4,029 (4,316)
Increase (Decrease) in accounts payable and
accrued expenses 100,862 (84,421)
(39,176) (57,394)
CASH FLOW FROM INVESTING ACTIVITIES:
Increase In Deposits 9,377 13,215
(Increases) Decreases In Advances
To Stockholders (110) (2,024)
Property & Equipment Acquisition 484
Proceeds From Sale of Property & Equipment
9,267 11,675
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase In Bank Overdraft 5,527
Repayments of note payable to Cooper
Financial Corp (2,298) (6,490)
Proceeds from (repayments of) note payable
to Dow Chemical Canada (33,801)
Proceeds from (repayments of) Capital
Lease Obligations 232
Proceeds from (repayment of) Other Loans
Payable (211)
Proceeds from (repayments of) Private Lenders
Proceeds from (repayments of) Stockholders' loans 16,315 33,277
Proceeds from issue of restricted common stock 46,812
Proceeds from issue of convertible debentures
and warrants, net of issuance costs (1,507)
18,269 39,587
EFFECT OF EXCHANGE RATE ON CASH (2,242) (1,104)
NET INCREASE (DECREASE) IN CASH BALANCE
FOR THE PERIOD (13,883) (7,238)
Cash Balance, begining of period 13,883 17,605
Cash Balance, end of period 0 10,368
PAYMENTS MADE DURING THE PERIOD FOR INTEREST 4,175 5,720
INCOME TAXES PAID - -
See notes to condensed consolidated financial statements.
(6)
<PAGE>8
TECHNICAL VENTURES INC. AND SUBSIDIARIES
REVISED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(NOT AUDITED)
1. REVISIONS TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements as at September 30, 1999 have been
revised in order to:
i) provide additional information to readers;
ii) reclassify financial statement amounts to provide more precise
information and better comparison with prior years.
iii) reflect the issuances of common shares at fair market value;
NOTE 2: BASIS OF PRESENTATION :
a) The accompanying condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-QSB and Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for
fair presentation have been included. Operating results for the
three months ended September 30, 1999 are not necessarily indicative
of the results that may be expected for the year ended June 30, 2000.
For further information refer to the financial statements and
footnotes thereto included in the Company's annual report on form
10-KSB for the year ended June 30, 1999.
b) Foreign Currency Translation:
Mortile maintains its books and records in Canadian dollars. Foreign
currency transactions are reflected using the temporal method. Under
this method, all monetary items are translated into Canadian funds at
the rate of exchange prevailing at balance sheet date. Non-monetary
items are translated at historical rates. Income and expenses are
translated at the rate in effect on the transaction dates.
Transaction gains and losses are included in the determination of
earnings for the year.
(7)
<PAGE>9
TECHNICAL VENTURES INC. AND SUBSIDIARIES
REVISED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(NOT AUDITED)
The translation of the financial statements of the subsidiary from
Canadian dollars into United States dollars is performed for the
convenience of the reader. Balance sheet accounts are translated
using closing exchange rates in effect at the balance sheet date and
income and expense accounts are translated using an average exchange
rate prevailing during each reporting period. No representation is
made that the Canadian dollar amounts could have been or could be
realized at the conversion rates. Adjustments resulting from the
translation are included in the accumulated other comprehensive
income in stockholders' deficiency.
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.
c) 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, 1999, 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, and accordingly, the estimates
are not necessarily indicative of the amounts that the Company could
realize in a current market exchange.
d) Net Income Per Share:
Basic income per share is computed based on the average number of
common shares outstanding during the year.
Diluted income per share reflects the potential dilution that could
occur if securities, or other contracts to issue common stock, were
exercised or converted into common stock or resulted in the issuance
of common stock that then shared in the income of the company. Such
securities or contracts are not considered in the calculation of
diluted income per share if the effect of their exercise or
conversion would be antidilutive.
(8)
<PAGE>10
TECHNICAL VENTURES INC. AND SUBSIDIARIES
REVISED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(NOT AUDITED)
e) Stock Based Compensation:
In December 1995, SFAS No. 123, Accounting for Stock-Based
Compensation, was issued. It introduced the use of a fair
value-based method of accounting for stock-based compensation. It
encourages, but does not require, companies to recognize compensation
expense for stock-based compensation to employees based on the new
fair value accounting rules. Companies that choose not to adopt the
new rules will continue to apply the existing accounting rules
contained in Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees. However, SFAS No. 123 requires
companies that choose not to adopt the new fair value accounting
rules to disclose pro forma net income and earnings per share under
the new method. SFAS No. 123 is effective for financial statements
for fiscal years beginning after December 15, 1995. The Company has
adopted the disclosure provisions of SFAS No. 123.
NOTE 3: INVENTORY:
Inventory is comprised of the following:
September 30, 1999
Raw Materials $40,982
NOTE 4: LONG TERM DEBT:
At September 30, 1999 the Company was in default on it's notes
payable to I.O.C. and it's lease payable to FBX Holdings Inc.
Although the respective creditors have not called the obligations,
payments are due on demand and accordingly the balances are reflected
on the September 30, 1999 balance sheet as current liabilities.
NOTE 5: In August 1999 the Company refinanced it's note payable due to Cooper
Financial Corp. This obligation, is guaranteed by a shareholder of
the Company. A refinancing charge was assessed, increasing the
principal owed to $95,999 US. At September 30, 1999 the Company was
current with the new loan provisions; with a payable balance of
$91,280. The Company has been maintaining monthly payments of $3,150
Interest charged is 10% per annum calculated over a period of 35
months.
(9)
<PAGE>11
TECHNICAL VENTURES INC. AND SUBSIDIARIES
REVISED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(NOT AUDITED)
NOTE 6: Contingent Liability And Related Costs:
The Company is contingently liable under a breach of secrecy
agreements, fiduciary duty and misuse of confidential information
lawsuit. The Company's attorneys are of the opinion that the
company's defences are meritorious and the lawsuit will result in no
material losses. Accordingly, no provision is included in the
accounts for possible related losses.
The Company does, however, reflect legal and any other related costs
incurred for any contingencies as a charge to operations of the year
in which the expenditures are determined.
(10)
<PAGE>12
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.
TECHNICAL VENTURES INC.
Date: January 26, 2000 BY: /s/Frank Mortimer
Frank Mortimer, President and
Chief Executive Officer
Date: January 26, 2000 BY: /s/Larry Leverton
Larry Leverton, V/P & Secretary
Chief Financial Officer
(11)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE BALANCE SHEET AND INCOME STATEMENT INCLUDED IN PART I, ITEM 1 OF
THE REGISTRANT'S QUARTERLY REPORT ON FORM 10-QSB FOR THE PERIOD ENDED
September 30,1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 146,590
<ALLOWANCES> 0
<INVENTORY> 40,982
<CURRENT-ASSETS> 187,572
<PP&E> 645,994
<DEPRECIATION> 498,846
<TOTAL-ASSETS> 417,556
<CURRENT-LIABILITIES> 1,083,102
<BONDS> 0
<COMMON> 232,480
0
0
<OTHER-SE> (1,281,241)
<TOTAL-LIABILITY-AND-EQUITY> 417,556
<SALES> 288,411
<TOTAL-REVENUES> 288,411
<CGS> 237,554
<TOTAL-COSTS> 237,554
<OTHER-EXPENSES> 116,180
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,904
<INCOME-PRETAX> (65,953)
<INCOME-TAX> 0
<INCOME-CONTINUING> (65,953)
<DISCONTINUED> 0
<EXTRAORDINARY> (254,691)
<CHANGES> 0
<NET-INCOME> (320,644)
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
