U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report pursuant to section 113 or 15(d)of the Securities
Exchange Act of 1934
For the quarter ended August 31, 1996.
[ ] Transition report under section 13 or 15(d) ofthe Securities Exchange
Act of 1934 [no fee required]
Commission File Number 2-33-3560D
CONECTISYS CORP.
(Name of small business issuer in its charter)
Colorado 84-1017107
(state or other jurisdiction (I.R.S. Employer
Incorporation or Organization Identification No.)
7260 Spigno Place 91350
Agua Dulce, California
Address of principal (Zip Code)
executive offices
Issuer's telephone number: (805) 268-0305
Securities registered pursuant to Section 12(b) of the Act: None Securities
registered pursuant to Section 12(g) of the Act: None
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(b) of the Exchange Act during the past 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 Contained herein,and disclosure will be contained,
to the best ofregistrant's knowledge, in definitive proxy or information
statements incorporated by reference in partIII of this Form 10-QSB. [X]
State Issuer's revenues for it's most recent fiscal year: $ 70,197
The aggregate market value of the voting stock held by non affiliates
computed by reference to the price at which the stock was sold on
August 31, 1996 was $15,517,212. For the purpose of the foregoing calculation
only, all directors and executive officers of the registrant have been deemed
affiliates. The number of shares outstanding of each of the issuer's classes
of common equity, as of August 31, 1996 was 2,586,202
PART 1
Financial Information
Item 1. Financial Statements
The unaudited financial statements for the quarter ended August 31, 1996
are attached hereto.
Item 2. Management's Discussion and Analysis of Financial Conditions
and Results of Operations
Results and Plan of Operations
Orders were placed at the end of the first quarter with the Company's
subsidiary PrimeLink. Sales for the Company realized in the third quarter
ended August 31,1996 were $ 70,197
The Company continues as a development stage company, and has incurred a
loss of $ 196,241 or $ .08 per weighted common share in the third quarter as
compared to a loss of $ 28,107 or $ .03 per weighted common share in the third
quarter of 1995. Losses for the nine month period ended August 31,1996 total
$ 1,270,276 or $.50 per weighted common share. Losses in this quarter were
decreased by sales for completed contracts with the Company's subsidiary
PrimeLink. Losses for the nine month period end August 31, 1995 were
$ 144,951 or $ .014 per weighted common share.
The General and Administrative costs rose from $120,890 for nine months at
the end of the third quarter of 1995 to $822,368 through three quarters in
1996. The increase was due to expenses associated with the substantial
progress of the Company's two subsidiaries PrimeLink and TechniLink. The
Company's spinning out, of its subsidiary Creative Image Products,Inc.
("CIPI") during the fourth quarter of 1995 and the restructuring of the
Company, had the effect of reducing a majority of the General and
Administrative costs that were associated with CIPI during the nine months
ended August 31, 1995.
During the 9 months ended August 31,1996 the company recorded $ 552,825 in
interest expense. The majority of this interest, $ 551,202 was due to stock
transactions during the year. The largest stock transaction that involved
an interest expense was the reduction of debt through the exercise of
options. The options were given in the first quarter of 1995 when the debt
was incurred by the company. This one transaction resulted in $ 412,000
toward interest expense. The difference in value between the option and the
market value was considered as the interest to the transaction. The second
largest interest expense was from the exercise of an option from an officer
to reduce accrued compensation. The interest on these stock transactions is
nonreoccurring.
Donald Wallace the president of PrimeLink owns 20% of the stock in
PrimeLink and Karl Elliott the President of TechniLink owns 20% of the
stock of TechniLink, the Company's two subsidiaries, which is reflected in the
minority interest section of the Financial Statements.
Liquidity and Capital Resources
The Company has negative working capital of $ 1,396,759 consisting of
$ 74,070 current assets and $ 1,470,829 of current liabilities, compared to
a negative working capital of $ 483,799 at the end of the third quarter of
1995. The Company remains focused on its financing and capital requirements,
and to continue to raise the capital necessary to complete its growth in
marketing and technological support to produce and sell its product line.
The Company in the early part of the fourth quarter has raised over
$300,000 for operating expenses through the contributions of shareholders
to the Company. Additionally, the Company is negotiating for both a debt
and equity placements within the Company to support its future operations.
This includes discussions with some of the Company's current customers of
the Company's product lines.
PrimeLink expects that its pilot project with Wilwire to be successfully
completed in the fourth quarter of this year and that further long term
contracts are likely in an expanded target base for both companies. PrimeLink is
actively marketing their product lines to the utility and vending machine
industries; additionally, PrimeLink is concentrating on the establishment of
a distribution and service network and has had some discussions with Wilwire
regarding their possible participation.
TechniLink is concentrating its marketing efforts on a number of large
petroleum refineries. Discussions are still continuing with Honeywell in
an attempt to come to an agreement on a Joint Marketing and Development
Agreement which could be completed either in the fourth quarter of this
year or the first quarter of next year.
The Company has neither made any commitments nor does it foresee the need
to spend capital for any additional fixed assets at this time.
Part 2
Item 2 Changes in Securities
On August 20, 1996 the Company entered into an agreement to issued one
million shares of common stock, and 300,000 shares of common stock as colateral
to a loan. These shares are still in the treasury of the Company awaiting
completion of the transaction by an investor. This transaction had no
monetary effect on the Company in this quarter.
On August 20, 1996 the Company entered in to an agreement with an investor
for the possible placement of three million shares of common stock. This
transaction has had no monetary effect on the Company this quarter
On July 25, 1996 the Company entered into an agreement to issue six (6)
million shares of common stock as colateral for a loan with an investor, these
shares are still in the treasury of the Company awaiting completion of the
transaction by the investor. This transaction has had no monetary effect on the
Company in this quarter.
During the third quarter 250,000 shares of common stock were returned to
the treasury of the Company. The return of these shares had no monetary
effect on the Company in the third quarter ended August 31,1996.
Item 6 Exhibits and Reports on Form 8-K
1. Exhibit A - Financial statements
2. Exhibit 27- Financial data schedule
3. Reports on Form 8-K
a) Filed 6/27/96
SIGNATURES
In accordance with 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.
Robert A. Spigno Robert A. Spigno
Dated: October 15, 1996 ____________________________
Conectisys Corp.
Robert A. Spigno
President and Chief Executive Officer
CONECTISYS CORP.
Unaudited Consolidated Balance Sheet
Aug.-31-1996
Aug.-31-1996 Aug.-31-1995 Nov.-30-1995
Unaudited Unaudited Audited
Assets
Current Assets
Cash 42,429 11644 1,911
Accounts Receivable 25,357 -0- -0-
Stock Subscription Receivable -0- -0- 20,000
Other Current Asset 6,283 -0- 7,947
Total Current Assets 74,070 11,644 29,858
Notes Receivable Net 466,625 270,694 466,625
Property and Equipment Net 173,386 23,895 121,734
Licenses and Technology 2,178,430 -0- 2,178,430
Other Assets 38,211 4,818 4,500
Total Assets 2,930,722 311,051 2,801,147
Liabilities and Shareholder equity
Current Liabilities
Accounts Payable 624,697 18,448 42,933
Accrued Compensation 44,961 -0- 53,295
Notes Payable
Related Party 514,230 -0- 456,235
Other 282,595 466,824 441,824
Other Current Liabilities 4,346 10,171 12,122
Total Current Liabilities 1,470,829 495,443 1,006,409
Minority Interest 58,259 -0- 120,569
Shareholders Equity
Preferred Stock - Class A 1,000,000
Shares Authorized $ 1.00 Par Value,
16345 Issued and Outstanding 16,345 16,345 16,345
Convertible Preferred Stock
Class B 1,000,000 Shares Authorized,
$1.00 Par Value, -0- Shares Issued
and Outstanding -0- -0- -0-
Common Stock 250,000,000 Shares
Authorized, No Par Value, 2,586,202
Authorized Issued and Outstanding 6,029,574 1,205,810 5,031,834
Accumulated Gain (Deficit)
During Development Stage (4,644,286) (1,406,547) (3,374,010)
Total Shareholder Equity 1,401,634 (184,392) 1,674,169
Total Liabilities and
Shareholders Equity 2,930,722 311,051 2,801,147
CONECTISYS CORP.
Statement of Operations (9 Months)
Aug.-31-1996
December 1,1990
(Inception) through
Aug.-31-1996 Aug.-31-1995 Aug.-31-1996
Unaudited Unaudited Unaudited
Revenues 70,197 -0- 70,197
Cost of Goods Sold 30,276 -0- 30,276
Gross Profit 39,921 -0- 39,921
General and Administrative 822,368 120,890 2,013,578
Bad Debt Write-offs -0- -0- 1,115,286
Loss From Operations (782,447) (120,890) (3,088,943)
NonOperating
Income (Expense) 2,687 828 5,379
Interest Expense (552,825) 24,889 (523,581)
Minority Interest 62,310 -0- 63,488
Net Loss ($1,270,276) ($144,951) ($3,602,146)
Weighted Average Shares
Outstanding 2,544,839 1,072,998
Net (loss) per share $ (0.50) $ (0.14)
CONECTISYS CORP.
Condensed statement of operation(3months ended)
Aug 31, 1996
Aug. 31, 1996 Aug. 31, 1995
Unaudited Unaudited
Revenues 70,197 -0-
Cost of goods sold 30,276 -0-
Gross profits 39,921 -0-
Cost and expenses
General and administrative 252,100 28,262
Bad debt write-offs -0- -0-
Gain (loss) from operations (212,179) (28,262)
Non-operating income
(expense) -0- -0-
Interest income(expense) (872) 155
Minority interest 16,809 -0-
Net Loss ($196,241) ($28,107)
Weighted Average Shares
Outstanding 2,544,839 1,072,998
Net loss per share $ (0.08) $ (0.03)
CONECTISYS CORP.
Condensed Statement of Cash Flows (9 Months Ended)
Aug.31, 1996
December 1,1990
Aug.-31-1996 Aug.-31-1995 (Inception)through
Unaudited Unaudited Aug. 31, 1996
Operating activities
Net Income (loss) (1,270,276) (144,951) (3,602,146)
Adjustments to reconcile net
income (loss)to net cash
Provided by (used in) operating activities:
Depreciation and amortization -0- 946 1,270
Stock issued for services 96,538 727,000 1,019,252
Stock issued for
interest (see Item 2
Paragraph 4) 551,202 -0- 551,202
Minority interest (62,310) -0- (63,488)
Changes in operating assets and liabilities
(Increase) decrease in assets
Accounts receivable (5,357) -0- (4,938)
Accrued interest -0- (25,065) (8,366)
Deposits -0- -0- (450)
Provision for possible losses -0- -0- 855,875
Increase (decrease) in liabilities
Accounts payable 581,764 5,542 624,697
Accrued interest -0- -0- 9,951
Accrued compensation (8,334) -0- 44,961
Other current liabilities (7,776) 5,654 (5,605)
Net cash provided by (used in)
operating activities (124,548) 569,126 332,738
Investing activities
Increase in notes receivable -0- (1,322,500) (1,322,500)
Costs of licenses -0- -0- (3,252)
Purchase of equipment (51,652) (3,281) (78,087)
Net cash from (used) in
investing activities (51,652) (1,325,781) (183,839)
Financing Activities
Common Stock issued for cash 150,000 305,000 560,655
Dividends received -0- -0- -0-
Preferred Stock issuance -0- -0- 16,345
Proceeds from debts
Related party 41,958 216,768 98,193
Other 24,761 (67,176) 1,352,395
Contributed capital -0- -0- 515
Net cash from (used)
in financing activities 216,719 454,592 2,028,103
Net Increase (decrease)
in cash 40,518 (302,063)
Cash beginning of
period 1,911 313,707
Cash end of period 42,429 11,644 42,429
Non Cash Activities
Common stock issued
for debt reduction 200,000 862,000
CONECTISYS CORP.
Statement of shareholder equity
Aug.-31-1996
<TABLE>
<CAPTION>
Preferred Stock Accumulated
Class A Common Stock Deficit Total
Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C>
Balance December 31,1990
(re-entry development stage) -0- -0- 212,188 1,042,140 (1,042,140)
5/31/93 Shares issued for cash -0- -0- 20,000 1,000 -0- 1,000
5/31/93 Capital contribution -0- -0- 40,000 515 -0- 515
3/26/93 Shares issued for
services -0- -0- 40,000 500 -0- 500
3/26/93 Shares issued for
services -0- -0- 24,000 600 -0- 600
Net (loss) for the year ended
November 30,1993 -0- -0- -0- -0- (5,459) (5,459)
Balance, November 30, 1993 -0- -0- 336,188 1,044,775 (1,047,599) (2,844)
5/1/94 Shares issued for
Services -0- -0- 48,000 3,000 -0- 3,000
9/1/94 Shares issued for
cash -0- -0- 355,426 23,655 -0- 23,655
9/15/94 Shares issued for
services -0- -0- 173,986 11,614 -0- 11,614
9/26/94 Shares issued for
cash -0- -0- 60,000 15,000 -0- 15,000
10/6/94 Shares issued for
cash 16,345 16,345 -0- -0- -0- 16,345
September and October Shares
issued for Cash -0- -0- 26,400 33,000 -0- 33,000
Net (loss) for the year
ended November 30, 1994 -0- -0- -0- -0- (32,544) (32,544)
Balance, November 30, 1994 16,345 16,345 1,000,000 1,131,024 (1,080,143) 67,226
2/13/95 Shares issued for
cash -0- -0- 23,200 232,000 -0- 232,000
2/13/95 Shares issued for
debt repayment -0- -0- 40,800 408,000 -0- 408,000
2/20/95 Shares issued for
debt repayment -0- -0- 95,562 477,810 -0- 477,810
2/95 Acquisition of assets
CIPI -0- -0- 575,000 1,950,000 -0- 1,950,000
4/5/95 Acquisition of
assets -0- -0- 300,000 -0- -0- -0-
April & May 1995 Shares
issued for cash and
services -0- -0- 320,000 800,000 -0- 800,000
6/1/95 Shares issued for
cash -0- -0- 10,000 30,000 -0- 30,000
9/26/95 Shares issued for
acquisition of assets and
services -0- -0- 80,000 200,000 -0- 200,000
9/28/95 Shares issued for
cash -0- -0- 825 3,000 -0- 3,000
9/95 Acquisition of assets -0- -0- 700,000 1,750,000 -0- 1,750,000
9/95 Return of assets,
CIPI -0- -0- (554,000) (1,950,000) -0- (1,950,000)
Net (loss) for the year
ended November 30, 1995 -0- -0- -0- -0- (2,293,867) (2,293,867)
Balance, November 30, 1995 16,345 16,345 2,591,387 5,031,834 (3,374,010) 1,674,169
12/4/95 Shares issued for
corporate officer back pay -0- -0- 2,381 8,334 -0- 8,334
12/15/95 shares issued for
services & interest -0- -0- 30,000 105,000
2/8/96 Shares issued for
debt repayment with option
& Interest -0- -0- 200,000 612,000 -0- 612,000
2/9/96 Shares issued for
Shares not listed with
transfer agent -0- -0- 900 -0- -0- -0-
2/16/96 Shares issued for
corporate officer back pay -0- -0- 1,113 3,443 -0- 3,443
2/16/96 Shares issued for
corporate officer back pay
with option -0- -0- 28,805 89,115 -0- 89,115
2/26/96 Shares issued for
cash, -0- -0- 27,778 152,779 -0- 152,779
2/29/96 Shares issued,
shares returned 7/18/96 -0- -0- 250,000 -0- -0- -0-
3/12/96 Shares returned
from Hollywood Trenz -0- -0- (300,000) -0- -0- -0-
3/21/96 Issued shares for
cash -0- -0- 3,571 25,000 -0- 25,000
4/2/96 Shares issued for
services, above market -0- -0- 267 2,069 -0- 2,069
7/18/96 returned shares
no monetary effect
reflect on transction
of 2/29/96 -0- -0- (250,000) -0- -0- -0-
Balance 8/31/96 16,345 16,345 2,586,202 6,029,574 (4,644,286) 1,401,633
</TABLE>
Financial Statements
Basis of presentation
The accompanying consolidated financial statement include the transactions
ofConectisys (the "Company") (formerly BDR Industries,Inc. and formerly
Coastal Financial Corp.) and its 80% owned subsidiaries TechniLink Technology
and Manufacturing, Inc. (TechniLink) and PrimeLink, Inc.(PrimeLink). All
material intercompany transactions have been eliminated in the accompanying
consolidated financial statements.
Development stage company
The company returned to the development stage company in accordance with
SFAS No 7 on December 1, 1990 and is still in process with its two
subsidiaries in developing its technology and product lines.
Cash equivalents
For the financial accounting purposes and the statement of cash flows,
cash equivalents include all highly liquid debt instruments with original
maturities of three months or less.
Property and equipment
Property and equipment are recorded at cost. Office Equipment is considered
to have a useful life of 5-7 years
Net loss per common Share
Net loss per common share is based on the weighted average number of common
and common equivalent shares outstanding for the periods presented. Common
equivalent shares representing the common shares that would be issued on
exercise of convertible securities.
Stocks issued for non cash consideration
Shares of the Company's no par value common stock issued in exchange for
goods services are valued at the cost of the goods sold or services received
or at the market value of the shares issued depending on the ability to
estimate the value of the goods or services received.
Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principals requires management to make estimates and
assumptions that affect the reported amounts 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
Note 1.
In the opinion of the management , the accompanying unaudited condensed
financial statements reflect all adjustments (which include only normal
recurring accruals) necessary to present fairly the Company's results of the
Interim periods. The results of operations for the nine months ended August
31, 1996 are not necessarily indicative of the results for the year ended
November 30, 1996.
Note 2
On July 25,1996 the Company agreed to issue 6 million shares of common stock
for investment with Avonni Holdings Corp. The transaction has not been
completed, and stock is still considered part of the treasury
Note 3
On August 20,1996 The Company agreed to issue 1,000,000 shares of common
stock and 300,000 shares of common stock issued to Conectisys and Savoia
Corporation respectively and are to be be held in the same account as
collateral to a loan. This transaction is not complete and shares are
still considered as part of the Company's treasury
Note 5
On August 26, 1996 the Company agreed to the possible sale of 3 million
shares of restricted common stock all unsold shares to be returned to the
Company treasury after approximately 90 days marketing firm requested
consecutive numbering to facilitate
placements
Note 6
These shares have been issued from the transfer agent but have not been
paid for in full at the third quarter ended August 31, 1996 and are still in
the company treasury and are not counted in any calulations ofearning or
values
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from SEC form 10QSB and is qualifed in its entirety by reference
to such financial statements
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> AUG-31-1996
<CASH> 42429
<SECURITIES> 0
<RECEIVABLES> 491982
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 74070
<PP&E> 173386
<DEPRECIATION> 0
<TOTAL-ASSETS> 2930722
<CURRENT-LIABILITIES> 1470829
<BONDS> 0
0
16345
<COMMON> 6029574
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2930722
<SALES> 70197
<TOTAL-REVENUES> 70197
<CGS> 30276
<TOTAL-COSTS> 30276
<OTHER-EXPENSES> 822368
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 552825
<INCOME-PRETAX> (782447)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1270276)
<EPS-PRIMARY> (.50)<F1>
<EPS-DILUTED> (.50)<F2>
<FN>
<F1>Calculate by using weighted common stock shares
<F2>Due to the loss all warrants and options are considerd anti-dilutive
</FN>
</TABLE>
