<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended ......... March 31, 1996
( ) TRANSITION REPORT PURSUANT SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ............. to ..............
Commission file number 33-11875-A
MEGALITH CORPORATION
Exact name of small business issuer as specified in its charter
COLORADO 22-2701047
(State or other jurisdiction (IRS identification No.)
of incorporation or organization)
4720 ESCO DRIVE, FORT WORTH, TEXAS 76140
Address of principal executive offices
817-478-4299
Issuer's telephone number
NONE
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required by Section 13,
or 15(d) of the Exchange Act of 1934 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
----- -----
The number of shares outstanding of the Company's common and preferred stock
as of March 31, 1996 are 9,867,346 and 7,286 respectively.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Megalith Corporation and Subsidiary
Consolidated Balance Sheet
(Unaudited)
March 31, March 31,
1996 1995
------------ -----------
ASSETS (Unaudited) (Unaudited)
Current Assets
Cash (14,488) (21,750)
Trade Accounts Rec, net 638,861 33,875
Other receivable 1,056
Inventory after adjustments 768,126
Prepaid Expenses 1,250
Prepaid Insurance 25,934
------------ --------
Total Current Assets 1,420,739 12,125
Plant, Property & Equipment 8,961,435 54,000
Less; Accumulated Depreciation (163,260) 0
------------ --------
Net 8,798,175 54,000
Other assets 6,130
------------ --------
Total Assets 10,225,044 66,125
------------ --------
------------ --------
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable, Trade 271,524 60,000
Deposits from customers 55,198
American Factors 355,949
Accrued Expenses 38,354
Accrued Interest related to Esco 210,140
Short Term Notes to related parties 356,191
Current Portion of long term debt 659,110
Other current liabilities 5,917
------------
Total Current Liabilities 1,952,383
Long term notes payable net of current portion 3,096,945
Stockholder's Equity
Preferred Stock, 5,000,000 authorized
7,286 issued and outstanding
at March 31, 1996 72,860 0
Common Stock, 50,000,000 authorized
9,857,346 and 7,512,346 shares
issued and outstanding at
March 31, 1996 and December
31, 1995 49,287 11,375
Additional Contributed Capital 5,505,866 73,304
Accumulated deficit (452,297) (78,554)
------------ --------
Total Stockholder's Equity 5,175,716 6,125
Total Liabilities & Equity 10,225,044 66,125
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Megalith Corporation and Subsidiary
Consolidated Statements of Operations
Three Months Ended March 31
(Unaudited)
1996 1995
----------- -----------
Revenues 1,136,559 33,875
Cost of Goods Sold 718,804 27,750
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Gross Profit 417,755 6,125
Expenses:
Selling, general & administrating exp. 565,917 0
Depreciation & Amortization 22,856
----------- -----------
588,773 0
----------- -----------
Operating Income (171,018) 6,125
Other income (expenses): (111,635) 194,564
Net Income (Loss) (282,653) 200,689
----------- -----------
----------- -----------
Net Income or (loss) per common and common
equivalent shares (0.03) 0.026
Number of common and common equivalent
shares outstanding 9,867,346 7,596,096
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Megalith Corporation and Subsidiary
Consolidated Statements of Stockholder's Equity
March 31, 1996
<TABLE>
Preferred Stock Common Stock
Issued Issued
----------------- ---------------------- Additional Retained Total
Amount Amount Paid in Earnings Stockholder's
Shares (at Par) Shares (at Par) Capital (Deficit) Equity
------ -------- ---------- -------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance December 31, 1996 325 3,250 7,512,346 37,562 4,966,591 (169,644) 4,837,759
Shares issued in S-8 filing 550,000 2,750 52,250 55,000
Exercise of option by
director/officer
Purchase of shares through
reduction of note payable 850,000 4,250 208,250 212,500
Shares issued to cancel notes 6,961 69,610 945,000 4,725 278,775 353,110
Earnings (Loss) for quarter ended
March 31, 1996 (282,653) (282,653)
------ ------- ---------- ------- ---------- --------- ----------
Balance March 31, 1996 7,286 72,860 9,857,346 49,287 5,505,866 (452,297) 5,175,716
</TABLE>
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Megalith Corporation and Subsidiary
Consolidated Statements of Cash Flows
Three Months Ended March 31
(Unaudited)
1996 1995
---------- ---------
Cash flows from operating activities
Net income (loss) (282,653) 6,125
Cash used in operating activities:
Depreciation and amortization 22,856 0
Change in operating assets & liabilities:
Account receiveables (159,743)
Other receiveables 43,758
Accounts payable 57,486
Customer prepayment (8,939)
Accrued expenses 10,217
Inventory 16,655
Prepaid expenses (27,184)
American Factors 355,949
Accrued Interest 30,213
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Net cash provided (used) by op activities 58,615 (34,597)
Cash flow from investing activities 0 (54,000)
Cash flow from financing activities:
Principal payment on notes (84,000) 60,000
---------- ---------
Net increase (decrease) in cash (25,385) (28,597)
Cash, beginning of quarter 10,897 722
---------- ---------
Cash, end of quarter (14,488) (27,875)
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MEGALITH CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements include Megalith
Corporation ("Megalith" or the "Company") and its wholly owned subsidiary, Esco
Elevator Corporation. These financial statements have been prepared by the
Company pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission. Certain information and disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments and disclosures
necessary to a fair presentation of these financial statements have been
included. Such adjustments consist of normal recurring adjustments.
The results of operations for the period ended March 31, 1996 are not
necessarily indicative of the results expected for the full year.
NOTE B - NOTES PAYABLE TO BANK AND OTHER OBLIGATIONS
In February, 1996, in exchange for canceling notes in the amount of $529,960.00
Company issued 900,000 shares of restricted common stock and 6,499 shares of
convertible preferred stock to a group of accredited investors. In addition
under a consulting agreement with Samad Group, Company issued 45,000 shares of
common stock and 787 shares of convertible preferred stock to Samad Group.
In January an S-8 was filed for 550,000 shares of common stock under two
consulting agreements and in February, in exchange for canceling notes to an
officer and director of the company in the amount of $212,500, an S-8 was filed
with the issuance of 850,000 shares.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
CURRENT OPERATIONS
Revenues of the Company are derived from the sale of passenger and freight
elevators, components and replacement parts manufactured by its wholly-owned
subsidiary, Esco Elevator Corporation.
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For the quarter ending March 31, 1996, the revenues from sales of elevators
and parts were $1,136,559, with gross profit of $417,755 (or 36.7% of sales).
The Company incurred losses of $282,653.00 during the quarter.
As described under the subsequent events, on May 10, 1996 Company acquired
100% ownership of Vertical Lift Management ("VLM") of Irving, Texas which
provides service, maintenance and installation of elevators. This will
immediately add to the revenues of the Company and will bring additional
elevator sales through VLM. With higher volume of business and buying power,
management believes that certain economies of scale may be achieved.
Company has reduced its liabilities and increased its assets by converting
part of the short term debt into equity. This will result in the reduction of
interest expense by approximately $5,000.00 per month.
As described under subsequent events, on June 21, 1996, Company entered
into an agreement to acquire 100% of Dalcom Elevator Corporation of Grand
Prairie, Texas. After the closing, Company will move the operations of Dalcom to
Esco thereby increasing the revenues by more than 100% at an incremental
increase in expenses of approximately 50%.
PART II - OTHER INFORMATION
ITEM 1
LEGAL PROCEEDINGS
There is no new litigation filed against the Company since the last filing which
may have material adverse effect on the Company.
ITEM 2
CHANGE IN SECURITIES
Since the last filing, there has been no change or modification in the rights of
holders of common stock of the Company.
ITEM 3
DEFAULTS UPON SENIOR SECURITIES
(a) During the period of this filing, there has been no material default in the
payment of principal, interest, a sinking or purchase fund installment, or any
other material default not cured within 30 days, with respect to any
indebtedness of the Company.
(b) During the period of this filing, no dividends have been declared.
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ITEM 4
SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
There has not been a shareholders meeting during this reporting time period.
ITEM 5
OTHER INFORMATION
SUBSEQUENT EVENTS
On May 10, 1996, Company acquired 100% ownership of Vertical Lift
Management ("VLM") of Irving, Texas. VLM, incorporated as a Texas Corporation on
June 21, 1995, started the business of elevator service, maintenance and
installation. Since its inception it has secured over 130 service and
maintenance contracts. VLM will provide Esco a vehicle to re-enter the service
business of elevators. Company plans to open VLM offices in other major
cities.
VLM was acquired for $75,000 cash and 166,666 shares of restricted common
stock.
On June 21, 1996, Company entered into an agreement to acquire 100%
ownership of Dalcom Elevator Corporation ("Dalcom") of Garland, Texas. Dalcom is
a four year old company in the business of manufacture and sales of elevator
cabs and entrances.
After the closing, Company plans to consolidate the operations of Dalcom
with Esco. The consolidation will more than double the sales with about a 50%
increase in expenses. Management anticipates continued growth for the Company.
Dalcom will be acquired for $500,000.00 in convertible preferred stock and
reduction in the debt of Dalcom by $600,000.00.
Company has been raising additional capital from accredited investors.
After March 31, 1996 and as of June 21, 1996, it raised $234,000 by issuing
936,000 shares of restricted common stock.
MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's stock is eligible to be quoted on the National Association of
Security Dealers, Inc. Automated Quotations System (NASDAQ)OTC/BB. The Company
has five (5) market makers.
The Company has not paid cash or stock dividends on its common stock in either
of its two most recent fiscal years and does not anticipate or contemplate
paying dividends in the foreseeable future. It is the present intention of
management to utilize all available
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funds for the development of the Company's business. Several of the
Company's current shareholders are broker/dealers which hold title to the
Company's shares for their customers.
SIGNATURES
In accordance with the requirement of the of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MEGALITH CORPORATION:
SYED G. ZAIDI
- -------------------------------------
Syed G. Zaidi, Chairman/CEO/ Director
Date: June 25, 1996
JAMES W. LANDRUM
- -------------------------------------
Mr. James W. Landrum
Vice President/Director
Date: June 25, 1996
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> (14,488)
<SECURITIES> 0
<RECEIVABLES> 638,861
<ALLOWANCES> 0
<INVENTORY> 768,120
<CURRENT-ASSETS> 1,420,739
<PP&E> 8,961,435
<DEPRECIATION> 163,260
<TOTAL-ASSETS> 10,225,044
<CURRENT-LIABILITIES> 1,952,383
<BONDS> 3,096,945
0
7,286
<COMMON> 9,867,340
<OTHER-SE> 5,175,716
<TOTAL-LIABILITY-AND-EQUITY> 10,225,044
<SALES> 1,136,559
<TOTAL-REVENUES> 1,136,559
<CGS> 718,804
<TOTAL-COSTS> 565,917
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 111,635
<INCOME-PRETAX> (282,653)
<INCOME-TAX> 0
<INCOME-CONTINUING> (282,653)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (282,653)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> 0
</TABLE>
