UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the Quarter ended December 31, 1998Commission File No. 133-16736
Media Vision Productions, Inc. (formerly Gulfstar Industries, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 23-2442288
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
105 S. Naccissos Ave. #701, West Palm Beach, FL 33401
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (727) 441 - 4442
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 shorter period that the registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes: X No:
Transitional Small Business Disclosure Format:
Yes: X No:
The number of shares outstanding of each of the registrant's classes of common
stock as of December 31, 1998 is 398,045 shares all of one class of $.80 par
value common stock and no shares of convertible preferred stock with a $10.00
par value. On January 4, 1999 the Company entered into a Plan of Merger with
Media Vision Properties, Inc. and issued 4,797,500 shares and as of the date
of this filing, March 20, 1999, 5,195,545 shares of $.80 par value common
stock are outstanding.
<PAGE>
Media Vision Productions, Inc.
(Formerly Gulfstar Industries, Inc.)
INDEX
PAGE
PART I FINANCIAL INFORMATION
Consolidated Balance Sheet - December 31, 1998 1
Consolidated Statements of Operations - Three Months
Ended December 31, 1998 and December 31, 1997 2
Consolidated Statement of Cash Flows - Three Months
Ended December 31, 1998 and December 31, 1997 3
Notes to the Consolidated Financial Statements 4-5
Management's Discussion and Analysis of financial
conditions and results of operations 6-7
PART II OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of 8
Security Holders
Item 5. Other Information 8
Item 6. Exhibits on Reports on Form 8-K 8
Signature Page 9
<PAGE>
MEDIA VISION PRODUCTIONS, INC.
(FORMERLY GULFSTAR INDUSTRIES, INC.)
BALANCE SHEETS
DECEMBER 31, 1998
Assets
Current Assets
Cash $ 32
Total Current Assets 32
Total Assets $ 32
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable and accrued expenses $ 90,481
Total Current Liabilities 90,481
Stockholders' Deficit
Common stock, par value $.080 per share; authorized
10,000,000 shares, 398,045 issued and outstanding 318,436
Convertible preferred stock, authorized 1,000,000
shares, par value $10.00; no shares issued
And outstanding
Additional paid in capital (318,436)
Retained deficit subsequent to reorganization (7-22-97) (90,449)
Total Stockholders' Deficit (90,449)
Total Liabilities and Stockholders' Deficit $ 32
<PAGE>
MEDIA VISION PRODUCTIONS, INC.
(FORMERLY GULFSTAR INDUSTRIES, INC.)
STATEMENTS OF OPERATIONS
For the
Three Months Ended
December 31,
1998 1997
Total Revenue $ - $ -
Operating Expenses
Selling and administrative expenses 4,350 8,381
Loss from operating activities (4,350) (8,381)
Provision for taxes - -
Net Loss $ (4,350) $ (8,381)
(Loss) per share $ (.011) $ (.023)
Weighted average shares outstanding 398,045 367,255
<PAGE>
MEDIA VISION PRODUCTIONS, INC.
(FORMERLY GULFSTAR INDUSTRIES, INC.)
STATEMENTS OF CASH FLOWS
For the Three Months Ended
December 31,
1998 1997
OPERATING ACTIVITIES
Cash Flows Used In Operating Activities:
Net loss from operations $ (4,350) $ (8,381)
Adjustments to reconcile net loss to cash
used in operating activities:
Increase in accounts payable and accrued
expenses 4,350 8,284
Net (decrease) in cash and cash equivalents 0 (97)
Cash and cash equivalents, beginning of the period 32 129
Cash and cash equivalents, end of the period $ 32 $ 32
<PAGE>
A. BASIS OF PRESENTATION
The accompanying unaudited condensed 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
Article 10 of Regulation S-X. 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 a fair presentation have been included.
Operating results for the three months period ended December 31, 1998 are
not necessarily indicative of the results that may be expected for the
year ended September 30, 1999. For further information, refer to the
financial statements and footnotes thereto included in the Registrant
Company's annual report on form 10-KSB for the year ended September 30,
1998.
B. PURCHASE OF SUBSIDIARY AND EFFECTIVE RECAPITALIZATION OF THE COMPANY
The following unaudited proforma consolidated condensed balance sheet of
Media Vision Productions, Inc and Subsidiaries as of December 31, 1998 the
transaction approved by the Board of Directors on January 4, 1999, whereby
the shareholders of the Media Vision Properties, Inc., a Delaware
corporation, received 4,797,500 shares of the Media Vision Properties,
Inc. in return for all its outstanding shares of common stock is deemed to
be effective as of the balance sheet date in December 31, 1998.
For accounting purposes the acquisition has been treated as an acquisition
of Media Vision Productions Inc. by Media Vision Properties, Inc. and as
such constitues a recapitalization of Media Vision Properties Inc. The
historical financial statements of the Company prior to January 4, 1999
will be of those Media Vision Properties, Inc.
Notes to the Proforma Balance Sheet
(1) To reflect the acquisition of Media Vision Properties, Inc. by the company
as of December 31, 1998, which for acounting purposes shall be treated as
an acquisition of Media Vision Productions, Inc (formerly Gulfstar
International), by Media Vision Properties, Inc and as such constitues
a recapitalization of Media Vision Properties, Inc.
(2) To reflect expenses of $15,038 for Media Vision Productions, Inc.
Bankrupcy paid by Media Vision Properties, Inc.
(3) Due to recapitalization, historical stockholders' equity of the acquirer
Media Vision Properties, Inc. prior to the merger is retroactively
restated for the equivalent number of shares received in the merger after
giving effect with an offset to paid-in-capital. Retained deficit of the
acquirer has been carried forward after the acquisition. <PAGE>
MEDIA VISION PRODUCTIONS, INC.
(FORMERLY GULFSTAR INDUSTRIES, INC.)
A Development Stage Enterprise
Proforma Consolidated Condensed Balance Sheet
December 31, 1998
(Unaudited)
(In Thousands of Dollars)
Media Media Proforma for
Vision Vision the completion
Productions Properties of reverse
Inc. Inc. Acquisition
Assets
Current Assets
Cash $ 0 $ 360 $ 360
Total Current Assets 0 360 360
Property and equipment, at cost
less accumulated depreciation 0 12 (1) 12
Other Assets 0 50 (1) 50
Total Assets 0 422 422
Liabilities and Stockholders'
Equity
Current Liabilities
Accounts payable and accrued
expenses 90 6 (2)(15) 81
Total Current Liabilities 90 6 81
Stockholders' Equity
Preferred stock
Common stock 318 1 (3)383 4,156
Additional paid in capital (318) 797 (3)(3838) (3,358)
Deficit accumulated during the
development stage (90) (382) (2) 15 (457)
Total Stockholders' Equity (90) (416) (2) 15 (457)
Total Liabilities and
Stockholders' Equity $ 0 $ 422 $ 422
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying condensed financial
statements including the Company's Florida operating subsidiary, as well as
information relating to the plans of the Company's current management.
RESULTS OF OPERATIONS
Three Months Ended December 31, 1998 vs. December 31, 1997
The loss from operations for the three months ended December 31,1998 represents
administrative expenses of $4,350 as compared to $8,381 of administrative
expenses during the three month period ended December 31, 1997.
Liquidity and Working Capital
The Company's working capital continued to decline during the quarter ended
December 31, 1998. At September 30, 1998 the Company had a working capital
deficit of $86,099 as compared to a working capital deficit of $90,449 at
December 31, 1998.
Plan of Reorganization
The Company Media Vision Productions, Inc. (formerly Gulfstar Industries, Inc.
and Subsidiaries) had filed a petition under Chapter 11 of the Bankruptcy laws.
The significant petition proposals divide prepetition liabilities into two
categories:
- - Class II consisted of unsecured obligations totaling $53,111. The obligees
will be impaired to the extent that they will not be paid the full amount owed
them, and will receive one share of post reverse split common stock for ever
$30 of the amount in which the holder has an approved claim.
- - Class IV consisted of equity security holders and related party lenders in the
amount of $812,649 and 75,000 preferred shares. The security holders will be
impaired to the extent that they will not be paid the full amount owed them, and
will receive one share of post reverse split stock for every $30 of the amount
in which the holder has an approved claim. Preferred shareholders shall receive
one common share for each preferred share, prior to the reverse split of shares
pursuant to the plan of reorganization.
As a result of the above, $3,232 was recorded as common stock for the issuance
of 30,970 shares based upon the OTC trading price at the time of conversion, and
the balance of these liabilities were recorded as cancellation of indebtedness
income during the year ended September 30, 1998. Additionally, the plan of
reorganization provided for the shareholders as of the date of the
reorganization to receive 1 share of "new" common stock for each 25 shares of
"prior" common stock or 367,225 "new" shares for the 9,181,365 "old" shares
including 75,000 shares of preferred stock as converted, previously
outstanding.
Additionally, the Plan proposed the repayment of $40,000 of liabilities to a
401K plan and creditors with accepted proof of claims shall receive one share
for every $30 of the amount in which that holders has an approved claim. As
stated above, the Plan as confirmed became effective on January 4, 1999. The
effects of the approval are reflected in the financial statements as of
September 30, 1998 and periods thereafter.
Pursuant to that plan of reorganization, the Company entered into the merger
agreement with Media Vision Properties, Inc. In connection with that plan of
merger 4,797,500 shares of the Company's stock were issued to the shareholders'
of Media Vision Properties, Inc. The Consolidated Company is in the Media
Industry producing shows for public Television, "Informercials" and the sale of
products over the world wide web.
Forward looking and other statements
Forward looking statements above and elsewhere in this report that suggest that
the company will increase revenues, become profitable and achieve significant
growth through acquisitions are subject to risks and uncertainties.
Forward-looking statements include the information concerning possible or
assumed future results of operations and cash flows. These statements are
identified by words such as "believes," "expects," "anticipates" or similar
expressions. Such forward looking statements are based on the beliefs of
Gulfstar Industries Inc. and its Board of Directors in which they attempt to
analyze the Company's competitive position in its industry and the factors
affecting its business.
Stockholders should understand that each of the foregoing risk factors, in
addition to those discussed elsewhere in this document and in the documents
which are incorporated by reference herein, could affect the future results
Gulfstar Industries Inc. and could cause those results to differ materially
from those expressed in the forward-looking statements contained or
incorporated by reference herein. In addition there can be no assurance that
Gulfstar Industries Inc. and its Board have correctly identified and assessed
all of the factors affecting the Company's business.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On January 4, 1999, the Company's plan of reorganization became
effective as confirmed and all litigation against the Company was
considered canceled. One creditor is appealing this decision and the
Company has reserved 58,833 shares in the event the appeal is
granted.
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
NONE
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant, caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Media Vision Productions, Inc.
Formerly Gulfstar Industriesnc.
Dated: March 20, 1999 By:/s/William O'Callaghan
William O'Callaghan, Acting President
<PAGE>
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