<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
---------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _____________________
Commission file number 1-10196
Dimensional Visions Incorporated
----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 23-2517953
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2301 W. Dunlap, Suite 207, Phoenix, Arizona, 85021
--------------------------------------------------
(Address of principal executive offices)
(602) 997 - 1990
--------------------------
(Issuer's telephone number)
Dimensional Visions Group, Ltd.,
8855 N. Black Canyon Hwy, #2000, Phoenix, AZ 85021
(Changed January 15, 1998)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) 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 .
----- ------
As of December 31, 1997, the number of shares of Common Stock issued and
outstanding was 2,970,309, after giving retroactive effect to a 1 for 25 reverse
stock split.
<PAGE>
Dimensional Visions Incorporated And Subsidiaries
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets - December 31, 1997
and June 30, 1997 1
Consolidated Condensed Statements of Operations - For the three and six
months ended December 31, 1997 and 1996 2
Consolidated Condensed Statements of Cash Flows - For the six
months ended December 31, 1997 and 1996 3
Notes to Consolidated Condensed Financial Statements 4
Item 2. Management's Discussion and analysis of Financial Conditions
and Results of Operations 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings N/A
Item 2. Changes in Securities N/A
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of Security Holders N/A
Item 5. Other Information N/A
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 12
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
December 31, June 30,
1997 1997
------------ ------------
(Unaudited)
Current assets
Cash and cash equivalents $21,897 $109,566
Current portion of note
receivable 136,389 --
Accounts receivable, trade net
of allowances for bad debts
of $215,743 45,959 82,301
Inventory 158,740 179,127
Prepaid supplies and expenses 8,500 10,001
--------- ---------
Total current assets 371,486 380,995
--------- ---------
Equipment
Equipment 313,722 1,527,776
Furniture and fixtures 44,343 125,035
--------- ---------
358,065 1,652,811
Less accumulated depreciation
and amortization 293,927 1,562,421
--------- ---------
64,138 90,390
--------- ---------
Other assets
Patent rights, and other assets 42,952 40,889
Deferred costs 8,854 17,246
Note receivable, net of current
position 253,903 --
--------- ---------
305,709 58,135
--------- ---------
Total assets $741,333 $529,520
========= =========
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
December 31, June 30,
1997 1997
------------ ------------
(Unaudited)
Current liabilities
Current portion of long-term debt $ 125,000 $ 75,000
Secured promissory notes 243,500 --
Accounts payable, accrued
expenses and other liabilities 285,310 413,947
------------ ------------
Total current liabilities 653,810 488,947
Long-term debt, net of current portion -- 125,000
------------ ------------
Total liabilities 653,810 613,947
------------ ------------
Commitments and contingencies -- --
Stockholders' equity (deficiency)
Preferred stock - $.001 par value,
authorized 10,000,000 shares;
issued and outstanding 218,878 219 219
Additional paid-in capital 921,959 923,209
------------ ------------
922,178 923,428
Common stock - $.001 par value,
authorized 100,000,000 shares;
issued and outstanding at December
31, 1997, 2,970,309 shares and
at June 30, 1997, 2,725,515
shares 2,970 2,726
Additional paid-in capital 18,129,562 17,909,556
Deficit (18,967,187) (18,920,137)
------------ ------------
Total stockholders' equity (deficiency) 87,523 (84,427)
------------ ------------
Total liabilities and stockholders'
equity (deficiency) $ 741,333 $ 529,520
============ ============
See notes to consolidated financial statements.
(1)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
------------ ------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C>
Operating revenue $58,697 $96,074 $172,251 $220,946
Cost of Sales 58,731 56,230 164,843 112,157
--------- --------- --------- ---------
Gross profit (34) 39,844 7,408 108,789
--------- --------- --------- ---------
Operating expenses
Engineering and development costs 53,555 101,937 113,380 194,839
Marketing expenses 56,787 101,916 114,079 196,647
General and administrative expenses 143,128 243,424 301,889 470,556
--------- --------- --------- ---------
Total operating expenses 253,470 447,277 529,348 862,042
--------- --------- --------- ---------
Loss before other income (expenses) (253,504) (407,433) (521,940) (753,253)
--------- --------- --------- ---------
Other income (expenses)
Interest expense (26,225) (8,173) (29,590) (14,518)
Interest income 7,008 3,018 7,212 5,021
Forgiveness of accrued compensation 106,149 -- 106,149 --
Loss on sale of equipment (18,881) -- (18,881) --
Sale of product line -- -- 410,000 --
Amortization of goodwill -- (48,250) -- (96,499)
--------- --------- --------- ---------
68,051 (53,405) 474,890 (105,996)
--------- --------- --------- ---------
Net loss ($185,453) ($460,838) ($47,050) ($859,249)
========= ========= ========= =========
Net loss per share of common stock ($0.06) ($0.28) ($0.02) ($0.62)
========= ========= ========= =========
Weighted average shares of common stock
outstanding after given effect to a 1 for 25
reverse stock split on January 15, 1998 2,931,548 1,661,009 2,883,038 1,394,439
========= ========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
(2)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended December 31,
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net loss ($47,050) ($859,249)
Total adjustments to reconcile net loss to net
cash used in operating activities (389,744) 231,427
--------- ---------
Net cash used in operating activities (436,794) (627,822)
--------- ---------
Cash flows from investing activities
Purchase of property and equipment (10,200) (2,730)
Proceeds from sale of equipment 10,000 --
--------- ---------
Net cash used in investing activities (200) (2,730)
--------- ---------
Cash flows from financing activities
Proceeds from long-term borrowing -- 250,000
Proceeds from secured promissory notes, net
of financing costs of $14,175 229,325 --
Sale of common stock, net of offering costs 135,000 489,000
Exercise of warrants to purchase common stock 10,000 --
Payment of long-term debt (25,000) --
--------- ---------
Net cash provided by financing activities 349,325 739,000
--------- ---------
Net change in cash and cash equivalents (87,669) 108,448
Cash and cash equivalents, beginning 109,566 203,073
--------- ---------
Cash and cash equivalents, ending $21,897 $311,521
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest -- --
========= =========
Issuance of common stock in connection with
Compensation $2,750 $43,520
========= =========
Consulting services $21,250 $77,350
========= =========
Payment of an advance from Individual -- $15,000
========= =========
</TABLE>
(3)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATE STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
Supplemental disclosure of non-cash investing and financing activities for six
months ended December 31, 1997 and 1996 (all common share amounts have been
adjusted to give retroactive effect to a 1 for 25 reverse stock split):
For the six months ended December 31, 1997, the Company issued 72,727
shares of the Company's common stock in connection with the conversion
of $50,000 of convertible debentures to common stock.
On October 20, 1997, the Company issued 200 shares of the Company's
common stock in connection with the conversion of 500 shares of Series
P Convertible Preferred Stock.
During the six months ended December 31, 1996, 24,000 shares of the
Company's stock was issued as a result of the conversion of 15,000
shares of Series A Convertible Preferred Stock valued at $150,000.
During the six months ended December 31, 1996, 7,527 shares of the
Company's Common Stock was issued as a result of the conversion of
18,817 shares of Series P Convertible Preferred Stock valued at
$47,043.
During December 1996, 891,360 shares of the Company's Common Stock was
issued as a result of the conversion of 185,700 shares of Series B
Convertible Preferred Stock valued at $1,857,000.
During the six months ended December 31, 1996, 196,916 shares of the
Company's Common Stock was issued as a result of the conversion of
$375,000 of Convertible Debenture issued pursuant to a Regulation S
offering.
See notes to condensed consolidated financial statements.
(4)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1997
(Unaudited)
Note 1 Basis of Presentation of Interim Financial Statements
The interim financial statements are prepared pursuant to the
requirements for reporting on Form 10-QSB. The June 30, 1997 balance
sheet data were derived from audited financial statements but does not
include all disclosures required by generally accepted accounting
principles. The interim financial statements and notes thereto should
be read in conjunction with the financial statements and notes included
in the Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1997. In the opinion of management, the interim financial
statements reflect all adjustments of a normal recurring nature
necessary for a fair statement of the results for the interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full
year ending June 30, 1998.
In this report all common shares and per share amounts have been
adjusted to give retroactive effect to a 1 for 25 reverse stock split.
Note 2 Accounts Payable, Accrued Expenses and Other Liabilities
December 31, 1997 June 30,1997
----------------- ------------
Accounts payable $195,827 $260,942
Accrued expenses
Interest 39,284 11,184
Salaries 44,790 117,943
Consulting fees -- 18,000
Payroll Taxes Payable 5,409 5,878
--------- --------
Total $ 285,310 $413,947
========= ========
Note 3 Secured Promissory Notes
As of December 31, 1997, there were $243,500 of outstanding Secured
Promissory Notes. Interest is calculated at 5% per month and is due and
payable at maturity (February 28, 1998). As of December 31, 1997,
accrued interest amounted to approximately $24,350. The Company during
November and December 1997 borrowed $243,500 net of financing costs of
$17,045, which is amortizable through February 1998. The Series A
Convertible Secured Promissory Notes include warrants to purchase
29,220 shares of the Company's common stock at $1.00 per share. The
warrants are exercisable over a 5 year period through the year 2002.
The notes are secured by all the assets of the Company.
The notes are convertible into one share for each $1.00 of outstanding
debt and unpaid interest is also convertible to common stock at the
rate of one share for each $1.00 of unpaid interest.
(5)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SIX MONTHS ENDED DECEMBER 31, 1997
(Unaudited)
Note 4 Long-Term Debt
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
December 31, 1997 June 30, 1997
----------------- -------------
<S> <C> <C>
5% convertible debenture due August 1, 1998 $50,000(1) $125,000(1)
10% secured notes due in Jan. and Feb. 1998 75,000(2)(3) 75,000(2)(3)
-------- --------
125,000 200,000
Less current portion 125,000 75,000
------- --------
Long term portion $ -- $325,000
------- --------
</TABLE>
(1) During the year ended June 30,1997, $375,000 of the outstanding
debentures were converted to 274,133 shares of the Company's common
stock at an average price per share of $1.25. This debt is convertible
into the Company's common stock at 50% of the price of the Company's
stock on the day prior to conversion, but at no time shall the
conversion price be greater than $3.625 a share.
During July 1997, $50,000 of the outstanding debentures were converted
to 72,727 shares of the Company's common stock at an average price of
$.6875 per share.
The debentures were due on August 1, 1997, and the debenture holder on
October 8, 1997 extended the due date to August 1, 1998.
During December 1997, $25,000 of the outstanding debenture was paid to
the debenture holder.
(2) As collateral for the secured notes, the Company has given a
security interest in all of the Company's tangible and intangible
assets, including all patents and proprietary technology, which was
evidenced by a Uniform Commercial Code filing on March 24, 1994.
(3) The Company has accrued interest on this obligation, but has not
paid interest to the noteholders since January 1996. No demand for
interest has been made by the noteholders, but the notes are in
technical default by failure to pay accrued interest. As of February
15, 1998, the secured notes are past due.
Note 5 Commitments and Contingencies
Effective January 24, 1997, the Company vacated its studio and
production facilities in Philadelphia, Pennsylvania. There are several
disputed invoices outstanding that amount to less than $2,000 that
management expects to resolve in its favor. There are no long-term
lease obligations outstanding as of December 31, 1997.
(6)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SIX MONTHS ENDED DECEMBER 31, 1997
(Unaudited)
During 1996, the Company's former principal distributor of its print
products refused to pay a certain sales invoice for goods shipped to,
accepted and paid for by the distributor's customer. The Company had
demanded payment and the distributor has refused to pay the invoice for
$213,522. In July 1996, the Company filed for judgment on the $213,522
invoice together with interest, costs and such other relief the court
will deem just and proper. The distributor has filed a counterclaim.
Management feels this matter will be resolved favorably and will not
have a material adverse effect on its financial position. During 1996,
the Company provided an allowance for possible bad debts for the full
amount of this sales transaction. During 1997, this matter has moved to
a deferred status while the parties engage in settlement negotiations.
There are no other legal proceedings which the Company believes will
have a material adverse effect on its financial position.
The Company has not declared dividends on Series A or B Convertible
Preferred Stock. The cumulative dividends in arrears through June 30,
1997 was approximately $68,000.
Note 6 Common Stock
As of December 31, 1997, there are outstanding 547,675 of non-public
warrants to purchase the Company's common stock at prices ranging from
$1.00 to $12.50 with a weighted average price of $3.50 per share.
As of December 31, 1997, there were 218,878 shares of various classes
of Convertible Preferred Stock outstanding which can be converted to
143,891 shares of common stock.
As of December 31, 1997, there are 7,500 Series B Warrants outstanding
to purchase Series B Convertible Preferred Stock which can be converted
into 30,000 shares of the Company's common stock.
As of December 31, 1997, there was a $50,000 5% Convertible Debenture
which can be converted into a minimum of 13,793 shares of the Company's
common stock depending upon the price of the Company's common stock the
day preceding the conversion.
As of December 31, 1997, there were $243,500 of secured promissory
notes which can be converted into 243,500 shares of the Company's
common stock.
The total number of shares of the Company's common stock that would
have been issuable upon conversion of the outstanding debt, warrants
and preferred stock equaled 978,859 shares as of December 31, 1997, and
would be in addition to the 2,970,309 shares of common stock
outstanding as of December 31, 1997.
During the six months ended December 31, 1997, 48,000 shares of the
Company's common stock was sold to third parties in a private placement
for $60,000 (at $1.25 per share).
(7)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SIX MONTHS ENDED DECEMBER 31, 1997
(Unaudited)
On September 30, 1997, the Company sold 66,667 shares of the Company's
common stock to a third party for $75,000 under a Regulation S
offering.
During the six months ended December 31, 1997, the Company issued
72,727 shares of the Company's common stock in connection with the
conversion of $50,000 of convertible debenture to common stock under a
Regulation S offering.
The Company issued 15,200 shares of the Company's common stock to
consultants for services valued at $21,250 (average price per share
$1.25).
The Company issued 2,000 shares of the Company's common stock to an
officer as a bonus valued at $1.375 per share.
A warrant holder exercised his right to purchase 40,000 shares of the
Company's common stock at $2.50 per share.
The Company issued on October 20, 1997, 200 shares of its common stock
as a result of a conversion of 500 shares of Series P convertible
Preferred Stock.
Note 7 Preferred Stock
The Company has authorized 10,000,000 shares of $.001 par value per
share Preferred Stock, of which the following were issued and
outstanding:
<TABLE>
<CAPTION>
Allocated Outstanding
--------- -----------
December 31, 1997 June 30, 1997
----------------- -------------
<S> <C> <C> <C>
Series A Preferred 100,000 25,500 25,500
Series B Preferred 200,000 5,000 5,000
Series C Preferred 1,000,000 18,681 18,681
Series P Preferred 600,000 167,547 168,047
Series S Preferred 50,000 2,150 2,150
--------- ------- -------
Total Preferred Stock 1,950,000 218,878 219,378
========= ======= =======
</TABLE>
The Company's Series A Convertible 5% Preferred Stock ("Series A
Preferred"), 100,000 shares authorized, is convertible into common
stock at the rate of 1.6 shares of common stock for each share of the
Series A Preferred. Dividends from date of issue, are payable from
retained earnings, and have been accumulated on June 30 each year, but
have not been declared or paid.
The Company's Series B Convertible 8% Preferred Stock ("Series B
Preferred"), is convertible at the rate of 4 shares of common stock for
each share of Series B Preferred. Dividends from date of
(8)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SIX MONTHS ENDED DECEMBER 31, 1997
(Unaudited)
issue are payable on June 30 from retained earnings at the rate of 8%
per annum and have not been declared or paid.
The Company's Series C Convertible Preferred Stock ("Series C
Preferred"), is convertible at a rate of 0.4 shares of common stock per
share of Series C Preferred.
The Company's Series P Convertible Preferred Stock ("Series P
Preferred"), is convertible at a rate of 0.4 shares of common stock for
each share of Series P Preferred.
The Company's Series S Convertible Preferred Stock ("Series S
Preferred"), is convertible at the rate of 4 shares of common stock for
each share of Series S Preferred.
The Company's Series A Preferred and Series B Preferred were issued for
the purpose of raising operating funds. The Series C Preferred was
issued to certain holders of the Company's 10% Secured Notes in lieu of
accrued interest and also will be held for future investment purposes.
The Series S Preferred was issued to certain stockholders consisting
mainly of officers and directors of the Company in exchange for such
stockholders' shares of common stock. After this exchange, common stock
was sold on September 5, 1995 for the purpose of raising additional
capital.
The Series P Preferred was issued on September 12, 1995, to InfoPak
shareholders in exchange for (1) all of the outstanding capital stock
of InfoPak, (2) as signing bonuses for certain employees and a
consultant of InfoPak, and (3) to satisfy InfoPak's outstanding debt
obligations to certain shareholders.
The 190,700 shares of Series B Preferred were issued to holders of
warrants to purchase such preferred stock. The funding for the exercise
of these warrants was the exchange of $1,907,000 of principal amount of
secured and unsecured notes. On December 3, 1996, 185,700 shares of
Series B Preferred were exchanged for 891,360 shares of the Company's
common stock.
The 26,275 shares of Series C Preferred were also issued in exchange
for $262,750 of interest due under the secured and unsecured notes.
Holders of 7,594 shares of Series C Preferred Stock have subsequently
converted their shares into the Company's common stock.
Note 8 Gain on Sale of Product Line
On September 25, 1997, the Company sold its real estate multiple
listing data delivery system. The purchase price was $450,000 plus the
assumption of a $59,247 liability to a third party. The transaction was
funded by a down payment of $40,000 which was applied to the
outstanding accounts receivable balance and the balance of $410,000 is
payable in 36 monthly installments of $13,229.55 including interest at
10% per annum commencing October 25, 1997.
(9)
<PAGE>
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
SIX MONTHS ENDED DECEMBER 31, 1997
(Unaudited)
Note 9 Income Taxes
There was no provision for current income taxes for the three months
ended September 30, 1997 and 1996.
The federal net operating loss carry forwards of approximately
$16,469,000 expire in varying amounts through 2012.
The Company has had numerous transactions in its common stock. Such
transactions may have resulted in a change in the Company's ownership,
as defined in the Internal Revenue Code Section 382. Such change may
result in an annual limitation on the amount of the Company's taxable
income which may be offset with its net operating loss carry forwards.
The Company has not evaluated the impact of Section 382, if any, on its
ability to utilize its net operating loss carry forwards in future
years.
Note 10 Events Subsequent to December 31, 1997
The secured promissory notes raised according to the letter agreement
with Capital West Investment Group, Inc. ("CWIG") increased from
$243,500 as of December 31, 1997 to $350,000 during January 1998.
Pursuant to the terms of the agreement CWIG will use its "best efforts"
to raise funds amounting to $3,000,000 in net proceeds less expenses
and commissions within six months of the date of the letter. CWIG has
provided the short term financing in the form of Series A Convertible
Secured Promissory Notes with warrants to purchase common stock, the
notes having a security interest in all the assets of the Company.
These notes are due February 28, 1998 unless they are converted. The
actual terms may change as the transaction progresses and no assurances
can be given that the funding will be completed as proposed. With the
approval of CWIG and the noteholders, the due date of the notes may be
extended.
In January 1998 the Company entered into a consulting agreement with
CWIG. Pursuant to such agreement, CWIG will provide the Company with,
among other things, strategic planning, advice with respect to the
identification of potential business opportunities, recommendations
regarding capital raising alternatives, and assistance in dealing with
potential investors and strategic partners. Pursuant to such consulting
agreement, CWIG and its assignees were granted warrants to acquire
1,500,000 shares of Common Stock at $0.50 per share.
In January 1998, options and/or warrants to acquire 1,300,000 shares of
Common Stock were allocated to directors, officers, and key personnel
at a price of $0.93 per share.
The shareholders of record at the close of business on December 5,
1997, voted on January 15, 1998, to approve a 1 for 25 reverse stock
split effective that date. In this report all common shares and per
share calculations have been adjusted to give retroactive effect to a 1
for 25 reverse stock split.
On January 1, 1998, the Company relocated its offices and entered into
a three year lease at a minimum rental of $44,950 per year.
(10)
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Three months ended December 31, 1997 and 1996
Liquidity and Capital Resources
As of December 31, 1997 the Company had a working capital deficiency of
$282,324, which comprised of the short term borrowing and the transfer
of the long term debt that become due during this period, compared with
a working capital surplus of $38,928 as of December 31, 1996. During
the quarter ended December 31, 1997, the Company received $10,000
through the exercise of warrants.
The Company received $243,500 less financing charges of $17,045
pursuant to its agreement with Capital West Investment Group, Inc.
("CWIG") as short term bridge loan financing in the form of Series A
Convertible Secured Promissory Notes.
Results of Operations
The net loss for the quarter ended December 31, 1997, was $185,453
compared to a net loss of $460,838 for the quarter ended December 31,
1996. The decrease in the loss was caused primarily by a decrease in
compensation and consulting expenses and forgiveness of accrued
compensation. Revenues for the quarter ended December 31, 1997, were
$58,697 compared to revenues of $96,074 for the quarter ended December
31, 1996. The decrease in revenues was the result the sale of the real
estate data delivery system by InfoPak. There are no longer any
licensing fees associated with this product. For the quarter ended
December 31, 1997, the Company recorded sales totaling approximately
$30,500 of its DV3D(R) Animotion(TM) print products compared to no
sales for the quarter ended December 31, 1996.
In December 1997 the Company sold all of its photographic equipment
resulting in a loss of $18,881. Currently all DV3D(R) and Animotion(TM)
print products are processed on a graphics work station to improve the
quality, time to market, and repeatability of these images.
Six months ended December 31, 1997 and 1996
Liquidity and Capital Resources
For the six months ended December 31, 1997, the Company raised $145,000
through private placement of its securities and the exercise of
warrants. In addition $243,500 was lent to the Company through short
term financing arrangements.
The Company needs additional funding in order to maintain current
operations. The Company is not to the point of generating sufficient
revenues from operations to cover its cost structure. The Company has
been funding its operations by selling its securities in private
placements, offshore transactions, short-term borrowing, and sale of
its products. The Company is currently working to complete a Private
Placement Memorandum to be used in raising funds amounting to
$3,000,000 from accredited investors. In the event the Company is not
able to secure sufficient funds in a timely basis necessary to maintain
its current operations, it may cease all or part of its existing
operations.
(11)
<PAGE>
In September 1997, the Company sold its real estate multiple listing
data delivery system. The purchase price was $450,000 plus the
assumption of a $59,427 liability. The purchase price was payable
$40,000 at closing, which was applied against outstanding accounts
receivable trade and the balance to be paid ratably over a thirty-six
month period commencing October 25, 1997 at $13,229.55 per month
including interest at 10%. In connection with the sale the Company
agreed to provide consulting services for a period of one hundred and
twenty days at no cost and thereafter at certain prescribed rates.
In January the Company received approximately $100,000 in additional
funding in the form of short term borrowings.
Results of Operations
The net loss for the six months ended December 31, 1997, was $47,050
compared to $859,249 for the six months ended December 31, 1996. The
reduction of the net loss is the result of the gain recognized from the
sale of the product line of $410,000, the elimination of the
amortization of good will of approximately $96,500, the forgiveness of
accrued compensation of $106,149, and reductions in compensation,
related travel expenses and outside consultants of approximately
$200,000.
The Company implemented a newly focused business plan which will
concentrate on offering and delivering integrated and systematic
Promotion Marketing Solutions to innovative business leaders to help
them increase their sales by offering two primary products, namely
MarketingLenses (a new trade name for all of the Company's print
products) and InfoPak. The Company has recently moved into its new
office in Phoenix, Arizona and has begun to close sales from its
concentrated marketing efforts.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
The following documents are filed as part of this report:
1. The following Exhibits are filed herein: 27.0 Financial Data
Schedule
2. Reports on Form 8-K filed: Incorporated by reference from
registrant's current report on Form
8-K dated October 21, 1997.
Signatures
In accordance with the Exchange Act, the registrant caused this report
to be signed on its behalf by the undersigned, duly authorized.
DIMENSIONAL VISIONS INCORPORATED
DATED: February 13, 1998 By: /s/ John D. McPhilimy
---------------------
John D. McPhilimy, Chairman, President and
Chief Executive Officer
(12)
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