EXHIBIT INDEX APPEARS ON PAGE
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
Commission File Number: 0-17170
TELVUE CORPORATION
(Exact name of small business issuer as specified in its charter)
DELAWARE 51-0299879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16000 Horizon Way, Suite 500
Mt. Laurel, New Jersey 08054
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code:(609) 273-8888
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
------ ------
Number of shares of registrant's common stock outstanding as of May 11,
1998: 23,814,500 shares.
Transitional Small Business Disclosure Form: Yes No X
------ ------
This report includes a total of 15 pages.
<PAGE>
TELVUE CORPORATION
INDEX
PAGE
NO.
-----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of March 31, 1998
(unaudited) and as of December 31, 1997
Statements of Operations for the three
months ended March 31, 1998 (unaudited)
and March 31, 1997 (unaudited)
Statements of Cash Flows for the three
months ended March 31, 1998 (unaudited)
and March 31, 1997 (unaudited)
Notes to Financial Statements (unaudited)
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
<PAGE>
<TABLE>
PART I. Financial Information
ITEM I. Financial Statements
TELVUE CORPORATION
BALANCE SHEETS
March 31, December 31,
1998 1997
------------- -----------
<S> <C> <C>
ASSETS (Unaudited) *
CURRENT ASSETS
Cash and cash equivalents $ 202,206 $ 445,368
Accounts receivable - trade 945,438 922,737
Other receivables 4,703 5,281
Prepaid income taxes 13,000 -
Deferred tax asset 403,987 477,987
Other current assets 29,246 10,898
----------- -----------
TOTAL CURRENT ASSETS 1,598,580 1,862,271
PROPERTY AND EQUIPMENT
Machinery and equipment 4,621,001 4,534,168
Less accumulated depreciation 2,856,492 2,639,651
----------- -----------
1,764,509 1,894,517
DEFERRED TAXES, net 2,027,450 2,027,450
SECURITY DEPOSITS 9,300 9,300
----------- -----------
$ 5,399,839 $5,793,538
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Notes payable-majority stockholder-current $ 1,800,000 $ 1,800,000
Accounts payable - trade 332,954 422,527
Accounts payable - equipment 50,193 1,324
Accrued expenses 199,722 192,305
Accrued dividends 105,561 -
Income taxes payable - 12,000
Deferred trunk credit 132,550 164,200
----------- -----------
TOTAL CURRENT LIABILITIES 2,620,980 2,592,356
NOTES PAYABLE - MAJORITY STOCKHOLDER 1,969,712 2,519,712
ACCRUED INTEREST - MAJORITY STOCKHOLDER 2,327,925 2,187,721
REDEEMABLE CONVERTIBLE PREFERRED STOCK, $1 par
value, 6,900,000 shares authorized,
3,518,694 shares issued and outstanding 3,518,694 3,518,694
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock, $.01 par value, 100,000,000
shares authorized, 23,814,500 shares
issued and outstanding 238,145 238,145
Additional paid-in capital 1,516,335 1,516,335
Accumulated deficit (6,791,952) (6,779,425)
----------- -----------
(5,037,472) (5,024,945)
----------- -----------
$ 5,399,839 $ 5,793,538
=========== ===========
* Derived from audited financial statements.
The accompanying unaudited notes are an integral part of these statements.
<PAGE>
TELVUE CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
----------------------------
1998 1997
---- ----
REVENUES $ 1,601,353 $ 1,542,844
OPERATING EXPENSES
Service 754,015 771,324
Selling and marketing 169,781 134,532
General and administrative 160,654 162,245
Depreciation 216,841 197,976
----------- -----------
1,301,291 1,266,077
----------- -----------
OPERATING INCOME 300,062 276,767
OTHER INCOME (EXPENSE)
Interest income 7,176 10,409
Interest expense (140,204) (127,904)
----------- -----------
(133,028) (117,495)
----------- -----------
INCOME BEFORE INCOME TAXES 167,034 159,272
(INCOME TAX) INCOME TAX BENEFIT (74,000) 1,070,000
--------- -----------
NET INCOME 93,034 1,229,272
DIVIDENDS ON REDEEMABLE
CONVERTIBLE PREFERRED STOCK (105,561) (89,569)
------------ ------------
NET INCOME (LOSS) AVAILABLE TO
COMMON STOCKHOLDERS $ (12,527) $ 1,139,703
============ ============
NET INCOME (LOSS) PER COMMON SHARE
BASIC ($.00) $.05
============ ============
DILUTED ($.00) $.02
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 23,814,500 23,794,500
=========== ===========
The accompanying unaudited notes are an integral part of these statements.<PAGE>
<PAGE>
TELVUE CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended March 31,
----------------------------
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 93,034 $ 1,229,272
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 216,841 197,976
Deferred taxes 74,000 (1,070,000)
Changes in assets and liabilities:
Decrease (increase) in -
Accounts receivable - trade (22,701) 5,244
Other receivable 578 284,767
Prepaid income taxes (13,000) -
Other current assets (18,348) (6,746)
Security deposits - (500)
Increase (decrease) in -
Accounts payable - trade (89,573) 160,855
Accounts payable - equipment 48,869 (79,921)
Accrued expenses 7,417 (2,651)
Income taxes payable (12,000) -
Deferred trunk credit (31,650) (31,650)
Accrued interest - majority stockholder 140,204 127,904
----------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 393,671 814,550
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (86,833) (101,388)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Debt reduction:
Notes payable - majority stockholder (550,000) (650,000)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (243,162) 63,162
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 445,368 668,367
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 202,206 $ 731,529
=========== ===========
The accompanying unaudited notes are an integral part of these statements.<PAGE>
<PAGE>
TELVUE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
----------------------
Summary Financial Information and Results of Operations
- --------------------------------------------------------
In the opinion of management, the accompanying unaudited financial
statements have been prepared in conformance with generally accepted
accounting principles and with the regulations of the Securities and Exchange
Commission and contain all adjustments (consisting of only normal recurring
adjustments) necessary to make the financial statements not misleading and to
present fairly the financial condition as of March 31, 1998, the results of
operations for the three months ended March 31, 1998 and 1997 and cash flows
for the three months ended March 31, 1998 and 1997.
Interim Financial Information
- -----------------------------
While management believes that the disclosures presented are adequate to
prevent misleading information, these unaudited financial statements must be
read in conjunction with the audited financial statements and notes included
in the Company's Form 10-KSB report for the fiscal year ended December 31,
1997, as filed with the Securities and Exchange Commission.
Prior period financial statements have been reclassified to conform with
current quarter presentation.
2. SUPPLEMENTAL CASH FLOW INFORMATION:
-----------------------------------
Supplemental disclosures of cash paid during the period-
1998 1997
---- ----
Income taxes $25,000 $ 0
Interest $ 0 $ 0
Non-cash Investing and Financing Transactions
- ---------------------------------------------
The Company accrued dividends on its redeemable convertible preferred stock
of 105,561 and 89,569 during the three months ended March 31, 1998 and 1997,
respectively. During the three months ended March 31, 1998 and 1997, no
shares of preferred stock were issued in payment of preferred stock
dividends.
3. EARNINGS (LOSS) PER COMMON SHARE:
--------------------------------
Earnings (loss) per common share amounts are based upon the weighted average
number of common and common equivalent shares outstanding during the year.
Common equivalent shares are excluded from the computation in periods in
which they have an antidilutive effect.
In February 1997, the Financial Accounting Standards Board issued SFAS 128
Earnings per Share ("SFAS 128"), which specifies the computation,
presentation, and disclosure requirements for earnings per share ("EPS"). It
replaces the presentation of primary and fully diluted EPS with basic and
diluted EPS. Basic EPS excludes all dilution. It is based upon the weighted
average number of common shares outstanding during the period. Diluted EPS
reflects the potential dilution that would occur if securities or other
contracts to issue common stock were exercised or converted into common
stock. The Company has adopted SFAS 128 as of the fourth quarter of 1997 and
has restated all previously reported per share amounts to conform to the new
presentation.
4. DIVIDENDS ON REDEEMABLE CONVERTIBLE PREFERRED STOCK:
----------------------------------------------------
As of March 31, 1998, undeclared dividends on outstanding preferred stock
amounted to $105,561.
5. CORPORATE INCOME TAXES:
-----------------------
The Company uses the asset and liability method of accounting for income
taxes in accordance with Financial Accounting Standards Board Statement
(SFAS) No. 109, "Accounting for Income Taxes". SFAS 109 requires recognition
of deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognized in the financial statements
or tax returns. Under this method, deferred tax liabilities and assets are
determined based on the differences between the financial statement carrying
amounts and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to reverse.
Differences between financial reporting and tax bases arise most frequently
from differences in timing of income and expense recognition. Deferred
income tax expense is measured by the change in the net deferred income tax
asset or liability during the year.
The provisions for income tax benefit (expense) consist of the following
components:
1998 1997
----------- ----------
Deferred
Federal $ (59,000) $ (60,000)
State (15,000) (15,000)
----------- ----------
(74,000) (75,000)
Valuation allowance decrease - 1,145,000
----------- ----------
$ (74,000) $1,070,000
=========== ==========
The Company has a net operating loss carryforward of approximately $4,800,000
on a tax reporting basis. The carryforward will begin to expire in 2004, if
not utilized.
Differences between the effective income tax rate and the statutory federal
income tax rate were primarily the result of the change in the valuation
allowance.
6. NOTES PAYABLE AND ACCRUED INTEREST - MAJORITY STOCKHOLDER:
----------------------------------------------------------
As of March 31, 1998, the Company had various outstanding notes due to the
majority stockholder in the aggregate principal amount of $3,769,712 and
accrued interest due on these notes in the aggregate amount of $2,327,925.
Effective as of March 31, 1998, the Company obtained from the majority
stockholder an extension to January 1, 2000, of his prior agreement not to
demand repayment of his loans or the accrued interest on the loans. The
Company has decided to voluntarily make, and the majority stockholder has
agreed to accept, monthly payments against loan principal in the amount of
$150,000 through December 31, 1998. The Company may make monthly principal
payments in excess of $150,000 when, in the opinion of management, the
Company has excess cash that is not needed to fund operations. The Company
made principal payments of $550,000 during the three months ended March 31,
1998. The Company has classified twelve payments of $150,000 each as a
current liability on the balance sheet.
7. COMMITMENTS AND CONTINGENCIES
-----------------------------
In April 1996, a former employee filed suit against the Company and its
majority stockholder, James T. Shelley vs. TelVue Corporation and H.F.
Lenfest, with the Superior Court of Burlington County, New Jersey, Civil
Action Number 01368-96. The complaint alleges breach of contract, breach of
implied covenant of good faith and fair dealing detrimental reliance and
unjust enrichment. The suit seeks damages for an unspecified amount for
compensation and compensatory damages. Based upon correspondence from Mr.
Shelley's attorneys prior to filing the suit, the Company's legal counsel
believes that Mr. Shelley is seeking actual damages of approximately $400,000
for commissions, unpaid salary, stock options and other benefits. The
Company believes the employee's claims are without merit and continues to
vigorously defend the suit brought against the Company.
The Company has received notice from a cable operating company customer
asserting its right to be indemnified against claims of patent infringement
made to the cable operator by a third party. The third party has alleged to
the cable operator that portions of the cable operator's pay-per-view
operations infringe one or more patents held by such party. No notice of
alleged infringement has been received by the Company from such third party.
The Company has retained independent patent counsel to review the third party
patents and the alleged infringement. The Company is unable at this time to
determine if it has liability under the indemnity provisions of the contracts
with the cable operator or the amount of such liability if it exists.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
TelVue Corporation (the "Company") is a marketing and service company
primarily selling automatic number identification ("ANI") telecommunications
services to the cable television industry for the automated ordering of
pay-per-view features and events (the "Service"). The Company provides the
Service through equipment it purchases. The Company also leases trunk
telephone lines from local and long distance telephone companies to connect
present cable television subscribers to the Company's National Point of
Presence ("National POP") for ordering the Service from their local cable
television systems. The Company also leases data circuits from local and
long distance telephone companies to link the POPS to the cable systems'
billing vendors.
The Company had income before income taxes of $167,034 for the quarter
ended March 31, 1998, compared $159,272 for the quarter ended March 31, 1997.
The Company experienced a decrease in the average monthly buy rate from 24.2%
for the quarter ended March 31, 1997 to 19.5% for the quarter ended March 31,
1998. The drop in the buy rate caused the pay-per-view buy revenue to
decrease $67,578 for the quarter ended March 31, 1998. This is a result of
a cable industry wide drop in pay-per-view buy rates. Although the pay-per-
view buy revenue decreased, the Company still had an overall increase in
service revenue of $58,509 for the quarter ended March 31, 1998 when compared
to the quarter ended March 31, 1997. The growth in service revenue is
partially attributable to the Company serving approximately 1,100,000 more
full-time cable subscribers during the quarter ended March 31, 1998. The
service revenue increase is also a result of an increase in National POP
feature revenue of $75,462, as a result of both new and existing customers
using more optional features. The Company had an increase in PPV+ revenue of
$76,116 for the quarter ended March 31, 1998. The PPV+ revenue increased as
a result of offering more promotions and having more new and previously
existing customers using the PPV+ Service.
The Company had net income of $93,034 for the quarter ended March 31,
1998. Included in net income is income tax of $74,000 for the quarter ended
March 31, 1998 compared to an income tax benefit of $1,070,000 for the
quarter ended March 31, 1997. The Company's income before income taxes is
$167,034 for the quarter ended March 31, 1998. In 1997, the Company reduced
its deferred tax asset valuation allowance since the Company believes that it
will benefit from the full utilization of its net operating losses. As of
December 31, 1997, the valuation allowance was reduced to zero and, as a
result, there will be no further reduction of the valuation allowance in 1998
and no further resulting tax benefit. As of March 31, 1998, the Company's
net operating loss carryforward is approximately $4,800,000 on a tax
reporting basis (see Note 5 to the financial statements).
Service expenses for the quarter ended March 31, 1998, decreased
$17,309 from the comparable 1997 period. The decrease in service expenses is
partially attributable to a decrease in 800 number database expenses of
$9,693 as a result of an FCC rate restructuring and a decrease in data link
expense of $16,785 primarily as a result of customers consolidating their
billing centers. These decreases are partially offset by increases in other
service expense categories.
As of March 31, 1998, the Company was serving approximately 9,800,000
full-time cable subscribers and 1,300,000 part-time subscribers on the
National POP compared to approximately 8,700,000 full-time cable subscribers
and 1,600,000 part-time subscribers served as of March 31, 1997. The part-
time subscribers did not significantly contribute to the revenue or service
expenses for the quarters ended March 31, 1998 and 1997.
The Company's operations had required a substantial purchase of
equipment by the Company. During the quarter ended March 31, 1998, the
Company purchased $86,833 of equipment compared to $101,388 purchased during
the quarter ended March 31, 1997. Depreciation accounted for 17% of total
operating expenses for the quarter ended March 31, 1998, compared to 16% for
the quarter ended March 31, 1997. For the quarter ended March 31, 1998,
selling and marketing expenses increased 26% as a result of an increase of
approximately $10,000 in advertising expense, $6,000 in promotional expenses,
and an increase of approximately $10,000 in travel and entertainment
expenses. General and administrative expenses decreased $1,591 during the
quarter ended March 31, 1998.
The Company's software is "Year 2000 Compliant" for its pay-per-view ANI
ordering as well as software used for administrative purposes. As a result,
the Company does not anticipate any material effect on its operating results
or financial condition arising from Year 2000 compliance issues.
Total liabilities decreased $381,172 and total assets decreased
$393,699 for the quarter ended March 31, 1998. The decrease in total
liabilities was primarily a result of a decrease in notes payable - majority
stockholder of $550,000 due to debt repayment. Partially offsetting the debt
repayment is an increase in accrued interest of $140,204 on outstanding loans
from Mr. H.F. Lenfest, the majority stockholder and Chairman of the Board of
Directors of the Company ("Mr. Lenfest"), and an increase in accrued
dividends on preferred stock of $105,561. The decrease in assets is
attributable to a decrease in cash of $243,162 as a result of debt repayment
and a decrease in current deferred tax asset of $74,000 (see above and Note
5 to the financial statements). The Company's days for sales in accounts
receivable is 52 days for the quarter ended March 31, 1998, compared to 53
days for the quarter ended March 31, 1997. The Company believes the decrease
of 1 day is not material. The Company does not offer incentives/discounts to
its customers, nor has it changed its credit terms with its customers.
The Company had positive cash flow from operations of $393,671 during
the quarter ended March 31, 1998. Ignoring changes in operating assets and
liabilities that result from timing issues, and considering only adjustments
to reconcile net loss to net cash provided by operating activities, the
Company would have positive cash flow from operating activities of $383,875
for the quarter ended March 31, 1998, compared to positive cash flow from
operating activities of $357,248 for the quarter ended March 31, 1997. The
increase in cash flow for the quarter ended March 31, 1998, is primarily a
result of increased revenue and a decrease in service expenses (see above).
Since November 2, 1989, the Company has funded its expansion and
operating deficit from the $2,500,000 of proceeds from the sale of shares of
the Company's Common Stock and Preferred Stock to Mr. Lenfest and from
borrowings from Mr. Lenfest. From November 1989 to February 1996, the
Company borrowed an aggregate of $6,128,712 from Mr. Lenfest. The interest
rates on the loans range from a floating rate based on the prime rate of PNC
Bank to a fixed rate of 12% Interest on one of the loans in the principal
amount of $1,471,272 as of March 31, 1998, is payable quarterly and, at the
option of the Company may be paid by the delivery of shares of the Company's
Preferred Stock at the rate of one share of Preferred Stock for each one
dollar of accrued interest. Interest due on this loan through December
31, 1997, in the amount of $473,682 has been paid with 473,682 shares of
Preferred Stock. In addition, during January 1995, Mr. Lenfest purchased
from Science the Company's non-interest bearing note in the amount of
$541,000 (the "Prior Science Note").
Effective as of March 31, 1998, the Company obtained from Mr. Lenfest a
written agreement stating he will not demand repayment of his loans or the
cash payment of accrued interest on the loans through January 1, 2000. The
deferring of the interest payments along with the increase in revenue has
enabled the Company to accumulate cash. Interest payments would have
amounted to $140,204 for the quarter ended March 31, 1998, compared to
$127,904 for the quarter ended March 31, 1997. During the fourth quarter of
1997, the Board of Directors of the Company (with Mr. Lenfest not
participating) authorized the Company to make monthly principal payments of
$150,000 to Mr. Lenfest and, at management's discretion, the Company may make
monthly principal payments in excess of $150,000 when the Company has excess
cash not needed to fund operations. In addition, the Board also authorized
the Company to begin accruing interest on all unpaid interest on all
outstanding loans balances due to Mr. Lenfest effective January 1, 1998. Mr.
Lenfest has agreed to accept payments of principal through December 31, 1998.
During the first quarter of 1998, the Company made principal payments of
$550,000 to Mr. Lenfest. The aggregate outstanding loan balances due to Mr.
Lenfest as of March 31, 1998 are $3,769,712.
The Company believes that increases in accrued interest under the loans
from Mr. Lenfest do not have a direct material effect on operations or
continued availability of credit. Cash flow from operations is sufficient to
fund current operations but is insufficient to fund total debt repayment.
The Company believes its suppliers look primarily to the Company's timely
payment of outstanding invoices. Historically, the Company has paid all the
suppliers it deals with on a timely basis and, therefore, the cash flow from
operations has no effect on the Company's availability of credit from key
suppliers of goods and services. The payment terms of the Company's
equipment and software providers are net 30 days.
The Company's ability to fund its operating expenses primarily depends
on three factors: the continued expansion of the Company's subscriber base,
the cable industry's buy rates, and the continued deferral by Mr. Lenfest of
the cash repayment of his loans to the Company. Management believes its
present marketing strategies will further increase the customer base,
although there can be no assurances that the Company will be able to attract
any further customers or that it will retain its current customers. In
addition, revenues are affected by the "buy rates" of subscribers connected
to the Service. The Company considers the buy rates of its subscribers to be
low compared to long term buy rates projected by industry pay-per-view
analysts. However, the Company experienced a decrease in the average monthly
buy rate from 24.2% for the quarter ended March 31, 1997 to 19.5% for the
quarter ended March 31, 1997, as a result of an industry wide drop in buy
rates. Hence, there can be no assurance that buys rates will continue to
increase or will remain at their current level.
The Company remains dependent upon the deferral of principal and
interest payments due to Mr. Lenfest to fund operations and capital
expenditures from operating cash flow. Mr. Lenfest has agreed not to demand
the cash repayment of principal or accrued interest on the outstanding loans
through January 1, 2000. Nevertheless, management intends to continue to
repay the outstanding principal amount of loans made by Mr. Lenfest from cash
not needed for operations. Management believes that the Company will have
sufficient funds to continue such repayments and will be able to fund its
core business from operating cash flow through December 31, 1998.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Certificate of Incorporation of the Company (incorporated by
reference to the Company's Registration Statement on Form S-8, dated
March 30, 1989 (the "Registration Statement")).
3.2 Bylaws of the Company (incorporated by reference to the Company's
Registration Statement).
3.3 Certificate of Amendment of Certificate of Incorporation of the
Company, dated April 11, 1990 (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1991, (the "1991 Form 10-K")).
3.4 Certificate of Amendment of Certificate of Incorporation of the
Company, dated March 15, 1991 (incorporated by reference to the 1991
Form 10-K).
3.5 Form of copy of Amendment of Certificate of Incorporation of the
Company, filed September 25, 1995 (incorporated by reference to the
Company's Form 10-QSB for the period ended September 30, 1995, (the
September 30, 1995 Form 10-QSB)).
4.1 Incentive Stock Option Plan (incorporated by reference to the
Company's Registration Statement).
4.2 Form of Stock Option Agreement (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1989, (the "1989 Form 10-K")).
4.3 Warrant Agreement, dated March 15, 1991, between the Company and
H.F. Lenfest (incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1990, (the "1990
Form 10-K")).
4.4 Certificate of Designation of Class A Preferred Stock (incorporated
by reference to the June 30, 1990 Form 10-Q).
10.1 Distributorship Agreement, dated November 2, 1989, between the
Company and Science (incorporated by reference to the 1989 Form
10-K).
10.2 Stock Purchase Agreement, dated November 2, 1989, between the
Company and H.F. Lenfest (incorporated by reference to the Company's
Report on Form 8-K, dated November 15, 1989, (the "1989 Form 8-K")).
10.3 Shareholders' Agreement, dated November 2, 1989, among the Company
and certain of its stockholders (incorporated by reference to the
Company's 1989 Form 8-K).
10.4 Option Agreement, dated November 2, 1989, among the Company and
certain of its stockholders (incorporated by reference to the 1989
Form 8-K).
10.5 Form of Credit Agreement between the Company and H.F. Lenfest
(incorporated by reference to the 1990 Form 10-K).
10.7 Form of Line of Credit Agreement between the Company and H.F.
Lenfest (incorporated by reference to the 1990 Form 10-K).
10.8 Subordinated Promissory Note, dated November 15, 1994 the principal
amount of $541,000 payable to Science Dynamics Corporation
(incorporated by reference to the 1994 Form 10-KSB).
10.10 Letter Agreement dated November 8, 1990 between Science Dynamics
Corporation and H.F. Lenfest (incorporated by reference to the
Company's Report on Form 8-K for November 16, 1990).
10.11 Loan Agreement dated December 24, 1991, between the Company and H.F.
Lenfest (incorporated by reference to the 1991 Form 10-K).
10.12 Lease Agreement for office space and the First Amendment to Lease
dated March 30, 1994, between the Company and Bloom Associates
(incorporated by reference to the 1994 Form 10-KSB).
10.13 Letter effective as of March 31, 1998, from H.F. Lenfest, waiving
the repayment of loans and accrued interest until January 1, 2000.
11. Statement re: Computation of Per Share Earnings (see the Company's
March 31, 1998 Financial Statements included herein).
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.
TELVUE CORPORATION
Dated: 5/12/98 By: /s/Frank J. Carcione
--------------------------------------------
Frank J. Carcione, (Chief Executive Officer)
Dated: 5/12/98 By: /s/Irene A. DeZwaan
-------------------------------------------
Irene A. DeZwaan, Treasurer (Controller)
<PAGE>
EXHIBIT INDEX
10.13 Letter effective as of March 31, 1998, from H.F. Lenfest, waiving
the repayment of loans and accrued interest until January 1, 2000.
<PAGE>
As of March 31, 1998
Frank Carcione
President
TelVue Corporation
16000 Horizon Way, Suite 500
Mt. Laurel, NJ 08054
Dear Frank,
At your request, this will continue our prior agreement. Namely, absent
any default under the terms of my loans to TelVue or any other obligations of
TelVue to any other person, including, without limitation, any voluntary or
involuntary bankruptcy or insolvency proceedings by or against TelVue, I
agree not to demand repayment of the loans or payment in cash of the accrued
interest prior to January 1, 2000.
Very truly yours,
\s\H F Lenfest
--------------------
H.F. (Gerry) Lenfest
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 202,206
<SECURITIES> 0
<RECEIVABLES> 945,438
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,598,580
<PP&E> 4,621,001
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0
3,518,694
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</TABLE>
