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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarters Ended
September 30, June 30, and March 31, 1995 Commission File No. 33-27627
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3D IMAGE TECHNOLOGY, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 76-0265438
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(State of Incorporation) (IRS Employer Identification No.)
5172-G Brook Hollow Parkway, Norcross, Georgia 30071
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (770) 416-8848
including area code: --------------
(Former name, former address and former
fiscal year, if changed since last report)
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 SUCH SHORTER PERIODS THAT
THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES XXX NO
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18,125,250 COMMON SHARES WERE OUTSTANDING AS OF QUARTERS ENDED SEPTEMBER 30,
JUNE 30, AND MARCH 31, 1995.
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INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
as of September 30, 1995, June 30, 1995 and March 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Condensed Consolidated Statements of Operations
September 30, 1995, June 30, 1995 and March 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Cash Flows
September 30, 1995, June 30, 1995 and March 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Change In Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Signatures
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3D IMAGE TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets (as amended)
<TABLE>
<CAPTION>
Nine Months Six Months Three Months
Ending Ending Ending
September 30, 1995 June 30, 1995 March 31, 1995
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<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 276,273 $ 559,822 $ 711,300
Accounts receivable, net 662,306 380,124 108,761
Receivables from affiliates, net 552,626 289,214 596,636
Inventories 1,847,074 1,886,661 1,166,656
Other current assets 64,831 5,643 3,458
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Total current assets 3,403,110 3,121,464 2,586,811
Property and equipment, at cost
Machinery and equipment 1,859,863 1,851,699 1,851,700
Furniture and fixtures 15,030 15,030 15,030
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Total Property and Equipment 1,874,893 1,866,729 1,866,730
Less accumulated depreciation (342,549) (289,732) (236,915)
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Net property and equipment 1,532,344 1,576,997 1,629,815
Other assets 11,778 12,105 12,433
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Total Assets $4,947,232 $4,710,566 $4,229,059
========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
1
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3D IMAGE TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets (as amended)
<TABLE>
<CAPTION>
Nine Months Six Months Three Months
Ending Ending Ending
September 30, 1995 June 30, 1995 March 31,1995
------------------ ------------- -------------
<S> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Currents liabilities:
Trade accounts payable 2,070,035 1,946,314 621,468
Accrued liabilities 22,165 262,970 684,786
Unearned revenue 62,167 104,045 2,287
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Total current liabilities 2,154,367 2,313,329 1,308,541
Shareholders' equity:
Preferred stock, par value $.001 per share
Authorized - 5,000,000 shares
Issued and outstanding - none
Common stock, par value $.001 per share
Authorized - 35,000,000 shares
Issued and outstanding -19,125,250 19,125 19,125 19,125
Additional paid-in capital 4,749,511 4,869,510 4,749,510
Stock subscription receivable (237,616) (1,000,000) (1,000,000)
Retained Earnings (1,738,155) (1,491,398) (878,872)
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Total shareholders' equity 2,792,865 2,397,371 2,920,518
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Total liabilities and shareholders' equity $4,947,232 $4,710,566 $4,229,059
========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
2
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3D IMAGE TECHNOLOGY, INC.
Consolidated Statements of Operations (as amended)
<TABLE>
<CAPTION>
Nine Months Six Months Three Months
Ending Ending Ending
September 30, 1995 June 30,1995 March 31,1995
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<S> <C> <C> <C>
Net Revenue:
Print Material $ 63,905 $ 29,553 $2,030,608
Cameras 660,748 489,153 272,255
Printer Processors 197,500 77,000 75,000
Print Development 155,339 139,899 96,327
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Total Net Revenue 1,077,492 735,609 2,474,190
Cost of Sales
Print Material 23,343 11,427 1,257,684
Camera 163,254 202,866 122,224
Print Processors 82,423 48,918 49,604
Print Development 120,213 216,743 29,560
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Total Cost of Sales 389,233 479,954 1,459,072
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Gross Margin 688,259 255,655 1,015,118
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Operating Expenses
General and Administrative 662,137 662,137 662,137
Selling Expenses 165,499 129,415 90,283
Research and Development 70,938 70,938 70,938
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Total Operating Expenses 898,574 862,490 823,358
Operating Income/(Loss) (210,315) (606,839) 191,760
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Interest, net (36,442) (36,442) (36,442)
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Net Income/(Loss) $ (246,757) $(643,281) $ 155,318
========== ========= ==========
</TABLE>
See notes to condensed consolidated financial statements.
3
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3D IMAGE TECHNOLOGY, INC.
Consolidated Statements of Cash Flows (as amended)
<TABLE>
<CAPTION>
Nine Months Six Months Three Months
Ending Ending Ending
September 30, 1995 June 30,1995 March 31,1995
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<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income/(loss) $(246,757) $(643,281) $ 155,318
Adjustment to reconcile net income
to net cash used in operating activities:
Depreciation and Amortization 53,145 53,146 53,886
Changes in operating assets and liabilities:
Accounts receivable (282,182) (271,363) 151,705
Inventories 39,587 (720,005) 727,672
Prepaid expenses and other assets (59,188) (2,185) (258)
Accounts payable and accrued expense (117,081) 903,030 507,179
Other liabilities and unearned revenue (41,878) 101,758 (463,834)
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Net cash (used in) provided by operating (881,322) (612,580) 1,100,913
INVESTING ACTIVITIES
Purchases of property and equipment (8,164) -- --
--------- --------- ---------
Net cash used in investing activities (8,164) 0 0
FINANCING ACTIVITIES
Net decrease/(increase) in receivable (232,657) 338,173 (446,358)
Proceeds from common stock subscribed 642,387 120,000 --
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Net cash provided by financing activities 409,730 458,173 (446,358)
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Increase in cash (283,549) (151,478) (654,555)
Cash, beginning of quarter 559,822 711,300 56,745
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Cash, end of quarter $ 276,273 559,822 711,300
========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
4
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3D IMAGE TECHNOLOGY, INC.
Notes to Condensed Consolidated Financial Statements (as amended)
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with instructions to Form 10-Q 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 quarter ended
September 30, June 30, and March 31, 1995, are not necessarily indicative of
results that may be expected for the year ended December 31, 1995. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the 3D Image Technology, Inc. annual report on Form 10-K
for the year ended December 31, 1995.
Note B - Inventories
Inventories are summarized as follows:
<TABLE>
<CAPTION>
September 30, June 30, March 31,
1995 1995 1995
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<S> <C> <C> <C>
Finished goods:
Consumer cameras 229,159 183,445 267,118
Printer processors 601,035 543,674 386,813
Print material 979,892 1,132,819 512,725
Raw material and component parts 36,989 26,923 0
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1,847,074 1,886,661 1,166,656
</TABLE>
Note C - Contingent Matters
On October 5, 1995, ITII and the Company approved a plan of merger of the
affiliated companies. Subsequent to the completion of this merger, the Company
will survive as the parent company of the affiliated group. Under the plan of
merger, each share of ITII common stock and Class A preferred stock will be
redeemed and canceled by ITII. Such redemption will be effected through the
issuance of common shares of the Company, the survivor, in proportion to the
pre-merger ITII ownership. This plan of merger has been postponed.
An affiliate of the Company, ITHK, is liable for unpaid legal fees totaling
approximately $600,000. Such legal fees were incurred by ITHK in connection
with an action taken as plaintiff in a Hong Kong court. ITHK ceased action
against the defendant.
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No accrual for such legal fees have been made in the accompanying financial
statements. Counsel has advised the Company that such fees are a liability
solely of ITHK and such liabilities do not extend to the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
During the first quarter of 1995, the Company had a large sale to one customer
of print material which directly contributed to the gain for the quarter. See
the previously filed 10K for further discussions of 1995 operating results.
Liquidity and Sources of Capital
Management of the Company continues to seek additional sources of capital
including the completion of the financing discussed above. Management believes
that such additional capital is necessary to enable the Company to effectively
market and distribute its 3D cameras, as well as establish an adequate print
development infrastructure in the markets in which the Company plans to
increase distribution. No assurance can be given that the Company will be able
to obtain such capital in order to continue the Company's investment in
marketing, distribution, and the development of a print development network.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There were no material proceedings pending in 1996 in which the Registrant was
named as a party.
On March 13, 1995, Image Technology International, Inc. ("ITII"), parent of the
Registrant, filed a Complaint against Jerry C. Nims, NimsTec, LLC, LenTec
Imaging, Inc., and Thomas J. Steimer in the Superior Court of Fulton County,
Georgia. Subsequently, the case was transferred to the Superior Court of
Walton County, Georgia. The Complaint alleges that commencing in approximately
February 1994, Defendants engaged in a course of conduct and conspiracy to
injure and destroy the business and reputation of ITII, including the 3D camera
business operated by the Company, in order to gain unfair and unlawful
competitive advantage, by making and disseminating false statements and false
claims regarding ITII and its principal officers and directors.
ITII was granted a temporary restraining order against Defendants on March 14,
1995. This restraining order was extended indefinitely on April 14, 1996 and
remains in effect. ITII is also seeking damages for Defendants' intentional
interference with ITII's business and contractual relations, and for exemplary
damages to deter similar fraudulent and unlawful conduct, in an amount to be
determined at trial. Defendants files answers to the Complaint generally
denying the allegations. No claims have been filed in the case by any
Defendant against the Company or ITII. The case is still pending.
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Item 2. Change in Securities
During 1995, an installment Subscription Agreement for 500,000 shares of common
stock of the Company at a price of $2.00 per share, executed by Drummend Pal,
S.A. on August 30, 1994 and amended on October 21, 1994, was fulfilled and the
500,000 shares were issued to Drummend Pal in 1995. These shares are
restricted by agreement and cannot be transferred or sold for a period of two
years from the date of issue. Drummend Pal, S.A. is not affiliated in any way
with any officer, director or employee of the Company.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of the company's security holders
during the quarter of the fiscal period covered by this report.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None
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 hereunto duly authorized.
3D IMAGE TECHNOLOGY, INC.
7/3/96 /s/ ALLEN LO
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Date ALLEN LO
Chairman and Chief Executive Officer
7/3/96 /s/ SUNNY IP
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Date SUNNY IP
Director and Treasurer
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