<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1997
OR
[ ] 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: 0-17878
VISION TEN, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 33-0340338
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
180 Broad St., Carlstadt, NJ 07072
(Address of principal executive office) (Zip Code)
(201) 935-3000
(Registrant's telephone number including area code)
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 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 of registrant's Common Stock, $.01 par value, outstanding
as of May 15, 1997 was 15,303,796 shares.
<PAGE>
VISION TEN, INC.
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet 1
Statement of Operations 2
Statement of Cash Flows 3-4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-7
PART II - OTHER INFORMATION 8
SIGNATURE 9
<PAGE>
VISION TEN, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
1997 1996
CURRENT ASSETS: (Unaudited)
------------------- -------------------
<S> <C> <C>
Cash $ - $ 34,004
Accounts receivable, less allowance for
doubtful accounts 135,615 119,710
Other receivables 32,200 32,200
Inventories 347,140 317,507
------------------- -------------------
TOTAL CURRENT ASSETS 514,955 503,421
PROPERTY AND EQUIPMENT, net
of accumulated depreciation 5,759 8,035
$ 520,714 $ 511,456
=================== ===================
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 56,703 $ 56,757
Advance from affiliate 89,981 68,481
Accrued expenses 72,804 72,804
------------------- -------------------
TOTAL CURRENT LIABILITIES 219,488 198,042
------------------- -------------------
NOTE PAYABLE TO STOCKHOLDER 650,000 650,000
------------------- -------------------
STOCKHOLDERS' DEFICIT:
Common Stock, $.01 par value, authorized 20,000,000 shares,
15,303,796 issued and outstanding 152,310 152,310
Additional paid-in-capital 7,848,269 7,848,269
Accumulated deficit (8,349,353) (8,337,165)
------------------- -------------------
TOTAL STOCKHOLDERS' DEFICIT (348,774) (336,586)
------------------- -------------------
$ 520,714 $ 511,456
=================== ===================
</TABLE>
See notes to financial statements.
<PAGE>
VISION TEN, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------
1997 1996
------------------ ------------------
<S> <C> <C>
REVENUES $ 36,278 $ 311,017
COST OF GOODS SOLD 27,209 248,814
------------------ ------------------
GROSS PROFIT 9,069 62,203
------------------ ------------------
OPERATING EXPENSES:
Selling and marketing expenses 3,309 17,396
General and administrative expenses 11,948 33,320
Product development 6,000 -
------------------ ------------------
TOTAL OPERATING EXPENSES 21,257 50,716
------------------ ------------------
INCOME (LOSS) FROM OPERATIONS (12,188) 11,487
------------------ ------------------
NET INCOME (LOSS) $ (12,188) $ 11,487
================== ==================
NET INCOME (LOSS) PER COMMON SHARE:
Net income (loss) per common share $ (0.001) $ 0.001
================== ==================
AVERAGE COMMON SHARES OUTSTANDING 15,303,796 14,351,763
================== ==================
</TABLE>
See notes to financial statements.
<PAGE>
VISION TEN, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit Total
--------------- ---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 15,303,796 $ 152,310 $ 7,848,269 $ (8,337,165) $ (336,586)
Net Loss - - - (12,188) (12,188)
--------------- ---------------- ---------------- --------------- ----------------
Balance at March 31, 1997 15,303,796 $ 152,310 $ 7,848,269 $ (8,349,353) $ (348,774)
=============== ================ ================ =============== ================
</TABLE>
See notes to financial statements.
<PAGE>
VISION TEN, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------
1997 1996
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (12,188) $ 11,487
------------------ ------------------
Adjustments to reconcile net income (loss) to net cash provided by (used
in) operating activities:
Depreciation 2,276 2,286
Issuance of common stock for services rendered 75,000
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (15,905) (151,400)
(Increase) decrease in inventories (29,633) 43,611
(Increase) decrease in prepaid expenses and other current assets - (4,677)
Increase (decrease) in accounts payable (54) (41,321)
Increase (decrease) in advance from affiliate 21,500 (6,412)
Increase (decrease) in accrued expenses and other current liabilities - 68,690
------------------ ------------------
TOTAL ADJUSTMENTS (21,816) (14,223)
------------------ ------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (34,004) (2,736)
------------------ ------------------
NET INCREASE (DECREASE) IN CASH (34,004) (2,736)
CASH, beginning of period 34,004 2,736
------------------ ------------------
CASH, end of period $ - $ -
================== ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for interest $ - $ -
================== ==================
Cash paid during the year for income taxes $ - $ -
================== ==================
</TABLE>
See notes to financial statements.
<PAGE>
VISION TEN, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying financial statements as of March 31, 1997 and for the
three months ended March 31, 1997 and 1996 have not been audited by independent
auditors, but in the opinion of management, such unaudited statements include
all adjustments consisting of normal recurring accruals necessary for a fair
presentation of the financial position, the results of operations and cash flows
for the three months ended March 31, 1997.
The financial statements should be read in conjunction with the
financial statements and related notes concerning the Company's accounting
policies and other matters contained in the Company's annual report on Form
10-KSB, as amended, for the year ended December 31, 1996. The results for the
three months ended March 31, 1997 are not necessarily indicative of the results
expected for the full year ending December 31, 1997. Certain prior year amounts
have been reclassified to conform with the current year's presentation.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL COMMENTS
This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward looking statements as defined in the
private securities litigation reform act of 1995. Such statements relating to
future events and financial performance are forward looking statements that
involve risk and uncertainty, detailed from time to time in the Company's
securities and exchange commission filings.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 compared to Three Months Ended March 31, 1996:
Sales for the three months ended March 31, 1997 were $36,278 as
compared to $311,017 for the three months ended March 31, 1996. The 88% or
$274,739 decrease was the result of primarily one customer having placed a large
order during the three months ended March 31, 1996, satisfied their long term
requirements for the Company's products and did not place any orders during the
three months ended March 31, 1997. Management anticipates receiving such orders
in the future quarters, however there is no assurance that these orders will be
placed.
Gross profit for the three months ended March 31, 1997 was $9,069, or
25% versus ($62,203), or (20%) for the year ago period. The increase in gross
profit percentage was primarily due to reduced overhead expenses during the
three months ended March 31, 1997.
Selling and marketing expenses during the three months ended March 31,
1997 were $3,309 and $17,396 for the year ago period, a decrease of $14,087. The
decrease is due to decreased sales activity in 1997.
General and administrative expenses for the three months ended March
31, 1997 were $11,948 as compared to $33,320 for the three months ended March
31, 1996. The decrease is primarily due to the termination of leased operations
in Los Angeles, California in December 1996 and the elimination of the related
expenses.
Product development costs during the three months ended March 31, 1997
were $6,000 and none for the year ago period, an increase of $6,000. The
increase is due to management's increasing emphasis on the development of new
products.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities utilized approximately $34,000
during the three months ended March 31, 1997. Accounts receivable increased by
$15,905 from December 31, 1996 to March 31, 1997. Management anticipates that
such receivable balances will be collected in due course in the Company's next
two fiscal quarters.
6
<PAGE>
The Company's chief executive officer, who holds a $650,000 note from
the Company, has agreed not to demand repayment of the note within twelve
months. Accordingly, the note has been reflected as a long term liability at
March 31, 1997.
The Company's largest shareholder has agreed to fund working capital
needs, should they arise during the remainder of 1997. Management believes that
these sources of working capital will adequately meet the Company's needs
through the end of 1997.
7
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS - NONE
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
8
<PAGE>
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.
VISION TEN, INC.
/s/ Dr. Alfred Thumim
------------------------
Dr. Alfred Thumim
Chief Executive Officer
/s/ Thomas A. Carpenter
------------------------
Thomas A. Carpenter
Accounting
Dated : May , 1997
9
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 135,615
<ALLOWANCES> 0
<INVENTORY> 347,140
<CURRENT-ASSETS> 514,955
<PP&E> 5,759
<DEPRECIATION> 0
<TOTAL-ASSETS> 520,714
<CURRENT-LIABILITIES> 219,488
<BONDS> 650,000
0
0
<COMMON> 8,000,579
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 520,714
<SALES> 36,278
<TOTAL-REVENUES> 36,278
<CGS> 27,209
<TOTAL-COSTS> 27,209
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,188)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,188)
<EPS-PRIMARY> (.001)
<EPS-DILUTED> 0.000
</TABLE>
