UNITED STATES
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 Quarter Ended September 30, 1998
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 November 12, 1998 was 15,303,796 shares.
<PAGE>
<TABLE>
<CAPTION>
VISION TEN, INC.
BALANCE SHEETS
September 30, December 31,
1998 1997
------------------- -------------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash $ 23,217 $ 12,110
Accounts receivable, net of allowance for
doubtful accounts of $98,000 168,724 84,745
Other receivables - 32,200
Inventories 381,619 309,868
------------------- -------------------
TOTAL CURRENT ASSETS 573,560 438,923
PROPERTY AND EQUIPMENT, net of
accumulated depreciation of $53,031 - -
------------------- -------------------
$ 573,560 $ 438,923
=================== ===================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 82,196 $ 12,885
Advance from affiliate 243,712 178,550
------------------- -------------------
TOTAL CURRENT LIABILITIES 325,908 191,435
------------------- -------------------
NOTE PAYABLE TO STOCKHOLDER 650,000 650,000
------------------- -------------------
STOCKHOLDERS' DEFICIT:
Common stock, $.01 par value, 20,000,000 shares authorized,
15,303,796 issued and outstanding 152,310 152,310
Additional paid-in-capital 7,848,268 7,848,269
Accumulated deficit (8,402,926) (8,403,091)
------------------- -------------------
TOTAL STOCKHOLDERS' DEFICIT (402,348) (402,512)
------------------- -------------------
$ 573,560 $ 438,923
=================== ===================
See notes to financial statements.
-1-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VISION TEN, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months ended September 30, Nine Months ended September 30,
---------------------------------------------------------------------------
1998 1997 1998 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES $ 62,267 $ 19,145 $ 240,571 $ 58,298
COST OF GOODS SOLD 1,137 14,359 193,660 43,724
---------------- ---------------- ---------------- ----------------
GROSS PROFIT 11,130 4,786 46,911 14,574
---------------- ---------------- ---------------- ----------------
OPERATING EXPENSES:
Selling and marketing expenses 169 1,436 7,921 6,117
General and administrative expenses 11,320 2,292 35,476 19,319
Product development 6,000 6,000 27,000 27,000
---------------- ---------------- ---------------- ----------------
TOTAL OPERATING EXPENSES 17,489 9,728 70,397 52,436
---------------- ---------------- ---------------- ----------------
LOSS FROM OPERATIONS (6,359) (4,942) (23,486) (37,862)
---------------- ---------------- ---------------- ----------------
OTHER INCOME
GAIN ON SALE OF MARKETABLE SECURITIES - - 23,651 -
---------------- ---------------- ---------------- ----------------
NET INCOME (LOSS) $ (6,359) $ (4,942)$ 165 $ (37,862)
================ ================ ================ ================
NET INCOME (LOSS) PER COMMON
SHARE $ ** $ ** $ ** $ **
================ ================ ================ ================
AVERAGE COMMON SHARES
OUTSTANDING 15,303,796 15,303,796 15,303,796 15,303,796
================ ================ ================ ================
** represents less than $.01 per share
See notes to financial statements.
-2-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VISION TEN, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
------------------------------------------
1998 1997
------------------- -------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) $ 165 $ (37,862)
------------------- -------------------
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation - 6,829
Gain on sale of marketable securities (23,651) -
Changes in assets and liabilities:
Increase (decrease) in accounts receivable (83,979) 4,139
Decrease (increase) in inventories (71,751) (111,215)
Increase (decrease) in accounts payable and accrued expenses 69,310 5,539
------------------- -------------------
TOTAL ADJUSTMENTS (110,071) (94,708)
------------------- -------------------
NET CASH USED IN OPERATING ACTIVITIES (109,906) (132,570)
------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of marketable securities 55,851 -
------------------- -------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 55,851 -
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from affiliates 65,162 105,196
------------------- -------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 65,162 105,196
------------------- -------------------
NET INCREASE (DECREASE) IN CASH 11,107 (27,374)
CASH, beginning of period 12,110 34,004
------------------- -------------------
CASH, end of period $ 23,217 $ 6,630
=================== ===================
See notes to financial statements.
-3-
</TABLE>
<PAGE>
VISION TEN, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-QSB.
Accordingly, they do not include all of the information and disclosures
required for annual financial statements. These financial statements
should be read in conjunction with the financial statements and related
footnotes for the year ended December 31, 1997 included in the Form
10-KSB for the year then ended.
In the opinion of the Company's management, all adjustments (consisting
of normal recurring accruals) necessary to present fairly the Company's
financial position as of September 30, 1998, and the results of
operations and cash flows for the three-month and nine-month periods
ended September 30, 1998, and 1997 have been included.
The results of operations for the three-month and nine-month periods
ended September 30, 1998, are not necessarily indicative of the results
to be expected for the full fiscal year. For further information, refer
to the financial statements and footnotes thereto included in the
Company's Form 10-KSB as filed with the Securities and Exchange
Commission for the year ended December 31, 1997.
-4-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
GENERAL COMMENTS
This Management's Discussion and Analysis or Plan of Operation 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
The net income was $165 for the nine months ended September 30, 1998 as compared
to a loss of $37,862 for the nine months ended September 30, 1997. Net loss was
$6,359 for the three months ended September 30, 1998 as compared to a net loss
of $4,942 for the three months ended September 30, 1997.
Sales for the nine months ended September 30, 1998 were $240,571 as compared to
$58,298 for the nine months ended September 30, 1997. The 313% or $182,273
increase was the result of additional activity from existing customers and
several new customers that placed orders during the nine months ended September
30, 1998. However, management cannot anticipate receiving such additional orders
in future quarters.
Selling and marketing expenses during the nine months ended September 30, 1998
were $7,921 compared to $6,117 for the nine months ended September 30,1998, a
increase of $1,804.
General and administrative expenses for the nine months ended September 30, 1998
were $35,476 as compared to $19,319 for the nine months ended September 30,
1997.
Product development costs remained constant compared to the nine months ended
September 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
Cash used for operations during the six months ended September 30, 1998 was
$109,906. Accounts receivable increased by $83,979 from December 31, 1997 to
September 30, 1998. Management anticipates that such receivable balances will be
collected in due course in the Company's next fiscal quarter. In addition,
accounts payable increased during this period by $69,310. Inventories increased
by $71,751 during this period.
The Company's chief executive officer, who holds a $650,000 note from the
Company, has agreed
-5-
<PAGE>
not to demand repayment of the note within twelve months. Accordingly, the note
has been reflected as a long term liability at September 30, 1998.
The Company's largest shareholder has agreed to fund working capital needs,
should they arise during the remainder of 1998. Management believes that these
sources of working capital will adequately meet the Company's needs through the
end of 1998.
YEAR 2000
The Company recognizes that a challenging problem exists in that many computer
systems worldwide do not have the capability of recognizing the year 2000 or the
years thereafter. No easy technological "quick fix" has yet been developed for
this problem. While the issue is not of significance for the Company because of
its minimal reliance on computers, this "Year 2000 Computer Problem" creates
risk for the Company from unforeseen problems in its own computer systems and
from third parties with whom the Company deals. Such failures of third parties'
computer systems could have a material adverse effect on the Company and its
ability to conduct its business in the future.
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
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Number Description
-------- --------------
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended September 30, 1998.
-6-
<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
Controller and Chief Accounting Officer
Dated : November 12, 1998
-7-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000848101
<NAME> VISION TEN, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 23,217
<SECURITIES> 0
<RECEIVABLES> 168,724
<ALLOWANCES> 0
<INVENTORY> 381,619
<CURRENT-ASSETS> 573,560
<PP&E> 53,031
<DEPRECIATION> 53,031
<TOTAL-ASSETS> 573,560
<CURRENT-LIABILITIES> 325,908
<BONDS> 650,000
0
0
<COMMON> 152,310
<OTHER-SE> (554,658)
<TOTAL-LIABILITY-AND-EQUITY> 573,560
<SALES> 240,571
<TOTAL-REVENUES> 240,571
<CGS> 193,660
<TOTAL-COSTS> 193,660
<OTHER-EXPENSES> 70,397
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 165
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 165
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
