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 the quarterly period ended October 31, 1999 or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-10366
LASER RECORDING SYSTEMS, INC.
(Name of Small Business Issuer in Its Charter)
NEW JERSEY 22-2582847
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1359 New York Avenue
Huntington Station, New York 11746
(Address of Principal Executive Offices) (Zip Code)
(800) 786-1352
(Registrant's Telephone Number, Including Area Code)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 7,800,000 shares of the
Company's Common Stock, $.001 par value, were outstanding as of January 4, 2000.
<PAGE>
Item 1 Financial Statements
LASER RECORDING SYSTEMS, INC.
BALANCE SHEET
ASSETS Ocgtober 31, January 31,
1999 1999
------------ -----------
CURRENT ASSETS:
Cash and Cash Equivalents $ 7,137 $ 10,498
----------- -----------
Total Current Assets $ 7,137 $ 10,498
----------- -----------
Total Assets $ 7,137 $ 10,498
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued Expenses $ -- $ --
Loan Payable--Stockholder -- --
----------- -----------
Total Liabilities $ -- $ --
----------- -----------
Stockholders' Equity
Preferred Stocks - 2,200,7 to 9 Preferred
Shares; 225,321 Class B Cumulative
Preferred Shares; 1,080,000 Class C
Convertible Preferred Shares issued and
outstanding on January 31,1998
Common Stocks - 10,000,000 shares
authorized, 5,825,592 issued and
outstanding on Jan. 31, 1999; 4,798,815
issued and outstanding on Jan. 31, 1998 7,408,910 7,408,910
Paid-in Capital --
Retained Earnings (7,401,773) (7,398,412)
Total Stockholders' Equity 7,137 10,498
----------- -----------
Total Liabilities and Stockholders' Equity $ 7,137 $ 10,498
=========== ===========
The accompanying notes are an integral part of the financial statements.
<PAGE>
LASER RECORDING SYSTEMS, INC.
STATEMENT OF REVENUES, EXPENSES AND RETAINED EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
October 31 October 31
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Interest Income $ 30 $ 31 $ 88 $ 94
Recovery of Bad Debts -- -- -- --
----------- ----------- ----------- -----------
Total Revenues $ 30 $ 31 $ 88 $ 94
----------- ----------- ----------- -----------
Expenses:
Professional Fees -- -- -- 1,973
Administrative Expenses 1,578 2,252
Taxes -- 1,110 --
Bank Charges 22 12 87 250
----------- ----------- ----------- -----------
Total Expenses 1,600 12 3,449 2,223
----------- ----------- ----------- -----------
Net Loss (1,570) 19 (3,361) (2,129)
Net loss per share $ (0.00) $ 0.00 $ (0.00) $ (0.00)
----------- ----------- ----------- -----------
Shares used in computing net loss
per share 7,800,000 4,798,815 7,800,000 4,798,815
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
LASER RECORDING SYSTEMS, INC.
ANALYSIS OF STOCKHOLDERS' EQUITY
October 31,
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Preferred Stocks -- 2,200,729 Preferred Shares; 225,321 Class
B Cumulative Preferred Shares; 1,080,000 Class C
Cumulative Convertible Preferred Shares issued and
outstanding $ 2,507,364
Paid in Capital 92,775
Conversion of all Preferred Stocks to Common Stocks $ 2,507,364
Conversion of Liabilities to Common Stocks 233,906
Conversion of Paid in Capital to Common Stock 92,775
Common Stocks at the beginning of year 4,574,865 4,574,865
-----------
7,800,000 Common Stock issued and outstanding $ 7,408,910
-----------
Retained Earnings at the beginning of the year $(7,398,412) $(7,396,194)
Net Income/(Loss) (3,361) (2,129)
----------- -----------
Retained Earnings at the end of the year $(7,401,773) $(7,398,323)
----------- -----------
Total Stockholders' Equity $ 7,137 $ (223,319)
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
LASER RECORDING SYSTEMS, INC.
STATEMENT OF CASH FLOWS
Nine Months Ended
October 31
(Unaudited)
1999 1998
---- ----
Cash flows from operating activities:
Net Income $ -- $ --
-------- --------
Cash flows from financing activities:
Accrued Expenses $ (940)
Maintaining of the Corporate Entity (3,361) (2,129)
-------- --------
Net cash provided by (used in) financing activities (3,361) (3,069)
-------- --------
Increase (Decrease) in Cash (3,361) (3,069)
Cash -- Beginning of period 10,498 13,656
-------- --------
Cash -- End of period $ 7,137 $ 10,587
======== ========
The accompanying notes are an integral part of the financial statements.
<PAGE>
LASER RECORDING SYSTEMS INC.
NOTES TO THE FINANCIAL STATEMENTS
AS OF OCTOBER 31, 1999
GENERAL
Laser Recording Systems, Inc. (the Company) was organized in 1985 as the
successor to several other businesses by the original founder. In 1988, Poly
Ventures, Limited Partnership held approximately 70% of the outstanding voting
shares and maintained a controlling interest in the Company until 1998. In 1998
several investors acquired the remaining interest from Poly Ventures.
As reported in form 10- Q, on October 31st 1993, the Company ceased operations
and laid off all its employees on August 16 1993 . The Company handed over
projects to their customers on that date. Since October 31st 1993, the Company
did not file any reports with the Securities and Exchange Commission.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles and reflect all adjustments, which in
the opinion of management are necessary for a fair presentation of the results
for the periods shown. The results of operations for such periods are not
necessarily indicative of the results expected for the full fiscal year or for
any future period.
The accompanying financial statements should be read in conjunction with the
audited financial statements of Laser Recording Systems, Inc. for the fiscal
year ended January 31, 1999 and the notes thereto contained in Laser Recording
System, Inc. Annual report on Form 10-K, filed with the Securities and Exchange
Commission.
Note 1
In 1998 several investors purchased from Poly Ventures 1,975,408 Common Shares,
2,200,729 Preferred Shares, 225,321 Class B Cumulative Preferred Shares and
1,080,000 Class C Cumulative Preferred Shares. Included in the purchased were
two notes for the total of $190,000.
In 1999 all classes of the preferred shares, accrued dividends and interest,
paid-in capital and loans payable were converted to capital stock. As a result
the Company's board of Directors on January 15, 1999 authorized issuing
3,001,185 Common Shares for all liabilities and preferred stocks.
Note 2
The Company discontinued operation on August 16, 1993, however the Company
maintain certain functions to continue the existence of the Corporation.
Stockholders services and maintaining of records were handled on an ongoing
basis. In 1999, the Company filed all necessary tax returns for the years of
February 1, 1993 to January 31, 1999. For financial statement purposes all
revenues and expenses are considered non-operating transactions from February 1,
1994 to the present.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Results of Operations
The Company has no sources of revenue. Expenses reflect only the minimum cost of
maintaining the Company's operations and miscellaneous expenses associated with
seeking a merger partner. In view of these limited operations, management does
not believe that a comparison of specific line items from period to period it
would be meaningful.
Liquidity and Capital Resources
The Company's financial statements have been prepared assuming that it will
continue as a going concern. As shown in the financial statements, at October
31, 1999 the Company had total assets of $7,137 and an accumulated deficit of
$7,401,773. The Company obtains its entire financial support from loans from the
Company's majority shareholder. As January 15, 1999 all outstanding shareholder
loans, as well as all outstanding preferred stock, were converted into common
stock. However, it is likely that additional loans from that shareholder will be
necessary if the Company is to pursue its plans to merge with an operating
enterprise. These factors, among other things, raise substantial doubt about its
ability to continue as a going concern. The financial statements do not include
any adjustments relating to the recoverability and classification of recorded
asset amounts or the amounts or classification of liabilities that might be
necessary should the Company be unable to continue in operation.
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No.
- ------------
27 Financial Data Schedule.
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.
LASER RECORDING SYSTEMS, INC.
(Registrant)
Date: January 6, 2000
/s/ Walter Hinchcliffe
--------------------------------------------
<PAGE>
Walter Hinchcliffe
President
Date: January 6, 2000
/s/ Carl Lanzisera
--------------------------------------------
Carl Lanzisera
Chief Financial Officer
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-START> FEB-01-1999
<PERIOD-END> OCT-31-1999
<CASH> 7,137
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,137
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,137
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 7,408,910
<OTHER-SE> (7,401,773)
<TOTAL-LIABILITY-AND-EQUITY> 7,137
<SALES> 0
<TOTAL-REVENUES> 30
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,449
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,361)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,361)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
