[As adopted in Release No. 34-32231, April 28, 1993, 58 F.R. 26509]
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission file number 0-18834
Klever Marketing, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 36-3688583
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
350 West 30 South, Suite 201, Salt Lake City, Utah 84101
(Address of principal executive offices)
(801) 322-1221
Issuer's telephone number
VideOcart, Inc.
(Former name, former address and former fiscal year, if changed since last
report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 No X
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes No X
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date:
May 23, 1997 9,443,513
Transitional Small Business Disclosure Format (check one).
Yes ; No X
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
KLEVER MARKETING, INC.
(FORMERLY VideOcart, Inc.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
September 30 December 31
ASSETS 1996 1995
Current Assets
Cash $ (4,738) $ 24,674
Total Current Assets (4,738) 24,674
Fixed Assets
Equipment 51,062 47,462
Less Accumulated Depreciation (26,336) (17,670)
Net Fixed Assets 24,726 29,792
Other Assets
Patents 1,448,169 1,445,146
Organization Costs 152,662 152,662
Less Accumulated Amortization (802,546) (690,748)
Net Other Assets 798,285 907,060
Total Assets $ 818,273 $ 961,526
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable, Trade $ 263,616 $ 95,821
Accrued Liabilities 34,015 33,460
Related Party Payables 50,166 50,166
Lease Obligation 5,406 8,186
Total Current Liabilities 353,203 187,633
Other
Deferred Income 229,000 214,000
Notes Payable - Related Party 30,283 39,689
Total Other Liabilities 259,283 253,689
Total Liabilities 612,486 441,322
KLEVER MARKETING, INC.
(FORMERLY VideOcart, Inc.)
(A Development Stage Company)
BALANCE SHEET
(Continued)
(Unaudited)
SEPTEMBER 30 DECEMBER 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
(Continued)
Stockholders' Equity
Preferred stock (par value $.01),
2,000,000 shares authorized.
-0- issued and outstanding $ - $ -
Common Stock (Par Value $.01),
20,000,000 shares authorized.
8,825,241 shares issued and out-
standing September 30, 1996 and
8,592,038 shares issued and out-
standing December 31, 1995 88,252 85,920
Common Stock to be issued 3,400 3,400
Paid in Capital in Excess of Par
Value 4,071,705 3,764,669
Retained Deficit (3,333,785) (3,333,785)
Deficit Accumulated During the
Development Stage (623,785) -
Total Stockholders' Equity 205,787 520,204
Total Liabilities and
Stockholders' Equity $ 818,273 $ 961,526
The accompanying notes are an integral part of these financial statements.
KLEVER MARKETING, INC.
(FORMERLY VideOcart, Inc.)
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
Cumulative
For the Three Months For the Nine Months During
September 30, September 30, Development
1996 1995 1996 1995
Stage
Revenue $ - $ - $ - $ - $ -
Total Revenue - - - - -
Expenses
General and
Administrative 135,344 131,306 406,033 393,918 406,033
Research and
Development 70,209 193,247 210,627 579,741 210,627
Total Expenses 205,553 324,553 616,660 973,659 616,660
Other Income (Expense)
Interest Income - 344 - 1,032 -
Interest Expense (2,375) (3,147) (7,125) (9,442) (7,125)
(2,375) (2,803) (7,125) (8,410) (7,125)
Income (Loss)
Before Taxes (207,928) (327,356) (623,785) (982,069) (623,785)
Income Taxes - - - - -
Net Income (Loss)
After Taxes $ (207,928) $(327,356) $ (623,785) $(982,069) $(623,785)
Weighted Average Shares
Outstanding 8,825,241 8,435,331 8,727,166 8,417,039
Loss Per Share $ (.02) $ (.04) $ (.07) $ (.12)
The accompanying notes are an integral part of these financial statements.
KLEVER MARKETING, INC.
(FORMERLY VideOcart, Inc.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
Cumulative
For the Nine Months Ended During
September 30, Development
1996 1995 Stage
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(623,785) $ (982,069) $(623,785)
Adjustments used to reconcile
net loss to net cash provided
by (used in) operating activities:
Increase (decrease) in
accounts receivable and
prepaid expenses - 12 -
Non cash general and administrative 4,398 - 4,398
Increase (decrease) in accounts
payable 167,795 20,836 167,795
Increase (decrease) in accrued
Liabilities 555 40,039 555
Deferred income 15,000 214,000 15,000
Depreciation and Amortization 120,464 90,904 120,464
Net Adjustment 308,212 365,791 308,212
Net cash used in operating activities (315,573) (616,278) (315,573)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment (3,600) (14,250) (3,600)
Acquisition of patents (3,023) (22,125) (3,023)
Net cash used by investing activities (6,623) (36,375) (6,623)
KLEVER MARKETING, INC.
(FORMERLY VideOcart, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Continued)
(Unaudited)
Cumulative
For the Nine Months Ended During
September 30, Development
1996 1995 Stage
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds From Capital Stock Issued $ 304,970 $ 660,100 $ 304,970
Proceeds From Loans 25,000 - 25,000
Principle Payments on
Lease Obligations (2,780) (8,112) (2,780)
Cash payments on notes payable (34,406) - (34,406)
Net Cash Provided by Financing
Activities 292,784 651,988 292,784
Net Increase (Decrease) in Cash
and Cash Equivalents (29,412) (665) (29,412)
Cash and Cash Equivalents at
Beginning of the Year 24,674 25,071 24,674
Cash and Cash Equivalents at
End of the Year $ (4,738) $ 24,406 $ (4,738)
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Interest $ 6,110 $ 9,443 $ 6,110
Income Taxes $ 100 $ 100 $ 100
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
On May 13, 1996 the Company issued 1,463 shares of stock in exchange for legal
services of $4,398.
The accompanying notes are an integral part of these financial statements.
KLEVER MARKETING, INC.
(FORMERLY VideOcart, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
1. Interim Reporting
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles and with Form 10-QSB
requirements. 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
considered necessary for a fair presentation have been included. Operating
results for the nine month period ended September 30, 1996, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1996.
2.MERGER
On July 5, 1996, pursuant to the plan of reorganization, the Company
merged with Klever Kart, Inc. in a reverse merger. The reorganized company is
to be obligated to pay up to $150,000 in administrative and priority claims of
the former VideOcart, Inc. The Reorganized Company issued shares of common
stock pursuant to the plan as follows:
* Current shareholders of Klever-Kart received 7,999,866 shares.
* Creditors of the Company (as specified in the second amended plan of
reorganization) will receive 900,000 shares pro rata or $100 if elected by
creditor. As of December 31, 1996, 560,000 shares have been issued. The
remaining 340,000 shares has been reserved, and will be issued when the
creditors entitled to them are identified.
* Series B preferred stock holders received 66,000 shares.
* Series D preferred stock holders received 99,994 shares.
* Common stock holders received 99,381 shares.
Item 2. Management's Discussion and Analysis or Plan of Operation.
General - This discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in
the Company's annual report on Form 10-KSB for the year ended December 31,
1995.
Results of Operations - From December 8, 1993 to July 5, 1996 the Company
was in Bankruptcy. On July 5, 1996 the Company was reorganized (See Note 2
above) and for the three and nine months ended September 30, 1996 the Company
became a development stage company and has not begun principal operations.
Liquidity and Capital Resources
The Company requires working capital principally to fund its current
operations. From time to time in the past the Company has relied on
short-term borrowing and the issuance of restricted common stock to fund
current operations. There are no formal commitments from banks or other
lending sources for lines of credit or similar short-term borrowing, but the
Company has been able to borrow any additional working capital that has been
required. From time to time in the past, required short-term borrowing have
been obtained from a principal shareholder or other related entities.
The Company generates and uses cash flows through three activities:
operating, investing, and financing. During the nine months ended September
30, 1996, operating activities used cash of $316,000 as compared to net cash
used of $616,000 for the nine months ended September 30, 1995.
Cash flows used in investing activities is primarily due to the
acquisition of $7,000 and $36,000 of computer equipment and office furniture
and patents for the nine months ended September 30, 1996 and September 30,
1995.
Financing activities provided $293,000 and $652,000 for the nine months
ended September 30, 1996 and 1995. The increase in cash flow from financing
activities was primarily from the sale of common stock.
The Company may be required to supplement its available cash and other
liquid assets with proceeds from borrowing, the sale of additional securities,
or other sources. There can be no assurance that any such required additional
funding will be available or, if available, that it can be obtained on terms
favorable to the Company.
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
The Company did not file a report on Form 8-K during the nine months
ended September 30, 1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Klever Marketing, Inc.
(Registrant)
DATE: June 20, 1997 By: /s/
Paul G. Begum
Chief Executive officer & Director
(Principal financial and
Accounting Officer)
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF KLEVER MARKETING, INC. AS OF SEPTEMBER 30, 1996 AND THE RELATED
STATEMENTS OF OPERATIONS AND CASHFLOWS FOR THE NINE MONTHS THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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