UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Period Ended June 30, 1996
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 0-19685
METROVISION OF NORTH AMERICA, INC.
(Exact name of registrant as specified in its charter)
New York 16-1276525
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporation or organization)
424 Madison Avenue New York, New York 10017
(Address of principal executive offices) (Zip Code)
(212) 759-2850
(Registrant's telephones number, including area code)
Not Applicable
(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 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 __
Applicable Only to Issuers Involved in Bankruptcy
Proceedings During the Preceding Five Years
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13,
or 15(d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by the
court. Yes No ___
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date.
Common Stock, $.001 Par Value - 6,987,846 shares as of August
12, 1996.
METROVISION OF NORTH AMERICA, INC.
INDEX
PAGE
Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed consolidated balance sheets - December 31, 1995 and
June 30, 1996 1
Condensed consolidated statements of operations -
Three months ended June 30, 1995 and 1996
Six months ended June 30, 1995 and 1996 2
Condensed consolidated statements of cash flows -
Six months ended June 30, 1995 and 1996 3
Notes to condensed consolidated financial statements - June 30,
1996 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results
of Operations 5
Part II. Other Information
Item 6. Exhibits and reports on form 8-K 9
Signatures 10<PAGE>
PART I - FINANCIAL INFORMATION
METROVISION OF NORTH AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, June 30,
1995 1996
(Note) (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $97,125 $2,092
Accounts receivable, net of allowance of $7,362 at June 30,
1996 441,955 272,964
Prepaid expenses 45,415 9,981
TOTAL CURRENT ASSETS 584,495 285,037
OPERATING EQUIPMENT
Installations and equipment 3,550,257 3,557,093
Installations-in-process 221,416 196,416
Equipment and fixtures 195,378 197,953
3,967,051 3,951,462
Less: accumulated depreciation (2,223,742) (2,403,352)
1,743,309 1,548,110
OTHER ASSETS 10,846 10,187
PREPAID SOFTWARE LICENSE 36,000 18,000
CONTRACT RIGHTS 257,761 157,761
$2,632,411 $2,019,095
LIABILITIES and STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable-trade $182,545 $175,574
Accrued salaries and commissions 133,284 138,928
Deferred Income 286,547 143,062
Other accrued expenses 66,905 79,824
Current portion of notes payable 96,000 76,000
TOTAL CURRENT LIABILITIES 765,281 613,388
PREFERRED STOCK, 5% SERIES A 649 649
COMMON STOCKHOLDERS' EQUITY
Common stock, Class A 6,987 6,987
Capital in excess of par value 13,385,979 13,385,979
Retained deficit (11,526,485) (11,987,908)
TOTAL COMMON STOCKHOLDERS' EQUITY 1,866,481 1,405,058
$2,632,411 $2,019,095
Note: The balance sheet at December 31, 1995 has been derived
from the audited financial statements at that date but does not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. See notes to condensed consolidated financial
statements.<PAGE>
METROVISION OF NORTH AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended ths Ended
June 30 June 30 ber 30
1995 1996 1995 1996
GROSS REVENUES $442,617 $318,350 $877,874 $530,603
Less: agency commissions (19,521) (10,137) (37,499)
(12,874)
NET REVENUES 423,096 308,213 840,375 517,729
OPERATING COSTS AND EXPENSES
Cost of sales 165,131 121,569 410,303 223,388
Selling, general, and administrative 216,377 194,108
521,307 429,318
381,508 315,677 931,610 652,706
OPERATING INCOME (LOSS) BEFORE DEPRECIATION,
DEPRECIATION AND AMORTIZATION 41,588 (7,464) (91,235)
(134,977)
Depreciation and amortization 161,500 161,500 323,000
323,000
LOSS FROM OPERATIONS (119,912) (168,964) (414,235)
(457,977)
Interest income 2,477 243 4,974 292
Interest expense (1,890) (1,861) (4,037) (3,738)
NET LOSS (119,325) (170,582) (413,298) (461,423)
Less: Preferred stock dividend requirements 45,793 0 45,041
91,586 90,082
NET LOSS APPLICABLE TO COMMON STOCK $(165,118) $(215,623)
$(504,884) $(551,505)
NET LOSS PER COMMON SHARE $(0.03) $(0.03) $(0.09)
$(0.09)
WEIGHTED AVERAGE NUMBER OF SHARES 5,814,457 6,502,850
5,802,472 6,342,660
<PAGE>
METROVISION OF NORTH AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)
Six months ended ended
June 30
1995 1996
OPERATING ACTIVITIES
Net loss $(413,298) $(461,423)
Adjustments to reconcile net loss to net cash used in
operating activities:
Provision for depreciation and amortization 323,000 323,000
Loss on sale of equipment 0 611
Changes in operating assets and liabilities:
Decrease in accounts receivable (net) 14,280 168,991
(Increase) Decrease in prepaid expenses and other assets
(6,808) 36,093
Decrease on accounts payable and other accrued expenses
(22,349) (131,893)
NET CASH USED IN OPERATING ACTIVITIES (105,175) (64,621)
INVESTING ACTIVITIES
Capital expenditures for operating equipment (13,865)
(12,912)
Proceeds from sale of equipment 0 2,500
NET CASH USED IN INVESTING ACTIVITIES (13,865) (10,412)
FINANCING ACTIVITIES
Principal payments on notes to former stockholders 0
(20,000)
NET CASH USED IN FINANCING ACTIVITIES 0 (20,000)
(119,040) (95,033)
Cash and cash equivalents at beginning of period 400,716
97,125
CASH AND CASH EQUIVALENTS AT END OF PERIOD $281,676 $2,092
<PAGE>
METROVISION OF NORTH AMERICA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 1996
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 the instructions to Form 10-QSB 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 six months ended
June 30, 1996 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1996. For
further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's
annual report on Form 10-K for the year ended December 31, 1995.
NOTE B--SUBSEQUENT EVENT
On July 10, 1996, certain officers and directors loaned the
Company $25,000 at 10% interest per annum with principal and
accrued interest due no later than November 1, 1996. In
connection with this borrowing the Company issued to the lenders
warrants to purchase 69,000 shares of common stock at an
exercise price of $.15 per share.<PAGE>
METROVISION OF NORTH AMERICA, INC.
Six Months Ended June 30, 1996
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
June 30, 1995 Compared to June 30, 1996
Gross Revenues. For the six months ended June 30, 1996, gross
revenues decreased by $347,271 to $530,603 as compared to
$877,874 for the six months ended June 30, 1995. For the three
months ended June 30, 1996 gross revenues decreased by $124,267
to $318,350 as compared to $442,617 for the three months ended
June 30, 1995. The decrease is attributable to a decrease in
system sales of $212,248 and a decrease in advertising and news
service revenues of $135,023 for the six months ended June 30,
1996. The decrease in ad revenues reflects the Company's
increased emphasis on higher margin system sales. System sales
for the period were adversely affected by harsh weather
conditions which delayed the installation of the New Jersey
Transit System project during the first three months of 1996.
System sales involves the sale of complete, installed video
systems to the secondary transit market.
Agency Commissions. Agency commissions consist of the fees
charged by advertising agencies against the value of the
advertising contracts billed to their clients by the Company.
These commissions generally are 15% of gross revenues. For the
six months ended June 30, 1996, agency commissions totaled
$12,874 which is $24,625 less than the agency commissions for
the six months ended June 30, 1995. For the three months ended
June 30, 1996, agency commissions totaled $10,137 which is
$9,384 less than the agency commissions for the three months
ended June 30, 1995. The decrease is primarily the result of
the decrease in gross advertising revenue.
Net Revenues. Net revenues are equal to gross revenues after
deducting advertising agency commissions. Net revenues for the
six months ended June 30, 1996 were $517,729, a decrease of
$322,646 or 38% from net revenues of $840,375 for the six months
ended June 30, 1995. Net revenues for the three months ended
June 30, 1996 were $308,123 a decrease of $114,883 or 27% from
net revenues of $423,096 for the three months ended June 30,
1995. The decrease in net revenues is associated with the
decrease in advertising and system sales revenues.
Cost of Sales. Cost of sales consists primarily of commissions
paid to installed transit systems, the cost of system
installations, maintenance costs, and software licensing fees.
Commissions to installed transit systems are based on a
percentage of revenues. Maintenance costs are directly related
to increases in the number of installed television monitors and
computers. Cost of sales for the six months ended June 30, 1996
was $223,388 a decrease of $186,915 or 46% from $410,303 for the
six months ended June 30, 1995. Cost of sales for the three
months ended June 30, 1996 were $121,569 a decrease of $43,562
or 26% from $165,131 for the three months ended June 30, 1995.
The decrease is directly associated with the decrease in system
sales revenues.
Selling, General and Administrative Expenses. Selling, general
and administrative expenses for the six months ended June 30,
1996 were $429,318, a decrease of $91,989 or 18% from $521,307
for the six months ended June 30, 1995. Selling, general and
administrative expenses for the three months ended June 30, 1996
were $194,108, a decrease of $22,269 or 10% from $216,377 for
the three months ended June 30, 1995. The decrease is primarily
attributable to a decrease in salaries, wages and related
employee costs resulting from reductions in sales, marketing and
operations employees.
Interest Income. For the six months ended June 30, 1996,
interest income totaled $292 as compared to $4,974 for the same
period in 1995. For the three months ended June 30, 1996,
interest income totaled $243 as compared to $2,477 for the same
period in 1995. The decrease in interest income is the result of
a smaller cash balance earning interest in 1996. <PAGE>
Liquidity and Sources of
Capital
At June 30, 1996, the Company had negative working capital of
$328,351.
Cash decreased $95,033 from December 31, 1995 to $2,092 at June
30, 1996. The net decrease is the result of cash being expended
for operating purposes and the repayment of amounts due to a
former shareholder. Accounts receivable, net of allowance for
doubtful accounts, decreased $168,991 to $272,964 at June 30,
1996. The decrease is the result of the collection of account
balances and lower gross revenues. Accrued salaries and
commissions increased $5,644 from $133,284 at December 31, 1995
to $138,928 at June 30, 1996. The increase is the result of the
timing of certain cash payments to sponsors for accrued
commissions. Deferred income decreased $143,485 to $143,062 at
June 30, 1996 from $286,547 at December 31, 1995. This decrease
is based on the percentage complete to date and the result of
recording revenue against advance billings on system sales to
the transit authorities in accordance with their budgetary and
funding requests. The retained deficit increased $461,423 from
$11,526,485 at December 31, 1995 to $11,987,908 at June 30,
1996. The increase is the result of the net loss for the period
ending June 30, 1996.
On May 10, 1996, the Company, York Hannover Pharmaceuticals,
Inc. ("York Hannover") and Stockbridge Investment Partners Inc.
("Stockbridge") entered into an Agreement and Plan of Merger
(the "Merger Agreement") for the merger of York Hannover, a
wholly owned subsidiary of Stockbridge, with and into the
Company. Under the Merger Agreement, MetroVision would issue
shares of its common stock to Stockbridge equal to 63.3 percent
of its total shares outstanding on a post merger basis, after
giving effect to a 4.6 for 1 reverse split of MetroVision common
stock. The Company's name would be changed to "York Hannover
Health Care, Inc."
MetroVision contemplates holding a shareholder meeting for the
purpose of soliciting shareholder approval of the proposed York
Hannover merger, change of name and reverse stock split. In
addition, the shareholders will be asked to approve an increase
in authorized shares of common stock and the amendment of the
Company's 1991 Stock Option Plan and 1993 Non-Employee
Directors' Stock Option Plan. Although, not subject to
shareholder approval, the Company intends to offer the holders
of its 648,535 shares of Series A 5% Preferred Stock an
aggregate of 800,000 shares of common stock (after giving effect
to the aforementioned reverse split) in exchange for such
Preferred Stock and forgiveness of all accrued dividends on such
Preferred Stock (approximately $600,000).
On May 22, 1996, the Company's Common Stock was de-listed from
the NASDAQ Small Cap Market for failure to comply with certain
listing requirements.
The Company is continuously engaged in discussions regarding
the sale of new installations. The Company has an agreement
amounting to approximately $2.9 million with New Jersey Transit
to install and maintain approximately 50 transit stations of
which $954,000 has been received to date.
On July 10, 1996 certain officers and directors loaned the
Company $25,000 at 10% interest per annum with principal and
accrued interest due no later than November 1, 1996. In
connection with this borrowing the Company issued to the lenders
warrants to purchase 69,000 shares of common stock at an
exercise price of $.15 per share.
The Company's independent auditors have included an explanatory
paragraph in their report on the 1995 consolidated financial
statements stating that recurring losses, resulting in negative
cash flows, raise substantial doubt about the Company's ability
to continue as a going concern. The Company anticipates that
losses will continue until the Company generates sufficient
advertising, system sale or other revenues to offset its
operating costs. The Company believes that generation of that
level of revenues is dependent upon, among other things (i)
expanding its network through sales of complete systems to
transit authorities and airports seeking to comply with the
Americans with Disabilities Act, (ii) the Company's ability to
contract with select alternative/transit media sales
organizations in order to significantly increase the sale of
advertising on its network and (iii) the completion of the
Company's proposed merger with York Hannover or alternative
strategic corporate and marketing alliances. There can be no
assurance, however, that the Company will be able to generate
significantly increased revenues or ever achieve profitable
operations.
The Company is not currently generating sufficient cash flow to
fund its operations and is dependent on the contract with New
Jersey Transit or other financing in order to sustain its
operations. Although there can be no assurance, the Company
believes that, based on currently proposed plans and assumptions
relating to its operations, the contract with New Jersey
Transit together with projected cash flow from operations, will
be sufficient to satisfy the Company's contemplated cash
requirements for 1996. In the event the Company's plans change
or its assumptions change or prove inaccurate or projected cash
flows prove to be insufficient to fund operations, the Company
would be required to seek additional financing. Except for the
loans from certain officers and directors discussed above the
Company has no current arrangements with respect to or sources
of additional financing, and there can be no assurance that
financing will be available to the Company on commercially
reasonable terms, if at all. Any inability to obtain additional
financing could have a material adverse effect on the Company,
including possibly requiring the Company to significantly
curtail or cease its operations.
<PAGE>
PART II - OTHER INFORMATION
METROVISION OF NORTH AMERICA, INC.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No reports on Form 8-K were filed during the six months
ended June 30, 1996.<PAGE>
METROVISION OF NORTH AMERICA, INC.
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 of the undersigned thereunto duly authorized.
METROVISION OF NORTH AMERICA, INC.
(Registrant)
Date: August 12, 1996 /s/ Robert F. Hussey
Robert F. Hussey, President
(Duly authorized officer)
Date: August 12, 1996 /s/ David M. Fancher
David M. Fancher
Chief Financial Officer and Secretary (Principal Financial &
Accounting Officer)
(Principal Financial & Accounting Officer)
<PAGE>
METROVISION OF NORTH AMERICA, INC.
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 of the undersigned thereunto duly authorized.
METROVISION OF NORTH AMERICA, INC.
(Registrant)
Date: August 12, 1996
Robert F. Hussey, President
(Duly authorized officer)
Date: August 12, 1996
David M. Fancher
Chief Financial Officer and Secretary (Principal Financial &
Accounting Officer)
(Principal Financial & Accounting Officer)
See notes to condensed consilidate financial statements.
See notes to condensed consilidate financial statements.
See notes to condensed consolidated financial statements.
See notes to condensed consolidated financial statements.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 0 2,092
<SECURITIES> 0 0
<RECEIVABLES> 0 272,964
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 9,981
<PP&E> 0 3,951,462
<DEPRECIATION> 0 2,403,352
<TOTAL-ASSETS> 0 2,019,095
<CURRENT-LIABILITIES> 0 613,388
<BONDS> 0 0
0 0
0 649
<COMMON> 0 6,987
<OTHER-SE> 0 1,398,071
<TOTAL-LIABILITY-AND-EQUITY> 0 2,019,015
<SALES> 0 530,603
<TOTAL-REVENUES> 0 517,729
<CGS> 0 223,388
<TOTAL-COSTS> 0 652,706
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 3,446
<INCOME-PRETAX> 0 (461,423)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 (461,423)
<EPS-PRIMARY> 0 (.09)
<EPS-DILUTED> 0 (.09)
</TABLE>
