FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 0-27828
WANDERLUST INTERACTIVE, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3779546
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
598 Broadway, New York, NY 10012
(Address of principal executive offices)
(Zip Code)
(212) 966-8887
(Registrant's telephone number, including area code)
(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 and 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 No X
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of November 4, 1996.
3,763,719 shares of common stock, par value $.01 per share.
Page 1 of 10
There is no Exhibit Index.
WANDERLUST INTERACTIVE, INC.
INDEX
Part I. Financial Information Page No.
Item 1. Financial Statements
Balance Sheet - 3
September 30, 1996
Statements of Operations- 4
Three Months Ended September
30, 1996 and September 30,
1995, and July 2, 1994 (inception)
to September 30, 1996 (cumulative)
Statement of Cash Flows - Three 5
Months Ended September 30, 1996,
and September 30, 1995, and
July 2, 1994 (inception) to
September 30, 1996 (cumulative)
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis 8
of Financial Condition and
Results of Operations
Part II. Other Information
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
Signature 10
-2-
<PAGE>
<TABLE>
<CAPTION>
Wanderlust Interactive, Inc.
(A Development Stage Company)
Balance Sheet
ASSETS
September 30,
1996
<S> <C>
Current assets:
Cash and cash equivalents $3,899,513
Prepaid expenses 24,000
Total current assets 3,923,511
Fixed assets, net 272,051
Other assets:
License rights 300,000
Organization costs, net of amortization 4,081
Deferred loan costs, net of amortization 7,184
Security deposits 44,444
Other 28,471
384,180
$4,579,744
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
and accrued liabilities $ 154,004
Convertible debentures 507,500
Total current liabilities 661,504
Commitments and contingency
Shareholders' equity:
Preferred stock, $.01 par value;
authorized, 100,000 shares;
issued and outstanding, none -
Common stock, $.01 par value;
authorized, 10,000,000 shares;
issued and outstanding, 3,763,719 shares 37,637
Additional paid-in capital 7,216,348
Deficit accumulated during the
development stage ( 3,335,745)
3,918,240
$4,579,844
See notes to financial statements.
-3-
<PAGE>
<CAPTION>
Wanderlust Interactive, Inc.
(A Development Stage Company)
Statements of Operations
July 1, 1994
Three Months Three Months (inception) to
ended ended September 30,1996
September 30, 1996 September 30, 1995 (cumulative)
<S> <C> <C> <C>
Sales, foreign
royalty rights $ 118,300 $ - $ 168,300
Expenses:
Research and
development 739,394 172,474 2,141,865
General and
administrative 392,639 110,674 1,424,848
Interest expense
(income), net (34,812) 3,424 (62,668)
1,097,221 286,572 3,504,045
Net loss $ 978,921 $ 286,572 $3,335,745
Net loss per
common stock share $ .26 $ .14 $ 1.24
Weighted average
shares outstanding 3,763,719 2,024,973 2,687,223
See notes to financial statements.
-4-
<CAPTION>
Wanderlust Interactive, Inc.
(A Development Stage Company)
Statements of Cash Flows
July 1, 1994
Three Months Three Months (inception) to
ended ended September 30,1996
September 30, 1996 September 30, 1995 (cumulative)
<S> <C> <C> <C>
Cash flows from
operating
activities:
Net loss $ (978,921) $ (286,574) $(2,356,824)
Adjustments to
reconcile net loss
to net cash used
in operating
activities:
Amortization
and depreciation 33,887 16,931 119,878
Common stock
issued for bonus - - 25,000
Common stock
issued for service - - 14,310
Common stock issued
for interest - - 19,610
Change in:
Prepaid expenses - - (24,000)
Organization costs - - (7,420)
Security deposit (15,673) (200) (57,244)
Accounts payable and
accrued liabilities 31,234 53,319 122,772
Net cash used in
operating activities (929,473) (216,524) (2,143,918)
Cash flows from
investing activities:
Purchase of license - - (300,000)
Purchase of fixed
assets (64,672) (148,585) (343,097)
Net cash used in
investing activities (64,672) (148,585) (643,097)
-5-
<PAGE>
<CAPTION>
Wanderlust Interactive, Inc.
(A Development Stage Company)
Statements of Cash Flows (continued)
July 1, 1994
Three Months Three Months (inception) to
ended ended September 30,1996
September 30, 1996 September 30, 1995 (cumulative)
<S> <C> <C> <C>
Cash flows from
financing activities:
Issuance of common
stock and warrants,
net of costs of
issuance - (1,847) 7,195,065
Proceeds,
notes payable - - 507,500
Deferred stock
offering costs - (40,354) -
Debt acquisition
costs - (1,847) (21,892)
Net cash provided
(used) by financing
activities - (44,048) 7,680,673
Increase (decrease)
in cash and cash
equivalents (994,145) (409,157) 3,899,513
Cash and cash
equivalents,
beginning 4,893,658 721,968 -
Cash and cash
equivalents,
ending $3,899,513 $ 312,811 $3,899,513
</TABLE>
See notes to financial statements.
-6-
<PAGE>
Wanderlust Interactive, Inc.
(A Development Stage Company)
Notes to Financial Statements
1. The financial statements as of September 30, 1996 and for the
three month periods ending September 30, 1996 and 1995 are
unaudited and reflect all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the financial
position and operating results for the interim periods. The
financial statements should be read in conjunction with the
financial statements and notes thereto, together with
management's discussion and analysis of financial condition
and results of operations contained in the Company's Annual
Report to Stockholders incorporated by reference in the
Company's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1996. The results of operations for the three
months ended September 30, 1996 are not necessarily indicative
of the results for the entire fiscal year ending June 30,
1997. Refer to Part II, Item 5 for additional information
with respect to a contingency.
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The Company had revenues of $118,300 and $0 for the three
months ended September 30, 1996 and 1995, respectively. The
Company incurred a net loss of $978,921, or $.26 per share, and
$286,572, or $.14 per share, for the three month periods ended
March 31, 1996 and 1995, respectively.
For the three month periods ended September 30, 1996 and 1995,
research and development expenses totalled $739,394 and $172,474,
respectively. General and administrative expenses were $392,639
and $110,674 for the three month periods ended September 30, 1996
and 1995, respectively.
Financial Condition
The Company's working capital at September 30, 1996 was
$3,262,007. It was $4,287,387 at June 30, 1996. The Company's
current ratio was 5.93 to 1 at September 30, 1996 as compared to
7.80 to 1 at June 30, 1996.
The Company used cash for operating activities in the amount
of $929,473 during the three months ended September 30, 1996, as
compared to using $216,524 in the year earlier period. The Company
purchased $64,672 of new equipment during the three months ended
September 30, 1996, as compared to $148,585 a year ago. The
Company did not use any funds from financing activities during the
three months ended September 30, 1996. However, the Company did
use $44,048 from financing activities during the three months ended
September 30, 1995. The Company's cash and cash equivalents
decreased from $4,893,658 at June 30, 1996 to $3,899,513 at
September 30, 1996.
-8-
<PAGE>
PART II - OTHER INFORMATION
Item 5. Other Information
On October 9, 1996, Robert Owens commenced an action against
the Company in the United States District Court for the Southern
District of New York, entitled Owens v. Wanderlust Interactive,
Inc., (96 Civ. 7672). The complaint alleges that plaintiff had an
agreement with the Company pursuant to which it was obligated to
permit plaintiff to subscribe for 108,000 shares of the Company's
common stock at the price of $.125 per share. The complaint
alleges two claims for relief: (1) for breach of the purported
contract to sell those shares to plaintiff and (2) for conversion
of the shares to which plaintiff claims to be entitled. The
Company has filed an answer to the complaint, which denies the
complaint's material allegation that the Company had an obligation
to plaintiff. The Company believes the complaint is without merit
and intends to vigorously defend itself against it. Moreover, it
has attempted to return the subscription payment of the plaintiff
who has rejected it. The Company has deposited the plaintiff's
payment into an interest bearing escrow account held by its
attorneys.
Item 6. Exhibits and Reports on Form 8-K
(b) During the quarter ended September 30, 1996, the
registrant did not file any reports on Form 8-K.
-9-
SIGNATURE
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.
WANDERLUST INTERACTIVE, INC.
Dated: November 6, 1996 s/Catherine Winchester
Catherine Winchester
President (Principal Financial
Officer)
-10-
WP51:C:\CDKIDZ\10Q-SEPT.96
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 3,899,513
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,923,511
<PP&E> 407,770
<DEPRECIATION> 135,719
<TOTAL-ASSETS> 4,579,744
<CURRENT-LIABILITIES> 661,504
<BONDS> 0
0
0
<COMMON> 37,637
<OTHER-SE> 3,880,603
<TOTAL-LIABILITY-AND-EQUITY> 4,579,844
<SALES> 118,300
<TOTAL-REVENUES> 118,300
<CGS> 0
<TOTAL-COSTS> 392,639
<OTHER-EXPENSES> 739,394
<LOSS-PROVISION> 978,921
<INTEREST-EXPENSE> (34,812)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> (.26)
<EPS-DILUTED> (.26)
</TABLE>
