-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EthFd38y16UM8x5L0jjgHr8mV9cCTDKH02qe/9JSNeu0V3NLDLXcDOTw7Fw70pDe 428t2ST/zHnoe20L8sb5Gw== /in/edgar/work/20000619/0000777844-00-000009/0000777844-00-000009.txt : 20000919 0000777844-00-000009.hdr.sgml : 20000919 ACCESSION NUMBER: 0000777844-00-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000430 FILED AS OF DATE: 20000619 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUSONICS VIDEO CORP CENTRAL INDEX KEY: 0000777844 STANDARD INDUSTRIAL CLASSIFICATION: [5960 ] IRS NUMBER: 841001336 STATE OF INCORPORATION: CO FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14200 FILM NUMBER: 656881 BUSINESS ADDRESS: STREET 1: 32751 MIDDLEBELT RD STE B CITY: FARMINGTON HILLS STATE: MI ZIP: 48334 BUSINESS PHONE: 8108515651 MAIL ADDRESS: STREET 1: 32751 MIDDLEBELT RD STE B CITY: FARMINGTON HILLS STATE: MI ZIP: 48334 10-Q 1 0001.txt CVC FORM 10-Q FOR QTR ENDING 4/30/00 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter year ended: Commission file number: April 30, 2000 0-14200 ------------------------- --------------- CompuSonics Video Corporation (Exact name of Registrant as specified in its charter) Colorado 84-1001336 -------- -------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 32751 Middlebelt Road, Suite B Farmington Hills, MI 48334 ------------------------------ -------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (248) 851-5651 ------------------ Securities registered pursuant to Section 12 (b) of the Act: None Securities registered pursuant to Section 12 (g) of the Act: Common Stock, $.001 Par Value ------------------------------------ (Title of Class) 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 and, (2) has been subject to such filing requirements for the past 90 days: Yes X No --- As of June 8, 2000, a total of 160,006,250 shares of common stock, $.001 par value, were outstanding. COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES Form 10-Q Filing for the Quarter Ended April 30, 2000 INDEX Page Number -------- PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements. Consolidated Balance Sheets April 30, 2000 (Unaudited) and July 31, 1999 3 Consolidated Statements of Operations (Unaudited) Three and Nine months ended April 30, 2000 and 1999 4 Consolidated Statements of Cash Flows (Unaudited) Nine months ended April 30, 2000 and 1999 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6-8 Item 5. Subsequent Events 8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 Signature Page 10
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS ------------------------------ 04/30/2000 07/31/1999 ----------- ----------- Current Assets Cash $ 3,599 $ 48,563 Accounts Receivable 50,645 30,254 Interest Receivable -0- 1,603 Note Receivable -0- 150,000 Prepaid Expenses 754 614 Marketable Equity Securities Available For Sale 46,272 88,984 ----------- ----------- Total Current Assets 101,270 320,018 ----------- ----------- Other Assets Investments 159,000 -0- Equipment 45,896 45,896 Less: Accumulated Depreciation (41,290) (39,510) ----------- ----------- Total Other Assets 163,606 6,386 ----------- ----------- Total Assets $ 264,876 $ 326,404 =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Notes Payable to Related Entities $ 542,490 $ 552,440 Notes Payable - Other 24,000 20,100 Accounts Payable and Accrued Liabilities 38,495 66,807 Accounts Payable - Related Entities 351,379 307,741 ----------- ----------- 956,363 947,088 ----------- ----------- Stockholders' Deficit Preferred Stock - Series A Convertible Stock $.001 Par Value, 75,000,000 Shares Authorized, -0- Shares Issued and Outstanding -0- -0- Common Stock $.001 Par Value, 300,000,000 Shares Authorized, 160,006,250 Shares Issued and Outstanding 160,006 160,006 Additional Paid-In Capital 680,880 680,880 Retained Earnings Unrealized Gain on Available for Sale Securities 21,237 63,949 Accumulated Deficit (1,553,609) (1,525,519) ----------- ----------- Total Stockholders' Deficit (691,487) (620,684) ----------- ----------- Total Liabilities and Stockholders' Deficit $ 264,876 $ 326,404 =========== =========== See notes to financial statements 3
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the three months ended April 30, For the nine months ended April 30, ------------------------------------- ----------------------------------- 2000 1999 2000 1999 ------------------------------------- ----------------------------------- Consulting Fee Income $ 48,250 $ 63,542 $ 147,332 $ 131,250 ---------------- --------------- --------------- ---------------- General and Administrative Expenses Staff Salary 28,475 26,225 98,504 63,725 Professional Fees (7,282) 1,695 2,797 3,743 Management Fees - Related Party 1,250 1,250 4,640 2,750 Patent Fees 6,028 3,360 9,668 6,572 All Other General and Administrative Expenses 10,283 10,579 23,056 18,893 ---------------- --------------- --------------- ---------------- 38,753 43,108 138,664 95,683 ---------------- --------------- --------------- ---------------- Income (Loss) From Operations 9,497 20,434 8,668 35,567 ---------------- --------------- --------------- ---------------- Other Income (Expense) Interest Income (165) -0- 7,397 -0- Interest Expense (14,712) (10,608) (44,155) (32,537) ---------------- --------------- --------------- ---------------- (14,877) (10,608) (36,758) (32,537) Net Income (Loss) Before Income Taxes (5,380) 9,825 (28,090) 3,030 Income Tax Benefit -0- -0- -0- -0- ---------------- --------------- --------------- ---------------- Net Income (Loss) $ (5,380) $ 9,825 $ (28,090) $ 3,030 ================ =============== =============== ================ Weighted Average Number of Common Shares 160,006,250 160,006,250 160,006,250 160,006,250 ================ =============== =============== ================ Net Loss Per Common Share $ (0) $ 0 $ (0) $ 0 ================ =============== =============== ================ See notes to Financial Statements 4
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIES STATEMENTS OF CASH FLOWS (Unaudited) For the nine months ended April 30, ------------------------------------------ 2000 1999 ------------------------------------------ Cash Flows From Operating Activities Net Income (Loss) $ (28,090) $ 3,030 Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities Depreciation 1,780 188 Change in Assets and Liabilities (Increase) Decrease In: Accounts Receivable and Accrued Assets 23,783 (20,981) Increase (Decrease) In: Accounts Payable and Accrued Liabilities (55,609) (222) Accounts Payable Related Entity 28,220 30,958 --------- ---------- Total Adjustments (1,825) 9,944 --------- ---------- Net Cash (Used For) Operations (29,916) 12,974 --------- ---------- Cash Provided by (Used For) Investing Activities Proceeds used for Investments (159,000) -0- Payments from Notes Receivable 150,000 -0- --------- ---------- Net Cash Provided by Investing Activities (9,000) -0- --------- ---------- Cash Provided by (Used For) Financing Activities Proceeds From Notes Payable 3,900 -0- Proceeds From Notes Payable - Related (9,950) 4,000 --------- ---------- Net Cash Provided by (Used For) Financing Activities (6,050) 4,000 --------- ---------- Increase (Decrease) in Cash (44,967) 16,974 Balance at Beginning of Period 48,563 77 --------- ---------- Balance at End of Period $ 3,599 $ 17,053 ========= ========== See notes to financial statements 5
COMPUSONICS VIDEO CORPORATION & SUBSIDIARIE Notes to Condensed Consolidated Financial Statements (Unaudited) PART I. FINANCIAL INFORMATION Item 1. Interim Financial Statements. The accompanying consolidated financial statements of CompuSonics Video Corporation and Subsidiaries have been prepared by the company without audit. In the opinion of the company's management, the financial statements reflect all adjustments necessary to present fairly the results of operations for the nine-month period ended April 30, 2000; the company's financial position at April 30, 2000 and July 31, 1999; and the cash flows for the nine-month period ended April 30, 2000 and 1999. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the company's July 1999 Form 10-K. The results for the nine-month period ended April 30, 2000 are not necessarily indicative of future financial results. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The net loss for the three-month period ended April 30, 2000 was $5,380 compared to net income of $9,825 for the three-month period ended April 30, 1999. This was due mainly to a decrease in consulting fee income of 15,292, an increase in staff salaries of $2,200, an increase in interest expense of $4,104 and a $2,668 increase in patent fees, which more than offset by a $8,997 decrease in professional fees compared to the same three month period of 1999. The net loss for the nine-month period ended April 30, 2000 was $28,090 compared to net income of $3,030 for the nine-month period ended April 30, 1999. This was due mainly to an increase in staff salaries of $34,779 and a $3,096 increase in patent fees and a $11,618 increase in interest expense, that more than offset a $16,082 increase in consulting fee income compared to the nine month period ended April 30, 1999. The Registrant has decided to discontinue it website development and maintenance activities due to the reduced prospects related to its only current client and the inability to obtain new business. The two employees involved in this activity have resigned their employment with the Registrant effective May 5, 2000. Working capital decreased by $228,023 from July 31, 1999 to April 30, 2000, due to the decrease in unrealized gain on investments of $42,712 net loss of $28,090 and the conversion of the notes receivable from PGI into an investment of $159,000. In the past, the Registrant has relied on a related company to provide the working funds it has required but there is no assurance that this will continue in future years. The Registrant has the following marketable securities: Williams Controls, Inc. 28,475 Common Shares Cost - $25,035 Market Value at 4/30/00 - $46,272 These shares are used as collateral against the notes payable. In the Registrant's fiscal second quarter ended January 31, 2000, the Registrant began negotiations with its transfer agent, American Securities Transfer and Trust, Inc. ("AST"), to settle a past due amount owed to AST by the Registrant for transfer agent services over the prior several years. On February 15, 2000, the Registrant and AST agreed to settle this matter and the Registrant is now current on its ongoing obligations to AST for its services and AST is providing its transfer agent services to the Registrant and its stockholders as of the date of this report. On June 22, 1999, the Registrant had loaned $150,000 to Pro Golf International, Inc. ("PGI"), a subsidiary of Ajay Sports, Inc. ("Ajay"), partly in the belief that it would have the opportunity to provide website development services to PGI and another Ajay subsidiary, ProGolf.com, in the future, for which it would be paid development fees. The proceeds for making the loan were provided by a related party. At the time, the Registrant received a promissory note that was subordinated to PGI's primary lender. On February 29, 2000, the Registrant converted its note receivable from PGI, and the interest accrued but unpaid on such note receivable, into common stock of PGI. The conversion was made at the rate of $60 per common share, the price at which PGI was raising equity capital under a Confidential Private Placement Memorandum dated February 4, 2000. The Registrant had held the note from PGI from that June 22, 1999 until the time of this conversion of the note into PGI common stock. In exchange for converting the $150,000 note, and $9,000 of interest accrued on the note, the Registrant received 2,650 shares of PGI's common stock. On April 28, 2000, the Registrant announced in a news release that it would begin to launch a program to attempt to license its patent portfolio relating to data compression technology. The Registrant's U.S. and foreign patents cover fundamental techniques for digital recording and playback of audio and video data. The Registrant indicated it had completed the preliminary phase of a review to identify potential target companies that provide services or offer electronic products that may use data compression technology believed to be similar to that covered by the patents in which the Registrant has an interest. The Registrant stated that it has not yet completed a definitive analysis to determine whether any infringements have occurred. Coincident with this initial licensing effort, the Registrant stated it would continue the process of determining the relationship between the technology covering its patents and the use of similar technology in today's marketplace, as it seeks licensing opportunities. Item 5. Subsequent Events In August 1998, the Registrant hired a manager experienced in Internet programming to develop a new business activity for the Registrant known as website development and maintenance. The Registrant subsequently began this activity and obtained two clients, both of whom were related parties, that paid the Registrant fees for its website development and maintenance services. In the early part of fiscal year 2000, due to lack of activity with one of the two clients, the Registrant ceased providing services to that client, while continuing to provide services to its remaining client, and seeking additional business from new clients. For that time through 4/30/00, the Registrant was unable to obtain additional business for the website development and maintenance activity. Beginning in Registrant's fiscal 2000 third quarter, the Registrant began to follow a strategy to more actively focus management's time and financial resources toward licensing its patent technology related for data compression to potential licensees. As such, and due to the lack of additional business received in the Registrant's website development and maintenance activity, on May 5, 2000, the manager of the Registrant's website development and maintenance activity resigned, as did the other employee of the Registrant involved in this activity, and the Registrant has decided to focus its time and financial resources on the technology licensing activity. The former manager has agreed to work on website development projects on an as-needed consulting basis for the Registrant, but the Registrant does not expect to put an emphasis on this activity in the future. On May 10, 2000, the Registrant announced in a news release that it had paid the renewal fees required to maintain its data compression patents in effect in The United Kingdom, France, Germany, Belgium, Luxembourg and Switzerland. These foreign patents, as well as the Registrant's Japanese patent, are counterparts of the corresponding U.S. Patents in which the Registrant holds an interest. The foreign patents are expected to be offered for license along with the Registrant's U.S. patents. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K: (a) Exhibits None (b) Reports on Form 8-K On May 11, 2000, the Registrant filed a Form 8-K regarding the extension of the Class A and Class B warrants from May 15, 2000 to July 31, 2000. COMPUSONICS VIDEO CORPORATION Form 10-Q For the quarter ended April 30, 2000 Signature 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. COMPUSONICS VIDEO CORPORATION ----------------------------- (Registrant) By s\ Robert R. Hebard ----------------------- Robert R. Hebard, Chief Executive Officer & Chairman of the Board Date Signed: June 16, 2000 EX-27 2 0002.txt FDS --
5 (Replace this text with the legend) 0000777844 Compusonics Video Corporation 1 U.S. Dollar 9-MOS JUL-31-2000 FEB-01-2000 APR-30-2000 1 3,599 46,272 0 0 0 101,270 45,896 (41,290) 264,876 956,363 0 0 0 160,006 (851,493) 264,876 0 147,352 0 138,664 (7,397) 0 44,155 (29,090) 0 (29,090) 0 0 0 (29,090) 0.00 0.00
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