-----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, HUi2XsVFQnqU6zxByz9a8EAQgDU8zKdNtSzgeKINoYM6h36DwZE27XmE+WmsPgoz G+J2vHCt1zgwa6Lsv5CpqQ== 0000950147-01-500117.txt : 20010124 0000950147-01-500117.hdr.sgml : 20010124 ACCESSION NUMBER: 0000950147-01-500117 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIMENSIONAL VISIONS INC/ DE CENTRAL INDEX KEY: 0000836809 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL PRINTING [2750] IRS NUMBER: 232517953 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-10196 FILM NUMBER: 1513175 BUSINESS ADDRESS: STREET 1: 2301 WEST DUNLAP STREET 2: SUITE 207 CITY: PHOENIX STATE: AZ ZIP: 85021 BUSINESS PHONE: 6029971990 MAIL ADDRESS: STREET 1: 8855 N. BLACK CANYON HWY STREET 2: STE 2000 CITY: PHOENIX STATE: AZ ZIP: 85021 10QSB 1 e-6102.txt QUARTERLY REPORT FOR THE QTR ENDED 12/31/00 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2000 [ ] 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 1-10196 DIMENSIONAL VISIONS INCORPORATED ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Delaware 23-2517953 - ------------------------------- ------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 2301 West Dunlap Avenue, Suite 207, Phoenix, Arizona, 85021 ----------------------------------------------------------- (Address of principal executive offices) (602) 997-1990 --------------------------- (Issuer's telephone number) ---------------------------------------------------- (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 [X] No [ ] As of December 31, 2000, the number of shares of Common Stock issued and outstanding was 10,259,873. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY INDEX PAGE NUMBER ------ PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets - December 31, 2000 and June 30, 2000 1 Condensed Consolidated Statement of Operations - For the six months ended December 31, 2000 and 1999 2 Condensed Consolidated Statement of Cash Flows - For the six months ended December 31, 2000 and 1999 3 Notes to Condensed Consolidated Financial Statements 4 Independent Accountants' Report 7 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations 8 PART II - OTHER INFORMATION Item 1. Legal Proceedings 9 Item 2. Changes in Securities 9 Item 3. Defaults Upon Senior Securities 9 Item 4. Submission of Matters to a Vote of Security Holders 9 Item 5. Other Information 9 Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 10 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DIMENSIONAL VISIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS DECEMBER 31, JUNE 30, 2000 2000 ------------ ------------ (Unaudited) Current assets Cash $ 14,129 $ 276,333 Notes receivable, net of allowance for bad debts of $443,669 -- -- Notes receivable, officers 12,341 -- Accounts receivable, trade 116,100 350,493 Prepaid expenses 6,593 9,227 ------------ ------------ Total current assets 149,163 636,053 ------------ ------------ Equipment Equipment 479,972 479,372 ------------ ------------ Furniture and fixtures 49,329 46,944 ------------ ------------ 529,301 526,316 Less accumulated depreciation 334,624 308,963 ------------ ------------ 194,677 217,353 ------------ ------------ Other assets Patent rights and other assets 29,589 31,627 ------------ ------------ Total assets $ 373,429 $ 885,033 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of obligations under capital leases 55,559 50,962 Accounts payable, accrued expenses and other liabilities 300,224 379,807 ------------ ------------ Total current liabilities 355,783 430,769 ------------ ------------ Obligations under capital leases, net of current portion 59,364 88,343 ------------ ------------ Total liabilities 415,147 519,112 ------------ ------------ Commitments and contingencies -- -- Stockholders' equity Preferred stock - $.001 par value, authorized 10,000,000 shares; issued and outstanding - 574,044 shares at December 31, 2000, and 1,146,044 shares at June 30, 2000 574 1,146 Additional paid-in capital 953,843 1,474,295 ------------ ------------ 954,417 1,475,441 Common stock - $.001 par value, authorized 100,000,000 shares; issued and outstanding 10,259,873 shares at December 31, 2000 and 8,934,916 shares at June 30, 2000 10,260 8,935 Additional paid-in capital 21,506,592 20,885,581 Deficit (22,427,533) (21,828,753) ------------ ------------ Total stockholders' equity before deferred consulting contracts 43,736 541,204 Deferred consulting contracts (85,454) (175,283) ------------ ------------ Total stockholders' equity (deficiency) (41,718) 365,921 ------------ ------------ Total liabilities and stockholders' equity (deficiency) $ 373,429 $ 885,033 ============ ============ See notes to condensed consolidated financial statements. 1 DIMENSIONAL VISIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, ---------------------------- ---------------------------- 2000 1999 2000 1999 ------------ ------------ ------------ ------------ (Unaudited) Operating revenue $ 91,805 $ 170,821 $ 162,996 $ 300,418 Cost of sales 53,452 112,757 106,475 193,261 ------------ ------------ ------------ ------------ Gross profit 38,353 58,064 56,521 107,157 ------------ ------------ ------------ ------------ Operating expenses Engineering and development costs 60,042 47,317 134,562 77,152 Marketing expenses 62,631 14,520 120,116 25,367 General and administrative expenses 182,799 168,241 392,754 348,577 ------------ ------------ ------------ ------------ Total operating expenses 305,472 230,078 647,432 451,096 ------------ ------------ ------------ ------------ Loss before other income (expenses) (267,119) (172,014) (590,911) (343,939) ------------ ------------ ------------ ------------ Other income (expenses) Interest expense (6,457) (53,505) (10,627) (120,196) Interest income 828 5,084 2,758 5,084 ------------ ------------ ------------ ------------ (5,629) (48,421) (7,869) (115,112) ------------ ------------ ------------ ------------ Net loss (272,748) (220,435) (598,780) (459,051) ============ ============ ============ ============ Net loss per share of common stock $ (.03) $ (.04) $ (.06) $ (.08) ============ ============ ============ ============ Weighted average shares of common stock outstanding 10,099,844 6,004,181 9,640,342 5,759,686 ============ ============ ============ ============
See notes to condensed consolidated financial statements. 2 DIMENSIONAL VISIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) SIX MONTHS ENDED DECEMBER 31, ----------------------------- 2000 1999 --------- --------- Cash flows from operating activities Net loss $(598,780) $(459,051) Total adjustments to reconcile net loss to net cash used in operating activities 262,630 29,115 --------- --------- Net cash used in operating activities (336,150) (429,936) --------- --------- Cash flows from investing activities Purchase of furniture and equipment (2,985) -- --------- --------- Net cash used in investing activities (2,985) -- --------- --------- Cash flows from financing activities Payment of obligations under capital lease (24,382) (9,780) Proceeds from exercise of warrants 107,875 40,000 Sale of preferred stock, net of offering costs of $94,500 -- 955,500 --------- --------- Net cash (used in) provided by financing activities (83,493) 985,720 --------- --------- Net increase (decrease) in cash (262,204) 555,784 Cash, beginning 276,333 18,018 --------- --------- Cash, ending $ 14,129 $ 573,802 ========= ========= Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 6,584 $ 7,152 ========= ========= Supplemental disclosure of non-cash investing and financing activities: During the six months ended December 31, 2000, 344,000 shares of the Company's common stock were issued as a result of the conversion of 172,000 shares of Series D Convertible Preferred Stock valued at $154,800. During the six months ended December 31, 2000, 400,000 shares of the Company's common stock were issued as a result of the conversion of 400,000 shares of Series E Convertible Preferred Stock valued at $366,222. See notes to condensed consolidated financial statements. 3 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED DECEMBER 31, 2000 (UNAUDITED) NOTE 1 BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS The interim financial statements are prepared pursuant to the requirements for reporting on Form 10-QSB. The June 30, 2000, balance sheet data were derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 2000. In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods presented. The financial statements as of and for the period ended December 31, 2000 and 1999 are unaudited. The financial statements for the period ended December 31, 2000 have been reviewed by an independent public accountant pursuant to rule 10-01(d) of regulation S-X and following applicable standards for conducting such reviews, and the report of the accountant is included as part of this filing. The current period results of operations are not necessarily indicative of results that ultimately will be reported for the full year ending June 30, 2001. The Company has incurred losses since inception of $22,427,533 and has a working capital deficiency of $206,620 as of December 31, 2000. The future of the Company as an operating business will depend on its ability to (1) successfully market and sell its products, (2) obtain sufficient capital contributions and/or financing as may be required to sustain its current operations and to fulfill its sales and marketing activities, (3) achieve a level of sales adequate to support the Company's cost structure, and (4) ultimately achieve a level of profitability. Management's plan to address these issues includes (a) redirecting its marketing efforts of the Company's products and substantially increasing sales results, (b) continued exercise of tight cost controls to conserve cash, (c) raising additional long term financing. The consolidated financial statements have been prepared on a going concern basis which contemplates the realization and settlement of liabilities and commitments in the normal course of business. The available funds at December 31, 2000, plus the limited revenue is not sufficient to satisfy the present cost structure. Management recognizes that the Company must generate additional resources to enable it to continue operations. Management plans include the continued expansion of the sale of its products and the sale of additional securities. NOTE 2 ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES December 31, 2000 June 30, 2000 ----------------- ------------- Accounts payable $281,280 $353,927 Salaries 13,448 18,523 Payroll Taxes Payable 5,496 7,357 -------- -------- Total $300,224 $379,807 ======== ======== NOTE 3 COMMITMENTS AND CONTINGENCIES There are no legal proceedings that the Company believes will have a material adverse effect on its financial position. The Company has not declared dividends on Series A or B Convertible Preferred Stock. The cumulative dividends in arrears through December 31, 2000, were approximately $74,225. 4 DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 2000 (CONTINUED) (UNAUDITED) NOTE 4 COMMON STOCK As of December 31, 2000, there are outstanding 6,677,410 of non-public warrants to purchase the Company's common stock at prices ranging from $0.10 to $12.50 with a weighted average price of $0.47 per share. As of December 31, 2000, there were 574,044 shares of various classes of Convertible Preferred Stock outstanding which can be converted to 713,818 shares of common stock. During the six months ended December 31, 2000, the Company issued 344,000 shares its Common Stock as a result of the conversion of 172,000 shares of Series D Convertible Preferred Stock. During the six months ended December 31, 2000, the Company issued 400,000 shares its Common Stock as a result of the conversion of 400,000 shares of Series E Convertible Preferred Stock. During the six months ended December 31, 2000, the Company issued 580,957 shares of its stock in connection with the exercise of warrants. NOTE 5 PREFERRED STOCK The Company has authorized 10,000,000 shares of $.001 par value per share Preferred Stock, of which the following were issued and outstanding: ALLOCATED OUTSTANDING --------- --------------------------------- DECEMBER 31, 2000 JUNE 30, 2000 ----------------- ------------- Series A Preferred 100,000 15,500 15,500 Series B Preferred 200,000 3,500 3,500 Series C Preferred 1,000,000 13,404 13,404 Series D Preferred 375,000 180,000 352,000 Series E Preferred 1,000,000 275,000 675,000 Series P Preferred 600,000 86,640 86,640 ---------- -------- ---------- Total Preferred Stock 3,325,000 574,044 1,146,044 ========== ======== ========== The Company's Series A Convertible 5% Preferred Stock ("Series A Preferred"), 100,000 shares authorized, is convertible into common stock at the rate of 1.6 shares of common stock for each share of the Series A Preferred. Dividends from date of issue are payable from retained earnings, and have been accumulated on June 30 each year, but have not been declared or paid. The Company's Series B Convertible 8% Preferred Stock ("Series B Preferred") is convertible at the rate of 4 shares of common stock for each share of Series B Preferred. Dividends from date of issue are payable on June 30 from retained earnings at the rate of 8% per annum and have not been declared or paid. The Company's Series C Convertible Preferred Stock ("Series C Preferred") is convertible at a rate of 0.4 shares of common stock per share of Series C Preferred. The Company's Series D Convertible Preferred Stock ("Series D Preferred") is convertible at a rate of 2 shares of common stock per share of Series D Preferred. The Company's Series E Convertible Preferred Stock ("Series E Preferred") is convertible at a rate of 1 share of common stock per share of Series E Preferred. 5 NOTE 5 PREFERRED STOCK (CONTINUED) The Company's Series P Convertible Preferred Stock ("Series P Preferred") is convertible at a rate of 0.4 shares of common stock for each share of Series P Preferred. The Company's Series A Preferred, Series B Preferred, Series D Preferred and Series E Preferred were issued for the purpose of raising operating funds. The Series C Preferred was issued to certain holders of the Company's 10% Secured Notes in lieu of accrued interest and also will be held for future investment purposes. The Series P Preferred was issued on September 12, 1995, to InfoPak shareholders in exchange for (1) all of the outstanding capital stock of InfoPak, (2) as signing bonuses for certain employees and a consultant of InfoPak, and (3) to satisfy InfoPak's outstanding debt obligations to certain shareholders. NOTE 6 INCOME TAXES There was no provision for current income taxes for the six months ended December 31, 2000 and 1999. The federal net operating loss carry forwards of approximately $19,070,000 expire in varying amounts through 2020. In addition the Company has state carryforwards of approximately $3,175,000. The Company has had numerous transactions in its common stock. Such transactions may have resulted in a change in the Company's ownership, as defined in the Internal Revenue Code Section 382. Such change may result in an annual limitation on the amount of the Company's taxable income which may be offset with its net operating loss carry forwards. The Company has not evaluated the impact of Section 382, if any, on its ability to utilize its net operating loss carry forwards in future years. 6 INDEPENDENT ACCOUNTANTS' REPORT To the Board of Directors and stockholders, We have reviewed the accompanying condensed consolidated balance sheet of Dimensional Visions, Incorporated, Phoenix, AZ as of December 31, 2000, and the related statements of operations and cash flows for the three and six month periods then ended. These financial statements are the responsibility of the management of the Company. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. Kopple & Gottlieb, LLP Certified Public Accountants Jenkintown, Pennslyvania January 22, 2000 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The discussion and financial statements contained herein are for the three months and six months ended December 31, 2000 and 1999. The following discussion regarding the financial statements of the Company should be read in conjunction with the financial statements of the Company included herewith. THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999 RESULTS OF OPERATIONS The net loss for the quarter ended December 31, 2000, was $272,748 compared to a net loss of $220,435 for the quarter ended December 31, 1999. The loss before other income and expenses for the quarter ended December 31, 2000 was $267,119 compared to a loss before other income and expenses for the quarter ended December 31, 1999, of $172,014. The Company's marketing expenses for the three months ended December 31, 2000 increased by approximately $48,000 over the same period last year. This increase was due to the addition of two salesmen to our staff along with their traveling expenses. The Company's general and administrative expenses increased in the three months ended December 31, 2000 by approximately $15,000 over the three months ended December 31, 1999. Included in the general and administrative expenses was an arbitration settlement of disputed commissions that amounted to approximately $41,000 and interest of approximately $4,100. The Company saved approximately $13,000 in professional fees for the quarter ended December 31, 2000 over the same period last year. Revenue for the quarter ended December 31, 2000, was $91,805 compared to revenue of $170,821 for the quarter ended December 31, 1999. Management primarily attributes the low revenue for these quarters to the seasonality of revenue that normally occurs towards the last half of the Company's fiscal year. Revenue for the quarter ended December 31, 1999 was boosted by $57,000 through the sale of Pokemon products that are no longer being ordered. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2000, the Company had a working capital deficiency of $206,620, compared with a working capital surplus of $176,423 as of December 31, 1999. During the quarter ended December 31, 2000, the Company collected approximately $65,000 of accounts receivable. The cash received plus cash on hand was used to pay current period operating expenses. As of December 31, 2000 the Company's financial position is precarious. The Company needs funding in order to maintain current operations and to support growth and sales. The Company has secured a $500,000 line of credit on January 12, 2000, that was obtained by an investor group of existing stockholders of the Company secured by the Company's assets. Additionally, the Company finalized an equity line with an institution to provide funding through the sale of the Company's common stock. The Company has the right at its sole discretion to put common stock to the investment banking firm, subject to certain limitations and conditions based upon the trading volume of the Company's common stock. Under this arrangement, the Company is required to file an SB-2 registration statement prior to February 5, 2001. However, due to the current limited trading volume of the Company's common stock, the Company would not be able to raise significant funding from this arrangement. The put to the investment firm is based upon the trading volume and cannot exceed 10% of the volume per trade day. SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999 RESULTS OF OPERATIONS The net loss for the six months ended December 31, 2000 was $598,780, compared to a net loss of $459,051 for the six months ended December 31, 1999. The Company's marketing expenses for the six months ended December 31, 2000 increased by approximately $95,000. This increase is due to the addition of two salesmen along with their travel expenses. The Company's engineering expenses for the six months ended December 31, 2000 increased by approximately $57,000 over the same period last year. This increase was attributed to the increase in the Company's design staff. The Company also increased their general and administrative expenses for the six months ended December 31, 2000 by $44,000 over the six months ended December 31, 8 1999. The Company attributes this increase to an arbitration settlement of disputed invoices for commissions, and the increase in the administrative staff. Revenue for the six months ended December 31, 2000 was $162,996 compared to revenue of $300,418 for the six months ended December 31, 1999. Revenue for the six months ended December 31, 1999 was boosted by $103,000 through the sale of Pokemon products that are no longer being ordered. Generally, the sales volume for the six months ended December 31, 2000 without Pokemon was down approximately $34,000. As a result of the decline in revenue, the Company has reduced its fixed overhead costs by reducing the number of personnel employed by the Company. As of December 31, 2000, the Company's work force has been reduced by six employees which will result in a savings of approximately $100,000 through June 30, 2001. LIQUIDITY AND CAPITAL RESOURCES During the six months ended December 31, 2000, the Company collected approximately $310,000 of accounts receivable. Substantially all the cash received and cash on hand was used to support operations. The Company will utilize the secured line of credit to sustain operations until its sales will support the Company's operations and growth. The Company is continually focusing on expanding its customer base through its marketing and sales campaign. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In August 2000, The Richman Group, an Ohio corporation, filed a claim against Dimensional Visions, Inc. at the American Arbitration Association, Dallas, Texas, with an arbitration venue of Phoenix, Arizona. Richman Group claimed damages resulting from a breach of contract for unpaid invoices in the amount of $50,000. The matter went to arbitration on December 13, 2000, and a decision was reached by the arbitrators on December 28, 2000 in favor of The Richman Group in the amount of approximately $50,000. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 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 None. 9 SIGNATURES In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, duly authorized. DIMENSIONAL VISIONS INCORPORATED Dated: January 22, 2000 By: /s/ John D. McPhilimy ------------------------------------ John D. McPhilimy, Chairman, President and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----