-----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, KEfPHVQtBPZ8+ItfH9+lqC02gEZFXjg/R6dRbQvX3vnfo2H1k5H/jQMTsStiTVig jGKP2pdVUV+9z0iTJc2t3A== 0000950147-98-000939.txt : 19981118 0000950147-98-000939.hdr.sgml : 19981118 ACCESSION NUMBER: 0000950147-98-000939 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 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: 98751474 BUSINESS ADDRESS: STREET 1: 2301 WEST DUNLAP STREET 2: SUITE 207 CITY: PHOENIX STATE: AZ ZIP: 85021 BUSINESS PHONE: 602-997-1990 MAIL ADDRESS: STREET 1: 8855 N. BLACK CANYON HWY STREET 2: STE 2000 CITY: PHOENIX STATE: AZ ZIP: 85021 10QSB 1 QUARTERLY REPORT F.T.Q.E. 9-30-98 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 SEPTEMBER 30, 1998 -------------------------------------- [ ] 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 W. DUNLAP, 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 September 30, 1998, the number of shares of Common Stock issued and outstanding was 3,612,228. 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 - September 30, 1998 and June 30, 1998 1 Condensed Consolidated Statements of Operations - For the three months ended September 30, 1998 and 1997 2 Condensed Consolidated Statements of Cash Flows - For the three months ended September 30, 1998 and 1997 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations 8 PART II - OTHER INFORMATION Item 1. Legal Proceedings N/A Item 2. Changes in Securities N/A Item 3. Defaults Upon Senior Securities N/A Item 4. Submission of Matters to a Vote of Security Holders N/A Item 5. Other Information N/A Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 9 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DIMENSIONAL VISIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS September 30, June 30, 1998 1998 ---- ---- (Unaudited) Current assets Cash $ 32,091 $ 15,910 Current portion of notes receivable 145,350 119,461 Accounts receivable, trade, net of allowance for bad debts of $215,743 77,436 144,620 Inventory 59,043 69,364 Prepaid expenses 70,397 25,678 ------------ ------------ Total current assets 384,317 375,033 ------------ ------------ Equipment Equipment 402,879 370,344 Furniture and fixtures 50,440 24,217 ------------ ------------ 453,319 394,561 Less accumulated depreciation 248,581 233,509 ------------ ------------ 204,738 161,052 ------------ ------------ Other assets Notes receivable net of current portion 307,655 342,377 Deferred costs 33,700 -- Patent rights and other assets 38,812 42,379 ------------ ------------ 380,167 384,756 ------------ ------------ Total assets $ 969,222 $ 920,841 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Short-term borrowings $ -- $ 79,500 Current portion of long-term debt -- 75,000 Current portion of obligations under capital leases 17,779 16,476 Accounts payable, accrued expenses and other liabilities 354,087 439,977 ------------ ------------ Total current liabilities 371,866 610,953 Long-term debt, net of current portion 475,000 -- Obligations under capital leases 97,814 102,586 ------------ ------------ Total liabilities 944,680 713,539 ------------ ------------ Commitments and contingencies -- -- Stockholders equity Preferred stock - $.001 par value, authorized 10,000,000 shares; issued and outstanding - 133,003 shares at September 30, 1998, and 133,321 shares at June 30, 1998 133 133 Additional paid-in capital 680,097 683,278 ------------ ------------ 680,230 683,411 Common stock - $.001 par value, authorized 100,000,000 shares; issued and outstanding 3,612,228 shares at September 30, 1998, and 3,612,101 shares at June 30, 1998 3,612 3,612 Additional paid-in capital 18,865,256 18,862,075 Deficit (19,524,556) (19,341,796) ------------ ------------ Total stockholders' equity 24,542 207,302 ------------ ------------ Total liabilities and stockholders' equity $ 969,222 $ 920,841 ============ ============ See notes to condensed consolidated financial statements. (1) DIMENSIONAL VISIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) THREE MONTHS ENDED SEPTEMBER 30, -------------------------------- 1998 1997 ----------- ----------- Operating revenue $ 191,089 $ 113,554 Cost of sales 132,007 106,112 ----------- ----------- Gross profit 59,082 7,442 ----------- ----------- Operating expenses Engineering and development costs 56,955 59,825 Marketing expenses 59,819 57,292 General and administrative expenses 123,493 158,761 ----------- ----------- Total operating expenses 240,267 275,878 ----------- ----------- Loss before other income (expenses) (181,185) (268,436) ----------- ----------- Other income (expenses) Interest expense (12,346) (3,365) Interest income 10,771 204 Gain on sale of product line -- 410,000 ----------- ----------- (1,575) 406,839 ----------- ----------- Net income (loss) $ (182,760) $ 138,403 =========== =========== Net income (loss) per share of common stock (.05) $ .05 =========== =========== Weighted average shares of common stock outstanding 3,612,129 2,834,528 =========== =========== See notes to condensed consolidated financial statements. (2) DIMENSIONAL VISIONS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) THREE MONTHS ENDED SEPTEMBER 30, -------------------------------- 1998 1997 --------- --------- Cash flows from operating activities Net income (loss) ($182,760) $ 138,403 Total adjustments to reconcile net income (loss) (33,724) (276,305) --------- --------- to net cash used in operating activities Net cash used in operating activities (216,484) (137,632) --------- --------- Cash flows from investing activities Proceeds from payments on notes receivable 8,092 Purchase of furniture and equipment (58,758) -- --------- --------- Net cash used in investing activities (50,666) -- --------- --------- Cash flows from financing activities Payment of obligations under capital lease (3,469) Payment of debt obligations (75,000) -- Proceeds from issuance of debt net of deferred financing 441,300 -- costs of $33,700 Repayment of short-term borrowing (79,500) -- Sale of common stock -- 135,000 --------- --------- Net cash provided by financing activities 283,331 135,000 --------- --------- Net increase (decrease) in cash 16,181 (2,632) Cash, beginning 15,910 109,566 --------- --------- Cash, ending $ 32,091 $ 106,934 ========= ========= Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 22,974 -- Supplemental disclosure of non-cash investing and financing activities: During the three months ended September 30, 1998, 127 shares of the Company's Common Stock were issued as a result of the conversion of 318 shares of Series C Convertible Preferred Stock valued at $3,180. See notes to condensed consolidated financial statements. (3) DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1998 (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, 1998, 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, 1998. 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 current period results of operations are not necessarily indicative of results which ultimately will be reported for the full year ending June 30, 1999. NOTE 2 ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER LIABILITIES September 30, 1998 June 30,1998 ------------------ ------------ Accounts payable $289,530 $370,633 Accrued expenses Interest 9,946 20,886 Salaries 47,483 43,587 Payroll Taxes Payable 7,128 4,871 -------- -------- Total $354,087 $439,977 ======== ======== NOTE 3 LONG-TERM DEBT Long-term debt consisted of the following: SEPTEMBER 30, 1998 JUNE 30, 1998 ------------------ ------------- 12% secured debentures due July 31, 2001 $475,000(1) $ -- 10% secured notes due in January and February 1998 -- 75,000 -------- -------- 475,000 75,000 Less current portion -- 75,000 -------- -------- Long term portion $475,000 $ -- -------- -------- (1) Interest is calculated at 12% per annum and is payable yearly on July 31, beginning July 31, 1999. The Company borrowed $475,000 net of financing costs of $33,700. The Series A 12% Convertible Secured Debentures include warrants to purchase 475,000 shares of the Company's common stock at $0.50 per share. The warrants are exercisable through January 15, 2001. The notes are secured by all the assets of the Company, except for the Company's accounts receivable and assets acquired pursuant to purchase-money financing transactions. The notes are convertible into one share for each $1.00 of outstanding debt and unpaid interest is also convertible to common stock at the rate of one share for each $1.00 of unpaid interest. (4) DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) NOTE 4 COMMITMENTS AND CONTINGENCIES On January 1, 1998, the Company relocated its offices and entered into a three year lease at a minimum rental of $44,950 per year. Effective January 24, 1997, the Company vacated its studio and production facilities in Philadelphia, Pennsylvania. There are several disputed invoices outstanding that amount to less than $2,000 that management expects to resolve in its favor. In July 1996, the Company filed a complaint in the United States District Court for the Eastern District of Pennsylvania (No. 96-CV-5259) against Dimensional Graphic Sales, Inc. ("DGS"). In the complaint the Company alleges that it delivered an order to DGS and properly invoiced DGS pursuant to a sales and marketing agreement. DGS attempted to pay the invoice in full by tendering a check for an amount less than the full amount of the invoice and placing a restrictive endorsement on the check which purported to constitute payment in full for the invoice. The Company crossed out the restrictive endorsement and attempted to deposit the check only to subsequently learn that DGS had stopped payment on the check. In its complaint the Company is seeking $213,522 the full amount of the invoice together with interest costs and such other relief as the court deems just and proper. DGS filed a counterclaim against the Company for an unspecified amount in excess of $100,000. The matter has moved to a deferred status while the parties engage in settlement negotiation. There are no other legal proceedings which 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 September 30, 1998 was approximately $78,300. NOTE 5 COMMON STOCK As of September 30, 1998, there are outstanding 4,000,819 of non-public warrants to purchase the Company's common stock at prices ranging from $0.50 to $12.50 with a weighted average price of $0.99 per share. As of September 30, 1998, there were 133,003 shares of various classes of Convertible Preferred Stock outstanding which can be converted to 98,801 shares of common stock. As of September 30, 1998, there were $475,000 of secured debentures which can be converted into 475,000 shares of the Company's common stock. The total number of shares of the Company's common stock that would have been issuable upon conversion of the outstanding debt, warrants and preferred stock equaled 4,574,620 shares as of September 30, 1998, and would be in addition to the 3,612,228 shares of common stock outstanding as of September 30, 1998. The Company issued on September 10, 1998, 127 shares of its common stock as a result of a conversion of 318 shares of Series C convertible Preferred Stock. (5) DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) NOTE 6 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 --------- ----------- September 30, 1998 June 30, 1998 ------------------ ------------- Series A Preferred 100,000 23,000 23,000 Series B Preferred 200,000 5,000 5,000 Series C Preferred 1,000,000 18,363 18,681 Series P Preferred 600,000 86,640 86,640 --------- --------- --------- Total Preferred Stock 1,950,000 133,003 133,321 ========= ======= ======= 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 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 and Series B 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. The 190,700 shares of Series B Preferred were issued to holders of warrants to purchase such preferred stock. The funding for the exercise of these warrants was the exchange of $1,907,000 of principal amount of secured and unsecured notes. On December 3, 1996, 185,700 shares of Series B Preferred were exchanged for 891,360 shares of the Company's common stock. The 26,275 shares of Series C Preferred were also issued in exchange for $262,750 of interest due under the secured and unsecured notes. Holders of 7,912 shares of Series C Preferred Stock have subsequently converted their shares into the Company's common stock. (6) DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) NOTE 7 INCOME TAXES There was no provision for current income taxes for the three months ended September 30, 1998 and 1997. The federal net operating loss carry forwards of approximately $16,539,000 expire in varying amounts through 2018. 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. NOTE 8 EVENTS SUBSEQUENT TO SEPTEMBER 30, 1998 On October 6, 1998, the Company received additional long-term financing of $10,000 in the form of its Series A 12% Convertible Secured Debentures. (7) DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1998, the Company had a working capital surplus of $12,451, compared with a working capital deficiency of $84,789 as of September 30, 1997. During the three months ended September 30, 1998, the Company raised $475,000 through the placement of its Series A 12% Convertible Secured Debentures (see Note 3). The Company expects to require additional working capital by December 1998. The Company anticipates raising this capital through either a private placement of preferred stock or through the financing of accounts receivable. There can be no assurances that the Company can obtain funds from either of these sources. The Company is focusing most of its resources and efforts towards marketing its print products. It has, therefore, decided to offer its subsidiary, InfoPak, Inc., for sale. Additionally, a substantial portion of the Company's cash and personnel resources were dedicated toward exhibiting at a trade show in October 1998. Included in prepaid expenses is approximately $14,000 which were costs in connection with this show. RESULTS OF OPERATIONS The net loss for the quarter ended September 30, 1998, was $182,760 compared to a net income of $138,403 for the quarter ended September 30, 1997. The net income for the quarter ended September 30, 1997, was the result of a one time sale of InfoPak's real estate data delivery system for $410,000. The loss before other income and expenses for the quarter ended September 30, 1998, was $181,185 compared to a loss before other income and expenses for the quarter ended September 30, 1997, of $268,436. Revenues for the quarter ended September 30, 1998, were $191,089 compared to revenues of $113,554 for the quarter ended September 30, 1997. The increase in revenues was the result of substantial increases in the sales of the Company's print products. For the quarter ended September 30, 1998, the Company recorded sales totaling approximately $126,000 of its DV3D(R) AnimotionTM print products compared to sales of approximately $22,900 for the quarter ended September 30, 1997. (8) DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K The following documents are filed as part of this report: 1.The following Exhibits are filed herein: 27.0 Financial Data Schedule 2. Reports on Form 8-K filed: None 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: November 9, 1998 By: /S/ John D. McPhilimy ---------------------------------------- John D. McPhilimy, Chairman, President and Chief Executive Officer (10) EX-27 2 FINANCIAL DATA SCHEDULE
5 1 U.S. DOLLARS 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 1 32091 0 293179 215743 59043 384317 453319 248581 969222 371866 0 0 680230 3612 659300 969222 191089 191089 132007 132007 240267 0 12346 (182760) 0 0 0 0 0 (182760) (.05) 0
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