-----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, EkOovhqELC4kCB1AZm/3IV6FaBou8VjU12IGjHleD4qVBSBeSkmmAj0T8sL0YEYa lKZITFl1yYCW15plVHgL9A== 0000891618-97-004730.txt : 19971120 0000891618-97-004730.hdr.sgml : 19971120 ACCESSION NUMBER: 0000891618-97-004730 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971119 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INSTANT VIDEO TECHNOLOGIES INC CENTRAL INDEX KEY: 0000865753 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 841141967 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 033-35580 FILM NUMBER: 97724658 BUSINESS ADDRESS: STREET 1: 500 SANSOME ST STE 503 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4153914455 MAIL ADDRESS: STREET 1: 500 SANSOME ST STREET 2: STE 503 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 FORMER COMPANY: FORMER CONFORMED NAME: CATALINA CAPITAL CORP/DE/ DATE OF NAME CHANGE: 19600201 10QSB 1 FORM 10-QSB FOR THE PERIOD ENDED SEPT. 30, 1997 1 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 quarterly period ended September 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ________, 19__ to ________, 19__. Commission File Number: 33-35580-D INSTANT VIDEO TECHNOLOGIES, INC. -------------------------------- (Exact Name of Small Business Issuer as Specified in its Charter) Delaware 84-1141967 -------- ---------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 500 Sansome Street, Suite 503 San Francisco, California 94111 ------------------------------- Address of Principal Executive Offices, Including Zip Code (415) 391-4455 -------------- (Issuer's Telephone Number, Including Area Code) N/A --- (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 Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X YES NO ----- ----- There were 4,900,981 shares of the Issuer's $.00001 par value common stock outstanding as of September 30, 1997. 2 INSTANT VIDEO TECHNOLOGIES, INC. AND SUBSIDIARY UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
September 30, 1997 December 31, 1996 ------------------ ----------------- CURRENT ASSETS Cash & Cash Equivalents $ 19,599 $ 208,613 Accounts Receivable 1,421 1,421 Accrued Revenue -- 136,400 Loans to Officers -- -- Advances -- -- Prepaid Expenses -- 8,648 ----------- ----------- Total Current Assets 21,020 355,082 Total Property & Equipment, Net 128,350 72,322 Patent Costs, Net 95,998 121,108 Other 18,242 52,670 ----------- ----------- 114,240 173,778 TOTAL ASSETS $ 263,610 $ 601,182 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 70,426 $ 128,263 Accrued Expenses -- 152,000 Notes Payable 660,000 90,000 Accrued Interest 42,937 29,813 ----------- ----------- Current Liabilities 773,363 400,076 Long Term Liabilities Long Term Notes Payable 214,210 141,000 ----------- ----------- 214,210 141,000 Total Liabilities 987,573 541,076 ----------- ----------- EQUITY Paid-In Capital 7,526,978 6,776,983 Preferred Stock - Series E 5 5 Preferred Stock - Series F 19 15 Common Stock 52 50 Accumulated Deficit (8,251,017) (6,716,947) ----------- ----------- Total Equity (723,963) 60,106 TOTAL LIABILITIES & EQUITY $ 263,610 $ 601,182 =========== ===========
3 INSTANT VIDEO TECHNOLOGIES, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, ------------------------------- 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net Loss (1,534,070) (552,968) Depreciation & Amortization 68,991 34,749 Amortization of Deferred Revenue -- (558,840) Decrease in A/R -- 605,000 Decrease in Unbilled Revenue 136,400 -- Decrease /(Increase) in Prepaids 8,648 (28,313) Decrease in Patents, Net 25,111 Decrease /(Increase) in Other Assets 34,428 -- (Increase) in Deferred Costs -- (350,943) (Decrease) in A/P (57,837) (14,225) (Decrease) in Accrued Expenses (152,000) (161,778) (Decrease) /Increase in Accrued Interest 13,124 (17,769) ---------- ---------- Net Cash Used in Operating Activities (1,457,205) (1,045,087) CASH FLOWS FROM INVESTING ACTIVITIES Patent Acquisition -- (9,582) Purchases of Property, Plant & Equipment (125,021) (11,461) ---------- ---------- Net Cash Used in Investing Activities (125,021) (21,043) CASH FLOWS FROM FINANCING ACTIVITIES Increase in Bank LOC 510,000 -- Increase/(Decrease) in Notes Payable 60,000 (406,048) Increase in Long Term Notes Payable 73,210 -- Proceeds from sale of Preferred Stock 749,996 -- Proceeds from sale of Common Stock -- 1,475,000 Preferred Stock Series E -- -- Series F 4 -- Common Stock 2 -- ---------- ---------- Net Cash Provided by Financing Activities 1,393,212 1,068,952 Increase/(Decrease) in Cash and Cash Equivalents (189,014) 2,822 Cash and Cash Equivalents, Beginning Balance 208,613 4,346 ---------- ---------- Cash and Cash Equivalents, Ending Balance 19,599 7,168 ========== ==========
4 INSTANT VIDEO TECHNOLOGIES, INC. & SUBSIDIARY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Nine months ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 ---- ---- ---- ---- Revenue (196,750) 520,379 247,879 558,948 -------- ---------- ---------- ---------- Costs and expenses: Research and development -- 35,700 -- 108,000 Project costs 63,290 210,000 247,460 650,000 Other general and administrative 499,796 109,756 1,480,234 302,604 -------- ---------- ---------- ---------- 563,086 355,456 1,727,694 1,060,604 -------- ---------- ---------- ---------- Net Income/(Loss) from Operations (759,836) 164,923 (1,479,815) (501,656) -------- ---------- ---------- ---------- Other Income/(Expense) Interest income -- 42 -- 637 Interest expense (24,587) (15,311) (53,455) (50,749) -------- ---------- ---------- ---------- (24,587) (15,269) (53,455) (50,112) -------- ---------- ---------- ---------- Net Income/(Loss) before Income Taxes (784,423) 149,654 (1,533,270) (551,768) -------- ---------- ---------- ---------- Income taxes -- (800) (800) (1,200) -------- ---------- ---------- ---------- Net Income/(Loss) (784,423) 148,854 (1,534,070) (552,968) ======== ========== ========== ========== Net Income/(Loss) per Common Share $ (0.16) $ 0.04 $ (0.31) $ (0.12) ======== ========== ========== ==========
5 INSTANT VIDEO TECHNOLOGIES, INC. AND SUBSIDIARY Notes to Unaudited Condensed Consolidated Financial Statements September 30, 1997 (1) BASIS OF PREPARATION AND PRESENTATION ------------------------------------- The condensed consolidated financial statements included herein have been prepared by Instant Video Technologies, Inc., and its Subsidiary (the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and include all adjustments which are, in the opinion of management, necessary for a fair presentation. The condensed consolidated financial statements include the accounts of the Company. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations. The Company suggests that these financial statements be read in conjunction with the historical financial statements and the notes thereto of Instant Video Technologies, Inc. The Company will be restating its financials for the quarter ended March 31, 1997. Included in the nine months ended September 30, 1997 figures is a retroactive prior period adjustment related to the first quarter 1997 in amount of $165,000, reducing revenue for the write off of contract revenue recorded in error. This had the impact of reducing the first quarter income from $29,036 to ($142,840), and reducing earning per share from .01 to (.03). The Company will file an amended 10-QSB to reflect the restatement. 6 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain information in this Report includes forward-looking statements within the meaning of applicable securities laws that involve substantial risks and uncertainties including, but not limited to, market acceptance of the Company's products and new technologies, the sufficiency of financial resources available to the Company, economic, competitive, governmental and technological factors affecting the Company's operations, markets, services and prices, and other factors described in this Report and in prior filings with the Securities and Exchange Commission. The Company's actual results could differ materially from those suggested or implied by any forward-looking statements as a result of such risks. Item 2. Management's Discussion and Analysis or Plan of Operation. Results of Operations During the three month period ending September 30, 1997, the Company recorded revenue, in the amount of ($196,750), as compared to revenue in the amount of $520,379 for the period ended September 30, 1996. The decrease in revenue was due to the Company not meeting its sales objectives, and the write-off of $201,750 of unbilled revenue associated with a development contract to provide a customized product accounted for under the percentage-of-completion method. The contract was cancelled by mutual agreement due to a reorganization of the customer which resulted in a move to a standardized product instead of a custom solution. Costs and expenses during the three month period ending September 30, 1997, totaled $550,173 as compared to $371,525 during the three month period ending September 30, 1996. The increase was primarily due to development and marketing costs associated with Burstware(TM) products and applications. During the nine month period ending September 30, 1997, costs and expenses totaled $1,248,691 as compared to $1,111,916 during the nine month period ending September 30, 1996. The increase in expenses during the nine month period ending September 30, 1997 was the result of increased marketing and administrative costs associated with Burstware(TM) products and applications and expenses incurred during due diligence for a proposed private placement. The Company realized a net loss of ($784,423) during the three month period ending September 30, 1997, as compared to a net loss of ($552,968) during the three month period ending September 30, 1996. For the nine month period ending September 30, 1997 the net loss was ($1,534,070), as compared to a net loss of ($552,968) during the nine month period ending September 30, 1996. 7 The Company will be restating its financials for the quarter ended March 31, 1997. Included in the nine months ended September 30, 1997 figures is a retroactive prior period adjustment related to the first quarter 1997 in the amount of $165,000, reducing revenue for the write off of contract revenue recorded in error. This had the impact of reducing the first quarter income from $29,036 to ($142,840), and reducing earnings per share from .01 to (.03). The Company will file an amended 10-QSB to reflect the restatement. Liquidity and Capital Resources As of September 30, 1997, the Company had a working capital deficit of ($752,343) as compared to a working capital deficit of ($1,022,678) at the same time in the previous year. The decreased deficit was primarily due to funds realized through financing and a reduction in operating expenses in September 1997. Net cash used in operating activities totaled ($1,457,205) during the nine month period ending September 30, 1997, as compared to net cash used in operating activities in the amount of ($1,045,087) during the nine month period ending September 30, 1996. The increase in net cash used was primarily the result of decreased revenue for the period, and uncollected receivables. Cash flow provided by financing activities during the nine month period ending September 30, 1997 totaled $643,210, as compared to $1,068,952 during the nine month period ending September 30, 1996. Net cash used in investing activities during the nine month period ending September 30, 1997 totaled $122,631, as compared to $21,043 during the nine month period ending September 30, 1996. The increase was due to spending for capital equipment used in the conversion to a new Windows NT network for development, operations, and administration. During the nine month period ending September 30, 1997, the Company received funding in the amount of $749,996 from the sale of investment units consisting of Series F Preferred Stock and Warrants to purchase Common Stock of the Company. As of November 14, 1997, the Company has cash in the amount of $39,122. The Company believes that this amount, along with the verbal commitment from a current investor to provide working capital as needed, will allow the Company to meet in its operating expenses through the end of January 1998. The Company is seeking additional financing to meet its funding requirements for 1998, and to remain a going concern. There can be no guarantee to the success of these efforts. If unsuccessful, the Company would need to cease or curtail operations. The Company presently has no commitments for material capital expenditures. 8 PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. During the quarter ended September 30, 1997, the Company raised an additional $550,000 from the issuance of 550,000 investment units at the price of $1.00 per unit (each unit consists of 1 share of Series F Stock and a warrant to purchase one share of Common Stock). Each share of Series F Stock may be converted into one share of the Company's Common Stock. The exercise price of the Common Stock Purchase Warrants is $1.00 per share. The document evidencing this financing includes provisions that, among other matters, give the investors the right to appoint two directors to the Board of Directors and certain registration rights. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. The majority holders of investment units consisting of one share of Series F Convertible Preferred Stock and a warrant to purchase one share of Common Stock, voted to extend the closing date of the original offering in order to allow for the issuance of the additional units issued in Item 2 herein. Item 5. Other Information. The Company is seeking to obtain restitution from the Company's former Chairman, CEO, and President, Gary Familian, and the Company's former Executive Vice President, Business Development, Therese Stacy. The Board of Directors terminated Mr. Familian and Ms. Stacy after serious accounting irregularities were discovered in an internal audit of their expenses. As a result of the actions, the Company has established a Note Receivable in the amount of $350,329 for amounts owed by Gary Familian and Therese Stacy. In accordance with GAAP the Company has established a reserve of $350,329 against these amounts. The Company believes that all expenses in question have been charged to Operating Expenses in the appropriate period and no restatement of prior period Net Income is required, as a result of these transactions. 9 The Company was able to negotiate an extension of its $500,000 bridge loan with Imperial Bank. The maturity date of the loan is January 31, 1998. In return for the extension, the Company committed to issue Imperial bank 200,000 investment units consisting of shares of Series F Convertible Preferred Stock and Warrants to purchase Common Stock. If the Company repays the loan prior to the maturity date, the number of units will be reduced to 100,000. The Company continues to maximize its use of available resources in order to conserve cash. The Company has taken action which has resulted in a reduction of operating expenses by approximately 30% since September 1997. The Company is also in the process of developing a standardized version of its software product that is scheduled to be available during the first quarter of 1998, and has retained several individuals, with extensive experience in software licensing, to assist the Company in its technology development, sales and marketing endeavors. Item 6. Exhibits and Reports on Form 8-K. The Company filed a Report on Form 8-K on September 12, 1997. 10 SIGNATURES In accordance with the Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INSTANT VIDEO TECHNOLOGIES, INC. Date: November 19, 1997 By: /s/ RICHARD LANG ------------------------------------ Richard Lang, President and Chief Executive Officer 11 INDEX TO EXHIBITS
Exhibit Number Description - ----------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 1 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 19,599 0 1,421 0 0 371,349 206,994 78,645 263,610 773,692 214,210 0 24 52 (724,040) 263,610 247,879 247,879 247,460 0 1,442,315 37,500 53,455 (1,533,270) 800 0 0 0 0 (1,534,070) (.31) (.31)
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