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 October 31, 2005 | ||||||||
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 0-14200
CPVD
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)
37735 Enterprise Ct, Suite 600-B
Farmington Hills, MI 48331
(Address of principal executive offices)
Registrant's telephone number, including area code:(248) 994-0099
Indicate by check mark whether the Company (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 (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
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes No X
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes No X
The number of shares outstanding of the registrant’s common stock as of October 31, 2005 was 160,006,250.
Table of Contents
PART 1
Item 1. Financial Statements
CompuSonics Video Corporation & Subsidiaries
Consolidated Balance Sheets
(In US dollars)
Unaudited | ||||
Assets | October 31, 2005 | July 31, 2005 | ||
Current Assets | ||||
Cash | $ | 1,800 | $ | 3,095 |
Accounts Receivable | 1,000 |
| ||
Total Current Assets | 2,800 | 3,095 | ||
Property and Equipment | ||||
Equipment | 6,719 | 6,719 | ||
Accumulated Depreciation Equipment | (1,833) | (1,498) | ||
Property and Equipment, Net | 4,886 | 5,221 | ||
Other Assets | ||||
Licenses and Agreements | 1,395,000 | 1,395,000 | ||
Accumulated Amortization | (103,042) | (88,634) | ||
Licenses and Agreements, Net | 1,291,958 | 1,306,366 | ||
Total Assets | $ | 1,299,644 | $ | 1,314,682 |
Liabilities and Stockholders’ Equity Current Liabilities | ||||
Accounts Payable and Accrued Liabilities | $ | 39,954 | $ | 33,008 |
Accounts Payable-Related Party | 207,695 | 182,455 | ||
Notes Payable - Related Party | 11,000 | - | ||
Total Liabilities | 258,649 | 215,463 | ||
Stockholders’ Equity | ||||
Preferred Stock-Series B Convertible, 20,000,000 Shares Authorized, 4,000,000 Shares Issued and Outstanding. | 400,000 | 400,000 | ||
Preferred Stock-Series D Convertible, $0.001 Par Value, 20,000,000 Shares Authorized, 2,000,000 Shares Issued and Outstanding. | 2,000 | 2,000 | ||
Preferred Stock-Series E Convertible, 24,000,000 Shares Authorized, 24,000,000 Shares Issued and Outstanding. | 400,000 | 400,000 | ||
Common Stock. $0.01 Par Value, 300,000,000 Shares Authorized, 160,006,250 Shares Issued and Outstanding. | 160,006 | 160,006 | ||
Paid-in Capital | 2,085,997 | 2,085,997 | ||
Paid -in-Capital Public Warrants | 411,000 | 411,000 | ||
Accumulated Deficit | (2,418,008) | (2,359,784) | ||
Total Stockholders’ Equity | 1,040,995 | 1,099,219 | ||
Total Liabilities & Stockholders’ Equity | $ | 1,299,644 | $ | 1,314,682 |
See accompanying notes to financial statements
CompuSonics Video Corporation & Subsidiaries
Consolidated Statements of Operations (Unaudited)
(In US dollars)
For the Three Months Ended October 31, | ||||
2005 | 2004 | |||
Revenues | ||||
Sales | $ | 2,630 | $ | - |
Cost of Goods Sold | - | - | ||
Gross Profit | 2,630 | - | ||
General and Administrative Expenses | ||||
Consulting Fees Related Party | 21,098 | 22,998 | ||
Professional fees | 22,964 | 3,823 | ||
Research and Development | 9,900 | 27,000 | ||
Depreciation | 336 | 249 | ||
Amortization | 14,408 | 23,250 | ||
Travel and Entertainment | - | 169 | ||
Other General & Administrative Expenses | 138 | 355 | ||
Total General & Administrative Expenses | 68,844 | 77,844 | ||
Loss from Operations | (66,214) | (77,844) | ||
Other Income | 8,076 | 12,591 | ||
Interest Expense Related Party | (86) | - | ||
Total other Income (Expense) | 7,990 | 12,591 | ||
Loss before income taxes | (58,224) | (65,253) | ||
Income tax benefit | - | - | ||
Net Loss | (58,224) | (65,253) | ||
Weighted Average Number of Common Shares Issued and Outstanding | 160,006,250 | 160,006,250 | ||
Basic and Diluted Loss per Share | $ | (0.000) | $ | (0.000) |
See accompanying notes to financial statement
CompuSonics Video Corporation & Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(In US dollars)
| October 31,2005 | October 31, 2004 | |
Cash Flows From Operating Activities | |||
Net Loss | $ (58,224) | $ (65,253) | |
Adjustments to reconcile Net Loss to Net | |||
Cash used for operating activities | |||
Depreciation | 336 | 249 | |
Amortization | 14,408 | 23,250 | |
Increase In: | |||
Accounts Receivable | (1,000) | - | |
Increase (Decrease) In: | |||
Accounts Payable and Accrued Liabilities | 6,945 | (72,732) | |
Accounts Payable-Related Party | 25,240 | (28,521) | |
Total Adjustments | 45,929 | (77,754) | |
Net Cash Used For Operations | (12,295) | (143,007) | |
Cash Provided by Investing Activities | |||
(Purchase) Disposed of Equipment | - | - | |
Net Cash from Investing Activities | - | - | |
Cash Provided by Financing Activities | |||
Proceeds from Issuance of Stock | - | 400,000 | |
Proceeds from Notes Payable - Related Party | 11,000 | - | |
Payments of Notes Payable – Related Party | - | (206,300) | |
Net Cash Provided by Financing Activities | 11,000 | 193,700 | |
Increase (Decrease) in Cash | (1,295) | 50,693 | |
Balance, beginning of period | 3,095 | 5,228 | |
Balance, end of period | $ 1,800 | $ 55,921 | |
See accompanying notes to financial statements
Notes to Consolidated Financial Statements (Unaudited)
Note 1: Financial Statements.
The financial data presented herein are unaudited, but in the opinion of management reflect those adjustments necessary for a fair presentation of the results of operations and financial condition of CompuSonics Video Corporation. Results for interim periods should not be considered indicative of results for a full year. Reference should be made to the financial statements contained in our Annual Report on Form 10-KSB for the year ended July 31, 2005. For purposes of this report, "CPVD", the "Company", "we", "our", "us" or similar references mean CompuSonics Video Corporation, Inc, unless the context requires otherwise. Certain prior period amounts have been reclassified to conform to current period presentation.
Note 2. Accounts Receivable
Recently the Company started the marketing of the TreeSoft CRM software, and the first sales of $2,630 generated the $1,000 in accounts receivable.
Note 3: Equipment
Equipment is stated at cost. Depreciation is computed for financial reporting purposes on a straight-line basis over an estimated life. At October 31, 2005, total cost of equipment was $6,719, accumulated depreciation was $1,833.
Note 4: Intangible Assets
TreeSoft USA, Inc, subsidiary of the Company owns an intangible asset, called “License Agreement”. This asset represents the rights to distribute ERP, CRM and Electrical –CAD (E-CAD) software products in the NAFTA region, the rights to use the trademarks, product names, logos, artwork and sales promotion material, patents and product documentation, and all other rights specified in the License Agreement dated March 25, 2003.
The Company believes that the estimated useful life of this license agreement should be 24 years starting at March 31, 2004. The Company is using the straight-line method of amortization. Accumulated amortization on this intangible asset was $103,042 at October 31, 2005.
Notes to Consolidated Financial Statements (continued)
Note 5: Notes payable to related parties.
The Company borrowed $11,000 from First Equity Corporation (FEC) during this quarter. This Note is due in 180 days, and carries a 7% interest rate per annum. As of today, no payments have been made on this note. Thomas W. Itin, Chairman of the Company has an indirect majority interest in FEC.
Note 6: Accounts payable - Related Party.
The balance of accrued consulting fees owed to each First Equity Corporation (FEC), and Quorum Capital Inc (DWI) was $59,994 and $49,995 at October 31, 2005 and July 31, 2005, respectively. On May l, 2003, CPVD entered into separate consulting agreements with DWI and FEC. Both agreements identically provide for monthly consulting fees of $3,333 to each of these parties until April 30, 2008.
The balance of accrued consulting fees owed to TreeCAD was $83,465 and $82,465 at October 31, 2005 and July 31, 2005, respectively. On March 25, 2003, CPVD entered into a consulting agreement with TreeCAD, a Cypriot company. President of TreCAD, Harald Engels is engaged as a consultant and Vice Chairman of the Board of Directors and Chairman of the Executive Committee of CPVD since March 25, 2003. This agreement provides for an annual compensation to TreeCAD charged on a time and material basis and is limited to $120,000 per year, starting July 1, 2003. TreeCAD Engineering has a direct ownership in CPVD through 2 million shares of Class D Preferred Stock convertible to 45,400,000 shares of common stock. CPVD paid $10,000 to TreeCAD during this quarter.
CPVD has determined that 90% of costs incurred for TreeCAD are considered research and development costs.
Note 7: Stockholders' Equity
Preferred Convertible Stock
Under the Company's Certificate of Incorporation, up to 75 million shares of preferred stock, with classes and terms as designated by the Company, may be issued and outstanding at any point in time. The Company had 300,000 authorized shares of Series A Convertible Preferred Stock ($.001 par value) issued and outstanding at July 31, 1988. In September 1988, all the outstanding shares of Preferred Stock were converted at $.001 per share, at the holder's option, into 30 million shares of common stock.
Notes to Consolidated Financial Statements (continued)
Series B of Preferred Convertible Stock.
In April 2001 the Company issued 4 million shares of Series B preferred convertible stock, convertible at 10 to 1 into 40 million shares of common stock, to Dearborn Wheels, Inc. and First Equity Corporation, in exchange for the extinguishments of the indebtedness to these related parties in the amount of $412,117.
Series D of Preferred Convertible Stock.
On March 31, 2004 the Company delivered to TreeCAD Engineering, Ltd 2 million shares of series D preferred convertible stock, Par value $0.001 per share, convertible at 1 for 22.7 rate into 45.4 million restricted or legended shares of common stock, within five years of the closing date, at the holder’s discretion. These shares are represented on the face of the statement of assets and liabilities. There are another two million shares of the same type of stock held in escrow, pending fulfillment of certain requirements by TreeCAD Engineering, Ltd.
Series E of Preferred Convertible Stock.
In October 2004, $400,000 was invested in the Company from various accredited investors through the sale of 24 million shares of class E preferred convertible stock and 24 million shares of warrants. Class E preferred convertible stock is convertible into 24 million shares of common stock (Rate of 1 to 1). One newly issued warrant entitles the holder to purchase one share of common stock at a price of $0.018 during the five-year period ending October 31, 2009.
Rights, preferences, privileges and restrictions of the Series B, D, and E of Preferred Convertible Stock.
See Exhibit 1.
Notes to Consolidated Financial Statements (continued)
Public Offering of Common Stock and Warrants
In December 1985, the Company completed a public offering of 30,000,000 units, each consisting of one share of the Company's common stock, $.001 par value, and one Class A purchase warrant. One Class A warrant entitles the holder to purchase one share of common stock plus a Class B warrant for $.05 during the twelve month period originally ending November 27, 1986 and currently extended to December 31, 2005. The Company may redeem the Class A warrants at $.001 per warrant if certain conditions are met.
One Class B warrant entitles the holder to purchase one share of the Company's Common Stock for $.08 per share for a twelve-month period originally ended November 27, 1987 and currently extended to December 31, 2005. The offering was made pursuant to an underwriting agreement whereby the units were sold by the Underwriter on a "best efforts, all or none" basis at a price of $.03 per unit. The Underwriter received a commission of $.003 per unit and a non-accountable expense allowance of $27,000.
The public offering was successfully completed on December 13, 1985 and the Company received $727,971 as the net offering proceeds for the 30,000,000 units sold. 6,250 Class A warrants have been exercised for total proceeds of $313, as of October 31, 2005.
Incentive Stock Option Plan
On October 4, 1985, the Company's Board of Directors authorized an Incentive Stock Option Plan covering up to 7,000,000 shares of the Company's common stock for key employees. The Board of Directors is authorized to determine the exercise price, the time period, the number of shares subject to the option and the identity of those receiving the options.
Additional Paid in Capital-Public Warrants
Based on SFAS 123R, the Company must record additional compensation expense for the incremental difference in fair value of the outstanding warrants, each time these warrants are extended. No incremental value is recognized as of September 30, 2005, the date these warrants were last extended.
Notes to Consolidated Financial Statements (continued)
Note 8. Legal Proceedings
CPVD is a co plaintiff with First Equity and CompuSonics Video Corporation vs. Target Holding, B.V., Senol Halfar, George Burmann, and Gunnallen Financial, Inc., Case Number: 05-CV-70341-DT. The complaint was filed at the Eastern District Court of Michigan, Southern Division on January 31, 2005, and amended on August 9, 2005. The Complaint alleges fraud, conspiracy, breach of contract, defamation and breach of settlement agreement and mutual release, and violations of securities law actively, or aiding and abetting.
Defendant, Target A, initially established, in 2001, a securities account with Defendant, Gunn Allen Financial, which account was managed by Defendant George Burmann, manager of the Gunn Allen Finacial branch in Orlando. The purpose of this account was to receive shares of CPVD common stock from Plaintiff, First Equity Corporation and other CPVD shareholders, so Target could receive approximately 32 million of such shares, pay Plaintiff, First Equity, and others, if any, for shares at prices ranging from one cent to two cents per share, so that those shares of CPVD could then be sold by Defendants Halfar, Burmann, and Gunn Allen for higher prices in the market for profit purposes.
Plaintiffs believe that the Defendants diverted and converted the profits of sale of CPVD stock to Target B, Halfar, George Burmann, and/or others in order to defraud First Equity, and CPVD and their former partner in Target, Engels.
Upon information and belief, defendants utilized the wrongfully diverted profits to launch and to help finance a scheme to take over Enercorp, Inc, a major shareholder of CPVD, through a proxy contest, and to help finance litigation that they brought in the name of George Burmann against Enercorp in Denver, Colorado for purposes of attempting to take over Enercorp to the detriment of First Equity, CPVD, and the Enercorp shareholders.
Plaintiffs have requested in whatever amount the Court deems appropriate, together with exemplary and/or punitive damages, costs, interest, and actual reasonable attorney fees, as permitted by law for their wrongful acts, and their willful, wanton misconduct.
There is no counter claim against CPVD. At this point, discovery has not been completed.
Item 2. Management's Discussion and Analysis or Plan of Operation
Results of Operations.
Three months ended October 31, 2005 compared to three months ended October 31, 2004.
The Company realized $2,630 and $ - in revenues from the sales of TreeSoft CRM software for the quarters ended October 31, 2005 and 2004, respectively.
The Company incurred $21,098 and $22,998 in consulting fees for the quarters ended October 31, 2005 and 2004, respectively. The Company is engaged in separate consulting agreements, with two abovementioned parties.
The Company incurred $22,964 and $3,823 of professional fees for the quarters ended October 31, 2005 and 2004, respectively. The increase in 2005 is due to the legal expenses incurred in relation with the lawsuit filed in the United States District Court, Eastern District of Michigan, Southern Division. See Part II, Item 1, Legal Proceedings.
Research and development costs were $9,900 and $27,000 for the quarters ended October 31, 2005 and 2004, respectively. These costs are calculated at 90% of total billings from TreeCAD. The decrease of such costs for this quarter is related to the amount of time TreeCAD devoted to CPVD.
The Company recorded $336 and $249 in depreciation expense for the quarters ended October 31, 2005 and 2004, respectively.
The Company recorded $14,408 and $23,250 in amortization expense for the quarters ended October 31, 2005 and 2004, respectively. The license is amortized over a 24-year period, starting March 31, 2004.
Other general and administrative expenses were $138 and $355 for the quarters ended October 31, 2005 and 2004, respectively.
Management's Discussion and Analysis or Plan of Operation (continued)
Liquidity and Capital Resources.
CPVD is in the stage of marketing the TreeSoft CRM software to small and mid size markets in the USA. Management is confident that this software product is the best in the pool of the CRM products, and the most cost effective. CPVD has spent over 18 months in research and development activities involving translation and localization of the software from its German version. Such activities caused a negative cash flow for CPVD during the past two years. Management plans to create sales revenue from this software and such revenue should support the company’s daily operations for the next 12 months by turning a positive net cash flow. Concurrently with the sales revenue, related party loans should continue to support any additional cash needs.
CPVD has no current plans to purchase or sell plants or equipment for the next 12 months. CPVD plans to hire, or contract additional work force in the marketing department during the next 12 months.
Item 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures.
The Company’s Chief Excecutive Officer and Chief Financial officer have performed an evaluation of the Company’s disclosure controls and procedures as of October 31, 2005, as those terms are defined in Rules 13a-15(e) and 15d-15(e)of the Securities and Exchange Act of 1934 as amended (the “Exchange Act”), and each has concluded that such disclosure controls and procedures are effective to ensure that the information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the Securities and Exchange Commission’s rules and regulations.
Changes in Internal Controls
There have been no changes in the Company’s internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f)under the Exchange Act) during the quarter ended October 31, 2005 to which this report relates, that have materially affected, or are reasonably likely to affect, the Company’s internal control over financial reporting.
PART II OTHER INFORMATION
Item 1. Legal proceedings
See Note 8.
Item 2. Unregistered Sales of Equity 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
See Exhibit 1.
Form 10-QSB
For the quarter ended October 31, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
COMPUSONICS VIDEO CORPORATION &SUBSIDIARIES
(Company)
December 15, 2005 /s/ Thomas W. Itin Chairman of the Board of Directors, President, CEO
Thomas W. Itin
RULE 15D-14(A) CERTIFICATION OF CEO
I, Thomas W. Itin certify that:
1. | I have reviewed this Annual Report on Form 10-QSB of CompuSonics Video Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
CEO Certification (continued)
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: December 15, 2005
|
/s/ Thomas W. Itin |
Chief Executive Officer |
RULE 15D-14(A) CERTIFICATION OF CFO
I, Majlinda Xhuti, certify that:
1. | I have reviewed this Annual Report on Form 10-QSB of CompuSonics Video Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
CFO Certification (continued)
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: December 15, 2005
|
/s/ Majlinda Xhuti |
Chief Financial Officer |
SECTION 1350 CERTIFICATION OF CEO
I, Thomas W. Itin, Chief Executive Officer of CompuSonics Video Corporation (the “Company”), hereby certify pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code that to my knowledge:
| 1. | the Company’s Annual Report on Form 10-QSB for the period ended October 31, 2005, to which this statement is furnished as an exhibit (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| ||
| 2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: December 15, 2005
/s/Thomas W Itin. | |
Chairman of the Board of Directors and | |
Chief Executive Officer |
SECTION 1350 CERTIFICATION OF CFO
I, Majlinda Xhuti, Chief Financial Officer of CompuSonics Video Corporation (the “Company”), hereby certify pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code that to my knowledge:
| 1. | the Company’s Annual Report on Form 10-QSB for the period ended October 31, 2005, to which this statement is furnished as an exhibit (the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| ||
| 2. | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: December 15, 2005
/s/Majlinda Xhuti. | |
Chief Financial Officer |
EXHIBIT.1
Rights, preferences, privileges and restrictions of the Series B Convertible Preferred stock
No Dividends.
Holders of the Series B preferred stock are not entitled to dividends on their shares of series B of preferred stock.
Liquidation preference.
Upon the liquidation of the company the holders of the series B preferred stock are entitled to receive out of the assets of the company a distribution of respectively $0.02 and $.10 for each share of Series A and B preferred stock held.
Conversion.
Each share of series B Preferred stock is convertible respectively into two shares and ten shares of common stock.
Voting rights.
The holders of the Series B Preferred stock have voting rights as if the conversion to Common stock had taken place, and votes together with the Common stock as a single voting group except and to the extent the Colorado Business Corporation Act provides for voting rights as a separate class under section 7-110-104 or any successor statutory provision or as provided below.
An affirmative vote of at least 60 percent of the holders of the series B preferred stock is required for a) change in the rights, preferences or privileges of the series B Preferred stock, b) an authorization, or issuance of additional shares of the same series, c) any change in the percent of series B preferred stock required to approve the forgoing.
No preemptive rights.
The series B preferred stock should have no preemptive rights as to any series of preferred stock issued subsequent to it.
Registration rights.
On one occasion at the request of the holders of at least 60% of the series B preferred stock, the Company shall register the shares of Common stock issued or issuable upon conversion of the series B preferred stock with the Securities and Exchange Commission. In addition, if the company proposes to file a registration statement with the SEC under the securities act with respect to an offering of securities of the Company, then the Company shall give the holders of the series B Preferred Stock notice of its intention and an opportunity to include all or a portion of the shares of Common Stock issuable upon conversion of the series B preferred stock in the proposed registration statement.
Exhibits (continued)
Notices
Any notice, request, demand, consent, approval or the other communication required or permitted hereunder shall be in writing and shall be delivered by personal service or agent, by registered or certified mail, return receipt requested, with postage thereon fully prepaid.
Rights, preferences, privileges and restrictions of the Series D Convertible Preferred stock
No Dividends
Holders of the Series D preferred stock are not entitled to dividends on their shares of series D preferred stock.
Liquidation preference.
Upon the liquidation of the Company the holders of the series D preferred stock are entitled to receive out of the assets of the Company a distribution of $.10 for each share of Series D preferred stock held.
Conversion.
Each share of series D Preferred stock is convertible respectively into 22.7 shares of common stock.
Voting rights.
The holders of the Series D Preferred stock have voting rights as if the conversion to Common stock had taken place, and votes together with the Common stock as a single voting group except and to the extent the Colorado Business Corporation Act provides for voting rights as a separate class under section 7-110-104 or any successor statutory provision or as provided below.
An affirmative vote of at least 60 percent of the holders of the series D preferred stock is required for a) change in the rights, preferences or privileges of the series D Preferred stock, b) an authorization, or issuance of additional shares of the same series, c) any change in the percent of series D preferred stock required to approve the forgoing.
No preemptive rights.
The series D preferred stock should have no preemptive rights as to any series of preferred stock issued subsequent to it.
Registration rights.
On one occasion, at the request of the holders of at least 60% of the series D preferred stock, the Company shall register the shares of Common stock issued or issuable upon conversion of the series D preferred stock with the Securities and Exchange Commission (“SEC”).
Exhibits (continued)
In addition, if the company proposes to file a registration statement with the SEC under the securities act with respect to an offering of securities of the Company, then the Company shall give the holders of the series D Preferred Stock notice of its intention and an opportunity to include all or a portion of the shares of Common Stock issuable upon conversion of the series D preferred stock in the proposed registration statement.
Notices.
Any notice, request, demand, consent, approval or any other communication required or permitted hereunder shall be in writing and shall be delivered by personal service or agent, by registered or certified mail, return receipt requested, with postage thereon fully prepaid.
Rights, preferences, privileges and restrictions of the Series E Convertible Preferred stock
No Dividends.
Holders of the Series E preferred stock are not entitled to dividends on their shares of series E preferred stock.
Liquidation preference.
Upon the liquidation of the Company the holders of the series E preferred stock are entitled to receive out of the assets of the Company a distribution of $.10 for each share of Series E preferred stock held.
Conversion.
Each share of series E Preferred stock is convertible respectively into (1) one share of common stock.
Voting rights.
The holders of the Series E Preferred stock have voting rights as if the conversion to Common stock had taken place, and votes together with the Common stock as a single voting group except and to the extent the Colorado Business Corporation Act provides for voting rights as a separate class under section 7-110-104 or any successor statutory provision or as provided below.
An affirmative vote of at least 60 percent of the holders of the series E preferred stock is required for a) change in the rights, preferences or privileges of the series E preferred stock, b) an authorization, or issuance of additional shares of the same series, c) any change in the percent of series E preferred stock required to approve the forgoing.
No preemptive rights.
The series E preferred stock have no preemptive rights as to any series of preferred stock issued subsequent to it.
Exhibits (continued)
Registration rights.
On one occasion, at the request of the holders of at least 60% of the series E preferred stock, the Company shall register the shares of common stock issued or issuable upon conversion of the series E preferred stock with the Securities and Exchange Commission (“SEC”). In addition, if the company proposes to file a registration statement with the SEC under the securities act with respect to an offering of securities of the Company, then the Company shall give the holders of the series E preferred stock notice of its intention and an opportunity to include all or a portion of the shares of common stock issuable upon conversion of the series E preferred stock in the proposed registration statement.
Notices.
Any notice, request, demand, consent, approval or any other communication required or permitted hereunder shall be in writing and shall be delivered by personal service or agent, by registered or certified mail, return receipt requested, with postage thereon fully prepaid.
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