U.S. SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-QSB (Mark One) [X] Quarterly report pursuant to section 113 or 15(d)of the Securities Exchange Act of 1934 For the quarter ended August 31, 1996. [ ] Transition report under section 13 or 15(d) ofthe Securities Exchange Act of 1934 [no fee required] Commission File Number 2-33-3560D CONECTISYS CORP. (Name of small business issuer in its charter) Colorado 84-1017107 (state or other jurisdiction (I.R.S. Employer Incorporation or Organization Identification No.) 7260 Spigno Place 91350 Agua Dulce, California Address of principal (Zip Code) executive offices Issuer's telephone number: (805) 268-0305 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(b) 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 Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B Contained herein,and disclosure will be contained, to the best ofregistrant's knowledge, in definitive proxy or information statements incorporated by reference in partIII of this Form 10-QSB. [X] State Issuer's revenues for it's most recent fiscal year: $ 70,197 The aggregate market value of the voting stock held by non affiliates computed by reference to the price at which the stock was sold on August 31, 1996 was $15,517,212. For the purpose of the foregoing calculation only, all directors and executive officers of the registrant have been deemed affiliates. The number of shares outstanding of each of the issuer's classes of common equity, as of August 31, 1996 was 2,586,202 PART 1 Financial Information Item 1. Financial Statements The unaudited financial statements for the quarter ended August 31, 1996 are attached hereto. Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations Results and Plan of Operations Orders were placed at the end of the first quarter with the Company's subsidiary PrimeLink. Sales for the Company realized in the third quarter ended August 31,1996 were $ 70,197 The Company continues as a development stage company, and has incurred a loss of $ 196,241 or $ .08 per weighted common share in the third quarter as compared to a loss of $ 28,107 or $ .03 per weighted common share in the third quarter of 1995. Losses for the nine month period ended August 31,1996 total $ 1,270,276 or $.50 per weighted common share. Losses in this quarter were decreased by sales for completed contracts with the Company's subsidiary PrimeLink. Losses for the nine month period end August 31, 1995 were $ 144,951 or $ .014 per weighted common share. The General and Administrative costs rose from $120,890 for nine months at the end of the third quarter of 1995 to $822,368 through three quarters in 1996. The increase was due to expenses associated with the substantial progress of the Company's two subsidiaries PrimeLink and TechniLink. The Company's spinning out, of its subsidiary Creative Image Products,Inc. ("CIPI") during the fourth quarter of 1995 and the restructuring of the Company, had the effect of reducing a majority of the General and Administrative costs that were associated with CIPI during the nine months ended August 31, 1995. During the 9 months ended August 31,1996 the company recorded $ 552,825 in interest expense. The majority of this interest, $ 551,202 was due to stock transactions during the year. The largest stock transaction that involved an interest expense was the reduction of debt through the exercise of options. The options were given in the first quarter of 1995 when the debt was incurred by the company. This one transaction resulted in $ 412,000 toward interest expense. The difference in value between the option and the market value was considered as the interest to the transaction. The second largest interest expense was from the exercise of an option from an officer to reduce accrued compensation. The interest on these stock transactions is nonreoccurring. Donald Wallace the president of PrimeLink owns 20% of the stock in PrimeLink and Karl Elliott the President of TechniLink owns 20% of the stock of TechniLink, the Company's two subsidiaries, which is reflected in the minority interest section of the Financial Statements. Liquidity and Capital Resources The Company has negative working capital of $ 1,396,759 consisting of $ 74,070 current assets and $ 1,470,829 of current liabilities, compared to a negative working capital of $ 483,799 at the end of the third quarter of 1995. The Company remains focused on its financing and capital requirements, and to continue to raise the capital necessary to complete its growth in marketing and technological support to produce and sell its product line. The Company in the early part of the fourth quarter has raised over $300,000 for operating expenses through the contributions of shareholders to the Company. Additionally, the Company is negotiating for both a debt and equity placements within the Company to support its future operations. This includes discussions with some of the Company's current customers of the Company's product lines. PrimeLink expects that its pilot project with Wilwire to be successfully completed in the fourth quarter of this year and that further long term contracts are likely in an expanded target base for both companies. PrimeLink is actively marketing their product lines to the utility and vending machine industries; additionally, PrimeLink is concentrating on the establishment of a distribution and service network and has had some discussions with Wilwire regarding their possible participation. TechniLink is concentrating its marketing efforts on a number of large petroleum refineries. Discussions are still continuing with Honeywell in an attempt to come to an agreement on a Joint Marketing and Development Agreement which could be completed either in the fourth quarter of this year or the first quarter of next year. The Company has neither made any commitments nor does it foresee the need to spend capital for any additional fixed assets at this time. Part 2 Item 2 Changes in Securities On August 20, 1996 the Company entered into an agreement to issued one million shares of common stock, and 300,000 shares of common stock as colateral to a loan. These shares are still in the treasury of the Company awaiting completion of the transaction by an investor. This transaction had no monetary effect on the Company in this quarter. On August 20, 1996 the Company entered in to an agreement with an investor for the possible placement of three million shares of common stock. This transaction has had no monetary effect on the Company this quarter On July 25, 1996 the Company entered into an agreement to issue six (6) million shares of common stock as colateral for a loan with an investor, these shares are still in the treasury of the Company awaiting completion of the transaction by the investor. This transaction has had no monetary effect on the Company in this quarter. During the third quarter 250,000 shares of common stock were returned to the treasury of the Company. The return of these shares had no monetary effect on the Company in the third quarter ended August 31,1996. Item 6 Exhibits and Reports on Form 8-K 1. Exhibit A - Financial statements 2. Exhibit 27- Financial data schedule 3. Reports on Form 8-K a) Filed 6/27/96 SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Robert A. Spigno Robert A. Spigno Dated: October 15, 1996 ____________________________ Conectisys Corp. Robert A. Spigno President and Chief Executive Officer CONECTISYS CORP. Unaudited Consolidated Balance Sheet Aug.-31-1996 Aug.-31-1996 Aug.-31-1995 Nov.-30-1995 Unaudited Unaudited Audited Assets Current Assets Cash 42,429 11644 1,911 Accounts Receivable 25,357 -0- -0- Stock Subscription Receivable -0- -0- 20,000 Other Current Asset 6,283 -0- 7,947 Total Current Assets 74,070 11,644 29,858 Notes Receivable Net 466,625 270,694 466,625 Property and Equipment Net 173,386 23,895 121,734 Licenses and Technology 2,178,430 -0- 2,178,430 Other Assets 38,211 4,818 4,500 Total Assets 2,930,722 311,051 2,801,147 Liabilities and Shareholder equity Current Liabilities Accounts Payable 624,697 18,448 42,933 Accrued Compensation 44,961 -0- 53,295 Notes Payable Related Party 514,230 -0- 456,235 Other 282,595 466,824 441,824 Other Current Liabilities 4,346 10,171 12,122 Total Current Liabilities 1,470,829 495,443 1,006,409 Minority Interest 58,259 -0- 120,569 Shareholders Equity Preferred Stock - Class A 1,000,000 Shares Authorized $ 1.00 Par Value, 16345 Issued and Outstanding 16,345 16,345 16,345 Convertible Preferred Stock Class B 1,000,000 Shares Authorized, $1.00 Par Value, -0- Shares Issued and Outstanding -0- -0- -0- Common Stock 250,000,000 Shares Authorized, No Par Value, 2,586,202 Authorized Issued and Outstanding 6,029,574 1,205,810 5,031,834 Accumulated Gain (Deficit) During Development Stage (4,644,286) (1,406,547) (3,374,010) Total Shareholder Equity 1,401,634 (184,392) 1,674,169 Total Liabilities and Shareholders Equity 2,930,722 311,051 2,801,147 CONECTISYS CORP. Statement of Operations (9 Months) Aug.-31-1996 December 1,1990 (Inception) through Aug.-31-1996 Aug.-31-1995 Aug.-31-1996 Unaudited Unaudited Unaudited Revenues 70,197 -0- 70,197 Cost of Goods Sold 30,276 -0- 30,276 Gross Profit 39,921 -0- 39,921 General and Administrative 822,368 120,890 2,013,578 Bad Debt Write-offs -0- -0- 1,115,286 Loss From Operations (782,447) (120,890) (3,088,943) NonOperating Income (Expense) 2,687 828 5,379 Interest Expense (552,825) 24,889 (523,581) Minority Interest 62,310 -0- 63,488 Net Loss ($1,270,276) ($144,951) ($3,602,146) Weighted Average Shares Outstanding 2,544,839 1,072,998 Net (loss) per share $ (0.50) $ (0.14) CONECTISYS CORP. Condensed statement of operation(3months ended) Aug 31, 1996 Aug. 31, 1996 Aug. 31, 1995 Unaudited Unaudited Revenues 70,197 -0- Cost of goods sold 30,276 -0- Gross profits 39,921 -0- Cost and expenses General and administrative 252,100 28,262 Bad debt write-offs -0- -0- Gain (loss) from operations (212,179) (28,262) Non-operating income (expense) -0- -0- Interest income(expense) (872) 155 Minority interest 16,809 -0- Net Loss ($196,241) ($28,107) Weighted Average Shares Outstanding 2,544,839 1,072,998 Net loss per share $ (0.08) $ (0.03) CONECTISYS CORP. Condensed Statement of Cash Flows (9 Months Ended) Aug.31, 1996 December 1,1990 Aug.-31-1996 Aug.-31-1995 (Inception)through Unaudited Unaudited Aug. 31, 1996 Operating activities Net Income (loss) (1,270,276) (144,951) (3,602,146) Adjustments to reconcile net income (loss)to net cash Provided by (used in) operating activities: Depreciation and amortization -0- 946 1,270 Stock issued for services 96,538 727,000 1,019,252 Stock issued for interest (see Item 2 Paragraph 4) 551,202 -0- 551,202 Minority interest (62,310) -0- (63,488) Changes in operating assets and liabilities (Increase) decrease in assets Accounts receivable (5,357) -0- (4,938) Accrued interest -0- (25,065) (8,366) Deposits -0- -0- (450) Provision for possible losses -0- -0- 855,875 Increase (decrease) in liabilities Accounts payable 581,764 5,542 624,697 Accrued interest -0- -0- 9,951 Accrued compensation (8,334) -0- 44,961 Other current liabilities (7,776) 5,654 (5,605) Net cash provided by (used in) operating activities (124,548) 569,126 332,738 Investing activities Increase in notes receivable -0- (1,322,500) (1,322,500) Costs of licenses -0- -0- (3,252) Purchase of equipment (51,652) (3,281) (78,087) Net cash from (used) in investing activities (51,652) (1,325,781) (183,839) Financing Activities Common Stock issued for cash 150,000 305,000 560,655 Dividends received -0- -0- -0- Preferred Stock issuance -0- -0- 16,345 Proceeds from debts Related party 41,958 216,768 98,193 Other 24,761 (67,176) 1,352,395 Contributed capital -0- -0- 515 Net cash from (used) in financing activities 216,719 454,592 2,028,103 Net Increase (decrease) in cash 40,518 (302,063) Cash beginning of period 1,911 313,707 Cash end of period 42,429 11,644 42,429 Non Cash Activities Common stock issued for debt reduction 200,000 862,000 CONECTISYS CORP. Statement of shareholder equity Aug.-31-1996 Preferred Stock Accumulated Class A Common Stock Deficit Total Shares Amount Shares Amount Balance December 31,1990 (re-entry development stage) -0- -0- 212,188 1,042,140 (1,042,140) 5/31/93 Shares issued for cash -0- -0- 20,000 1,000 -0- 1,000 5/31/93 Capital contribution -0- -0- 40,000 515 -0- 515 3/26/93 Shares issued for services -0- -0- 40,000 500 -0- 500 3/26/93 Shares issued for services -0- -0- 24,000 600 -0- 600 Net (loss) for the year ended November 30,1993 -0- -0- -0- -0- (5,459) (5,459) Balance, November 30, 1993 -0- -0- 336,188 1,044,775 (1,047,599) (2,844) 5/1/94 Shares issued for Services -0- -0- 48,000 3,000 -0- 3,000 9/1/94 Shares issued for cash -0- -0- 355,426 23,655 -0- 23,655 9/15/94 Shares issued for services -0- -0- 173,986 11,614 -0- 11,614 9/26/94 Shares issued for cash -0- -0- 60,000 15,000 -0- 15,000 10/6/94 Shares issued for cash 16,345 16,345 -0- -0- -0- 16,345 September and October Shares issued for Cash -0- -0- 26,400 33,000 -0- 33,000 Net (loss) for the year ended November 30, 1994 -0- -0- -0- -0- (32,544) (32,544) Balance, November 30, 1994 16,345 16,345 1,000,000 1,131,024 (1,080,143) 67,226 2/13/95 Shares issued for cash -0- -0- 23,200 232,000 -0- 232,000 2/13/95 Shares issued for debt repayment -0- -0- 40,800 408,000 -0- 408,000 2/20/95 Shares issued for debt repayment -0- -0- 95,562 477,810 -0- 477,810 2/95 Acquisition of assets CIPI -0- -0- 575,000 1,950,000 -0- 1,950,000 4/5/95 Acquisition of assets -0- -0- 300,000 -0- -0- -0- April & May 1995 Shares issued for cash and services -0- -0- 320,000 800,000 -0- 800,000 6/1/95 Shares issued for cash -0- -0- 10,000 30,000 -0- 30,000 9/26/95 Shares issued for acquisition of assets and services -0- -0- 80,000 200,000 -0- 200,000 9/28/95 Shares issued for cash -0- -0- 825 3,000 -0- 3,000 9/95 Acquisition of assets -0- -0- 700,000 1,750,000 -0- 1,750,000 9/95 Return of assets, CIPI -0- -0- (554,000) (1,950,000) -0- (1,950,000) Net (loss) for the year ended November 30, 1995 -0- -0- -0- -0- (2,293,867) (2,293,867) Balance, November 30, 1995 16,345 16,345 2,591,387 5,031,834 (3,374,010) 1,674,169 12/4/95 Shares issued for corporate officer back pay -0- -0- 2,381 8,334 -0- 8,334 12/15/95 shares issued for services & interest -0- -0- 30,000 105,000 2/8/96 Shares issued for debt repayment with option & Interest -0- -0- 200,000 612,000 -0- 612,000 2/9/96 Shares issued for Shares not listed with transfer agent -0- -0- 900 -0- -0- -0- 2/16/96 Shares issued for corporate officer back pay -0- -0- 1,113 3,443 -0- 3,443 2/16/96 Shares issued for corporate officer back pay with option -0- -0- 28,805 89,115 -0- 89,115 2/26/96 Shares issued for cash, -0- -0- 27,778 152,779 -0- 152,779 2/29/96 Shares issued, shares returned 7/18/96 -0- -0- 250,000 -0- -0- -0- 3/12/96 Shares returned from Hollywood Trenz -0- -0- (300,000) -0- -0- -0- 3/21/96 Issued shares for cash -0- -0- 3,571 25,000 -0- 25,000 4/2/96 Shares issued for services, above market -0- -0- 267 2,069 -0- 2,069 7/18/96 returned shares no monetary effect reflect on transction of 2/29/96 -0- -0- (250,000) -0- -0- -0- Balance 8/31/96 16,345 16,345 2,586,202 6,029,574 (4,644,286) 1,401,633 Financial Statements Basis of presentation The accompanying consolidated financial statement include the transactions ofConectisys (the "Company") (formerly BDR Industries,Inc. and formerly Coastal Financial Corp.) and its 80% owned subsidiaries TechniLink Technology and Manufacturing, Inc. (TechniLink) and PrimeLink, Inc.(PrimeLink). All material intercompany transactions have been eliminated in the accompanying consolidated financial statements. Development stage company The company returned to the development stage company in accordance with SFAS No 7 on December 1, 1990 and is still in process with its two subsidiaries in developing its technology and product lines. Cash equivalents For the financial accounting purposes and the statement of cash flows, cash equivalents include all highly liquid debt instruments with original maturities of three months or less. Property and equipment Property and equipment are recorded at cost. Office Equipment is considered to have a useful life of 5-7 years Net loss per common Share Net loss per common share is based on the weighted average number of common and common equivalent shares outstanding for the periods presented. Common equivalent shares representing the common shares that would be issued on exercise of convertible securities. Stocks issued for non cash consideration Shares of the Company's no par value common stock issued in exchange for goods services are valued at the cost of the goods sold or services received or at the market value of the shares issued depending on the ability to estimate the value of the goods or services received. Estimates The preparation of the financial statements in conformity with generally accepted accounting principals requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates Note 1. In the opinion of the management , the accompanying unaudited condensed financial statements reflect all adjustments (which include only normal recurring accruals) necessary to present fairly the Company's results of the Interim periods. The results of operations for the nine months ended August 31, 1996 are not necessarily indicative of the results for the year ended November 30, 1996. Note 2 On July 25,1996 the Company agreed to issue 6 million shares of common stock for investment with Avonni Holdings Corp. The transaction has not been completed, and stock is still considered part of the treasury Note 3 On August 20,1996 The Company agreed to issue 1,000,000 shares of common stock and 300,000 shares of common stock issued to Conectisys and Savoia Corporation respectively and are to be be held in the same account as collateral to a loan. This transaction is not complete and shares are still considered as part of the Company's treasury Note 5 On August 26, 1996 the Company agreed to the possible sale of 3 million shares of restricted common stock all unsold shares to be returned to the Company treasury after approximately 90 days marketing firm requested consecutive numbering to facilitate placements Note 6 These shares have been issued from the transfer agent but have not been paid for in full at the third quarter ended August 31, 1996 and are still in the company treasury and are not counted in any calulations ofearning or values