UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: March 31, 2001
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________________ to _________________
Commission File Number: 000-29645
AMNIS SYSTEMS INC.
(Formerly Graffiti-X, Inc.)
(Exact name of small business issuer as specified in its charter)
Delaware 33-0821967
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3450 Hillview Avenue, Palo Alto, California 94304
(Address of principal executive offices, including zip code)
Issuer's telephone number, including area code: (650) 855-0200
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [_] No [_]
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of each of the issuer's classes of common
equity as of May 11, 2001: 11,364,597 shares of Common Stock.
Transitional Small Business Disclosure Format (check one): [_] Yes [X] No
1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
This information is contained on pages F-1 through F-6 of this report
and is incorporated into this Item 1 by reference.
In management's opinion, all adjustments necessary for a fair
presentation of the statements of the results for the interim period have been
included.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read in conjunction
with our financial statements and the related notes included elsewhere in this
report.
Plan of Operation
We were formed in July 1998 as a Delaware corporation. On April 16, 2001,
TTS Acquisition, Inc., a California corporation and our wholly-owned subsidiary,
merged with and into Optivision, Inc., a California corporation ("Optivision").
As a result of the merger, Optivision became our wholly-owned subsidiary and the
former stockholders of Optivision acquired 39.31% of our outstanding common
stock, and 60.69% of our common stock on a fully-diluted basis. We are
continuing the business of Optivision following the merger with Optivision and
have sold our previous business.
Optivision is a leading global provider of hardware and software products
for the creation, management and transmission of high resolution, full-motion,
full-screen video over computer networks. It provides the key video
infrastructure components for broadband networks based on various transport
protocols, including the Internet protocol, or IP, and asynchronous transfer
mode, or ATM, protocol. Its products enable the deployment of industry standard
MPEG digital video in such diverse applications as interactive distance
learning, corporate training, video courier services, telemedicine, corporate TV
channel, cable TV content distribution, broadcast news distribution, and remote
surveillance. MPEG is the Motion Picture Expert Group that has developed
standards for compression and decompression of digital video. Optivision's
innovative technology enables its network clients to:
. Capture, encode and compress high-quality video from any source,
including cable, wireless, satellite, tape or live;
. Store high-quality video locally or in remote network video servers;
. Transmit live or stored high-quality video across a computer or public
network;
. Manage high-quality video distribution as a part of the total
application; and
. Play live or stored high-quality video on a TV monitor, desktop PC or
set-top box.
2
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
Recent Sales of Unregistered Securities
During the three months ended March 31, 2001, we issued and sold securities
not registered under the Securities Act of 1933, as amended, as follows:
(1) In January 2001, we issued and sold to two corporate investors 333,334
shares of our common stock for a total of $1,000,000 in cash in reliance upon an
exemption from registration pursuant to Regulation S promulgated under of the
Securities Act of 1933.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
We did not file any Current Reports on Form 8-K during the three
months ended March 31, 2001.
3
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: May 14, 2001 AMNIS SYSTEMS INC.
By: /s/ Lawrence L. Bartlett
-------------------------------------------
Lawrence L. Bartlett
Vice President and Chief Financial Officer
4
INDEX TO FINANCIAL STATEMENTS
Unaudited Condensed Balance Sheet as of March 31, 2001...................... F-1
Unaudited Condensed Statement of Operations for the three-month period ended
March 2001, and since inception (July 29, 1998)........................ F-2
Unaudited Condensed Statement of Cash Flows for the three-month period ended
March 31, 2001, and since inception (July 29, 1998).................... F-3
Notes to Unaudited Financial Statements..................................... F-4 to F-6
5
Amnis Systems Inc. and Subsidiary
(A Development Stage Company)
Consolidated Balance Sheet
(Unaudited)
- --------------------------------------------------------------------------------
March 31, 2001
- --------------------------------------------------------------------------------
Assets
Current Assets:
Cash $ --
Notes receivable -- Optivision 1,000,000
- --------------------------------------------------------------------------------
Total current assets $ 1,000,000
================================================================================
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 25,100
- --------------------------------------------------------------------------------
Total current liabilities 25,100
- --------------------------------------------------------------------------------
Stockholders' Equity:
Preferred stock, at .0001 par value;
authorized -- 20,000,000 shares in 2001;
issued and outstanding -- 0 in 2001 --
Common stock, at .0001 par value;
authorized -- 100,000,000 shares in 2001;
issued and outstanding -- 6,897,534 shares in 2001 689
Additional paid-in capital 1,112,364
Deficit accumulated during the development stage (138,153)
- --------------------------------------------------------------------------------
Total stockholders' equity 974,900
- --------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 1,000,000
================================================================================
F-1
Amnis Systems Inc. and Subsidiary
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)
From July 29, 1998 (Inception) through the three months ended March 31, 2001
- --------------------------------------------------------------------------------
July 29,
1998
(Inception)
through
March 31,
2001 2000 2001
----------- --------- -----------
Sales $ -- $ -- $ --
Cost of Goods Sold -- -- --
- -------------------------------------------------------------------------------
Gross margin -- -- --
Operating Expenses:
General and administrative 25,100 186 138,153
- -------------------------------------------------------------------------------
Total operating expenses 25,100 186 138,153
- -------------------------------------------------------------------------------
Loss from Operations (25,100) (186) (138,153)
Income Taxes -- -- --
- -------------------------------------------------------------------------------
Net Loss $ (25,100) $ (186) $ (138,153)
===============================================================================
Basic and Dilutive Loss per Share $ (0.0019) $ 0.0000 $ (0.0058)
===============================================================================
F-2
Amnis Systems Inc. and Subsidiary
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Unaudited)
From July 29, 1998 (Inception) through the three months ended March 31, 2001
- -------------------------------------------------------------------------------------------------------------
July 29,
1998
(Inception)
through
March 31,
2001 2000 2001
------------ ---------- -------------
Cash Flows from Operating Activities:
Net loss $ (25,100) $ (186) $ (138,153)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Decrease in inventories -- 156 --
Issuance of common stock for services 109,203
Accounts payable 25,100 -- 25,100
- -------------------------------------------------------------------------------------------------------------
Net cash used in operating activities -- (30) (3,850)
- -------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities:
Loans to Optivision (1,000,000) -- (1,000,000)
- -------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from issuance of common stock 1,000,000 -- 1,003,850
- -------------------------------------------------------------------------------------------------------------
Net Decrease in Cash and Cash Equivalents -- (30) --
Cash and Cash Equivalents, beginning of quarter -- 3,697 --
- -------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents, end of quarter $ -- $ 3,667 $ --
=============================================================================================================
Non-Cash Financing Activities:
Issuance of common stock for services $ -- $ -- $ 109,203
=============================================================================================================
F-3
Amnis Systems Inc. and Subsidiary
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
Note 1 - Description of the The Company and a newly formed subsidiary entered into an
Organization: Agreement and Plan of Merger with Optivision, Inc. (Optivision)
on September 11, 2000 and as amended January 11, 2001 (see Note
4), and intends to continue the business of Optivision.
Optivision develops, manufactures and delivers networked
streaming video solutions for high quality video creation,
management and distribution worldwide both directly and through
leading industry partners.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The
Company incurred a net loss of $25,100 for the three months
ended March 31, 2001 and a deficit accumulated during the
development stage of $138,153. These factors raise substantial
doubt about the Company's ability to continue as a going
concern. During the year ended December 31, 2000, the Company
entered into a merger arrangement with Optivision, and arranged
for some funding for the operations and payment obligations of
Optivision effective with the merger (see Note 4). There is no
assurance that the Company will be able to achieve successful
operations or obtain sufficient financing. The accompanying
financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
F-4
Amnis Systems Inc. and Subsidiary
(A Development Stage Company)
Notes to Consolidated Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
Note 2 - Summary of Significant a. Principles of Consolidation:
Accounting Policies: ---------------------------
The financial statements include the consolidation of a
wholly-owned subsidiary of Amnis Systems, Inc. which was formed
for the purpose of merging with Optivision. All significant
intercompany accounts and transactions have been eliminated in
consolidation.
b. Current Pronouncements:
----------------------
In June 2000, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No.
139, "Rescission of FASB Statement No. 53 and amendments to FASB
Statements No. 63, 89 and 121." The statement rescinds FASB
Statement No. 53, "Financial Reporting by Producers and
Distributors of Motion Picture Films"; amends FASB Statements
No. 63, "Financial Reporting by Broadcasters," No. 89,
"Financial Reporting and Changing Prices," and No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 139 has no
impact on the Company's financial position, results of
operations or cash flows.
In September 2000, the FASB issued SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." The statement provides accounting and
reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities and revises the
accounting standards for securitizations and transfers of
financial assets and collateral. SFAS No. 140 does not have a
material effect on the Company's financial position, results of
operations or cash flows.
F-5
Amnis Systems Inc. and Subsidiary
(A Development Stage Company)
Notes to Consolidated Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
Note 3 - Stockholders' Equity: On January 9, 2001 the Company issued 166,667 shares of common
stock to an unrelated third party, valued at $500,000.
On January 25, 2001 the Company issued 166,667 shares of common
stock to an unrelated third party, valued at $500,000.
In February 2001 the Company extinguished 19,740,000 shares of
its common stock without consideration.
Note 4 - Subsequent Events: The Company merged with Optivision, Inc on April 16, 2001.
Under the terms of the merger, each issued and outstanding share
of Optivision common stock was converted into the right to
receive 0.10 shares of Company common stock rounded to the
nearest whole share; each outstanding but unexercised option to
purchase common stock of Optivision was converted into an option
to acquire the number of shares of Company common stock equal to
the product of 0.10 multiplied by the number of shares of
Optivision common stock that would have been obtained before the
merger rounded to the nearest whole share; each outstanding
warrant to purchase common stock of Optivision was converted
into a warrant to acquire the number of shares of Company common
stock equal to the product of 0.10 multiplied by the number of
shares of Optivision common stock that would have been obtained
before the merger, rounded to the nearest whole share.
Additional information can be found in the Agreement and Plan of
Merger with Optivision, Inc.
As a result of the planned merger with Optivision, there will be
11,364,597 shares of common stock issued and outstanding. There
will also be 5,246,768 warrants and stock options to purchase
common stock outstanding.
Note 5 - Loss Per Share: The loss per share was calculated based on a weighted average
number of shares outstanding of 13,566,602 for the three months
ended March 31, 2001.
F-6