UNITED STATES
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 Quarter Ended September 30, 1996
OR
[ ] 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: 0-17878
VISION TEN, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 33-0340338
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
180 Broad St., Carlstadt, NJ 07072
(Address of principal executive office) (Zip Code)
(201) 935-3000
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (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
The number of shares of registrant's Common Stock, $.01 par value,
outstanding as of November 12, 1996 was 15,303,796 shares.
VISION TEN, INC.
INDEX
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Balance Sheets 1
Statements of Operations 2
Statements of Accumulated Deficit 3
Statements of Cash Flows 4
Notes to Financial Statements 5
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II - OTHER INFORMATION 7
SIGNATURE 8
VISION TEN, INC.
BALANCE SHEETS
September 30, December 31,
1996 1995
(Unaudited)
----------------- -----------------
ASSETS
CURRENT ASSETS:
Cash $ 402 $ 2,736
Accounts receivable, net of allowance for
doubtful accounts 233,235 139,851
Inventories 341,085 346,140
Prepaids and other 4,100 -
----------------- -----------------
TOTAL CURRENT ASSETS 578,822 488,727
PROPERTY AND EQUIPMENT, net of
accumulated depreciation 10,312 14,651
MARKETABLE SECURITIES 32,200 32,200
----------------- -----------------
$ 621,334 $ 535,578
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 78,665 $ 198,703
Advance form affiliate 81,494 6,412
Accrued expenses 72,804 12,214
----------------- -----------------
TOTAL CURRENT LIABILITIES 232,963 217,329
----------------- -----------------
NOTE PAYABLE TO STOCKHOLDER 650,000 650,000
----------------- -----------------
STOCKHOLDERS' DEFICIT:
Common stock, $.01 par value, 20,000,000 shares authorized,
15,303,796 and 12,182,496 issued and outstanding, respectively 152,310 121,097
Additional paid-in-capital 7,848,269 7,804,482
Accumulated deficit (8,262,208) (8,257,330)
----------------- -----------------
(261,629) (331,751)
----------------- -----------------
$ 621,334 $ 535,578
================= =================
See notes to financial
statements.
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VISION TEN, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months ended September 30, Nine Months Ended September 30,
-------------------------------- --------------------------------
1996 1995 1996 1995
-------------- -------------- -------------- --------------
REVENUES $ 39,171 $ 137,000 $ 448,933 $ 352,000
COST OF GOODS SOLD 26,378 106,000 333,700 279,000
-------------- -------------- -------------- --------------
GROSS PROFIT 12,793 31,000 115,233 73,000
-------------- -------------- -------------- --------------
OPERATING EXPENSES:
Selling, general and administrative 15,253 27,000 93,111 141,000
Research and development 6,000 3,000 27,000 3,000
-------------- -------------- -------------- --------------
TOTAL OPERATING EXPENSES 21,253 30,000 120,111 144,000
-------------- -------------- -------------- --------------
INCOME (LOSS) FROM OPERATIONS (8,460) 1,000 (4,878) (71,000)
OTHER INCOME (EXPENSES):
Interest income (expense) - - - -
Other income (expense) - - - 7,000
--------------- ------------- -------------- --------------
TOTAL OTHER INCOME (EXPENSES) - - - 7,000
--------------- ------------- -------------- --------------
NET INCOME (LOSS) $ (8,460) $ 1,000 $ (4,878) $ (64,000)
=============== ============= ============== ==============
NET INCOME (LOSS) PER COMMON
SHARE $ (0.00) 0.00 (0.00) (0.01)
=============== ============= ============== ==============
AVERAGE COMMON SHARES
OUTSTANDING 15,912,414 10,164,000 13,743,146 8,964,000
=============== ============= ============== ==============
See notes to
financial statements.
-2-
VISION TEN, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Common Stock Additional
----------------------------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
--------------- ---------------- ---------------- ----------------- ---------------
Balance at December 31, 1995 12,182,496 $ 121,097 $ 7,804,482 $ (8,257,330) $ (331,751)
Issuance of common stock for
services rendered 3,121,300 31,213 43,787 - 75,000
Net loss - - - (4,878) (4,878)
--------------- ---------------- ---------------- ----------------- ---------------
Balance at September 30, 1996 15,303,796 $ 152,310 $ 7,848,269 $ (8,262,208) $ (261,629)
=============== ================ ================ ================= ===============
See notes to financial
statements.
-3-
VISION TEN, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
------------------------------------------
1996 1995
------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,878) $ (64,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 4,339 2,000
Issuance of common stock 75,000 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (93,384) (110,000)
(Increase) decrease in inventories 5,055 96,000
(Increase) decrease in prepaid expenses and other
current assets (4,100) 9,000
(Increase) decrease in marketable securities - (22,000)
Increase (decrease) in accounts payable (120,038) 17,000
Increase (decrease) in accrued expenses and other
current liabilities 60,590 (11,000)
------------------- -------------------
(151,877) (21,000)
------------------- -------------------
NET CASH USED IN OPERATING ACTIVITIES (77,416) (83,000)
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid - (15,000)
Increase (decrease) in advances from affiliate 75,082 104,000
-------------------
-------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 75,082 89,000
------------------- -------------------
NET INCREASE IN CASH (2,334) 6,000
CASH, beginning of period 2,736 7,000
------------------- -------------------
CASH, end of period $ 402 $ 13,000
=================== ===================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for interest $ - $ -
=================== ===================
Cash paid during the year for income taxes $ - $ -
=================== ===================
See notes to financial
statements.
-4-
VISION TEN, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying financial statements as of September 30, 1996 and for
the nine months ended September 30, 1996 and 1995 have not been
audited, but in the opinion of management, such unaudited statements
include all adjustments consisting of normal recurring accruals
necessary for a fair presentation of the financial position, the
results of operations and cash flows for the nine months ended
September 30, 1996.
The financial statements should be read in conjunction with the
financial statements and related notes concerning the Company's
accounting policies and other matters contained in the Company's annual
report on Form 10-KSB, as amended, for the year ended December 31,
1995. The results for the nine months ended September 30, 1996 are not
necessarily indicative of the results expected for the full year.
Certain prior year amounts have been reclassified to conform with the
current year's presentation.
2. RELATED PARTY TRANSACTIONS
Charges from an affiliate representing rent and utilization of
employees on an as needed basis aggregated approximately $120,000 and
$183,000 for the nine months ended September 30, 1996 and 1995,
respectively.
-5-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1996 compared to Nine Months Ended September 30,
1995:
Sales for the nine months ended September 30, 1996 were $448,933 as compared to
$352,000 for the nine months ended September 30, 1995. The 28% or $97,000
increase was the result of several large customer orders received and delivered
during the nine months ended September 30, 1996. Although the Company realized
and delivered additional orders during this period, it is felt that these orders
may have satisfied such customers long-term requirements and that these orders
may not necessarily be indicative of the volume of such orders in future
quarters in the fiscal year ending December 31, 1996.
Gross profit for the nine months ended September 30, 1996 was $115,233 or
approximately 26% versus $73,000, or approximately 21% for the year ago period,
primarily due to the increased level of sales and the resulting absorption of
overheads.
Selling, general and administrative expenses during the nine months ended
September 30, 1996 were $93,111 and $141,000 for the year ago period, a decrease
of $47,889. The decrease is due to cost cutting in administrative salaries and
other related costs, as well as a reduction in the management fee charged by an
affiliate during this period.
Three Months Ended September 30, 1996 compared to the Three Months Ended
September 30, 1995 Sales for the three months ended September 30, 1996 were
$39,000 as compared to $137,000 for the comparable prior year period. Sales were
adversely affected in the current period by the magnitude of orders received in
prior 1996 quarters.
Gross profit as a percentage of sales was approximately 33% in the current
quarter as compared to approximately 23% in the comparable prior year quarter.
Operating expenses were $21,000 for the current quarter as compared to $30,000
for the comparable prior quarter, reflecting less charges from an affiliate as
a result of reduced sales volume.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities utilized approximately $77,000 during the
nine months ended September 30, 1996. Accounts receivable increased by $93,384
from December 31, 1995 to September 30, 1996, reflecting the increased volume of
sales in the period previously discussed. Management anticipates that such
receivable balances will be collected in due course. In addition, accounts
payable and accrued expenses decreased during this period by approximately
$60,000.
-6-
Inventories decreased by approximately $5,000 during this period. Charges in the
accompanying statement of operations which did not require the current outlay of
funs aggregated approximately $75,000 and are principally related to charges
related to the issuance of common shares to an affiliate for services provided.
The Company's chief executive officer, who holds a $650,000 note from the
Company, has agreed not to demand repayment of the note within twelve months.
Accordingly, the note has been reflected as a long term liability at September
30, 1996.
The Company's largest shareholder has agreed to fund working capital needs,
should they arise during the remainder of 1996. Management believes that these
sources of working capital will adequately meet the Company's needs through the
end of 1996.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS - NONE
Item 2. CHANGES IN SECURITIES - 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
-7-
SIGNATURES
Pursuant to 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.
VISION TEN, INC..
/s/Alfred Thumim__________
Dr. Alfred Thumim
Chief Executive Officer
/s/Thomas A. Carpenter____
Thomas A. Carpenter
Controller and Chief Accounting
Officer
Dated : November , 1996
-8-