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 the quarterly period ended: September 30, 2001
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[ ] 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 0-10093
Intercom Systems, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 11-2599441
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
111 Village Parkway, Building 2, Marietta, Georgia 30067
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(Address of principal executive offices) (Zip Code)
770-951-0984
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(Issuer's telephone number)
N/A
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(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 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
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State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: As of November 12, 2001, the
issuer had 8,008,229 shares of common stock, par value $.01 per share,
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
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INTERCOM SYSTEMS, INC.
Form 10 - QSB
For the Quarterly Period Ended September 30, 2001
TABLE OF CONTENTS
Page No.
Part I Financial Information
Item 1. Financial Statements
Condensed Balance Sheet 1
Condensed Statements of Operations 2
Condensed Statements of Cash Flows 3
Notes to Condensed Financial Statements 4 - 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Part II Other Information
Item 6. Exhibits and Reports on Form 8 - K 7
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INTERCOM SYSTEMS, INC.
CONDENSED BALANCE SHEET
SEPTEMBER 30, 2001
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 85,648
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 23,863
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STOCKHOLDERS' EQUITY:
Preferred stock - $100 par value per share,
100,000 shares authorized, none outstanding -
Common stock - $.0005 par value per share,
200,000,000 shares authorized,
8,008,229 shares issued and outstanding 4,000
Additional capital in excess of par value 5,200,000
Accumulated deficit (5,142,215)
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TOTAL STOCKHOLDERS' EQUITY 61,785
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 85,648
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The accompanying notes are an integral
part of these condensed financial statements.
(1)
INTERCOM SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
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September 30, September 30,
2001 2000
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REVENUES:
Interest $ 505 $ 2,015
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EXPENSES:
Professional fees 10,969 7,559
Management and administrative fees 1,575 1,575
Corporate transfer agent fees 1,200 1,834
Franchise taxes 945 755
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TOTAL EXPENSES 14,689 11,723
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NET LOSS $ (14,184) $ (9,708)
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BASIC AND DILUTED NET LOSS
PER COMMON SHARE $ - $ -
=========== ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 8,008,229 8,008,229
=========== ==========
The accompanying notes are an integral
part of these condensed financial statements.
(2)
INTERCOM SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
-------------------------------
September 30, September 30,
2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (14,184) $ (9,708)
Adjustments to reconcile net loss to
net cash from operating activities:
Increase (decrease) in:
Accounts payable and accrued expenses 13,319 (5,269)
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NET CASH USED BY
OPERATING ACTIVITIES (865) (14,977)
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NET DECREASE IN
CASH AND CASH EQUIVALENTS (865) (14,977)
CASH AND CASH EQUIVALENTS - beginning 86,513 169,923
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CASH AND CASH EQUIVALENTS - ending $ 85,648 $ 154,946
========== ========
The accompanying notes are an integral
part of these condensed financial statements.
(3)
INTERCOM SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed balance sheet of Intercom
Systems, Inc. (the "Company") as of September 30, 2001 and the
unaudited condensed statements of operations for the three-month
periods ended September 30, 2001 and 2000 and the unaudited condensed
statements of cash flows for the three-month periods ended September
30, 2001 and 2000 reflect all material adjustments which, in the
opinion of management, are necessary for a fair presentation of
results for the interim periods. Certain information and footnote
disclosures required under generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the year-end financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB for the year
ended June 29, 2001, as filed with the Securities and Exchange
Commission on October 11, 2001.
The results of operations for the three-month periods ended September
30, 2001 and 2000 are not necessarily indicative of the results to be
expected for the entire fiscal year or for any other period.
NOTE 2 - CONCENTRATION OF CREDIT RISK
The financial instruments subject to credit risk are primarily cash
and cash equivalents. The Company places temporary cash investments in
a money-market fund that invests solely in short-term obligations of
the U.S. Treasury and repurchase agreements fully collateralized by
obligations of the U.S. Treasury. These investments are not insured by
the Federal Deposit Insurance Corporation (FDIC) or any other agency
and are subject to investment risk, including possible loss of
principal. The uninsured cash balance at September 30, 2001 is
approximately $61,000.
NOTE 3 - LOSS PER SHARE
Net loss per common share for each period is computed by dividing the
net loss by the weighted average number of shares outstanding during
the period. Excluded from the net loss per share calculations for the
three-month periods ended September 30, 2001 and 2000 are contingently
issuable shares that, if included, would have an antidilutive effect.
NOTE 4 - RELATED PARTY TRANSACTIONS
Effective July 1, 2000, the Company has incurred management and
administrative fees in the amount of $500 per month under an
office-sharing agreement that provides administrative and bookkeeping
assistance, and for the use of offices, fixtures, furniture and
equipment. These fees are paid to a corporation whose chief financial
officer is a director and the treasurer of the Company.
(4)
INTERCOM SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5 - FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION
In January 1991, the Company filed a Form 15 with the Securities and
Exchange Commission to deregister the Company's common stock under the
Securities Exchange Act of 1934, as amended. From January 1991 until
March 2001, the Company did not file any further reports under the
Securities Exchange Act of 1934. On March 1, 2001, the Company filed
its Annual Report on Form 10-KSB that included the Company's balance
sheet as of June 30, 2000 and the related statements of operations,
stockholders' equity and cash flows for the fiscal years ended June
30, 2000, June 25, 1999 and June 26, 1998. The Company filed Quarterly
Reports on Forms 10-QSB for each quarter during fiscal 2001 and an
Annual Report on Form 10-KSB for the year ended June 29, 2001. The
Company is current with its reporting obligations under the Securities
Exchange Act of 1934 and intends to become listed on the OTC Bulletin
Board, although there is no assurance that it will be successful in
the long run.
(5)
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Form 10-QSB contains forward-looking statements that may involve
known and unknown risks, uncertainties and other factors that may cause the
Company's actual results and performance in future periods to be materially
different from any future periods or performance suggested by these statements.
Overview
Intercom Systems, Inc. was incorporated in Delaware in 1982. Until
October 1989, the Company was engaged in the design, manufacture, marketing and
sale of microprocessor-based systems designed to access and test
telecommunications lines. To a lesser extent, the Company was also engaged in
the sale of engineering services to an affiliated company, TII Industries, Inc.
In October 1989, the Company sold all of the assets relating to its
business operations to a third party. The Company has had no active business
operations since the date of that sale.
On June 27, 2000, new investors, including the Company's current
management, purchased an aggregate of 5,484,999 shares from TII Industries, Inc.
and TII International, Inc., who were the Company's two largest stockholders.
The shares purchased by the new investors represented approximately 69 percent
of the Company's then issued and outstanding common stock. The sale of these
shares resulted in a change in control and management of the Company.
Current Business Plan
The Company's current business plan is primarily to serve as a
vehicle for the acquisition of a target business that the Company believes will
have significant growth potential. The Company intends to use the Company's
available cash, capital stock, debt or a combination of these to effect a
business combination. A business combination may involve the acquisition of, or
merger with, a financially stable, mature company that desires to establish a
public trading market for its securities while avoiding what it may deem to be
adverse consequences of undertaking a public offering itself, such as time
delays, significant expense, loss of voting control and other burdens (including
significant professional fees) related to compliance with various federal and
state securities laws. In the alternative, a business combination may involve a
company that may be financially unstable or in its early stages of development
or growth.
The Company is current with its reporting obligations under the
Securities Exchange Act of 1934 and intends to become listed on the OTC Bulletin
Board, although there is no assurance that we will be successful in doing so
(see Note 5 to the Condensed Financial Statements).
Results of Operations
Three months ended September 30, 2001 as compared to the three months ended
September 30, 2000:
We have had no significant revenues since 1989 and will not achieve
any significant revenues until, at the earliest, the completion of a business
combination. For the three months ended September 30, 2001 interest income was
$505 compared to $2,015 for the comparable period of the prior fiscal year.
Interest income declined because the Company had less money invested in money
market funds during the three months ended September 30, 2001 as compared to the
three months ended September 30, 2000.
General, administrative and other expenses were $14,689 for the three
months ended September 30, 2001 compared to $11,723 for the three months ended
September 30, 2000. The increase in general, administrative and other expenses
was due primarily to approximate increases in accounting fees of $2,300, legal
fees of $1,100, and franchise taxes of $200, offset by an approximate reduction
in stockholder relations expenses of $200 for the three months ended September
30, 2001 as compared to the three months ended September 30, 2000.
Liquidity and Capital Resources
At September 30, 2001, cash and cash equivalents were $85,648. Working capital
was $61,785. Money market funds of $60,773 bear an interest rate of 2.66%.
(6)
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
(7)
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this amendment to be signed on its behalf by the undersigned, thereunto
duly authorized.
INTERCOM SYSTEMS, INC.
/s/ Robert H. Donehew
Dated: November 12, 2001 By: ___________________________
Robert H. Donehew
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
(8)