-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OH1Rz9cJ/ICpzDnrbVydgiRuf1PGPpDD1pB4RjrjduBq+3evfPAxcx1wOf1YYt8g rFptvxL+7wuXYDaf+MB23g== 0001010549-00-000296.txt : 20000516 0001010549-00-000296.hdr.sgml : 20000516 ACCESSION NUMBER: 0001010549-00-000296 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAX INTERNET COMMUNICATIONS INC CENTRAL INDEX KEY: 0001061554 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-CONSUMER CREDIT REPORTING, COLLECTION AGENCIES [7320] IRS NUMBER: 752715335 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-24273 FILM NUMBER: 633368 BUSINESS ADDRESS: STREET 1: 8115 PRESTON RD STREET 2: 8TH FL EAST CITY: DALLAS STATE: TX ZIP: 75225 BUSINESS PHONE: 2146910055 MAIL ADDRESS: STREET 1: 8115 PRESTON RD STREET 2: 8TH FL EAST CITY: DALLAS STATE: TX ZIP: 75225 FORMER COMPANY: FORMER CONFORMED NAME: VOXCOM HOLDINGS INC DATE OF NAME CHANGE: 19980512 10QSB/A 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO _________ Commission file number 0-24273 VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) Nevada 75-2715335 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8115 Preston Road, Eighth Floor - East Dallas, Texas 75225 (Address of principal executive offices) (214) 691-0055 (Registrant's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) 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 --- --- Number of shares outstanding of the Registrant's common stock (par value $.0001 per share) as of September 30, 1999: 15,629,861. Transitional Small Business Disclosure Format (Check one) Yes No X --- ---
VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS September 30, June 30, ASSETS 1999 1999 ------ ------ (Unaudited) CURRENT ASSETS Cash and cash equivalents $ 4,127,692 $ 8,136,585 Accounts receivable 209,950 169,217 Inventories 3,534,000 1,286,539 Prepaid expenses 235,348 44,475 ------------ ------------ Total current assets 8,106,990 9,636,816 PROPERTY AND EQUIPMENT, AT COST Machinery and equipment 162,370 87,830 Furnishings 75,401 67,634 ------------ ------------ 237,771 155,464 Less accumulated depreciation 41,230 27,969 ------------ ------------ 196,541 127,495 OTHER ASSETS 852,863 901,336 ------------ ------------ $ 9,156,394 $ 10,665,647 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 138,850 $ 113,356 Accrued expenses 442,737 788,797 ------------ ------------ Total current liabilities 581,587 902,153 STOCKHOLDERS' EQUITY Preferred stock, $.0001 par value; Series A, authorized, 100,000 shares; issued and outstanding, 80,000 shares 8,000,000 8,000,000 Preferred stock, $.0001 par value; Series B convertible, authorized, 350,000 shares; none issued and outstanding -- -- Common stock, $.0001 par value; authorized, 25,000,000 shares; issued, 15,829,861 shares at September 30, 1999 and 15,772,823 shares at June 30, 1999 1,583 1,577 Additional paid-in capital 18,029,952 17,693,743 Accumulated deficit (17,244,228) (15,719,326) ------------ ------------ 8,787,307 9,975,994 Less 200,000 shares of common stock in treasury - at cost (212,500) (212,500) ------------ ------------ 8,574,807 9,763,494 ------------ ------------ $ 9,156,394 $ 10,665,647 ============ ============
See notes to financial statements. -1- VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Three Months Ended Ended September 30, September 30, 1999 1998 ------------- ------------- Net sales $ 137,154 $ 188,432 Cost of sales 98,365 66,720 ------------ ------------ Gross profit 38,789 121,712 Selling, general and administrative expenses 1,640,100 632,591 ------------ ------------ Operating loss (1,601,311) (510,879) Interest income 76,432 -- Interest expense (23) (46,171) ------------ ------------ Loss from continuing operations (1,524,902) (557,050) Loss from discontinued operations -- (1,140,606) Gain on disposal of discontinued operations -- 1,905,494 ------------ ------------ -- 764,888 ------------ ------------ Net earnings (loss) $ (1,524,902) $ 207,838 ============ ============ Earnings (loss) per share - basic and diluted: Continuing operations $(.10) $(.09) ===== ===== Discontinued operations $ -- $ .12 ===== ===== Net earnings (loss) $(.10) $ .03 ===== ===== Weighted average shares outstanding 15,807,944 6,194,462 ============ ============ See notes to financial statements -2-
VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) THREE MONTHS ENDED SEPTEMBER 30, 1999 Series A Series B Common stock Preferred stock Preferred stock -------------- ----------------- ----------------- Shares Amount Shares Amount Shares Amount -------- ------ -------- ------ -------- -------- Balances at June 30, 1999 15,772,823 $ 1,577 80,000 $ 8,000,000 -- -- Sales of common stock 32,038 3 -- -- -- -- Stock options issued -- -- -- -- -- -- Shares issued in payment of liabilities 25,000 3 -- -- -- -- Net (loss) -- -- -- -- -- -- ------------ ------------ -------- ------------ -------- -------- Balances at September 30, 1999 15,829,861 $ 1,583 80,000 $ 8,000,000 -- $ -- ============ ============ ======== ============ ======== ======== Additional paid-in Accumulated Treasury capital deficit Stock ------------ ------------- ------------- Balances at June 30, 1999 $ 17,693,743 $(15,719,326) $ (215,500) Sales of common stock 128,149 -- -- Stock options issued 73,688 -- -- Shares issued in payment of liabilities 134,372 -- -- Net (loss) -- (1,524,902) -- ------------ ------------ ------------ Balances at September 30, 1999 $ 18,029,952 $(17,244,228) $ 212,500 ============ ============ ============
See notes to financial statements -3-
VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three months ended September 30, 1999 1998 ----------- ----------- Cash flows from operating activities Net earnings (loss) $(1,524,902) $ 207,838 Gain from discontinued operations -- (764,888) Adjustments to reconcile net earnings (loss) to net cash used by operating activities Depreciation and amortization 86,008 172,771 Stock options issued 73,688 -- Change in operating assets and liabilities Prepaid expenses (193,998) (124,575) Accounts receivable (40,733) (442,799) Inventories (2,247,461) (121,210) Other assets (21,149) 24,503 Accounts payable and accrued expenses (186,191) (107,597) ----------- ----------- Net cash used by continuing operations (4,054,738) (1,155,957) Net cash used by discontinued operations -- (393,434) ----------- ----------- Net cash used by operating activities (4,054,738) (1,549,391) Cash flows from investing activities Purchase of property and equipment (82,307) (49,411) Cash flows from financing activities Sales of common stock 128,152 -- ----------- ----------- Net decrease in cash (4,008,893) (1,598,802) Cash and cash equivalents at beginning of period 8,136,585 1,774,091 ----------- ----------- Cash and cash equivalents at end of period $ 4,127,692 $ 175,289 =========== =========== Noncash financing activities: Issuance of common stock in payment of liabilities $ 134,375 $ 56,250 =========== =========== Conversion of convertible debentures $ -- $ 300,000 =========== ===========
See notes to financial statements -4- VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. NOTES TO FINANCIAL STATEMENTS NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB. These financial statements have not been examined by independent certified public accountants, but in the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) necessary for a fair presentation of consolidated results of operations, financial position and cash flows at the dates and for the periods indicated, have been included. These financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the three-month period ended September 30, 1999 are not necessarily indicative of the results that may be expected for the year ending June 30, 2000. For further information, refer to the consolidated financial statements and notes thereto for the fiscal year ended June 30, 1999 included in the Company's Form 10-KSB, as filed with the Securities and Exchange Commission on September 28, 1999. These financial statements include the accounts of Voxcom Holdings, Inc., d/b/a MAX Internet Communications, Inc. (MAX) and its subsidiaries, MAXpc Technologies, Inc. (MAXpc), MAX Internet Communications do Brasil LTDA (Brasil) and MAX Internet Communications Deutschland GmbH (GmbH), collectively, "the company." During the quarter ended September 30, 1999, the company formed two new subsidiaries, both of which are 100% owned. MAX Internet Communications Deutschland GmbH was incorporated in Frankfurt, Germany on August 4, 1999, and MAX Internet Communications do Brasil Ltda was formed in Rio de Janeiro, Brazil on September 14, 1999. Both of these companies will sell and service the MAX i.c. Live card in their respective regions, as well as other products the company may develop. The financial statements include the operations of Brasil and GmbH from the dates of formation NOTE B - BUSINESS MAX assembles, through contractors, and markets a high-performance, multi-media add-in card providing both hardware and software for inclusion in either new or existing personal computers. MAX markets its card under the trade name "MAX i.c. Live". The MAX i.c. Live card enhances the performance of computers, either as an add-in at time of manufacture or installed into existing units. The card, with its own inbuilt processor, has the ability to perform multi-media software functions simultaneously if need be, without detracting from the central processor of the computer. Additional software can be added to the card as developed. The company continues to look for additional software applications which may be integrated into the card, and it is believed some of these will give rise to the availability of patent protection. The company will continue limited research and development in this regard. -5- VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. NOTES TO FINANCIAL STATEMENTS NOTE C - ACQUISITION AND DISPOSITION OF BUSINESSES Effective October 1, 1997, the company formed Home Business Group Inc. (HBG) to acquire certain assets and assume the liabilities of a company engaged in the business of home-based business seminars for no consideration. A major stockholder and officer of the acquired business is a stockholder and officer of the company. The acquisition was accounted for as a purchase. On September 30, 1998, the company sold the stock of HBG to HBG's management in exchange for the redemption of 200,000 shares of the company's common stock previously owned by such management. Effective January 15, 1999, the company closed AmeraPress, as it had been unable to generate sufficient business activity to justify its ongoing overhead following the sale of HBG described above. The company sold AmeraPress in June 1999. Effective February 19, 1999, the company closed Systems, as it had been unable to generate sufficient business activity to justify its ongoing overhead following the sale of HBG and the closure of AmeraPress described above. The company sold Systems in June 1999. During the quarter ended September 30, 1999, MAX formed two new subsidiaries, both of which are 100% owned. MAX Internet Communications Deutschland GmbH was incorporated in Frankfurt, Germany on August 4, 1999, and MAX Internet Communications do Brasil Ltda was formed in Rio de Janeiro, Brazil on September 14, 1999. Both of these companies will sell and service the MAX i.c. Live card in their respective regions, as well as other products the company may develop. NOTE D - RESTATEMENT The company previously reported sales for the three months ended September 30, 1999 in the amount of $2,637,154. The majority of these reported sales were from the Brazilian subsidiary to a single customer in Brazil that returned the product soon after delivery. The company has recently discovered its management in Brazil misled the company regarding its sales in South America. South American sales in both the first and second quarters are being reversed following this discovery. -6- VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. ITEM 2. Management's discussion and analysis. Results of Operations Three months ended September 30, 1999 compared to three months ended September 30, 1998. Net Sales Net sales from continuing operations were $137,154 for the three months ended September 30, 1999, a decrease of $51,278 from the $188,432 for the three months ended September 30, 1998. The company has discontinued the businesses that were the primary operations in the prior year and restructured its business plan to direct all resources to its MAX i.c. Live product. The marketing of the MAX i.c. Live product was in its very early stages during the quarter ended September 30, 1998. As of September 30, 1999 the marketing plan and materials are nearly complete, and the first print ads appeared after the end of the quarter. Therefore, any sales in the three month periods ended September 30, 1999 and 1998 were generated by inside sales personnel, as a result of telemarketing and demonstrations only. Contract negotiations for sales of the MAX i.c. Live product are ongoing, and are expected to generate increasing net sales and net earnings in future quarters. Selling, General and Administrative Expenses Selling, general and administrative expenses increased 159% to $1,640,100 for the three months ended September 30, 1999 from $632,591 for the three months ended September 30, 1998. This increase is due to significant increases in advertising, marketing and selling expenses related to the MAX i.c. Live product, as well as the overhead structure which has been put into place in order to generate and service expected future increases in net sales. Interest Income and Expense The interest income of $76,432 for the three months ended September 30, 1999 was earned on the available cash balances the Company has invested in money market funds. There was virtually no interest expense during this period. Interest expense for the three months ended September 30, 1998 of $46,171 was incurred primarily on the convertible debentures. This debt has been fully converted to common stock as of November 1998, and no further interest is payable. Discontinued Operations On September 30, 1998, the company sold the stock of a wholly owned subsidiary, HBG, to HBG's management in exchange for the redemption of 200,000 shares of the Company's common stock previously owned by such management. Effective January 15, 1999, the company closed AmeraPress, as it had been unable to generate sufficient business activity to justify its ongoing overhead following the sale of HBG described above. AmeraPress was sold on June 30, 1999. Effective February 19, 1999, the company closed Systems, as it had been unable to generate sufficient business activity to justify its ongoing overhead following the sale of HBG and the closure of AmeraPress described above. Systems was sold on June 30, 1999. The financial statements for the three months ended September 30, 1998 reflect the results of operations of Systems, AmeraPress and HBG as discontinued operations. -7- VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. Management's discussion and analysis - continued Restatement The company previously reported sales for the three months ended September 30, 1999 in the amount of $2,637,154. The majority of these reported sales were from the Brazilian subsidiary to a single customer in Brazil that returned the product soon after delivery. The company has recently discovered its management in Brazil misled the company regarding its sales in South America. South American sales in both the first and second quarters are being reversed following this discovery. Management of the Brazilian unit has been dismissed and the company is reviewing available legal action. MAX has hired a new managing director in Brasil, and is currently in negotiations with various parties to complete the sale and delivery of the MAX i.c. Live cards that are in our warehouses in Brazil. However, there is no assurance that these sales will be consummated. Liquidity and Capital Resources Cash and cash equivalents decreased $4,008,893 in the three months ended September 30, 1999. Net cash used in operating activities for the period was $4,054,738. This cash used in operating activities primarily consisted of the cash operating loss for the period, plus increases in accounts receivable of $40,733, inventories of $2,247,461 and prepaid expenses of $193,998, as well as a decrease in accounts payable and accrued expenses of $186,191. Inventories continue to increase in part because of the need to purchase certain components well in advance of the scheduled production date, due to competition for these parts. Cash used in investing activities consisted of approximately $82,000 in purchases of property and equipment. Financing activities generated approximately $128,000, consisting of sales of common stock. Working capital at September 30, 1999 decreased by 14%, to $7,525,403, from $8,734,663 at June 30, 1999. Management believes this working capital will be sufficient to meet ongoing overhead expenses, plus pursue an aggressive advertising and marketing campaign for the MAXpc product. Future cash resources available to the company are expected to come from profitable operations. However, due to the need to purchase inventories in advance, and the selling of product on terms to customers, it is anticipated the company will need additional working capital. The company is currently in discussions regarding the possibility of credit facilities from various lending authorities, as well as new issues of capital stock. Year 2000 The company, like most companies, is faced with the Year 2000 ("Y2K") issue, which is a result of the use of computer systems designed to process two digits rather than four when designating the year. The company began an internal assessment of its year 2000 preparedness in the early months of 1998, through a review of all equipment and software. For purposes of the review, the equipment and software were divided into critical and non-critical categories. The critical category included accounting software, customer databases, the actual computer systems themselves and our vendors' individual preparedness. The non-critical category included the telephone systems, general administrative software and network operating systems. In the critical category, the accounting software, customer databases, and computer systems issues have been addressed through software and hardware updates provided to our company by the software and/or hardware vendors. These updates were provided at minimal cost. It should also be noted that these applications are relatively simple programs. -8- VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. Management's discussion and analysis - continued The company has contacted its major component suppliers and its contract manufacturer. To date, none has indicated that it anticipates material internal risks. The company is continuing this process to determine the readiness of all significant suppliers and will assess, and where practicable, attempt to mitigate its risks with respect to any failure of these entities to be Y2K compliant. The company is in the process of identifying additional contract manufacturers, and one of the key contract requirements is for the manufacturer to make their systems Y2K compliant. These critical areas have been monitored for any unforeseen issues since June 1998, and procedures are in place to ensure that a hard copy of all critical transactions is maintained. With regard to the company's non-critical category, such as telephone systems, general administrative software and network operating systems, these areas have also been addressed. Any minor infractions found were resolved through software updates and upgrades. Although the company cannot quantify the potential effect of Y2K issues on its financial condition, business or results of operations, it is reasonably certain that any such future costs will not be significant. Forward Looking Statements This document includes statements which may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products in the marketplace, competitive factors, changes in regulatory environments, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this filing. -9- VOXCOM HOLDINGS, INC. d/b/a MAX INTERNET COMMUNICATIONS, INC. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The company has filed a lawsuit alleging breach of contract against Heartland Payment Systems, LLC (Heartland), a credit card processing company which has performed this function for the company. Heartland then filed suit against the company alleging breach of contract, and asking for an unspecified amount. As yet, this case has not yet reached the discovery stage. Management believes that the ultimate resolution of this case will not have a material effect on financial position, results of operations or cash flows. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K None 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. Voxcom Holdings, Inc. d/b/a MAX Internet Communications, Inc. (Registrant) Date: May 15, 2000 /s/ Donald G. McLellan -------------------------------------------- Donald G. McLellan, President /s/ Leslie D. Crone -------------------------------------------- Leslie D. Crone, Chief Financial Officer -10- EX-27 2 FDS
5 0001061554 VOXCOM HOLDINGS, INC. 1 US DOLLARS 3-MOS JUN-30-2000 JUL-01-1999 SEP-30-1999 1 4,127,692 0 209,950 30,000 3,534,000 8,106,990 237,771 41,230 9,156,394 581,587 0 0 8,000,000 1,583 573,224 9,156,394 137,154 137,154 98,365 98,365 1,640,100 0 23 (1,524,902) 0 (1,524,902) 0 0 0 (1,524,902) (.10) (.10)
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