-----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, IcziYyGH4apGwVh2bTe7n1IPHbhFeoKbeqrIQrStktOfQvN4V/oUUBEXstcBhbYl Q+9PP0HYQuaMFL3dgtuQCQ== 0000891554-97-001097.txt : 19971117 0000891554-97-001097.hdr.sgml : 19971117 ACCESSION NUMBER: 0000891554-97-001097 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GATEWAY INDUSTRIES INC /CA/ CENTRAL INDEX KEY: 0000725876 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 953702929 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-13803 FILM NUMBER: 97721817 BUSINESS ADDRESS: STREET 1: 101-01 FOSTER AVENUE CITY: BROOKLYN STATE: NY ZIP: 11236 BUSINESS PHONE: 7182729700 MAIL ADDRESS: STREET 1: 101-01 FOSTER AVENUE CITY: BROOKLYN STATE: NY ZIP: 11236 FORMER COMPANY: FORMER CONFORMED NAME: GATEWAY COMMUNICATIONS INC DATE OF NAME CHANGE: 19920703 10QSB 1 QUARTERLY REPORT U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 FOR QUARTER ENDED SEPTEMBER 30, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 0-13803 GATEWAY INDUSTRIES, INC. (Exact name of small business issuer as specified in its charter) Delaware 33-0637631 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 750 Lexington Avenue New York, New York 10022 (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: 212-446-5216 Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 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 [ ] Transition Small Business Disclosure Format (check one): Yes [ ] No [X] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable data. As of November 3, 1997, the Registrant had approximately 3,592,000 shares of Common Stock outstanding. Gateway Industries, Inc. Index Part I--Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited): Condensed Consolidated Balance Sheet--September 30, 1997............... 3 Condensed Consolidated Statements of Operations-- Three and Nine Month Periods Ended September 30, 1997 and 1996......... 4 Condensed Consolidated Statements of Cash Flows-- Nine Months Ended September 30, 1997 and 1996.......................... 5 Notes to Condensed Consolidated Financial Statements................... 6 Item 2. Management's Discussion and Analysis or Plan of Operations.......... 7 2 Gateway Industries, Inc. Condensed Consolidated Balance Sheet (Unaudited) September 30, 1997 Assets Current assets: Cash and cash equivalents $ 5,762,000 Prepaid expenses and other current assets 10,000 ----------- Total current assets 5,772,000 ----------- Total assets $ 5,772,000 =========== Liabilities and Shareholders' equity Current liabilities: Accounts payable $ 12,000 Accrued expenses and other liabilities 77,000 ----------- Total current liabilities 89,000 =========== Shareholders' equity: Preferred stock, $.10 par value, 1,000,000 shares authorized, no shares issued and outstanding -- Common stock, $.001 par value, 10,000,000 shares authorized, 3,592,022 shares issued and outstanding 4,000 Capital in excess of par value 9,555,000 Accumulated deficit (3,830,000) Treasury stock, 11,513 shares (46,000) ----------- Total shareholders' equity 5,683,000 ----------- Total liabilities and shareholders' equity $ 5,772,000 =========== See accompanying notes. 3 Gateway Industries, Inc. Condensed Consolidated Statements of Operations (Unaudited)
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 ---- ---- ---- ---- Net sales $ $ 5,048,000 $ $ 13,447,000 Cost of sales 4,643,000 12,179,000 ---------------------------------------------------------------------- Gross profit 405,000 1,268,000 Sales and marketing 379,000 1,072,000 General and administrative expenses 93,000 255,000 228,000 1,318,000 ---------------------------------------------------------------------- Operating Loss (93,000) (229,000) (228,000) (1,122,000) Other income (expense): Interest income 75,000 7,000 224,000 22,000 Interest expense (197,000) (574,000) Other income 29,000 30,000 ---------------------------------------------------------------------- Total other income (expense) 75,000 (161,000) 224,000 (522,000) ---------------------------------------------------------------------- Net income (loss) $ (18,000) $ (390,000) $ (4,000) $ (1,644,000) ====================================================================== Net income (loss) per share $ (.01) $ (.29) $ -- $ (1.24) ====================================================================== Weighted average number of shares outstanding 3,592,022 1,325,000 3,592,022 1,325,000 ======================================================================
See accompanying notes. 4 Gateway Industries, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended September 30 1997 1996 -------------------------- Cash flows from operating activities: Net income (loss) .................................... $ (4,000) $(1,644,000) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization ........................ 259,000 Changes in operating assets and liabilities: Accounts receivable .................................. (285,000) Inventories .......................................... 353,000 Prepaid expenses and other current assets ............ 6,000 25,000 Accounts payable ..................................... (13,000) 532,000 Accrued expenses and other liabilities ............... (271,000) 343,000 Net cash (used in) provided by operating activities .. (282,000) (417,000) Cash flows from investing activities: Purchase of machinery and equipment .................. (82,000) -------------------------- Net cash used in investing activities ................ (82,000) Cash flows from financing activities: Proceeds from issuance of common stock ............... 5,779,000 Share issuance expense ............................... (130,000) Purchase of treasury stock ........................... (46,000) Repayments of capital lease obligations .............. (169,000) Repayments of short-term financing ................... (4,444,000) Proceeds from short-term financing ................... 4,741,000 -------------------------- Net cash provided by financing activities ............ 5,731,000 -------------------------- Increase (decrease) in cash and cash equivalents ..... (282,000) 5,232,000 Cash and cash equivalents at beginning of period ..... 6,044,000 848,000 -------------------------- Cash and cash equivalents at end of period ........... $ 5,762,000 $ 6,080,000 ==========================
See accompanying notes. 5 1. General 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 and Item 310 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to make such financial statements not misleading. Results for the three and nine months ended September 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1996. 2. Earnings per Share In February 1997, the Financial Standards Board issued Statement No. 128, Earnings per Share, which is required to be adopted on December 31, 1997. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options will be excluded. The impact of Statement 128 on the calculation of primary and fully diluted earnings per share for these quarters is not expected to be material. 3. Pro Forma Information (Unaudited) On December 21, 1996, the Company sold the stock of its subsidiary Marsel Mirror and Glass Products, Inc. ("Marsel") for $1. The operations of Marsel are included in the statement of operations for the three and nine months ended September 30, 1996. The pro forma unaudited results of operations for the nine months ended September 30, 1996, assuming the sale of Marsel had been consummated as of January 1, 1996, are as follows: Revenues $ -- Net loss $ 82,000 Net loss per common share $ .02 6 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction The financial statements included in this Report as of, and for the quarter and nine months ended, September 30, 1996 contain the consolidated financial condition and results of operation for the Company and its wholly-owned subsidiary, Marsel Mirror & Glass Products, Inc. ("Marsel"). On December 21, 1996, the Company sold all the outstanding shares of Marsel. The Company currently has no operating business. Accordingly, a comparison of operating results with prior periods is not material. Liquidity and Capital Resources The Company's cash and cash equivalents totaled $5,762,000 at September 30, 1997, a decrease of $282,000 from December 31, 1996. The decrease in cash during the first quarter of 1997 was attributable to the payment during 1997 of guarantees of certain of Marsel's payables which were accrued as of December 31, 1996. 7 Item 4. EXHIBITS AND REPORTS ON FORM 8-K Exhibit 27 - Financial Data Schedule SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Gateway Industries, Inc. (Registrant) Date: November 11,1997 By: /s/Warren G. Lichtenstein ------------------------------- Warren G. Lichtenstein Chairman of the Board and Principal Financial and Accounting Officer 8 EX-27 2 FDS --
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SEPTEMBER 30, 1997 CONDENSED FINANCIAL STATEMENTS AND IS QUALIFIED AS ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1997 SEP-30-1997 5,762,000 0 0 0 0 5,772,000 0 0 5,772,000 89,000 0 0 0 4,000 5,679,000 5,772,000 0 0 0 0 228,000 0 0 (4,000) 0 (4,000) 0 0 0 (4,000) .001 .001
-----END PRIVACY-ENHANCED MESSAGE-----