-----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, RQizQTjXpwxQNM53ry5hXj0g0SqPbMg2zB/d5BrlVJ/qtkGTe1vdDguBpcc09Xgo 0+Wwk2JFV4WOinQ/1izSuQ== 0000950116-97-000920.txt : 19970515 0000950116-97-000920.hdr.sgml : 19970515 ACCESSION NUMBER: 0000950116-97-000920 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 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: 1934 Act SEC FILE NUMBER: 000-13803 FILM NUMBER: 97603478 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 FORM 10-QSB 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 MARCH 31, 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 May 1, 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--March 31, 1997.......... 3 Condensed Consolidated Statements of Operations-- Three Months Ended March 31, 1997 and 1996.................... 4 Condensed Consolidated Statements of Cash Flows-- Three Months Ended March 31, 1997 and 1996..................... 5 Notes to Condensed Consolidated Financial Statements........... 6 Item 2. Management's Discussion and Analysis or Plan of Operations....... 7 Item 6. Exhibits......................................................... 7 Part II--Other Information None 2 Gateway Industries, Inc. Condensed Consolidated Balance Sheet (Unaudited) March 31, 1997 Assets Current assets: Cash and cash equivalents $5,840,000 Prepaid expenses and other current assets 32,000 ---------- Total current assets 5,872,000 ---------- Total assets $5,872,000 ========== Liabilities and Shareholders' equity Current liabilities: Accounts payable $8,000 Accrued expenses and other liabilities 166,000 ---------- Total current liabilities 174,000 ---------- Total liabilities 174,000 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, 3,592,000 shares issued and outstanding 4,000 Capital in excess of par value 9,555,000 Accumulated deficit (3,815,000) Treasury stock (46,000) ---------- Total shareholders' equity 5,698,000 ---------- Total liabilities and shareholders' equity $5,872,000 ========== See accompanying notes. 3 Gateway Industries, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three months ended March 31 --------------------------- 1997 1996 -------- ---------- Net sales $ --- $4,431,000 Cost of sales --- 3,932,000 Gross profit --- 499,000 Sales and marketing --- 358,000 General and administrative expenses 64,000 411,000 -------- ---------- Operating loss (64,000) (270,000) Other income (expense): Interest income 74,000 7,000 Interest expense --- (185,000) Other income (expense) --- (1,000) -------- ---------- Total other income (expense) 74,000 (179,000) -------- ---------- Net income (loss) 10,000 $(449,000) ========= ========== Net income (loss) per share $.00 $(.44) ========= ========== Weighted average number of shares 3,592,000 1,025,000 ========= ========== See accompanying notes. 4 Gateway Industries, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited)
Three months ended March 31 ------------------------ 1997 1996 ------- ------- Cash flows from operating activities Net income (loss) $10,000 $(449,000) Adjustments to reconcile net income (loss) to ne cash used in operating activities: Depreciation and amortization --- 86,000 Changes in operating assets and liabilities: Accounts receivable --- (64,000) Inventories --- (557,000) Prepaid expenses and other current assets (16,000) (32,000) Accounts payable (17,000) 104,000 Accrued expenses and other liabilities (182,000) 294,000 Net cash used in operating activities (205,000) (618,000) --------- ---------- Cash flows from investing activities Purchase of property and equipment --- (34,000) Net cash used in investing activities --- (34,000) --------- ---------- Cash flows from financing activities Purchase of treasury stock --- (46,000) Repayments of capital lease obligations --- (61,000) Repayments of short-term financing --- (4,304,000) Proceeds from short-term financing --- 4,789,000 Net cash provided by financing activities --- 378,000 --------- ---------- Decrease in cash and cash equivalents (205,000) (274,000) Cash and cash equivalents at beginning of year 6,045,000 848,000 Cash and cash equivalents at end of year 5,840,000 $574,000 ========= =========
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 months ended March 31, 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 months ended March 31, 1996. The pro forma unaudited results of operations for the three months ended March 31, 1996, assuming the sale of Marsel had been consummated as of January 1, 1996, are as follows (in thousands, except per share date): Revenues $------ Net loss $51,000 Net loss per common share $.05 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 ended, March 31, 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 shars 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 $5,840,000 at March 31, 1997, a decrease of $206,000 from $6,046,000 at December 31, 1996. The decrease in cash during the first quarter of 1997 was attributable to the payment in the quarter ended March 31, 1997 of guarantees of certain of Marsel's payables which were accrued as of December 31, 1996. While the Company seeks an acquisition or other business combination, management believes its cash position is sufficient to cover administrative expenses and current obligations for the foreseeable future. Item 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- Exhibit 27 - Financial Data Schedule. 7 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: May 13, 1997 By: ------------------------------------------ Warren G. Lichtenstein Chairman of the Board and Principal Financial and Accounting Officer 8 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH 31, 1997 CONDENSED FINANCIAL STATEMENTS AND IS QUALIFIED AS ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS MAR-31-1997 MAR-31-1997 5,840,000 0 0 0 0 5,872,000 0 0 5,872,000 174,000 0 0 0 4,000 5,694,000 5,872,000 0 0 0 0 64,000 0 0 10,000 0 0 0 0 0 10,000 .00 .00
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