-----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, RCCYkDVtYXiycqEmgNlXaHvstD7yllgG/evSZ3Ce3i9fA77N+0Gq+YXpj04LYUmE /yTqrdy4IOWxqZMIYSc2wg== 0000763730-96-000002.txt : 19960208 0000763730-96-000002.hdr.sgml : 19960208 ACCESSION NUMBER: 0000763730-96-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960207 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GALLERY OF HISTORY INC CENTRAL INDEX KEY: 0000763730 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 880176525 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13757 FILM NUMBER: 96512356 BUSINESS ADDRESS: STREET 1: 3601 WEST SAHARA AVE CITY: LAS VEGAS STATE: NV ZIP: 89102-5822 BUSINESS PHONE: 7023641000 MAIL ADDRESS: STREET 1: 3601 WEST SAHARA AVENUE CITY: LAS VEGAS STATE: NV ZIP: 89102 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN MUSEUM OF HISTORICAL DOCUMENTS CHARTERED/NV/ DATE OF NAME CHANGE: 19900816 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 1995 [ ] 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 0-13757 GALLERY OF HISTORY, INC. (Exact Name of Small Business Issuer as Specified in Its Charter) Nevada 88-0176525 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3601 West Sahara Avenue, Las Vegas, Nevada 89102-5822 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (702) 364-1000 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 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. X Yes No The Registrant had 5,917,654 shares of Common Stock, par value $.001, outstanding as of February 1, 1996. Part 1 - FINANCIAL INFORMATION GALLERY OF HISTORY, INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - UNAUDITED
DECEMBER 31, SEPTEMBER 30, 1995 1995 ----------- ------------- ASSETS Cash $ 102,992 $ 171,295 Prepaid expenses 79,276 57,843 Documents owned 9,024,287 9,123,220 Land and building-net 1,518,781 1,530,278 Property and equipment-net 238,735 204,033 Other assets 487,408 460,359 __________ __________ TOTAL ASSETS $11,451,479 $11,547,028 LIABILITIES Accounts payable $ 93,268 $ 60,950 Notes payable 290,802 321,553 Indebtedness to related parties 87,617 105,929 Mortgage notes payable 1,907,715 1,918,216 Deposits 136,075 266,828 Accrued and other liabilities 150,466 129,129 __________ __________ TOTAL LIABILITIES $ 2,665,943 $ 2,802,605 STOCKHOLDERS' EQUITY Common stock: $.001 par value; authorized, 10,000,000 shares; issued and outstanding, 5,917,654 shares 5,918 5,918 Additional paid-in-capital 9,392,363 9,392,363 Accumulated deficit (612,745) (653,858) __________ __________ TOTAL STOCKHOLDERS' EQUITY $ 8,785,536 $ 8,744,423 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $11,451,479 $11,547,028 ========== ========== See the accompanying notes to consolidated financial statements. ______________________________________________________________________
GALLERY OF HISTORY, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
THREE MONTHS ENDED DECEMBER 31, 1995 1994 -------- -------- REVENUES $ 635,622 $ 693,435 COST OF REVENUES 170,911 185,679 -------- -------- GROSS PROFIT 464,711 507,756 -------- -------- OPERATING EXPENSES: Selling, general and administrative 358,157 373,669 Depreciation 37,016 52,943 Advertising 9,712 8,955 Maintenance & repairs 6,791 9,607 Loss on gallery closure 5,676 -- -------- -------- TOTAL OPERATING EXPENSES 417,352 445,174 -------- -------- OPERATING INCOME 47,359 62,582 -------- -------- OTHER INCOME (EXPENSE): Interest expense (58,833) (68,681) Other 52,687 42,930 -------- -------- TOTAL OTHER INCOME(EXPENSE) (6,146) (25,751) -------- -------- INCOME BEFORE INCOME TAXES 41,213 36,831 PROVISION FOR INCOME TAXES 100 100 -------- -------- NET INCOME $ 41,113 $ 36,731 ======== ======== EARNINGS PER SHARE: $.01 $.01 === === See the accompanying notes to consolidated financial statements.
GALLERY OF HISTORY, INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
THREE MONTHS ENDED DECEMBER 31, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 41,113 $ 36,731 Adjustments to reconcile net income to net cash provided from (used in) operating activities: Depreciation and amortization 52,080 64,649 Loss on disposal of property 3,437 -- (Increase) decrease in: Prepaid expenses (21,433) (11,252) Documents owned 98,933 119,525 Other assets (27,049) 4,494 (Decrease) increase in: Accounts payable 32,318 25,552 Customer deposits (130,753) (109,512) Accrued and other liabilities 21,337 28,397 -------- -------- Net cash provided by (used in) operating activities 69,983 147,584 CASH FLOWS USED FOR INVESTING ACTIVITIES: Purchase of property and equipment (78,722) (716) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from bank line of credit -- 25,000 Repayments of bank line of credit -- (85,000) Repayments of mortgage and notes payable (59,564) (111,387) -------- -------- Net cash provided by (used in) financing activities (59,564) (171,387) -------- -------- NET DECREASE IN CASH (68,303) (24,519) CASH, BEGINNING OF PERIOD 171,295 33,961 -------- -------- CASH, END OF PERIOD $ 102,992 $ 9,442 ======== ======== SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: For the three month period ended December 31, 1994: (1) Stock options were exercised in part for the retirement of a note payable in the amount of $18,750 to a related party. See the accompanying notes to consolidated financial statements.
GALLERY OF HISTORY, INC. and SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Three Month Period Ended December 31, 1995 and 1994 _______________________________________________________________ 1) Summary of Significant Accounting Policies The consolidated financial statements included herein have been prepared by Gallery of History, Inc. (the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments, consisting of normal recurring items, necessary for a fair presentation of the results for the interim periods have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's 1995 Annual Report on Form 10-KSB. 2) Unclassified Balance Sheet The Company includes in its financial statements an unclassified balance sheet because it believes that such presentation is more meaningful as a consequence of the Company's policy of acquiring documents in excess of its current needs, when feasible, and it is not practicable to determine what portion of the documents owned will be sold within the next twelve months. 3) Earnings (Loss) per Share The computation of earnings or loss per share is based on the weighted average number of shares of common stock outstanding and stock options granted that are outstanding, if applicable. The average number of shares of outstanding common stock for each of the three months ended December 31, 1995 and 1994 was 5,917,654 and 5,916,594, respectively. Part 1 - Item 2 Financial Information MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources - ------------------------------- Due to the nature of the Company's inventory of documents owned, the Company has presented an unclassified balance sheet (see Note 1 to the consolidated financial statements). Accordingly, the traditional measures of liquidity in terms of changes in working capital are not applicable. Net cash provided by operating activities exceeded net cash used in operating activities for the three month period ended December 31, 1995, by $69,982 due to the net income from operations, a decrease in the document inventory and a decrease in customer deposits, in addition to the non-cash depreciation charge. The decrease in the document inventory was a result of reduced purchasing of inventory. Deposits from customers decreased $130,753 during the three month period ended December 31, 1995 due to a reduction of deposits received and held for future auction sales. The cash generated from operations was primarily used for the purchase of new air conditioning units at the headquarters building and the reduction of mortgage and notes payable. The Company has available a line of credit from its bank in the amount of $100,000 at an interest rate of 1.5% over the prime rate with a maturity date of July 15, 1996. Loans under the line are secured by the Company's inventory. As of December 31, 1995, there was no outstanding balance on this line of credit. The Company closed its Dallas, Texas gallery December 26, 1995. The loss realized in the current period for the closure amounted to $5,676, which was primarily the write-off of leasehold improvements. The Company believes that by continuing to reduce its overhead expenses and increasing revenues, its current cash and working capital requirements will be satisfied for the near term by revenue generated from operations and amounts available under the existing line of credit. In the event the Company does not generate sufficient working capital from operations, the Company will seek alternative equity and/or debt financing, the availability and terms of which cannot be assured. Results of Operations - --------------------- Document sales decreased 8% for the three month period ended December 31, 1995 as compared to the three month period ended December 31, 1994. The Las Vegas and Dallas gallery sales were down an average of 15% comparing the quarters ended December 31, 1995 to 1994. This was largely due to general decline in retail sales in the current quarter. The Georgetown gallery sales increased 34% comparing the quarters due to a very poor holiday season in the 1994 quarter in addition to a major customer sale amounting to 9.6% of total sales in November 1995. Sales generated from auctions during the current three month period amounted to 24% of total sales compared to 21% of total sales in the quarter ended December 31, 1994. Cost of sales remained the same at 27% of net sales for both three month periods ended December 31, 1995 and 1994. Total operating expenses decreased 6% for the quarter ended December 31, 1995 compared to the quarter ended December 31, 1994. However, due to the decrease in sales, operating expenses increased to 66% of net sales in 1995 compared to 64% of net sales in 1994. Selling, general and administrative expense decreased 4% (56% of net sales) for the three month period ended December 31, 1995 compared to the three month period ended December 31, 1994 (54% of net sales). Comparing the quarters, salaries and related payroll taxes decreased 8% due to a reduction of staff at the headquarters operation. In addition, freight expense decreased 44% in the current period compared to the previous quarter due to a reduction in intercompany shipments. Depreciation expense decreased 30% to 6% of net sales for the three month period ended December 31, 1995 from 8% of net sales for the three months ended December 31, 1994. The decrease can be attributed to a reduction of furnishings and equipment largely due to the closure of galleries. Advertising expenses increased 8% to 2% of net sales in the current quarter as compared to 1% of net sales in the quarter ended December 31, 1994 due to expanded promotional campaigns the Company employed. Repair expenses decreased 29% comparing the two quarter periods which was directly related to the gallery closures. Interest expense amounted to 9% of net sales for the three months ended December 31, 1995 as compared to 10% of net sales for the three months ended December 31, 1994. The decrease in interest expense can be attributed to the lower average outstanding loan balances in the current period. Included in selling, general and administrative expenses is 50% of the operating cost to maintain the headquarters building. This percentage is the approximate percentage of leasable space of the building occupied by the Company's headquarters operation. The remaining building operating expenses plus the rental revenues realized are offset and included in other income and expense. This amounted to approximately $45,000 operating profit for the three month period ended December 31, 1995 as compared to approximately $37,000 operating profit for the three month period ended December 31, 1994. The increase is due to an increase in the square footage leased in addition to increased rents. Part II - Other Information Item 1-5. None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. None. (b) Reports on Form 8-K. None. 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. Gallery of History, Inc. _______________________________ (Registrant) February 6, 1996 /s Todd M. Axelrod Date _________________ ________________________________ Todd M. Axelrod President and Chairman of the Board (Principal Executive Officer) February 6, 1996 /s Rod Lynam Date _________________ _______________________________ Rod Lynam Treasurer and Director (Principal Accounting Officer) EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 1ST QTR 10-QSB
5 This schedule contains summary financial information extracted from the Company's Consolidated Balance Sheet dated December 31, 1995 and its Consolidated Statement of Operations covering the period from October 1, 1995 to December 31, 1995 andis qualified in its entirety by reference to such financial statement and notes thereof. 3-MOS SEP-30-1996 DEC-31-1995 102992 0 0 0 9024287 0 3332748 2155231 11451479 0 1907715 0 0 5918 8779618 11451479 635622 635622 170911 170911 417352 0 58833 41213 100 41113 0 0 0 41113 .01 .01
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