-----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, CH1gys7ko0Jqn/9q95d84WZQtKscCBl0Bgox6ek7FYtEMPvO5OBN3Tqg6+9Lz7bo HJXYH5qzdSEfVglc2En4bg== 0000889812-97-001064.txt : 19970502 0000889812-97-001064.hdr.sgml : 19970502 ACCESSION NUMBER: 0000889812-97-001064 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970501 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARK SOLUTIONS INC CENTRAL INDEX KEY: 0000807397 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED METAL BUILDINGS & COMPONENTS [3448] IRS NUMBER: 112684481 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-17118 FILM NUMBER: 97593073 BUSINESS ADDRESS: STREET 1: 1515 BROAD ST STREET 2: PARKWAY TECHNICAL CENTER CITY: BLOOMFIELD STATE: NJ ZIP: 07003 BUSINESS PHONE: 2013688118 MAIL ADDRESS: STREET 1: 1515 BROAD ST STREET 2: PARKWAY TECHNICAL CENTER CITY: BLOOMFIELD STATE: NJ ZIP: 07003 FORMER COMPANY: FORMER CONFORMED NAME: SHOWCASE COSMETICS INC DATE OF NAME CHANGE: 19920703 10-Q/A 1 AMENDMENT NO. 1 TO QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A-1 X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: December 31, 1996 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: 0-17118 Mark Solutions, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware 11-2864481 (State or Other Jurisdiction (I.R.S. Employer of Incorporation) Identification No.) Parkway Technical Center 1515 Broad Street Bloomfield, New Jersey 07003 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (201) 893-0500 - ------------------------------------------------------------------------------- Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report Indicate by check whether registrant (1) has 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 registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date: Common Stock, $ .01 par value: 14,616,282 shares outstanding as of February 13, 1997. Mark Solutions, Inc. ("Mark") hereby amends its Form 10-Q for the period ended December 31, 1996 filed on February 14, 1997 as follows: Part I. Financial Information Item 1. Financial Statements The following financial statements are amended to read in their entirety as included in this Form 10-Q/A-1. Consolidated Balance Sheets as of December 31, 1996 and June 30, 1996 ........ 3 Consolidated Statements of Operations for the Six Months Ended December 31, 1996 and December 31, 1995 ...................... 5 Consolidated Statements of Cash Flows for the Six Months Ended December 31, 1996 and December 31, 1995 ...................... 6 Notes to Consolidated Financial Statements ... 7 Mark Solutions, Inc. and Subsidiaries Consolidated Balance Sheets
Assets December 31, 1996 June 30, 1996 --------------------------- ------------------------ Current Assets: Cash and cash equivalents $ 107,394 263,922 Restricted cash 183,688 181,781 Accounts receivable 1,778,769 904,596 Inventories 683,980 146,305 Other current assets 201,645 133,325 ------------ ---------- Total Current Assets $2,955,476 $1,629,929 Property and Equipment: Machinery and equipment 1,486,087 1,472,528 Demonstration equipment 436,348 395,419 Office furniture and equipment 368,763 324,006 Leasehold improvements 40,084 14,254 Vehicles 62,283 68,783 Property held under capital lease - - - 40,929 ------------ ---------- Total 2,393,565 2,315,919 Less: Accumulated depreciation and amortization 2,002,794 1,939,415 ------------ ---------- Net Property and Equipment 390,771 376,504 Other Assets: Costs in excess of net assets of businesses acquired, less accumulated amortization of $122,465 and $17,495 at December 31, 1996 and June 30, 1996, respectively 927,226 1,032,196 Debt issue costs, less accumulated amortization of $27,117 as of December 31, 1996 135,583 - - - Other assets 78,548 45,134 ------------ ---------- Total Other Assets 1,142,357 1,077,330 ---------- ---------- Total Assets $4,488,604 $3,083,763 ========== ==========
3 Mark Solutions, Inc. and Subsidiaries Consolidated Balance Sheets Liabilities and Stockholders' Equity
December 31, 1996 June 30, 1996 ------------------------------ --------------------------- Current Liabilities: Accounts payable $ 1,132,535 499,254 Current maturities of long-term debt 96,496 80,558 Current portion of obligations under capital leases - - - 5,921 Due to related parties 132,441 45,194 Accrued liabilities 265,939 323,138 ------------ ---------- Total Current Liabilities $1,627,411 $ 954,065 Other Liabilities: Long-term debt excluding current maturities 994,979 19,989 Long-term portion of obligations under capital leases - - - 30,308 ------------ ---------- Total Other Liabilities 994,979 50,297 Commitments and Contingencies Stockholders' Equity: Common stock, $.01 par value, 25,000,000 shares authorized, 14,616,282 shares issued and outstanding at December 31, 1996 and 13,576,315 shares issued and outstanding at June 30, 1996 144,645 135,762 Additional paid-in capital 26,035,596 24,260,299 Retained earnings (deficit) (24,314,027) (22,316,660) ------------ ---------- Total Stockholders' Equity 1,866,214 2,079,401 ---------- ---------- Total Liabilities and Stockholders' Equity $4,488,604 $3,083,763 ========== ==========
4 Mark Solutions, Inc. and Subsidiaries Consolidated Statements of Operations
Six Months Ended Three Months Ended December 31 December 31 ---------------------- ---------------------- 1996 1995 1996 1995 ---- ---- ---- ---- Revenues: Sales $ 1,684,030 $ 2,550,492 $ 1,374.672 $ 583,435 Other income 11,177 - - - 11,177 - - - ----------- ----------- ----------- ----------- Total Revenues 1,695,207 2,550,492 1,385,849 583,435 ----------- ----------- ----------- ----------- Cost and Expenses: Cost of sales 1,358,375 2,929,219 1,116,549 820,327 Selling, general and administrative 1,822,640 1,977,745 936,872 975,098 ----------- ----------- ----------- ----------- Total Costs and Expenses 3,181,015 4,906,964 2,053,421 1,795,425 ----------- ----------- ----------- ----------- Operating (Loss) (1,485,808) (2,356,472) (667,572) (1,211,990) ----------- ----------- ----------- ----------- Other Income (Expenses): Interest earned 17,146 12,044 7,464 5,724 Interest expense (525,583) (4,979) (61,589) (2,098) Loss on asset disposal (3,120) - - - (1,500) - - - ----------- ----------- ----------- ----------- Net Other Income (Expenses) (511,557) 7,065 (55,625) 3,626 ----------- ----------- ----------- ----------- (Loss) From Continuing Operations (1,997,365) (2,349,407) (723,197) (1,208,364) ----------- ----------- ----------- ----------- Discontinued Operations: Loss on cosmetics segment - - - (35,078) - - - - - - Loss on disposal of cosmetics segment - - - (69,425) - - - - - - ----------- ----------- ----------- ----------- Loss From Discontinued Operations - - - (104,503) - - - - - - ----------- ----------- ----------- ----------- Net (Loss) $(1,997,365) $(2,453,910) $ (723,197) $(1,208,364) =========== =========== =========== =========== (Loss) Per Share $ (.14) $ (.20) $ (.05) (.10) =========== =========== =========== =========== Weighted Average Shares Outstanding 14,061,378 12,290,665 14,232,470 12,700,914 =========== =========== =========== =========== Dividends Paid $ 0 $ 0 $ 0 $ 0 =========== =========== =========== ===========
5 Mark Solutions, Inc. and Subsidiaries Consolidated Statements of Cash Flows
Six Months Ended Six Months Ended December 31, 1996 December 31, 1995 ----------------------------- ------------------------------- Cash Flows From Operating Activities: Net (loss) $ (1,997,365) $ (2,453,910) Adjustments to reconcile net (loss) to net cash (used for) operating activities: Depreciation and amortization $ 198,846 $ 312,600 Accrued interest on debt conversion 9,477 - - - Loss on sale of equipment 3,120 - - - Loss from discontinued operations - - - 104,503 Imputed interest expense on convertible debt 440,000 - - - (Increase) decrease in assets: Restricted cash (1,907) 16,075 Accounts receivable (874,173) 395,968 Costs and estimated earnings in excess of billings on contract in progress - - - (293,742) Inventories (537,675) (177,211) Other current assets (68,320) (29,170) Other assets (34,414) (74,354) Increase (decrease) in liabilities: Accounts payable 633,281 (494,548) Due to related parties 87,247 (154,864) Accrued liabilities (57,202) (5,016) --------- --------- Net adjustments to reconcile net (loss) to net cash (used for) operating activities (201,720) (399,759) ----------- ---------- Net Cash (Used for) Operating Activities (2,199,085) (2,853,669) Cash Flows From Investing Activities: Additions to property and equipment (84,146) (28,334) Proceeds from disposition of segment - - - 85,000 --------- --------- Net Cash Provided by (Used for) Investing Activities (84,146) 56,666 Cash Flows From Financing Activities: Proceeds from short-term borrowings 2,200,000 - - - Increase of short-term borrowings 13,086 - - - Repayment of notes payable for equipment (8,386) (14,605) Proceeds from issuance of common stock 105,982 2,907,088 Debt issue costs (162,700) - - - Payment of issuance costs (21,279) - - - --------- --------- Net Cash Provided by Financing Activities 2,126,703 2,892,483 ----------- ---------- Net Increase (Decrease) in Cash and Cash Equivalents (156,528) 95,480 Cash at Beginning of Year 263,922 116,704 ----------- ---------- Cash at End of Period $ 107,394 $ 212,184 =========== ==========
6 Mark Solutions, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 1 - Financial Statement Presentation: In the opinion of management, the accompanying consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the financial position of Mark Solutions, Inc. and Subsidiaries (the Company) as of December 31, 1996 and June 30, 1996 and the results of operations and cash flows for the six months ended December 31, 1996 and 1995. The accounting policies followed by the Company are set forth in the Notes to Financial Statements included in the company's Annual Reports on Form 10-K for the fiscal year ended June 30, 1996, respectively, and such notes are incorporated herein by reference. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full fiscal year. Certain reclassifications have been made to the current and prior year amounts to conform to the current period presentation. Convertible Debenture Conversion Discount - The discount to market value rights on conversion of convertible debentures to common stock is recorded as interest expense over the period from the sale of the debentures to the first conversion date. Note 2 - Inventories: Inventories at December 31, 1996 and June 30, 1996 consist of the following: December 31, 1996 June 30, 1996 ----------------- ------------- Raw materials $ 518,030 $ 127,477 Finished goods 165,950 18,828 --------- --------- $ 683,980 $ 146,305 ========= ========= Note 3 - Convertible Debentures: On August 23, 1996, the Company sold $2,200,000 principal amount 7% convertible debentures due August 22, 1998 (the "Debentures"). The Debentures are convertible into shares of common stock at a conversion price which is the lesser of (i) $5-3/16 or (ii) 80% of the average closing bid price on the five trading days immediately preceding the date(s) of conversion. Interest on the Debentures is payable in cash or common stock at the Company's option. The outstanding balance of $2,200,000 as of September 30, 1996 is included in long-term debt excluding current maturities on the accompanying balance sheet. Included in interest expense for the period ended December 31, 1996 is $440,000 of imputed interest which represents the twenty percent discount on conversion of the convertible debentures into common stock. In connection with the issuance of these debentures, the Company incurred $162,700 of debt issue costs. These costs have been capitalized and are amortized over the term of the debentures. 7 Note 4 - Common Stock and Additional Paid-In Capital: During the six months ended December 31, 1996, the Company issued 43,572 shares of common stock as a result of exercise of warrants, receiving gross proceeds of $105,894. Note 5 - Subsequent Events: On January 21, 1996, the Company sold $759,000 principal amount 7% convertible debentures due January 20, 1999 (the "1997 Debentures"). The 1997 Debentures are convertible, on or after July 15, 1997, into shares of common stock at a conversion price which is the lesser of (i) $2.125 or (ii) 80% of the average closing bid price on the five trading days immediately preceding the date(s) of conversion. Interest on the Debentures is payable in cash or common stock at the Company's option. 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned thereunto duly authorized. Date: April 30, 1997 MARK SOLUTIONS, INC. By: /s/ Carl Coppola -------------------- Carl Coppola- President, Chief Executive Officer and Chief Financial Officer 9 EX-27.1 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from the consolidated financial statements and is qualified in its entirety by reference to such financial statements. 6-MOS JUN-30-1996 DEC-31-1996 107,394 0 1,778,769 0 683,980 2,955,476 2,393,565 2,002,794 4,488,604 1,627,411 0 0 0 144,645 1,721,569 4,488,604 1,684,030 1,695,207 1,358,375 3,181,015 3,120 0 525,583 (1,997,365) 0 (1,997,365) 0 0 0 (1,997,365) (.14) (.14)
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