Filing today: ELECTRO KINETIC SYSTEMS INC (EKSIA.OB)
May 12, 2000
Quarterly Report (SEC form 10QSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS
OF OPERATIONS.
The following discussion should be read in conjunction with the selected financial data and
the financial statements appearing elsewhere in this report.
GENERAL
Electro-Kinetic Systems, Inc. [EKS or the Company] was formed on April 24, 1972,
under the laws of the State of Pennsylvania. Its corporate office is now
located in Jersey City, New Jersey. The consolidated financial statements include the
accounts of Electro-Kinetic Systems, Inc. and its wholly-owned subsidiaries.
RESULTS OF OPERATIONS
The Company ceased its laboratory operations in March 1995 and failed in its subsequent
efforts for profit education (1996), magazine publishing (1996), visual
communication technology (1997), marketing of computer decision models (1997 and
1998), and desk-top publishing and printing (1995-98).
The Company had no operations in 1999 and 2000. The Company's 50% owned
unconsolidated affiliate, Printone Media Inc., ceased operations in 1998. As a
result of the acquisition of Israel Investment Technologies, Inc. and two affiliates, in
September 1995, the Company acquired certain preliminary designs for
developments of computer models in the fields of medical compliance and electronic book
publishing. The Company has been unsuccessful in its efforts to exploit
these developments.
The Company's loss for the first quarter increased from $8,099 in 1999 to $61,452 in
2000, primarily as a result of increases in interest expense of approximately
$45,000. The Company borrowed $27,500 during the first quarter of 2000 under two
year, 6% notes, convertible into 5,500,000 common shares. The accounting
requirement is to value the conversion factor as interest computed by the difference
between the average bid and ask price of the common stock (.0135) and the
conversion price (.005) times the number of shares (5,500,000) to which the loan can be
converted. This calculation has no effect on stockholders' equity
(deficiency) since the expense charged to earnings is offset by a corresponding increase in
paid-in capital.
LIQUIDITY AND CAPITAL RESOURCES
Working capital increased from ($19,565) as of December 31, 1999 to ($3,164) as of
March 31 2000. New directors and officers were elected (with the
exception of one carryover member) in January 2000, who negotiated loans in the amount
of $27,500, due in two years with an interest rate of 6%, convertible into
common shares of the Company as detailed above.
Shareholders' equity declined from ($19,565) to ($24,336), as a result of an operating loss
of $(61,452) offset by $44,750 of imputed value of the conversion
feature and by the issuance of 75,000 shares of stock in partial payment of indebtedness
valued at $11,931. (The debt for which stock was issued and settled.)
The Company's operating losses during the past years have been funded by the sale of its
common stock, by loans from shareholders, and by the disposal of a
subsidiary. For the Company to become a viable entity, it must continue to raise sufficient
capital to fund its plans. The Company is seeking merger opportunities, but
there can be no assurance of success in these endeavors.
ELECTRO-KINETIC SYSTEMS, INC. AND SUBSIDIARIES |
