EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial Statements
The following financial statements of the Company are incorporated herein
by reference to Part II, Item 8:
Independent Auditors' Report F - 1
Balance Sheets at December 31, 1996 and 1997 F - 2
Statements of Operations for the Years Ended December 31, 1995,
1996, and 1997 F - 3
Statements of Stockholders' Equity for the Years Ended
December 31, 1995, 1996, and 1997 F - 4
Statements of Cash Flows for the Years Ended December 31,
1995, 1996, and 1997 F - 5
Notes to Financial Statements F - 6
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(a) (2) Financial Statement Schedules
All schedules are omitted because they are not applicable or the
information required is included in the financial statements and notes thereto.
(a) (3) Exhibits
The following is a list of exhibits filed as part of the Annual Report on
Form 10-K for the fiscal year ended December 31, 1997.
Exhibit No.
3.2.1 Amended Certificate of Designation for Series D Cumulative Preferred
Stock
3.2.1 Certificate of Designation for Series E Preferred Stock
10.52 Acquisition Agreement and Related Agreements with Vidikron Industries,
S.p.A.
27 Financial Data Schedule
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of Projectavision, Inc.:
We have audited the accompanying balance sheets of Projectavision, Inc. (the
"Company") as of December 31, 1996 and 1997, and the related statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Projectavision, Inc. as of December 31, 1996
and 1997 and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1997 in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
--------------------------------
New York, New York
March 18, 1998
F-1
PROJECTAVISION, INC
BALANCE SHEETS
--------------------------------------------------------------------------------
December 31, December 31,
1996 1997
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,060,283 $ 1,331,925
Accounts receivable - net of Allowance of $ 11,540 -- 377,608
Inventory -- 1,857,604
Investments 3,437,386 --
Other current assets 851,198 1,001,629
------------ ------------
Total Current Assets 5,348,867 4,568,766
PROPERTY AND EQUIPMENT
Furniture, fixtures and equipment 68,422 127,128
Tooling 4,208,005 5,907,288
Computers and software 226,019 259,048
Assets under capital leases -- 47,989
Leasehold improvements 185,030 185,030
------------ ------------
4,687,476 6,526,483
Less: Accumulated depreciation and amortization 242,896 851,250
------------ ------------
Property and equipment, net 4,444,580 5,675,233
OTHER ASSETS 339,041 168,358
------------ ------------
TOTAL ASSETS $ 10,132,488 $ 10,412,357
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,718,004 $ 2,466,676
Accrued liabilities 209,476 1,070,638
Current portion of capital lease obligations -- 15,229
------------ ------------
Total Current Liabilities 1,927,480 3,552,543
------------ ------------
LONG-TERM LIABILITIES
Long-term portion of capital lease obligations -- 22,851
Other Long-Term Liabilities -- 250,000
Convertible Debt 1,762,963 900,000
------------ ------------
Total Long-term Liabilities 1,762,963 1,172,851
------------ ------------
TOTAL LIABILITIES 3,690,443 4,725,394
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Preferred stocks
Series A Preferred Stock, $.01 par value
100 shares authorized, 100 shares issued
($100,000 liquidation preference) -- --
Series B Preferred Stock, $.01 par value
434,667 shares authorized, 385,982 and 351,258 shares
outstanding as of December 31, 1996 and 1997, respectively
($ 1,756,290 liquidation preference) 3,859 3,512
Series C Preferred Stock, $.001 par value
7,500 shares authorized; 7,500 shares issued; 7,500 shares and no shares
outstanding as of December 31, 1996 and 1997, respectively ($100,000
liquidation preference) 8 --
Series D Preferred Stock, $100 par value 60,000 shares authorized; 51,000
shares issued;
($5,100,000 liquidation preference) -- 5,100,000
Series E Preferred Stock, $1,000 par value 1,650 shares authorized; 1,650
shares issued;
($1,650,000 liquidation preference) -- 1,650,000
Common stock $.0001 par value - 50,000,000 shares
authorized; 14,229,401 and 19,988,997 issued and
outstanding in 1996 and 1997 respectively 1,423 1,999
Additional paid-in capital 40,594,023 44,535,906
Accumulated Deficit (34,157,268) (45,604,454)
------------ ------------
Total Stockholders' Equity 6,442,045 5,686,963
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,132,488 $ 10,412,357
============ ============
See notes to financial statements
F-2
ROJECTAVISION, INC
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
Years Ended December 31,
--------------------------------------------
1995 1996 1997
REVENUE $ 200,000 $ 150,000 $ 1,017,645
------------ ------------ ------------
COST OF SALES -- -- 990,044
------------ ------------ ------------
GROSS PROFIT 200,000 150,000 27,601
OPERATING EXPENSES
General and administrative 1,562,746 2,179,132 3,230,742
Salaries 778,279 1,266,287 1,518,695
Legal fees 1,001,737 1,017,909 1,347,146
Depreciation 73,739 91,284 608,355
Research and development 608,651 2,389,329 1,240,578
Patent and license expense 243,229 362,967 283,030
------------ ------------ ------------
Total Operating Expenses 4,268,381 7,306,908 8,228,546
------------ ------------ ------------
LOSS FROM OPERATIONS (4,068,381) (7,156,908) (8,200,945)
------------ ------------ ------------
OTHER INCOME (EXPENSE)
(Provision for)/recovery of
allowances on advances (125,017) 109,166 --
Interest income 362,107 458,979 167,855
Interest expense - 8% Debentures (352,049) (117,524)
Interest expense - Amortization of debt expense -- (3,868,016) (39,306)
------------ ------------ ------------
Other income/(expense) - Net 237,090 (3,651,920) 11,025
------------ ------------ ------------
Loss before Equity in Loss of
Unconsolidated Affiliate (3,831,291) (10,808,828) (8,189,920)
Equity in Loss of Unconsolidated Affiliate (2,640,347) (72,065) (100,000)
------------ ------------ ------------
Net Loss (6,471,638) (10,880,893) (8,289,920)
Dividends on Preferred Stock -- (2,635,331) (3,157,266)
------------ ------------ ------------
Net Loss Attributable to Common Shareholders $ (6,471,638) $(13,516,224) $(11,447,186)
============ ============ ============
Basic and Diluted Net Loss
per Share Attributable to Common Shareholders $ (.52) $ (.99) $ (.64)
============ ============ ============
AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 12,390,962 13,586,705 17,968,876
============ ============ ============
See Notes to Financial Statements
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