January 07, 2000
LASER RECORDING SYSTEMS INC (LRSY.OB)
Annual Report (SEC form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
The Company has no sources of revenue. Expenses reflect only the minimum cost of maintaining the Company's operations and miscellaneous expenses associated with seeking a merger partner. In view of these limited operations, management does not believe that a comparison of specific line items from period to period it would be meaningful.
Liquidity and Capital Resources
The Company's financial statements have been prepared assuming that it will continue as a going concern. As shown in the consolidated financial statements, at January 31, 1999 the Company had total assets of $10,498 and an accumulated deficit of $7,398,412. The Company obtains its entire financial support from loans from the Company's majority shareholder, and it is likely that additional loans from that shareholder will be necessary if the Company is to pursue its plans to merge with an operating enterprise. These factors, among other things, raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities that might be necessary should the Company be unable to continue in operation.
Item 7A. Qutative and Qualitative Disclosures About Market Risk
Not applicable
Item 8. Financial Statements and Supplementary Data.
INDEPENDENT AUDITOR'S REPORT
TAMAS B. REVAI
CERTIFIED PUBLIC ACCOUNTANT
CERTIFIED VALUATION ANALYST
68124 HAMILTON PARKWAY, BROOKLYN, NY 11219
(718) 833-0982 Fax: (718) 833-3658
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
and Stockholder of
Laser Recording Systems, Inc.
We have audited the accompanying balance sheet's of Laser Recording Systems, Inc. as of January 31, 1999, January 31, 1998, January 31, 1997 and the related statements of income, retained earnings and cash flows for the years then ended. These financial statements are 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, the financial statements referred to above present fairly, in all material respects, the financial position of Laser Recording Systems, Inc. as of January 31, 1999, 1998, 1997 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
As we discussed in Note 2 to the financial statements, the Company discontinued operation in 1993 and liquidated most of its assets. As a result, all revenues and expenses were classified as non-operating items for the years of February 1, 1994 to January 31, 1999.
/s/ Tamas B. Revai
Certified Public Accountant
Brooklyn, NY
August 5, 1999
LASER RECORDING SYSTEMS, INC.
BALANCE SHEET
January 31,
ASSETS
1999 1998
CURRENT ASSETS:
Cash and Cash Equivalents $ 10,498 $ 13,656
----------- -----------
Total Current Assets $ 10,498 $ 13,656
----------- -----------
Total Assets $ 10,498 $ 13,656
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued Expenses $ -- $ 44,846
Total Current Liabilities $ -- $ 44,846
Loan Payable-- Stockholder $ -- $ 190,000
Total Liabilities $ -- $ 234,846
----------- -----------
Stockholders' Equity Preferred Stocks 2,200,729 Preferred Shares; 225,321 Class B Cumulative Preferred Shares; 1,080,000 Class C Cumulative Convertible Preferred Shares issued and outstanding on January 31, 1998 and 1997 $ 2,507,364
Common Stocks 10,000,000 shares authorized, 7,800,000 shares issued and outstanding on January 31, 1999; 4,798,815
issued and outstanding on January 31, 1998 $ 7,408,910 4,574,865
Paid in Capital 92,775
Retained Earnings (7,398,412) (7,396,194)
----------- -----------
Total Stockholders' Equity 10,498 (221,190)
----------- -----------
Total Liabilities and Stockholders' Equity $ 10,498 $ 13,656
=========== ===========
The accompanying notes are an integral part of the financial statements.
LASER RECORDING SYSTEMS, INC.
STATEMENT OF REVENUES, EXPENSES AND RETAINED EARNINGS
For the Year Ended
January 31, 1999
1999 1998
---- ----
Revenue:
Interest Income $ 123 $ 120
Recovery of Bad Debts -- --
----------- -----------
Total Revenues $ 123 $ 120
----------- -----------
Expenses:
Document Storage $ -- $ --
Administrative Expenses 2341 649
----------- -----------
Total Expenses 2341 649
----------- -----------
Net Income $ (2,218) $ (529)
Retained Earnings at Beginning of Year (7,396,194) (7,395,665)
----------- -----------
Retained Earnings at End of Year $(7,398,412) $(7,396,194)
=========== ===========
The accompanying notes are an integral part of the financial statements.
LASER RECORDING SYSTEMS, INC.
ANALYSIS OF STOCKHOLDERS' EQUITY
JANUARY 31,
1999 1998
---- ----
Preferred Stocks -- 2,200,729 Preferred Shares;
225,321 Class B Cumulative Preferred Shares;
1,080,000 Class C Cumulative Convertible Preferred
Shares issued and outstanding $ 2,507,364
Paid in Capital 92,775
Conversion of all Preferred Stocks to Common Stocks $ 2,507,364 Conversion of Liabilities to Common Stocks 233,906 Conversion of Paid in Capital to Common Stock 92,775
Common Stocks at the beginning of year 4,574,865 4,574,865
-----------
7,800,000 Common Stock issued and outstanding $ 7,408,910
-----------
Retained Earnings at the beginning of the year $(7,396,194) $(7,395,665)
Net Income/(Loss) (2,218) (529)
----------- -----------
Retained Earnings at the end of the year $(7,398,412) $(7,396,194)
----------- -----------
Total Stockholders' Equity $ 10,498 $ (221,190)
----------- -----------
The accompanying notes are an integral part of the financial statements.
LASER RECORDING SYSTEMS, INC.
STATEMENT OF CASH FLOWS
For the Year Ended
January 31,
1999 1998
---- ----
Cash flows from operating activities:
Net Income $ -- $ --
-------- --------
Cash flows from financing activities:
Maintaining of the Corporate Entity $ (3,158) $ 411
-------- --------
Net cash provided by (used in) financing activities $ (3,158) $ 411
-------- --------
Increase (Decrease) in Cash $ (3,158) $ 411
Cash -- Beginning of year 13,656 13,245
-------- --------
Cash -- End of Year $ 10,498 $ 13,656
======== ========
The accompanying notes are an integral part of the financial statements.
LASER RECORDING SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS JANUARY 31, 1999
Laser Recording Systems, Inc. (the Company) was organized in 1985 as the successor to several other businesses by the original founder. In 1988, Poly Ventures, Limited Partnership held approximately 70% of the outstanding voting shares and maintained a controlling interest in the Company until 1998. In 1998 several investors acquired the remaining interest from Poly Ventures.
As reported in form 10- Q, on October 31st 1993, the Company ceased operations and laid off all its employees on August 16 1993 . The Company handed over projects to their customers on that date. Since October 31st 1993, the Company did not file any reports with the Securities and Exchange Commission.
Note 1.
In 1998 several investors purchased from Poly Ventures 1,975,408 Common Shares, 2,200,729 Preferred Shares, 225,321 Class B Cumulative Preferred Shares and 1,080,000 Class C Cumulative Preferred Shares. Included in the purchased were two notes for the total of $190,000.
In 1999 all classes of the preferred shares, accrued dividends and interest, paid-in capital and loans payable were converted to capital stock. As a result the Company's board of Directors authorized issuing 3,001,185 Common Shares on January 15, 1999.
Note 2
The Company discontinued operation on August 16, 1993, however the Company maintain certain functions to continue the existence of the Corporation. Stockholders services and maintaining of records were handled on an ongoing basis. In 1999, the Company filed all necessary tax returns for the years of February 1, 1993 to January 31, 1999. For financial statement purposes all revenues and expenses are considered non-operating transactions from February 1, 1994 to the present.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Not applicable
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