F - 3
PROJECTAVISION, INC
STATEMENTS OF STOCKHOLDERS' EQUITY
-------------------------------------------------------------------------------
SERIES A SERIES B SERIES C
PREFERRED STOCK PREFERRED STOCK PREFERRED STOCK
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
BALANCE, DECEMBER 31, 1994 100 $ 0 410,144 $4,101 0 $ 0
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK DIVIDENDS
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK (24,162) (242)
ISSUANCE OF COMMON STOCK
FOR PROFESSIONAL SERVICES.
NET LOSS
------- -- ------- ------ ----- --
BALANCE, DECEMBER 31, 1995 100 0 385,982 3,859 0 0
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK DIVIDENDS
CONVERSION OF 8% DEBENTURES INTO
COMMON STOCK
ISSUANCE OF SERIES C PREFERRED STOCK 7,500 8
SERIES C PREFERRED STOCK PLACEMENT FEE
CASH DIVIDEND ON SERIES C PREFERRED STOCK
EXERCISE OF STOCK OPTIONS
AMORTIZATION OF DISCOUNT ON 8% DEBENTURES
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES C PREFERRED STOCK
ISSUANCE OF WARRANTS AND OPTIONS FOR SERVICES
NET LOSS
------- -- ------- ------ ----- --
BALANCE, DECEMBER 31, 1996 100 0 385,982 3,859 7,500 $8
CONVERSION OF SERIES B PREFERRED
STOCK INTO COMMON STOCK (34,724) (347)
SERIES C PREFERRED STOCK CONVERSION (7,500) (8)
ISSUANCE OF SERIES D PREFERRED STOCK
ISSUANCE OF SERIES E PREFERRED STOCK
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES C PREFERRED STOCK
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES D PREFERRED STOCK
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES E PREFERRED STOCK
ISSUANCE OF WARRANTS TO SERIES D PREFERRED STOCKHOLDERS
FINANCING COST FOR SERIES D PREFERRED STOCK
ISSUANCE OF WARRANTS TO SERIES E PREFERRED STOCKHOLDERS
ISSUANCE OF COMMON STOCK
FOR SERIES B PREFERRED STOCK DIVIDENDS
ISSUANCE OF COMMON STOCK FOR SERVICES
CONVERSION OF 8% DEBENTURES INTO
COMMON STOCK
NET LOSS
------- -- ------- ------ ----- --
BALANCE, DECEMBER 31, 1997 100 $0 351,258 $3,512 0 $0
======= == ======= ====== ===== ==
SERIES D SERIES E
PREFERRED STOCK PREFERRED STOCK COMMON STOCK
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
BALANCE, DECEMBER 31, 1994 0 $0 0 $0 12,228,803 $1,223
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK DIVIDENDS 52,795 6
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK 24,162 2
ISSUANCE OF COMMON STOCK
FOR PROFESSIONAL SERVICES. 83,030 8
NET LOSS
------ ---------- ----- ---------- ---------- ------
BALANCE, DECEMBER 31, 1995 0 0 0 0 12,388,790 1,239
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK DIVIDENDS 37,666 4
CONVERSION OF 8% DEBENTURES INTO
COMMON STOCK 1,772,945 177
ISSUANCE OF SERIES C PREFERRED STOCK
SERIES C PREFERRED STOCK PLACEMENT FEE
CASH DIVIDEND ON SERIES C PREFERRED STOCK
EXERCISE OF STOCK OPTIONS 30,000 3
AMORTIZATION OF DISCOUNT ON 8% DEBENTURES
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES C PREFERRED STOCK
ISSUANCE OF WARRANTS AND OPTIONS FOR SERVICES
NET LOSS
------ ---------- ----- ---------- ---------- ------
BALANCE, DECEMBER 31, 1996 0 0 0 0 14,229,401 1,423
CONVERSION OF SERIES B PREFERRED
STOCK INTO COMMON STOCK 34,724 3
SERIES C PREFERRED STOCK CONVERSION 4,881,656 489
ISSUANCE OF SERIES D PREFERRED STOCK 51,000 5,100,000
ISSUANCE OF SERIES E PREFERRED STOCK 1,650 1,650,000
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES C PREFERRED STOCK
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES D PREFERRED STOCK
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES E PREFERRED STOCK
ISSUANCE OF WARRANTS TO SERIES D PREFERRED STOCKHOLDERS
FINANCING COST FOR SERIES D PREFERRED STOCK
ISSUANCE OF WARRANTS TO SERIES E PREFERRED STOCKHOLDERS
ISSUANCE OF COMMON STOCK
FOR SERIES B PREFERRED STOCK DIVIDENDS 66,740 6
ISSUANCE OF COMMON STOCK FOR SERVICES 50,000 5
CONVERSION OF 8% DEBENTURES INTO
COMMON STOCK 726,476 73
NET LOSS
------ ---------- ----- ---------- ---------- ------
BALANCE, DECEMBER 31, 1997 51,000 $5,100,000 1,650 $1,650,000 19,988,997 $1,999
====== ========== ===== ========== ========== ======
ADDITIONAL
PAID IN ACCUMULATED
CAPITAL DEFICIT TOTAL
BALANCE, DECEMBER 31, 1994 $23,623,739 $(14,015,013) $ 9,614,050
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK DIVIDENDS 154,388 (154,393) 0
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK 240 0
ISSUANCE OF COMMON STOCK
FOR PROFESSIONAL SERVICES. 540,284 540,292
NET LOSS (6,471,638) (6,471,638)
----------- ----------- ----------
BALANCE, DECEMBER 31, 1995 24,318,651 (20,641,044) 3,682,705
ISSUANCE OF COMMON STOCK
FOR PREFERRED STOCK DIVIDENDS 154,389 (154,393) 0
CONVERSION OF 8% DEBENTURES INTO
COMMON STOCK 3,020,298 3,020,475
ISSUANCE OF SERIES C PREFERRED STOCK 7,499,992 7,500,000
SERIES C PREFERRED STOCK PLACEMENT FEE (500,000) (500,000)
CASH DIVIDEND ON SERIES C PREFERRED STOCK (123,750) (123,750)
EXERCISE OF STOCK OPTIONS 24,372 24,375
AMORTIZATION OF DISCOUNT ON 8% DEBENTURES 3,333,333 3,333,333
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES C PREFERRED STOCK 2,357,188 (2,357,188) 0
ISSUANCE OF WARRANTS AND OPTIONS FOR SERVICES 385,800 385,800
NET LOSS (10,880,893) (10,880,893)
----------- ----------- ----------
BALANCE, DECEMBER 31, 1996 40,594,023 (34,157,268) 6,442,045
CONVERSION OF SERIES B PREFERRED
STOCK INTO COMMON STOCK 344 0
SERIES C PREFERRED STOCK CONVERSION (481) 0
ISSUANCE OF SERIES D PREFERRED STOCK 5,100,000
ISSUANCE OF SERIES E PREFERRED STOCK 1,650,000
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES C PREFERRED STOCK 478,248 (478,248) 0
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES D PREFERRED STOCK 1,700,000 (1,700,000) 0
AMORTIZATION OF DISCOUNT (DIVIDEND) ON SERIES E PREFERRED STOCK 550,000 (550,000) 0
ISSUANCE OF WARRANTS TO SERIES D PREFERRED STOCKHOLDERS 232,620 (232,620) 0
FINANCING COST FOR SERIES D PREFERRED STOCK (75,000) (75,000)
ISSUANCE OF WARRANTS TO SERIES E PREFERRED STOCKHOLDERS 48,900 (48,900) 0
ISSUANCE OF COMMON STOCK
FOR SERIES B PREFERRED STOCK DIVIDENDS 147,492 (147,498) 0
ISSUANCE OF COMMON STOCK FOR SERVICES 96,870 96,875
CONVERSION OF 8% DEBENTURES INTO
COMMON STOCK 762,890 762,963
NET LOSS (8,289,920) (8,289,920)
----------- ----------- ----------
BALANCE, DECEMBER 31, 1997 $44,535,906 (45,604,454) $5,686,963
=========== =========== ==========
See Notes to Financial Statements
F-4
PROJECTAVISION, INC
STATEMENTS OF CASH FLOWS
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Years Ended December 31,
------------------------------------------------
1995 1996 1997
OPERATING ACTIVITIES
Net loss $ (6,471,638) $(10,880,893) $ (8,289,920)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 73,739 3,959,300 647,661
Issuance of common stock for services 540,292 -- 96,875
Allowance taken on investment in unconsolidated affiliate 2,129,252 -- --
Other noncash operating expenses -- -- 115,690
Provision for allowances on advances 125,017 (109,166) --
Equity in loss of unconsolidated affiliate 511,094 72,065 --
Asset and liability management
Changes in other operating assets (179,370) (597,659) 15,255
Changes in accounts receivable (377,608)
Changes in inventories (1,857,604)
Accounts payable and other liabilities 249,237 1,441,770 1,897,914
------------ ------------ ------------
Net cash used in operating activities (3,022,377) (6,114,583) (7,751,737)
------------ ------------ ------------
INVESTING ACTIVITIES
Capital expenditures (30,397) (4,322,105) (1,839,007)
Investment in and advances to unconsolidated affiliate (94,240) -- (150,000)
Interest accrued on loan to unconsolidated affiliate (67,314) -- --
Purchases and redemption of government securities 2,993,320 (3,437,386) 3,437,386
------------ ------------ ------------
Net cash (used in)/provided by investing activities 2,801,369 (7,759,491) 1,448,379
------------ ------------ ------------
FINANCING ACTIVITIES
Proceeds from notes payable -- 10,000,000 --
Private placement costs -- (500,000) --
Repayment of convertible debt -- (4,958,250) (100,000)
Issuance of preferred stock -- 7,500,000 6,750,000
Issuance Fees -- (500,000) (75,000)
Series C Preferred Stock Dividend -- (123,750) --
Proceeds from stock options excercised -- 24,375 --
------------ ------------ ------------
Net cash provided by financing activities 0 11,442,375 6,575,000
------------ ------------ ------------
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (221,008) (2,431,699) 271,642
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 3,712,990 3,491,982 1,060,283
------------ ------------ ------------
CASH AND CASH EQUIVALENTS-END OF YEAR $ 3,491,982 $ 1,060,283 $ 1,331,925
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $ -- $ 352,049 $ 1,834
============ ============ ============
See notes to financial statements
F-5
PROJECTAVISION, INC.
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
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In 1995, the Company issued 52,795 of its common stock as payment with a value
of $ 154,393 for the dividend on its series B convertible stock. In addition,
the Company issued 50,000 shares of its common stock for services rendered by an
officer and director of the Company. These shares were canceled by the Company
in December 1995. Also, the Company issued 24,162 shares of its common stock for
24,162 shares of its series B convertible preferred stock, and 83,030 shares of
its common stock for professional services rendered and to be rendered.
In 1996, the Company issued 37,666 shares of its common stock with a value of
$154,393 as payment for the dividend on its series B convertible stock. In
addition, the Company issued 1,772,945 shares of its common stock and paid
$4,958,250 in cash in exchange for retiring $8.4 million of convertible debt.
Also, the Company issued 34,724 shares of its common stock in connection with
the conversion of 34,724 shares of its Series B convertible preferred stock into
common stock.
In 1997, the Company issued 66,740 shares of its common stock with a value of
$147,498 as payment for the dividend on its series B convertible stock. In
addition, the Company issued 4,881,656 shares of its common stock to retire the
entire issue of 7,500 shares of Series C convertible preferred stock. The
Company also issued 50,000 shares of its common stock for services rendered by
an officer and director of the Company. Finally, the Company issued shares of
common stock in connection with retiring $0.6 million of convertible debt,
leaving a face value on the debt of $ 900,000.
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