SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2003 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10366 | |
LASER RECORDING SYSTEMS, INC. | |
(Exact name of registrant as specified in its Charter) | |
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NEW JERSEY | 22-2582847 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
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1359 New York Avenue |
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Huntington Station, New York | 11746 |
(Address of Principal Executive Offices) | (Zip Code) |
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(800) 786-1352 | |
(Registrant's Telephone Number, Including Area Code) | |
Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 10,000,000 shares of the Company's Common Stock, $.001 par value, were outstanding as of December 19, 2003.
Item 1 Financial Statements
LASER RECORDING SYSTEMS, INC. |
BALANCE SHEETS OCTOBER 31, 2003 AND JANUARY 31, 2003 |
ASSETS
CURRENT ASSETS: Cash and Cash Equivalents Total Current Assets Total Assets | October 31, 2003 $ 491 $ 491 $ 491 | January 31, 2003 $ 1,566 $ 1,566 $ 1,566 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES: Accrued Expenses Loan Payable – Officer Total Current Liabilities Stockholders’ Equity: Common Stocks – 10,000,000 shares authorized, 10,000,000 issued and outstanding Paid in Capital Retained Earnings Total Stockholders’ Equity Total Liabilities and Stockholders’ Equity | $ 32,000 $ 32,000 $ 7,408,910 1,400 (7,441,819) $ (31,509) $ 491 | $500 $ 30,000 $ 30,500
$ 7,408,910 1,400 (7,439,244) $ (28,934) $ 1,566 |
The accompanying notes are an integral part of the financial statements.
LASER RECORDING SYSTEMS, INC. |
STATEMENT OF REVENUES, EXPENSES AND RETAINED EARNINGS |
FOR THE NINE MONTHS ENDED OCTOBER 31 |
Revenues: Interest Income Total Revenues Expenses: Administrative Expenses Taxes Total Expenses Net Loss | 2003 $ -0- $ -0- $ 2,513 62 $ 2,575 $ (2,575) | 2002 $ -0- $ -0- $ 6,040 50 $ 6,090 $ (6,090) |
The accompanying notes are an integral part of the financial statements.
LASER RECORDING SYSTEMS, INC. |
STATEMENT OF CASH FLOWS |
For the Nine Months Ended |
October 31, |
Cash flows from operating activities:
Net Loss Cash flows from financing activities: Loan from Shareholder Accrued Expenses Maintaining the Corporate Entity Net cash provided by (used in) financing activities Increase (Decrease) in Cash Cash – Beginning of Period Cash – End of Period | 2003 $ -0- $ 2,000 (500) (2,575) $ (1,075) $ (1,075) $ 1,566 $ 491 | 2002 $ -0- $ 5,000 (791) (6,090) $ (1,881) $ (1,881) $ 4,254 $ 2,373 |
The accompanying notes are an integral part of the financial statements.
LASER RECORDING SYSTEMS INC.
NOTES TO THE FINANCIAL STATEMENTS
As of October 31, 2003
GENERAL
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 16th 1993. The Company handed over projects to their customers on that date. From October 31st 1993 to January 7, 2000, the Company did not file any reports with the Securities and Exchange Commission. On January 7, 2000 the Company filed Form 10-K for January 31, 1999 and the required Forms 10-Q for the following quarters and year.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles and reflect all adjustments, which in the opinion of management are necessary for a fair presentation of the result for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for any future periods.
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 purchase were two notes for the total of $190,000.
In 1999 all classes of the preferred shares, accrued dividend and interest, paid in capital and loans payable were converted to capital stock. As a result the Company’s board of Directors on January 15, 1999 authorized issuing 3,001,185 Common Shares for all liabilities and preferred stocks. In lieu of compensation, the board of directors authorized issuing additional shares to the officers of the company. Therefore, the Company recognized $1,400 director fees and the same amount were credited against Paid In Capital. As of the date of the financial statements all 10,000,000 shares of the company were issued and outstanding. In addition, the officers received 1,800,000 warrants for future services. The warrants expired on January 31, 2003.
Note 2.
The Company discontinued operation on August 16th 1993, however the Company maintained 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, 2000. For financial statement purposes all revenues and expenses are considered non-operating transactions from February 1, 1994 to the present.
Note 3.
On June 4, 2003 the Company filed Form 8-K with the Securities and Exchange Commission. The Company reported the execution of a Share Exchange Agreement with SCL Ventures, Ltd., a British Virgin Islands Company. The closing of the Exchange is conditioned upon, among others, the one-for-four reverse split of the Company’s stock and an equity investment by SCL of up to $6,000,000. The agreement may be amended or terminated under certain circumstances prior to the closing of the Exchange.
ITEM 2. 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 October 31, 2003 the Company had total assets of $491 and an accumulated deficit of $7,441,819. 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 the Company's 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 co ntinue in operation.
Exchange Agreement
As previously reported, on May 20, 2003, the Company and three shareholders owning an aggregate of approximately 68% of the Company's currently outstanding common stock entered into a Share Exchange Agreement with SCL Ventures, Ltd., a British Virgin Islands company and its shareholders. That agreement was to have closed not later than November 16, 2003. Following the close of the quarter, the parties agreed to extend the outside closing date to March 31, 2004.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
N/A
ITEM 4. CONTROLS AND PROCEDURES
Based upon an evaluation performed within 90 days of this report, our CEO and CFO has concluded that our disclosure controls and procedures are effective to ensure that material information relating to our company is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared, and that our internal controls are effective to provide reasonable assurance that our financial statements are fairly presented in conformity with generally accepted accounting principles.
In accord with SEC requirements, the CEO and CFO notes that, since the date of his evaluation to the date of this Quarterly Report, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.
PART II -- OTHER INFORMATION
Item 5. Other Information
N/A
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
31
Chief Executive Officer and Chief Financial Officer - Rule 13a-14(a) Certification
32
Chief Executive Officer and Chief Financial Officer - Sarbanes-Oxley Act Section 906 Certification
(b) On December 18, 2003, the Company filed a Report on Form 8-K reporting extension of its Share Exchange Agreement with SCL Ventures, Ltd. to March 31, 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
LASER RECORDING SYSTEMS, INC.
(Registrant)
Date: December 19, 2003
/s/ Carl Lanzisera
Carl Lanzisera
(Chief Executive Officer and Principal Financial and Accounting Officer)