Item 1. Financial Statements.
TELVUE CORPORATION
CONDENSED BALANCE SHEETS
March 31, 2012
December 31, 2011
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
3,764,006
$
151,134
Accounts receivable – trade, net of allowance for doubtful accounts of
$32,610 at March 31, 2012 and $29,194 at December 31, 2011
550,964
666,074
Inventory
472,304
399,637
Prepaid expenses
44,975
14,930
TOTAL CURRENT ASSETS
4,832,249
1,231,775
PROPERTY AND EQUIPMENT
6,934,797
6,806,652
Less accumulated depreciation
6,459,206
6,398,247
PROPERTY AND EQUIPMENT, NET
475,591
408,406
OTHER ASSETS
10,916
10,916
TOTAL ASSETS
$
5,318,756
$
1,651,097
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable – trade
$
637,875
$
595,310
Accrued expenses
212,177
264,589
Deferred service revenue
699,971
648,202
Other liabilities
1,136
1,150
TOTAL CURRENT LIABILITIES
1,551,159
1,509,251
LINES OF CREDIT – MAJORITY STOCKHOLDER
—
20,400,000
NOTE PAYABLE – MAJORITY STOCKHOLDER
—
541,000
ACCRUED INTEREST – MAJORITY STOCKHOLDER
—
4,669,223
TOTAL LIABILITIES
1,551,159
27,119,474
COMMITMENTS AND CONTINGENCIES
REDEEMABLE CONVERTIBLE SERIES A PREFERRED STOCK,
$0.001 par value, 22,500 shares authorized, 14,285.714 shares issued and outstanding, including accrued dividends at March 31, 2012 of $8,225
5,008,225
—
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock, $.01 par value, 3,000,000 shares authorized,
615,374 and 245,415 shares issued and outstanding at
March 31, 2012 and December 31, 2011, respectively
6,154
2,454
Additional paid-in capital
31,352,740
5,494,938
Accumulated deficit
(32,599,522
)
(30,965,769
)
(1,240,628
)
(25,468,377
)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
$
5,318,756
$
1,651,097
See the accompanying unaudited notes which are an integral part of these condensed financial statements.
3
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TELVUE CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
2012
2011
REVENUES
TelVue products and services
$
821,202
$
859,340
ANI services
124,586
181,653
945,788
1,040,993
COST OF REVENUES
TelVue products and services
435,237
534,569
ANI services
25,868
31,564
TOTAL COST OF REVENUES
461,105
566,133
GROSS MARGIN
484,683
474,860
OPERATING EXPENSES
Selling and marketing
454,345
281,463
General and administrative
1,352,667
686,225
Depreciation
60,960
68,992
1,867,972
1,036,680
OPERATING LOSS
(1,383,289
)
(561,820
)
OTHER INCOME (EXPENSE)
Interest income
1,395
87
Interest expense-related party
(251,859
)
(235,873
)
TOTAL OTHER INCOME (EXPENSE)
(250,464
)
(235,786
)
LOSS BEFORE INCOME TAXES
(1,633,753
)
(797,606
)
INCOME TAX EXPENSE
—
—
NET LOSS
(1,633,753
)
(797,606
)
DIVIDENDS ON REDEEMABLE COVERTIBLE PREFERRED STOCK
(8,225
)
—
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
$
(1,641,978
)
$
(797,606
)
NET LOSS PER COMMON SHARE
BASIC AND DILUTED
$
(5.58
)
$
(3.28
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
BASIC AND DILUTED
294,240
243,370
See the accompanying unaudited notes which are an integral part of these condensed financial statements.
4
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TELVUE CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
2012
2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(1,633,753
)
$
(797,606
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation
60,960
68,992
Accrued interest – majority stockholder
251,859
235,873
Stock-based compensation
4,145
—
Provision for losses on accounts receivable
3,416
—
Changes in assets and liabilities:
Accounts receivable – trade
111,694
(36,057
)
Inventory
(72,667
)
33,584
Prepaid expenses
(30,045
)
(32,194
)
Accounts payable – trade
42,565
21,766
Accrued expenses
(52,412
)
45,588
Deferred service revenue
51,769
44,631
Other liabilities
(14
)
—
NET CASH USED IN OPERATING ACTIVITIES
(1,262,483
)
(415,423
)
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchases of property and equipment
(128,145
)
(37,290
)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from line of credit – majority stockholder
5,000,000
400,000
Issuance of common stock
3,500
—
NET CASH PROVIDED BY FINANCING ACTIVITIES
5,003,500
400,000
NET CHANGE IN CASH AND CASH EQUIVALENTS
3,612,872
(52,713
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
151,134
185,954
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
3,764,006
$
133,241
See the accompanying unaudited notes which are an integral part of these condensed financial statements.
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