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UNITED STATES
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 AND
EXCHANGE ACT OF 1934
FOR THE PERIOD ENDING SEPTEMBER 30, 2001
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
------------ -------------
COMMISSION FILE NUMBER 0 - 1325
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VICOM, INCORPORATED
(Exact name of registrant as specified in its charter)
MINNESOTA
(State or other jurisdiction of incorporation or organization)
41 - 1255001
(IRS Employer Identification No.)
9449 SCIENCE CENTER DRIVE, NEW HOPE, MINNESOTA 55428
(Address of principal executive offices)
TELEPHONE (763) 504-3000 FAX (763) 504-3060
www.vicominc.net Internet
(Registrant's telephone number, facsimile number, and Internet address)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 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 |_|
On November 9, 2001 there were 9,904,249 shares outstanding of the
registrant's common stock, par value $.01 per share, and 260,118 outstanding
shares of the registrant's convertible preferred stock.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VICOM, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
------------ ------------ ------------ ------------
REVENUES $ 7,678,534 $ 10,219,008 $ 26,191,582 $ 28,624,886
------------ ------------ ------------ ------------
COSTS AND EXPENSES
Cost of products and services 6,110,861 7,868,109 20,714,309 22,181,052
Selling, general and administrative 2,040,043 2,501,869 7,078,249 8,154,184
------------ ------------ ------------ ------------
8,150,904 10,369,978 27,792,558 30,335,236
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (472,370) (150,970) (1,600,976) (1,710,350)
------------ ------------ ------------ ------------
OTHER EXPENSES
Interest expense (271,641) (133,669) (796,386) (446,820)
Miscellaneous income (expense) (480,955) 169,834 (1,144,435) --
------------ ------------ ------------ ------------
(752,596) 36,165 (1,940,821) (446,820)
------------ ------------ ------------ ------------
LOSS BEFORE INCOME TAXES (1,224,966) (114,805) (3,541,797) (2,157,170)
INCOME TAX PROVISION -- -- -- --
------------ ------------ ------------ ------------
NET LOSS $ (1,224,966) $ (114,805) $ (3,541,797) $ (2,157,170)
============ ============ ============ ============
LOSS ATTRIBUTABLE TO COMMON STOCK
Net loss $ (1,224,966) $ (114,805) $ (3,541,797) $ (2,157,170)
Preferred dividends (72,817) (5,971) (248,425) (23,377)
------------ ------------ ------------ ------------
$ (1,297,783) $ (120,776) $ (3,790,222) $ (2,180,547)
============ ============ ============ ============
LOSS PER COMMON SHARE-
BASIC AND DILUTED $ (.15) $ (.01) $ (.46) $ (.32)
============ ============ ============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING-BASIC AND DILUTED 8,939,847 7,738,599 8,317,954 6,695,499
See notes to condensed consolidated financial statements
VICOM, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31,
2001 2000
------------------ -----------------
(UNAUDITED) (AUDITED)
ASSETS
CURRENT ASSETS
Cash ........................................................................ $ 1,026,170 $ 1,161,479
Accounts receivable, net allowance of $132,407 and $159,000 ................. 3,210,310 5,661,064
Inventories, net allowance of $285,000 and $200,000 ......................... 2,000,794 2,122,002
Other ....................................................................... 310,969 294,216
Costs and estimated earnings in excess of billings .......................... (17,969) 7,491
------------ ------------
TOTAL CURRENT ASSETS ....................................................... 6,530,274 9,246,252
------------ ------------
PROPERTY AND EQUIPMENT ......................................................... $ 4,096,597 $ 3,277,109
NONCURRENT ASSETS
Goodwill, net of accumulated amortization of $694,000 and $436,678 .......... 2,835,526 2,914,037
Other ....................................................................... 185,905 177,175
------------ ------------
3,021,431 3,091,212
------------ ------------
$ 13,648,302 $ 15,614,573
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Wholesale financing arrangement ............................................. $ 1,058,693 $ 2,033,340
Notes and installment obligations payable-current maturities ................ 573,005 428,334
Accounts payable ............................................................ 2,452,642 2,769,390
Other liabilities ........................................................... 702,652 825,933
Deferred service obligations and revenue .................................... 440,244 319,141
------------ ------------
TOTAL CURRENT LIABILITIES ................................................ 5,227,236 6,376,138
------------ ------------
------------ ------------
NOTES AND INSTALLMENT OBLIGATIONS PAYABLE ...................................... 3,913,504 3,362,083
------------ ------------
COMMITMENTS AND CONTINGENCIES .................................................. -- --
STOCKHOLDERS' EQUITY
Preferred Stock
10% Class A cumulative convertible-no par value
(issued and outstanding - 50,972 and 0 shares) ........................... 479,040 --
10% Class B cumulative convertible-no par value
(issued and outstanding-22,836 and 22,836 shares) ........................ 218,869 218,869
10% Class C cumulative convertible-no par value
(issued and outstanding-147,310 and 150,810 shares) ...................... 1,909,003 1,951,003
14% Class D cumulative convertible-no par value (issued and outstanding
39,000 and 72,500 shares) ................................................ 407,500 802,813
Common stock-no par value (issued 9,767,771 and 8,137,181 shares; outstanding
9,671,777 and 8,023,352 share ............................................ 3,118,686 1,340,074
Subscription receivable ..................................................... (510,000) --
Options and warrants ........................................................ 16,503,661 14,347,833
Unamortized compensation .................................................... (1,390,186) (278,138)
Accumulated deficit ......................................................... (16,229,010) (12,506,102)
------------ ------------
4,507,563 5,876,352
------------ ------------
$ 13,648,302 $ 15,614,573
------------ ------------
See notes to condensed consolidated financial statements.
VICOM, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
2001 2000
------------ ------------
OPERATING ACTIVITIES
Net loss ......................................................................... $ (3,541,796) $ (2,157,170)
Adjustments to reconcile net loss to net cash used by operating activities
Depreciation .................................................................. 766,881 452,163
Amortization .................................................................. 625,144 398,781
Gain on sales of property and equipment ....................................... (5,234)
Changes in operating assets and liabilities:
Accounts receivable ......................................................... 2,450,753 (976,320)
Inventories ................................................................. 350,697 (486,861)
Costs, estimated earnings, and billings ..................................... 25,460 137,974
Other assets ................................................................ (107,650) (115,974)
Accounts payable ............................................................ (187,698) (741,439)
Other liabilities ........................................................... (125,435) --
Wholesale line of credit .................................................... (974,647) --
Deferred service obligations and revenue .................................... 121,103 (175,428)
-------------------------------
Net cash used by operating activities .................................... (597,188) (3,669,508)
-------------------------------
INVESTING ACTIVITIES
Purchases of property and equipment .............................................. (1,585,278) (1,409,830)
Proceeds from sales of property and equipment .................................... 62,410
Purchase acquisition ............................................................. (50,000) --
Issuance of note receivable ...................................................... (96,897)
Collections on notes receivable .................................................. 52,972 31,551
-------------------------------
Net cash used by investing activities ........................... (1,582,306) (1,412,766)
-------------------------------
FINANCING ACTIVITIES
Decrease in checks issued in excess of deposits .................................. -- (126,297)
Net borrowings under credit arrangements ......................................... -- 942,600
Proceeds from long-term debt and warrants ........................................ 1,695,000 --
Proceeds from notes and installment obligations payable .......................... 169,050 144,907
Payments on notes and installment obligations payable ............................ (352,883) (987,326)
Collections on subscription receivable ........................................... 458,250
Proceeds from issuance of stock and warrants ..................................... 1,363,919 5,703,704
Stock issuance costs ............................................................. (101,975) (596,579)
Redemption of preferred stock .................................................... (480,500) --
Preferred stock dividends ........................................................ (248,425) (23,377)
-------------------------------
Net cash provided by financing activities ................................ 2,044,186 5,515,882
-------------------------------
INCREASE (DECREASE) IN CASH ......................................................... (135,309) 433,608
CASH
Beginning of period .............................................................. 1,161,479 204,365
-------------------------------
End of period .................................................................... $ 1,026,170 $ 673,973
-------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid .................................................................... 495,234 430,023
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Notes payable converted to preferred stock ....................................... 255,850 200,000
Accounts payable converted to preferred stock .................................... 129,050 --
Notes payable converted to stock and warrants issued ............................. -- 2,633,100
Subscriptions receivable on common stock ......................................... 510,000 458,250
Warrant dividends ................................................................ -- 13,255,870
Refinancing of debt .............................................................. 1,603,189
Conversion of preferred to common stock .......................................... 107,522
Purchase acquisition
Assets acquired ............................................................. 381,808 --
Liabilities assumed ......................................................... 2,154 --
Equity securities consideration ............................................. 329,664 --
Employee stock options issued with unamortized compensation ................. 1,200,000
See notes to condensed consolidated financial statements
VICOM, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The information furnished in this report is unaudited and reflects all
adjustments which are normal recurring adjustments and, which in the opinion of
management, are necessary to fairly present the operating results for the
interim periods. The operating results for the interim periods presented are not
necessarily indicative of the operating results to be expected for the full
fiscal year.
CERTAIN FINANCING ACTIVITIES
In September 2001, Vicom received an investment of $500,000 in exchange
for Vicom Common Shares and Warrants. The transaction for the common shares was
completed at the then trading market price for Vicom Common Stock. The
investment was made by the Crestview Capital Fund 1, a Chicago based fund, which
invests in undervalued publicly traded and medical companies. Proceeds were used
primarily to fund original MultiBand construction.
LOSS PER SHARE
Loss per share-basic is determined by dividing net loss plus the
preferred stock dividends by the weighted average common shares outstanding. Net
loss per common share-diluted is computed by dividing net loss plus the
preferred stock dividends by the weighted average common shares outstanding and
the common share equivalents (stock options, stock warrants, convertible
preferred shares, and issued but not outstanding restricted stock). Common share
equivalents are not included in the computations as their effects were
anti-dilutive. Options, convertible preferred stock and warrants together
totaling 10,554,288 were excluded from the computation of dilutive loss per
share for the periods ended September 30, 2001.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2001, the FASB issued SFAS No. 141 "Business Combinations." SFAS 141
eliminates the pooling-of-interests method of accounting for business
combinations except for qualifying business combinations that were initiated
prior to July 1, 2001. In addition, SFAS 141 further clarifies the criteria to
recognize intangible assets separately from goodwill. The requirements of
Statement 141 are effective for any business combination accounted for by the
purchase method that is completed after June 30, 2001. The adoption of SFAS
No. 141 will not have a material effect on the Company's financial position or
results or operations.
In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." Under SFAS 142, goodwill and indefinite lived intangible assets are no
longer amortized but are reviewed annually (or more frequently if impairment
indicators arise) for impairment. Separable intangible assets that are not
deemed to have an indefinite life will continue to be amortized over their
useful lives (but with no maximum life). The amortization provisions of SFAS 142
apply to goodwill and intangible assets acquired after June 30, 2001. The
adoption of SFAS No. 142 will decrease the amount of goodwill amortization the
Company is recording in the statement of operations. The amount of goodwill
amortization recorded for the nine months ended September 30, 2001 was $258,953.
FORWARD-LOOKING STATEMENTS
From time to time, the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, product pricing, management for growth, integration of acquisitions,
technological developments, new products, and similar matters. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements including those made in this statement. In order to
comply with the terms of the Private Securities Litigation Reform Act, the
Company notes that a variety of factors could cause the Company's actual results
and experience to differ materially from the anticipated results or Company's
forward-looking statements.
The risks and uncertainties that may affect the operations,
performance, developments and results of the Company's business include the
following: national and regional economic conditions; pending and future
legislation affecting IT and telecommunications industries; market acceptance of
the Company's products and services; the Company's products and services; the
Company's continued ability to provide integrated communication solutions for
customers in a dynamic industry; and other competitive factors.
Because these and other factors could affect the Company's operating
results, past financial performance should not necessarily be considered as a
reliable indicator of future performance and anticipated future period results.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
GENERAL
Vicom is the parent corporation of three wholly-owned subsidiaries,
Corporate Technologies USA, Inc. (CTU), MultiBand, Inc. (MultiBand) and Vicom
Midwest Telecommunications Systems, Inc. (VMTS) (collectively the "company").
VMTS was not active as of September 30, 2001. Vicom incorporated MultiBand in
February 2000 to provide voice, data and video services to residential
multi-dwelling units (MDUs).
Vicom has provided clients with telecommunications products and
services since its inception in 1975. As of September 30, 2001, Vicom was
providing telephone equipment and service to approximately 1,000 customers, with
approximately 10,000 telephones in service. In addition, CTU provides computer
products and services to approximately 3,500 customers. The telecommunications
systems we distribute are intended to provide customers with flexible,
cost-effective alternatives as compared to systems available from major
telephone companies, including those formerly comprising the Bell System, and
from other interconnected telephone companies. As of September 30, 2001,
MultiBand provided services to approximately 406 customers.
Vicom and CTU provide a full range of voice, data and video
communications systems and service, system integration, training and related
communication sales and support activities for commercial, professional and
institutional customers, most of which are located in Minnesota, North Dakota,
South Dakota and Nebraska. Vicom purchases products and equipment from NEC
America, Inc. ("NEC"), Cisco Systems, Inc., Nortel Networks Corp., ECI
Telecommunications, Inc. ("ECI"), and other manufacturers of communications and
electronic products and equipment. We use these products to design
telecommunications systems to fit our customers' specific needs and demands.
SELECTED CONSOLIDATED FINANCIAL DATA AS A PERCENTAGE OF REVENUES
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------- ----------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
------------- ------------- ------------- -------------
2001 2000 2001 2000
---- ---- ---- ----
(unaudited) (unaudited) (unaudited) (unaudited)
REVENUES 100.0% 100.0% 100.0% 100.0%
COST OF PRODUCTS AND SERVICES 79.6% 76.9% 79.1% 77.4%
----- ----- ----- -----
GROSS MARGIN 20.4% 23.1% 20.9% 22.6%
SELLING, GENERAL & ADMINISTRATIVE
EXPENSES 26.6% 24.5% 27.0% 28.5%
----- ----- ----- -----
LOSS FROM OPERATIONS (6.2)% (1.5)% (6.1)% (5.9)%
OTHER EXPENSES, NET (9.8)% (.4)% (7.4)% (1.5)%
----- ----- ----- -----
LOSS BEFORE INCOME TAXES (16.0)% (1.1)% (13.5)% (7.5)%
INCOME TAX PROVISION 0.0% 0.0% 0.0% 0.0%
----- ----- ----- -----
NET LOSS (16.0)% (1.1)% (13.5)% (7.5)%
===== ===== ===== =====
The following table sets forth, for the period indicated, the gross margin
percentages for Vicom, Incorporated, CTU and MultiBand.
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- ----------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
---------------------------------------------------------
VICOM, INCORPORATED 0.0% 1.7% 54.7% 24.2%
CTU 20% 23.5% 20.9% 21.9%
MULTIBAND 76.3% 1.9% 6.5% 59.7%
RESULTS OF OPERATIONS
REVENUES
Revenues decreased 24.8% to $7,678,534 in the quarter ended September
30, 2001, as compared to $10,219,008 for the quarter ended September 30, 2000.
Revenues for Vicom, Incorporated decreased 100% to $0.00 in the third
quarter of fiscal 2001, as compared to $119,037 in the third quarter of fiscal
2000. This decrease is due to the fact that all sales operations have been
transferred to CTU.
Revenues for Corporate Technologies decreased 28.4% to $7,618,442 as
compared to $10,651,245 in the third quarter of fiscal 2000. These results are
reflective, in the Company's opinion, of current general economic conditions.
MultiBand revenues in the quarter ended September 30, 2001 were $60,092
as compared to $22,299 in the third quarter of fiscal 2000. MultiBand recorded
its first revenues in the third quarter of 2000.
Revenues for the nine-month period ended September 30, 2001 decreased
8.5% to $26,191,582 from $28,624,886 for the comparable nine-month period of
fiscal 2000. The Company believes the decrease in revenues for the quarter and
year to date primarily resulted from a slowing economy.
GROSS MARGIN
The Company's gross margin decreased 33.3% or $783,226 to $1,567,673
for the quarter ended September 30, 2001, as compared to $2,350,899 for the
similar quarter last year. Decrease in gross margin percentage is largely due to
decreased sales of telephone equipment, which generally have a higher margin
than sales of data equipment. For the quarter ended September 30, 2001, as a
percent of total revenues, gross margin was 20.4% as compared to 23.1% for the
similar period last year.
Gross margin for Vicom, Inc. for the quarter ended September 30, 2001,
was $0 as compared to gross margin of $(51,932) for the quarter ended September
30, 2000. This decrease is a result of sales operations transferred to CTU.
Gross margin for CTU decreased by 39.3%, or $983,624, to $1,521,816 for
the quarter ended September 30, 2001, as compared to $2,505,440 in the third
quarter of fiscal 2000, reflecting a drop in revenues.
Gross margin for MultiBand for the quarter ended September 30, 2001 was
$45,857 as compared to $43,981 in the third quarter of 2000.
For the nine-month period ended September 30, 2001, the Company's gross
margin decreased 15.0% or $966,561 to $5,477,273, as compared to $6,443,834 for
the similar period last year. The decrease in gross margin is directly
attributable to the Company's decrease in revenues.
For the nine-month period ended September 30, 2001, as a percent of
total revenues, gross margin was 20.9% as compared to 22.6% for the similar
period last year. Decrease in gross margin percentage is largely due to
decreased sales of telephone equipment, which generally have a higher margin
than sales of data equipment.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses decreased 18.45% to
$2,040,043 in the quarter ended September 30, 2001, compared to $2,501,869 in
the prior year quarter. This decrease in selling, general and administrative
expenses was, as a percentage of revenues, 26.6% for the quarter ended September
30, 2001 and 24.5% for the similar period a year ago. This decrease in expenses
is primarily attributable to reductions in payroll and other corporate expenses.
For the nine-month period ended September 30, 2001, these expenses
decreased 13.2% to $7,078,249, as compared to $8,154,184 for the same period in
2000. As a percentage of revenues, selling, general and administrative expenses
are 26.6% for the period ended September 30, 2001, as compared to 28.5% for the
same period last year. This percentage decrease is primarily attributable to
reductions in payroll and other corporate expenses.
INTEREST EXPENSE
Interest expense was $271,641 for the quarter ended September 30, 2001,
versus $133,669 for the similar period a year ago, reflecting an increased
Company debt load due to acquisition related debt and increased borrowings.
Interest expense was $796,386 for the nine months ended September 30,
2001, and $446,820 for the same period last year.
NET LOSS
In the third quarter of fiscal 2001, the Company incurred a net loss of
$1,224,966 compared to a net loss of $114,805 for the third fiscal quarter of
2000. The nine-month period ended September 30, 2001, resulted in a net loss of
$3,541,797 compared to a net loss of $2,157,170 for the same period last year.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2001, the FASB issued SFAS No. 141 "Business Combinations." SFAS 141
eliminates the pooling-of-interests method of accounting for business
combinations except for qualifying business combinations that were initiated
prior to July 1, 2001. In addition, SFAS 141 further clarifies the criteria to
recognize intangible assets separately from goodwill. The requirements of
Statement 141 are effective for any business combination accounted for by the
purchase method that is completed after June 30, 2001. The adoption of SFAS
No. 141 will not have a material effect on the Company's financial position or
results or operations.
In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." Under SFAS 142, goodwill and indefinite lived intangible assets are no
longer amortized but are reviewed annually (or more frequently if impairment
indicators arise) for impairment. Separable intangible assets that are not
deemed to have an indefinite life will continue to be amortized over their
useful lives (but with no maximum life). The amortization provisions of SFAS 142
apply to goodwill and intangible assets acquired after June 30, 2001. The
adoption of SFAS No. 142 will decrease the amount of goodwill amortization the
Company is recording in the statement of operations. The amount of goodwill
amortization recorded for the nine months ended September 30, 2001 was $258,953.
LIQUIDITY AND CAPITAL RESOURCES
Available working capital at September 30, 2001 increased approximately
$542,207 over September 30, 2000. This increase is primarily due to the
investment from Crestview Capital Fund I.
The Company also experienced a significant decrease in accounts payable
and other payables related to wholesale financing at September 30, 2001 versus
September 30, 2000, reflecting lower revenues.
Inventories and accounts receivable at September 30, 2001 decreased
from September 30, 2000, also due to lower revenues.
Current maturities of notes and installment obligations payable at
September 30, 2001 decreased materially from September 30, 2000 generally due to
replacement with longer-term debt.
Management of Vicom believes that, for the next 12 months, cash
generated by sales of stock, and existing credit facilities, in aggregate, are
adequate to meet the anticipated liquidity and capital resource requirements of
its CTU business. Significant continuation of the Company's MultiBand's
build-out is highly dependent on securing additional financing for future
projects. Management believes that while future build-out
financing is available, there is no guarantee that said financing will be
obtained or on terms acceptable to the Company.
CAPITAL EXPENDITURES
The Company used $1,585,278 for capital expenditures during the nine
months ended September 30, 2001, as compared to $1,409,830 in the similar period
last year. Of the total year-to-date expenditures $1,194,657 were incurred
during the first quarter of 2001. These year-to-date 2001 expenditures were
primarily for construction-in-process items, which totaled $1,548,072 and
related to the continued build-out of MultiBand (see Liquidity and Capital
Resources). For the similar period last year, substantially all capital
expenditures consisted of equipment acquired for internal use.
IMPACT OF YEAR 2000
The Company has experienced no significant system problems since
January 1, 2000. In addition, the Company is not aware of any material problems
being experienced by its suppliers and business partners. The Company believes
it has adequately addressed the Year 2000 issue related to its internal systems
and that it did not and will not have a material impact on its business,
financial condition or its results of operations.
ITEM 3. QUANTITIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISK
Vicom is not subject to any material interest rate risk as any current
lending agreements are at a fixed rate of interest.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of September 30, 2001, the Company was not engaged in any
legal proceedings whose anticipated results would have a
material adverse impact.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) An Annual Meeting of Vicom shareholders was held on May 20,
2001.
(b) The meeting resulted in the re-election for one year of the
following individuals as follows:
Nominee For Against
Steven Bell 5,330,724 70,000
Jonathan Dodge 5,400,724 0
David Ekman 5,400,724 0
Marvin Frieman 5,400,724 0
Paul Knapp 5,400,724 0
James L. Mandel 5,330,724 70,000
Pierce McNally 5,400,724 0
Mark Mekler 5,400,724 0
Manuel A. Villafana 5,400,724 0
(c) Voting to ratify Lurie, Besikof, Lapidus & Co., LLP as
independent auditors of Vicom for the fiscal year ended
December 31, 2000:
For Against Abstain
5,400,724 0 2,500
ITEM 2. CHANGES IN SECURITIES
In September 2001, Vicom received an investment of $500,000 in exchange
for Vicom Common Shares and Warrants. The transaction for the common shares was
completed at the then trading market price for Vicom Common Stock. The
investment was made by the Crestview Capital Fund 1, a Chicago based fund, which
invests in undervalued publicly traded and medical companies. Proceeds were used
primarily to fund original MultiBand construction.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K.
None.
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.
VICOM, INCORPORATED
Registrant
Date: November 14, 2001 By: /s/ James L. Mandel
--------------------------------------
James L. Mandel
CHIEF EXECUTIVE OFFICER
Date: November 14, 2001 By: /s/ Steven M. Bell
--------------------------------------
Steven M. Bell
CHIEF EXECUTIVE OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)