INFOSONICS CORP - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 - - Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2005.

005-79915

(Commission File Number)

InfoSonics Corporation

(Exact name of registrant as specified in its charter)

Maryland		33-0599368
(State or other jurisdiction of incorporation)		(IRS Employer Identification Number)

5880 Pacific Center Blvd

San Diego, CA 92121

(Address of principal executive offices including zip code)

(858) 373-1600

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

As of May 10, 2005, the Registrant had 5,212,000 shares outstanding of its $.001 par value common stock.

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

InfoSonics Corporation and Subsidiaries

Consolidated Balance Sheets

	March 31 2005			December 31 2004
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	3,543,213		$	5,183,876
Trade accounts receivable, net of allowance for doubtful accounts of $361,650 (unaudited) and $250,000	12,572,410			7,596,104
Inventory, net of reserves of $119,756 (unaudited) and $141,086	3,764,319			4,640,756
Prepaid Inventory	2,500,000			71,850
Prepaid expenses	216,235			384,456
Net assets of discontinued operations	176,947			181,010
Deferred tax assets - current	343,000			285,000

Total current assets	23,116,124			18,343,052

Property and equipment, net	267,234			237,853
Deferred tax assets - noncurrent	(2,000		)	67,000
Other assets	86,266			71,851

Total assets	$	23,467,624		$	18,719,756

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Line of credit	$	7,500,000		$	2,564,115
Accounts payable	2,049,887			2,576,034

Accrued expenses	384,830			447,054
Income taxes payable	108,514			—
Net liabilities of discontinued operations	670,555			693,542

Total current liabilities	10,713,786			6,280,745

Stockholders’ equity
Preferred stock, $0.001 par value 10,000,000 shares authorized 0 and 0 shares issued and outstanding	—			—
Common stock, $0.001 par value 40,000,000 shares authorized 5,212,000 shares issued and outstanding	5,212			5,212
Additional paid-in capital	10,529,652			10,529,652
Retained earnings	2,218,974			1,904,147

Total stockholders’ equity	12,753,838			12,439,011

Total liabilities and stockholders’ equity	$	23,467,624		$	18,719,756

See accompanying notes.

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of March 31, 2005 (unaudited) and December 31, 2004

	Consolidated Statements of Income for the Three Months Ended March 31, 2005 (unaudited) and 2004 (unaudited)

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2005 (unaudited) and 2004 (unaudited)

	Notes to Consolidated Financial Statements

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	Controls and Procedures

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings

Item 2.	Changes in Securities and Use of Proceeds

Item 3.	Defaults Upon Senior Securities

Item 4.	Submission of Matters to a Vote of Security Holders

Item 5.	Other Information

Item 6.	Exhibits

Signatures

Exhibit 31.1

Exhibit 32.1