-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, BfXZBUWJ4xvN/Uz2r45IidDo7mCKvod101Pxzf4/HLEJ4TBZr/gHPzsix9hdT8c5 mfMC6/36RVACVmW9qb7yaw== 0000102198-95-000007.txt : 19950517 0000102198-95-000007.hdr.sgml : 19950517 ACCESSION NUMBER: 0000102198-95-000007 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950131 FILED AS OF DATE: 19950516 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPETITIVE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000102198 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 362664428 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08696 FILM NUMBER: 95540089 BUSINESS ADDRESS: STREET 1: 1465 POST RD E STREET 2: PO BOX 901 CITY: WESTPORT STATE: CT ZIP: 06881-0901 BUSINESS PHONE: 2032556044 MAIL ADDRESS: STREET 1: 1465 POST ROAD EAST STREET 2: P O BOX 901 CITY: WESTPORT STATE: CT ZIP: 06881-0901 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSITY PATENTS INC DATE OF NAME CHANGE: 19920703 10-Q/A 1 10-Q/A January 1995 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A AMENDMENT NO. 1 AMENDMENT TO QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1995 Commission file number 1-8696 COMPETITIVE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Quarterly Report for the quarterly period ended January 31, 1995 on Form 10-Q as set forth in the pages attached hereto: (List all such items, financial statements, exhibits or other portions amended) PART I Item 1. Condensed Financial Statements - Pages 3-19 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned hereunto duly authorized. COMPETITIVE TECHNOLOGIES, INC. Registrant Date: May 16, 1995 By: Frank R. McPike, Jr. Vice President, Finance Principal Financial Officer and Authorized Signer COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION Page No. Item 1. Condensed Financial Statements A. Financial Statements Consolidated Balance Sheets January 31, 1995 and July 31, 1994 3 Consolidated Statements of Operations for the three months ended January 31, 1995 and 1994 4 Consolidated Statements of Operations for the six months ended January 31, 1995 and 1994 5 Consolidated Statement of Changes in Shareholders' Interest for the six months ended January 31, 1995 6 Consolidated Statements of Cash Flows for the six months ended January 31, 1995 and 1994 7-8 Notes to Consolidated Financial Statements 9-12 B. Pro Forma Financial Information (Unaudited) 13 Pro Forma Consolidated Balance Sheet at January 31, 1995 14-15 Pro Forma Consolidated Statement of Operations for the three months ended January 31, 1995 16 Pro Forma Consolidated Statement of Operations for the six months ended January 31, 1995 17 Notes to Pro Forma Consolidated Financial Statements 18-19 PART I. FINANCIAL INFORMATION COMPETITIVE TECHNOLOGIES, INC., INC. AND SUBSIDIARIES Consolidated Balance Sheets January 31, 1995 and July 31, 1994 (Unaudited)
January 31, July 31, ASSETS 1995 1994 Current assets: Cash and cash equivalents $ 1,422,137 $ 1,134,633 Short-term investments, at market, January 31, 1995; at cost, July 31, 1994 1,210,349 1,232,341 Receivables: Royalties 238,993 229,266 Computer-based education services 628,624 1,012,934 Other, including $63,386 and $45,469 receivable from related parties in January and July, respectively 112,006 121,400 Prepaid expenses and other current assets 332,857 311,187 Total current assets 3,944,966 4,041,761 Property and equipment, net 793,977 629,508 Investments in affiliates 417,355 364,236 Excess of purchase price over net assets acquired, net of accumulated amortization of $697,949 and $622,587, respectively 848,186 923,548 Other assets 458,952 487,579 TOTAL ASSETS $ 6,463,436 $ 6,446,632 LIABILITIES AND SHAREHOLDERS' INTEREST Current liabilities: Line of credit obligation $ -- $ 100,000 Accounts payable, including $3,938 and $22,626 payable to related parties in January and July, respectively 308,498 353,456 Accrued liabilities, including $2,217 and $6,071 payable to related parties, in January and July, respectively 351,888 324,030 Deferred revenues 1,161,007 980,596 Total current liabilities 1,821,393 1,758,082 Other noncurrent liabilities 102,736 108,379 Minority interest 519,139 430,396 Commitments and contingencies -- -- Shareholders' interest: 5% preferred stock, $25 par value 60,675 60,675 Common stock, $.01 par value 58,243 57,918 Capital in excess of par value 24,344,621 24,097,604 Less: treasury stock at cost: 12,208 shares (96,362) -- Net unrealized holding gains on available- for-sale securities 11,735 -- Accumulated deficit (20,358,744) (20,066,422) Total shareholders' interest 4,020,168 4,149,775 TOTAL LIABILITIES AND SHAREHOLDERS' INTEREST $ 6,463,436 $ 6,446,632
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Operations for the three months ended January 31, 1995 and 1994 (Unaudited)
1995 1994 Revenues: Retained royalties $ 249,459 $ 264,714 Revenues under service contracts, including $51,803 and $34,171 from related parties in 1995 and 1994, respectively 73,559 34,171 Grant revenues 11,531 -- Computer-based education services 1,255,811 884,909 1,590,360 1,183,794 General and administration expenses, including costs of technology management business of which $36,896 and $20,194 were paid to related parties in 1995 and 1994, respectively 542,910 565,087 Research and development expenses 16,482 -- Costs of computer-based education services, including $2,546 and $8,459 paid to related parties 1,137,092 901,394 1,696,484 1,466,481 Operating loss (106,124) (282,687) Interest income 21,575 26,895 Interest expense (8,624) (5,012) (Losses) income related to equity method affiliates (36,143) 267 Other, net 24,611 38,952 Loss from continuing operations before income taxes and minority interest (104,705) (221,585) Provision for income taxes 19,000 8,084 Loss from continuing operations before minority interest (123,705) (229,669) Minority interest in (income) losses of subsidiaries (37,652) 12,797 Loss from continuing operations (161,357) (216,872) Net gain on disposal of discontinued operations -- 171,078 Net loss $ (161,357) $ (45,794) Net income (loss) per share (primary and fully diluted): Continuing operations $ (0.03) $ (0.04) Discontinued operations -- 0.03 Net loss per share of common stock $ (0.03) $ (0.01) Weighted average number of common and common equivalent shares outstanding (primary and fully diluted): 5,806,994 5,778,416
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Operations for the six months ended January 31, 1995 and 1994 (Unaudited)
1995 1994 Revenues: Retained royalties $ 339,364 $ 356,663 Revenues under service contracts, including $115,222 and $76,595 from related parties in 1995 and 1994, respectively 156,472 76,595 Grant revenues 60,671 -- Computer-based education services 2,522,876 1,819,361 3,079,383 2,252,619 General and administration expenses, including costs of technology management business of which $53,254 and $31,762 were paid to related parties in 1995 and 1994, respectively 952,474 996,813 Research and development expenses 34,885 -- Costs of computer-based education services, including $10,643 and $12,047 paid to related parties 2,287,280 1,840,223 3,274,639 2,837,036 Operating loss (195,256) (584,417) Interest income 39,462 50,984 Interest expense (17,261) (11,920) (Losses) income related to equity method affiliates (43,936) 8,551 Other, net 28,121 38,952 Loss from continuing operations before income taxes and minority interest (188,870) (497,850) Provision for income taxes 24,609 13,684 Loss from continuing operations before minority interest (213,479) (511,534) Minority interest in (income) losses of subsidiaries (78,843) 18,814 Loss from continuing operations (292,322) (492,720) Net gain on disposal of discontinued operations -- 221,852 Net loss $ (292,322) $ (270,868) Net income (loss) per share (primary and fully diluted): Continuing operations $ (0.05) $ (0.09) Discontinued operations -- 0.04 Net loss per share of common stock $ (0.05) $ (0.05) Weighted average number of common and common equivalent shares outstanding (primary and fully diluted): 5,802,885 5,739,338
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statement of Changes in Shareholders' Interest For the six months ended January 31, 1995 (Unaudited)
Net Unrealized holding Preferred Stock gains on Shares Common Stock Capital in Treasury stock available- issued and Shares excess of Shares for-sale Accumulated outstanding Amount issued Amount par value held Amount Securities Deficit Balance - July 31, 1994. . . 2,427 $60,675 5,791,824 $57,918 $24,097,604 -- $ -- $ -- $(20,066,422) Effect of change in accounting for available- for-sale securities. . . 11,154 Stock issued under Director's Stock Participation Plan . . . 7,545 75 49,925 Stock issued to Knowledge Solutions, Inc. in exchange for 205,325 shares of KSI's Class A common stock . . . . . . 25,000 250 197,092 Change in net unrealized holding gains on available- for-sale securities . . . 581 Stock held by Knowledge Solutions, Inc. considered treasury stock. . . . . . (12,208) (96,362) Net loss . . . . . . . . . (292,322) Balance - January 31, 1995 . . 2,427 $60,675 5,824,369 $58,243 $24,344,621 (12,208) $(96,362) $11,735 $(20,358,744)
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows for the six months ended January 31, 1995 and 1994 (Unaudited)
1995 1994 Cash flow from operating activities: Net loss $ (292,322) $ (270,868) Continuing operations: Noncash items included in net loss: Depreciation and amortization 260,024 206,984 (Income) losses related to equity method affiliates 43,936 (8,551) Minority interest in income (losses) of subsidiaries 78,843 (18,814) Accrual for issuance of directors' stock 20,833 24,167 Accrual for stock retirement plan 37,500 25,000 Other noncash items included in net loss 44,966 60,137 Other 13,374 (1,444) Net changes in various operating accounts (see schedule) 416,942 (47,342) Proceeds from disposal of discontinued operations, net -- (221,852) Net cash flow from operating activities 624,096 (252,583) Cash flow from investing activities: Purchases of property and equipment, net (312,144) (194,180) Proceeds from sales and redemptions of short-term investments 1,108,428 14,446 Purchases of marketable securities and short-term investments (1,047,094) (62,108) Investments in affiliates and subsidiaries 5,218 (360) Proceeds from disposal of discontinued operations, net -- 221,852 Net cash flow from investing activities (245,592) (20,350) Cash flow from financing activities: Payments on line of credit obligation (100,000) -- Proceeds from subsidiary's issuance of stock 9,000 -- Payments on capital lease obligations (49,251) Proceeds from issuance of common stock, net 524,757 Net cash flow from financing activities (91,000) 475,506 Net increase in cash and cash equivalents 287,504 202,573 Cash and cash equivalents at beginning of period 1,134,633 1,948,241 Cash and cash equivalents at end of period $ 1,422,137 $ 2,150,814
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows for the six months ended January 31, 1995 and 1994 (Unaudited)
1995 1994 Schedule of net changes in various operating accounts: Receivables: Royalties $ (9,727) $ (49,960) Computer-based education services 384,310 (99,954) Other 9,394 30,695 Prepaid expenses and other current assets (56,440) (14,640) Accounts payable (99,702) 19,775 Accrued liabilities 8,696 66,742 Deferred revenues 180,411 -- Net changes in various operating accounts $ 416,942 $ (47,342) Supplemental cash flow information: Cash paid for: Interest $ 16,743 $ 9,674 Income taxes 14,795 21,957 Schedule of noncash investing activities: Investments in affiliates and subsidiaries $ (205,325) $ -- Stock held by affiliates considered treasury stock 96,362 -- Schedule of noncash financing activities: Stock issued for investments in affiliates and subsidiaries $ 205,325 $ -- Stock held by affiliates considered treasury stock $ (96,362) $ -- Issuance of directors' stock $ 50,000 $ 59,999
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 1. Interim Financial Statements Interim financial information presented in the accompanying financial statements and notes hereto is unaudited. The year end balance sheet data was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. In the opinion of management, all adjustments which are necessary to present the financial statements fairly in conformity with generally accepted accounting principles, consisting only of normal recurring adjustments, have been made. The interim financial statements and notes thereto as well as the accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended July 31, 1994. 2. Short-term Investments Effective August 1, 1994 the Company adopted Statement of Financial Accounting Standards No. 115 "Accounting for Certain Investments in Debt and Equity Securities." As required by Statement No. 115, prior years' financial statements have not been restated. The unrealized holding gain for securities classified as available-for-sale as of August 1, 1994 has been reported as an adjustment of the balance of net unrealized holding gains on available-for-sale securities in shareholders' interest. As of January 31, 1995 the components of the Company's available- for-sale securities are as follows (in thousands):
Gross Gross Unrealized Unrealized Aggregate Holding Holding Amortized Maturity Security Type Fair Value Gains Losses Cost Basis Grouping U.S. Treasury Within Bills $ 1,056 $ 9 -- $ 1,047 1 year Mortgaged backed Present securities 154 3 -- 151 through 2018 Total $ 1,210 $12 -- $ 1,198
For the quarter ended January 31, 1995 proceeds from the sale of available-for-sale securities were $1,074,158 which resulted in gross realized gains of $24,611. For the six months ended January 31, 1995 proceeds from the sale of available-for-sale securities were $1,106,401 which resulted in gross realized gains of $25,582. In addition, realized gains on sale of short-term investments classified as cash equivalents were $2,026 in the quarter and six months ended January 31, 1995. Cost is based on specific identification in computing realized gains. 3. University Communications, Inc. ("UCI") Costs associated with UCI's computer-based education services for the six months ended January 31 consist of the following: 1995 1994 Direct costs of providing services $ 1,393,997 $ 1,039,362 Selling, general and administration expenses (1)(2) 893,283 800,861 Total $ 2,287,280 $ 1,840,223 (1) Including $3,631 and $35,415, in 1995 and 1994, respectively, charged by CTI for services provided to UCI. (2) Including $46,157 and $46,521 in 1995 and 1994, respectively, of amortization of excess purchase price over net assets acquired. 4. Investment in Knowledge Solutions, Inc. In September 1994 Competitive Technologies, Inc. ("CTI"), formerly University Patents, Inc., made an additional investment in Knowledge Solutions, Inc. ("KSI") by acquiring 205,325 shares of KSI's Class A common stock in exchange for 25,000 shares of its common stock valued at $205,325. In addition, Safeguard Scientifics, Inc. ("SSI"), an unaffiliated company, purchased 200,000 shares of Class A common stock of KSI for $200,000 in cash. SSI also received warrants to purchase an additional 100,000 shares of Class A common stock of KSI at $1.00 per share through December 31, 1994, which warrants expired unexercised, and 133,333 shares of Class A common stock at $1.50 per share through December 31, 1995. As a result of these and related transactions UPI's ownership in KSI decreased to 48.8%. Effective October 1994 Competitive Technologies of PA, Inc. ("CTI- PA"), formerly Competitive Technologies, Inc., the Company's 80%-owned subsidiary, granted KSI an exclusive ten-year license to its process model for interactive multimedia training in exchange for royalties on future sales. 5. Accrued Liabilities Accrued liabilities consist of the following: January 31, July 31, 1995 1994 Accrued compensation $ 117,536 $ 94,920 Other 234,352 229,110 $ 351,888 $ 324,030 6. Segment Data The Company is engaged in two business segments: (a) technology management services and (b) marketing interactive computer-based education services. Financial data relating to the Company's segments for the six months ended January 31, 1995 and 1994 are as follows (in thousands):
Computer- Technology based Management Education Other Total (1)(2) 1995 Net revenues $ 556 $ 2,523 $ -- $ 3,079 Operating income (loss) (283) 250 (162) (195) Identifiable assets 959 3,074 2,430 6,463 Depreciation and amortization 92 168 -- 260 Capital additions 72 240 -- 312 1994 Net revenues $ 434 $ 1,819 $ -- $ 2,253 Operating income (loss) (398) 6 (192) (584) Identifiable assets 945 2,184 2,955 6,084 Depreciation and amortization 79 128 -- 207 Capital additions 33 162 -- 195
(1) Other operating loss includes general corporate expenses. (2) Other identifiable assets are corporate assets consisting primarily of cash and cash equivalents, short-term investments, the directors' escrow fund and investments in equity method affiliates unrelated to an industry segment. 7. Contingencies In November 1991, a suit was filed in Connecticut against CTI, its wholly-owned subsidiary, Genetic Technology Management, Inc. ("GTM"), its majority-owned subsidiary, UOP, and several present and former directors on behalf of the 59 limited partners of Optical Associates, Limited Partnership ("OALP"). The complaint alleges, among other things, that the January 1989 sale of UOP's assets to Unilens violated the partnership agreement and that OALP is entitled to the full proceeds of the sale to Unilens. The complaint claims, among other things, money damages and treble and punitive damages in an unspecified amount and attorneys' fees. The Company believes that the asserted claims are without merit and intends to defend the action instituted by plaintiffs vigorously. In August 1994 the defendants filed a motion for summary judgment for dismissal of the case. The motion for summary judgment was argued on March 6, 1995 and the court has not yet ruled on the motion. 8. Subsequent Events On February 15, 1995, Barden Companies, Inc. (to which Barden Communications, Inc. had assigned its rights and interests) exercised its option to purchase from CTI additional shares of UCI common stock. Barden Companies, Inc. ("Barden") paid $3,227,372 ($1.375 per share) in cash for 2,347,180 shares held by CTI. Before the transaction Barden owned 7.4% and CTI owned 55.1% of the outstanding common stock of UCI. Upon consummation of the transaction Barden owned 50.1% and CTI owned 12.4% of the outstanding common stock of UCI. CTI intends to offer all UCI shareholders other than Barden the opportunity to participate in the transaction on a pro rata basis. Pursuant to this offer, CTI would offer to purchase from the other UCI shareholders a maximum of approximately 950,000 shares at $1.375 per share, the same price CTI received from Barden. CTI expects to report a gain on the sale of UCI shares of between $1,600,000 and $2,700,000 in the fiscal year ending July 31, 1995. The amount of CTI's gain is dependent on the level of participation in the offer, which is not currently determinable. In February 1995 CTI purchased 250,000 shares of Class A common stock of Equine Biodiagnostics, Inc. ("EBI") for $25,000 in cash. EBI was organized by Kentucky Technology Incorporated, a wholly-owned technology management company formed by the University of Kentucky, to provide diagnostic laboratory services for the equine industry. EBI's initial product is a test for equine protozoal myeloencephalitis, a neurological disease. After this investment CTI owns 37.5% of the outstanding common stock of EBI and will account for its investment in EBI on the equity method. EBI stock is not publicly traded and there is no quoted market price for its stock. COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Pro Forma Financial Information (unaudited) On February 15, 1995, Barden Companies, Inc. (to which Barden Communications, Inc. had assigned its rights and interests) exercised its option to purchase from Competitive Technologies, Inc. ("CTI") additional shares of University Communications, Inc.'s ("UCI") common stock. Barden Companies, Inc. ("Barden") paid $3,227,372 ($1.375 per share) in cash for 2,347,180 shares held by CTI. Before the transaction Barden owned 7.4% and CTI owned 55.1% of the outstanding common stock of UCI. Upon consummation of the transaction Barden owned 50.1% and CTI owned 12.4% of the outstanding common stock of UCI. CTI intends to offer all UCI shareholders other than Barden the opportunity to participate in the transaction on a pro rata basis. Pursuant to this offer, CTI would offer to purchase from the other UCI shareholders a maximum of approximately 950,000 shares at $1.375 per share, the same price CTI received from Barden. CTI expects to report a gain on the sale of UCI shares of between $1,600,000 and $2,700,000 in the fiscal quarter ending April 30, 1995. The amount of CTI's gain is dependent on the level of participation in the offer, which is not currently determinable. Accordingly the accompanying pro forma financial information has been prepared as if there were no participation of other UCI shareholders. The following pro forma balance sheet reflects the sale as if it had occurred on January 31, 1995. The following pro forma statements of operations for the Company for the three and six months ended January 31, 1995 reflect CTI's sale of 2,347,180 shares of UCI stock as if it had occurred on August 1, 1993. COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Pro Forma Consolidated Balance Sheet January 31, 1995 (Unaudited)
Historical Competitive Technologies, Inc. Pro Forma January 31, Pro Forma Balance ASSETS 1995 Adjustments Sheet Current assets: Cash and cash equivalents $ 1,422,137 $ 2,434,820 (A)(B) $ 3,856,957 Short-term investments, at market 1,210,349 -- 1,210,349 Receivables: Royalties 238,993 238,993 Computer-based education services 628,624 (628,624) (A) -- Other, including $63,386 receivable from related parties (pro forma: $63,386) 112,006 (2,000) (A) 110,006 Loans, advances and interest from affiliate 318,253 (A) 318,253 Prepaid expenses and other current assets 332,857 (210,375) (A) 122,482 Total current assets 3,944,966 1,912,074 5,857,040 Property and equipment, net 793,977 (668,386) (A) 125,591 Investments in affiliates 417,355 46,962 (A)(B) 464,317 Excess of purchase price over net assets acquired, net of accumulated amortization of $697,949 (pro forma: $125,688) 848,186 (659,643) (A) 188,543 Other assets 458,952 (9,971) (A) 448,981 Total assets $ 6,463,436 $ 621,036 $ 7,084,472
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Pro Forma Consolidated Balance Sheet January 31, 1995 (Unaudited)
Historical Competitive Technologies, Inc. Pro Forma January 31, Pro Forma Balance 1995 Adjustments Sheet LIABILITIES AND SHAREHOLDERS' INTEREST Current liabilities: Accounts payable, including $3,938 payable to related parties (pro forma: $3,938) $ 308,498 $ (255,191) (A) $ 53,307 Accrued liabilities, including $2,217 payable to related parties (pro forma: none) 351,888 (115,128) (A) 236,760 Deferred revenues 1,161,007 (1,118,231) (A) 42,776 Total current liabilities 1,821,393 (1,488,550) 332,843 Other noncurrent liabilities 102,736 (102,736) (A) -- Minority interest 519,139 (519,139) (A) -- Shareholders' interest: 5% preferred stock, $25 par value 60,675 -- 60,675 Common stock, $.01 par value 58,243 -- 58,243 Capital in excess of par value 24,344,621 -- 24,344,621 Less: treasury stock at cost: 12,208 shares (96,362) -- (96,362) Net unrealized holding gains on available-for-sale securities 11,735 -- 11,735 Accumulated deficit (20,358,744) 2,731,461 (B) (17,627,283) Total shareholders' interest 4,020,168 2,731,461 $ 6,751,629 Total liabilities and shareholders' interest $ 6,463,436 $ 621,036 $ 7,084,472
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Pro Forma Consolidated Statement of Operations for the three months ended January 31, 1995 (Unaudited)
Historical Competitive Technologies, Inc. January 31, Pro Forma Pro Forma 1995 Adjustments Results Revenues: Retained royalties $ 249,459 $ -- $ 249,459 Revenues under service contracts, including $51,803 from related parties 73,559 -- 73,559 Grant revenues 11,531 -- 11,531 Computer-based education services 1,255,811 (1,255,811) (C) -- 1,590,360 (1,255,811) 334,549 General and administration expenses, including costs of technology management business of which $36,896 was paid to related parties 542,910 -- 542,910 Research and development expenses 16,482 -- 16,482 Costs of computer-based education services, including $2,546 paid to related parties 1,137,092 (1,137,092) (C) -- 1,696,484 (1,137,092) 559,392 Operating loss (106,124) (118,719) (224,843) Interest income 21,575 (2,106) (C)(F) 19,469 Interest expense (8,624) 8,624 (C) -- Losses related to equity method affiliates (36,143) 5,840 (C) (30,303) Other, net 24,611 -- 24,611 Loss from continuing operations before income taxes and minority interest (104,705) (106,361) (E) (211,066) Provision for income taxes 19,000 (16,000) (C) 3,000 Loss from continuing operations before minority interest (123,705) (90,361) (214,066) Minority interest in (income) losses of subsidiaries (37,652) 40,552 (D) 2,900 Net loss $ (161,357) $ (49,809) $ (211,166) Net loss per share of common stock (primary and fully diluted) $ (0.03) $ (0.04) Weighted average number of common and common equivalent shares outstanding (primary and fully diluted) 5,806,994 5,806,994
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Pro Forma Consolidated Statement of Operations for the six months ended January 31, 1995 (Unaudited)
Historical Competitive Technologies, Inc. January 31, Pro Forma Pro Forma 1995 Adjustments Results Revenues: Retained royalties $ 339,364 $ -- $ 339,364 Revenues under service contracts, including $115,222 from related parties 156,472 -- 156,472 Grant revenues 60,671 -- 60,671 Computer-based education services 2,522,876 (2,522,876) (C) -- 3,079,383 (2,522,876) 556,507 General and administration expenses, including costs of technology management business of which $53,254 was paid to related parties 952,474 -- 952,474 Research and development expenses 34,885 -- 34,885 Costs of computer-based education services, including $10,643 paid to related parties 2,287,280 (2,287,280) (C) -- 3,274,639 (2,287,280) 987,359 Operating loss (195,256) (235,596) (430,852) Interest income 39,462 (1,409) (C)(F) 38,053 Interest expense (17,261) 17,261 (C) -- Losses related to equity method affiliates (43,936) 6,098 (C) (37,838) Other, net 28,121 -- 28,121 Loss from continuing operations before income taxes and minority interest (188,870) (213,646) (E) (402,516) Provision for income taxes 24,609 (16,000) (C) 8,609 Loss from continuing operations before minority interest (213,479) (197,646) (411,125) Minority interest in (income) losses of subsidiaries (78,843) 88,743 (D) 9,900 Net loss $ (292,322) $ (108,903) $ (401,225) Net loss per share of common stock (primary and fully diluted) $ (0.05) $ (0.07) Weighted average number of common and common equivalent shares outstanding (primary and fully diluted) 5,802,885 5,802,885
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Pro Forma Consolidated Balance Sheet (Unaudited) The pro forma condensed consolidated balance sheet reflects CTI's sale of 2,347,180 shares of UCI stock for $3,227,372 in cash as if it had occurred on January 31, 1995. The historical consolidated balance sheet of CTI reported UCI as a consolidated subsidiary. The pro forma consolidated balance sheet reflects CTI's remaining 12.4% investment in UCI on the cost method. The specific pro forma adjustments to achieve this change are as follows: (A) This entry removes the assets and liabilities of UCI, including its minority shareholders' interest in those net assets, as reflected in the historical consolidated balance sheet at January 31, 1995 and records CTI's investment in UCI as it would have been reflected on January 31, 1995 if UCI were not a consolidated subsidiary. (B) This entry reflects CTI's sale of part of its investment in UCI for $3,227,372 in cash, the reduction of its investment in UCI and the resulting gain that would have been recorded if the sale had occurred on January 31, 1995. COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Pro Forma Consolidated Statements of Operations (Unaudited) The pro forma condensed consolidated statements of operations treat CTI's sale of 2,347,180 shares of UCI stock for $3,227,372 in cash as if it had occurred on August 1, 1993. CTI intends to offer all UCI shareholders other than Barden the opportunity to participate in the transaction on a pro rata basis. Pursuant to this offer, CTI would offer to purchase from the other UCI shareholders a maximum of approximately 950,000 shares at $1.375 per share, the same price CTI received from Barden. CTI expects to report a gain on the sale of UCI shares of between $1,600,000 and $2,700,000 in the fiscal quarter ending April 30, 1995. The amount of CTI's gain is dependent on the level of participation in the offer, which is not currently determinable. The historical consolidated statements of operations of CTI reported UCI as a consolidated subsidiary. The pro forma consolidated statements of operations reflect CTI's remaining 12.4% investment in UCI on the cost method. Since UCI incurred losses from its inception through the fiscal year ended July 31, 1994, it has declared no dividends to date. UCI may not declare or pay dividends during the term of its current credit facility (see Note 2 to Consolidated Financial Statements in CTI's Annual Report on Form 10-K for the year ended July 31, 1994). (C) This entry removes the revenues and expenses of UCI as reflected in the historical consolidated statements of operations for the periods presented. (D) This entry adjusts for UCI's minority shareholders' interest in UCI's net income or loss for the period presented. (E) No pro forma adjustment has been recorded to reflect CTI's sale of part of its investment in UCI for $3,227,372 in cash or the resulting gain. This transaction, including CTI's gain on its sale of part of its investment in UCI, will be recognized in the third quarter of fiscal 1995 when the sale is consummated. (F) No pro forma adjustment has been recorded to reflect interest which would have been earned on the proceeds of the sale if it had occurred on August 1, 1993 and the proceeds had been invested throughout the period. If the proceeds had been invested at the weighted average interest rate available on its short-term investment account throughout the period, CTI estimates it would have earned approximately $44,000 and $81,000 in the three and six months ended January 31, 1995, respectively. EX-27 2
5 FDS for Form 10-Q/A for January 31, 1995 0000102198 COMPETITIVE TECHNOLOGIES, INC. 6-MOS JUL-31-1995 JAN-31-1995 1,422,137 1,210,349 979,623 0 0 3,944,966 1,540,130 (746,153) 6,463,436 1,821,393 0 58,243 0 60,675 3,901,250 6,463,436 0 3,079,383 0 3,274,639 0 0 (17,261) (188,870) 24,609 (292,322) 0 0 0 (292,322) $(0.05) $(0.05)
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