-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O3WomvC+kOxaxeU+FcbEB8WagKuCNGr3UmJMpxGql7X7MG6qMQK5hL+A/KNQuJ6v 74W+QtkWfGwSTYWg+0w4Nw== 0001000096-97-000136.txt : 19970318 0001000096-97-000136.hdr.sgml : 19970318 ACCESSION NUMBER: 0001000096-97-000136 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970131 FILED AS OF DATE: 19970317 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACCELR8 TECHNOLOGY CORP CENTRAL INDEX KEY: 0000727207 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 841072256 STATE OF INCORPORATION: CO FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-11485 FILM NUMBER: 97557815 BUSINESS ADDRESS: STREET 1: 303 E 17TH AVE STREET 2: SUITE 108 CITY: DENVER STATE: CO ZIP: 80203 BUSINESS PHONE: 3038638088 MAIL ADDRESS: STREET 1: 303 E 17TH ST STREET 2: SUITE 108 CITY: DENVER STATE: CO ZIP: 80203 FORMER COMPANY: FORMER CONFORMED NAME: HYDRO SEEK INC DATE OF NAME CHANGE: 19880802 10QSB 1 U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1997 --------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________________ to ____________________ Commission file number 0-11485 ------------------------------ ACCELR8 TECHNOLOGY CORPORATION --------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) COLORADO 84-1072256 ---------------------------- ------------------ (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 303 East Seventeenth Avenue, Suite 108, Denver, Colorado 80203 -------------------------------------------------------------- (Address of principal executive office) (303) 863-8088 ------------------------- (Issuer's telephone number) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 --- --- Number of shares outstanding of the issuer's Common Stock: Class Outstanding at January 31, 1997 ----- ------------------------------- Common Stock, no par value 6,642,500 -1- Accelr8 Technology Corporation INDEX ----- Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets - as of January 31, 1997 and July 31, 1996 1 Condensed Statements of Operations for the three months and six months ended January 31, 1997 and 1996 2 Condensed Statements of Cash Flows for the six months ended January 31, 1997 and 1996 3 Notes to Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5-7 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 7 SIGNATURES 8 -ii-
PART I. FINANCIAL INFORMATION Item 1. Financial Statements - ----------------------------- Accelr8 Technology Corporation Condensed Balance Sheets January 31, July 31, 1997 1996 ASSETS (Unaudited) (Audited) - ------ ----------- ----------- CURRENT ASSETS: Cash and cash equivalents $ 7,980,468 $ 1,407,026 Accounts receivable 332,094 431,252 Prepaid expenses and other 117,850 49,695 Deferred tax assets 141,223 123,223 ----------- ----------- Total current assets 8,571,635 2,011,196 ----------- ----------- PROPERTY AND EQUIPMENT: Computer equipment 231,614 209,735 Furniture and fixtures 13,679 11,231 ----------- ----------- Total property and equipment 245,293 220,966 Less accumulated depreciation (164,293) (150,453) ----------- ----------- Net property and equipment 81,000 70,513 ----------- ----------- SOFTWARE DEVELOPMENT COSTS: Software development costs 1,001,158 906,581 Less accumulated amortization (787,167) (746,260) ----------- ----------- Net software development costs 213,991 160,321 ----------- ----------- OTHER ASSETS 75,000 75,000 ----------- ----------- TOTAL $ 8,941,626 $ 2,317,030 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 113,843 $ 52,091 Incomes taxes payable 0 18,000 Accrued liabilities 47,290 20,316 Product development advance payable 50,000 50,000 Deferred consulting revenue 43,082 91,724 Deferred maintenance revenue 82,681 75,460 ----------- ----------- Total current liabilities 336,896 307,591 ----------- ----------- LONG TERM LIABILITIES: Deferred tax liabilities 69,723 69,723 Other liability 75,000 0 ----------- ----------- Total long-term liabilities 144,723 69,723 ----------- ----------- SHAREHOLDERS' EQUITY Common stock, no par value; 11,000,000 shares authorized; 6,642,500 and 5,492,500 shares issued and outstanding as of January 31, 1997 and July 31, 1996, respectively 8,205,677 1,970,970 Contributed capital 41,449 41,449 Retained earnings (accumulated deficit) 212,881 (72,703) ----------- ----------- Shareholders' equity - net 8,460,007 1,939,716 ----------- ----------- TOTAL $ 8,941,626 $ 2,317,030 =========== ===========
- 1 -
Accelr8 Technology Corporation Condensed Statements of Operations (Unaudited) - --------------------------------------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended ----------------------------- ----------------------------- January 31, January 31, January 31, January 31, 1997 1996 1997 1996 ----------- ----------- ----------- ------------ Revenues: Consulting fees $ 84,899 $ 232,980 $ 278,602 $ 399,458 Product license and customer support fees 96,948 76,341 362,578 193,156 Resale of software purchased 77,041 61,707 230,636 118,861 ----------- ----------- ----------- ----------- Total Revenues 258,888 371,028 871,816 711,475 ----------- ----------- ----------- ----------- Costs and Expenses: Cost of services 98,462 66,170 177,936 130,057 Cost of software purchased for resale 25,172 19,106 69,332 42,456 General and administrative 110,180 54,827 225,570 124,332 Marketing and advertising 103,174 72,963 191,658 149,133 Research and development 11,218 7,487 20,529 15,269 ----------- ----------- ----------- ----------- Total Expenses 348,206 220,553 685,025 461,247 ----------- ----------- ----------- ----------- Income from operations (89,318) 150,475 186,791 250,228 Interest income 79,024 9,225 98,794 16,378 ----------- ----------- ----------- ----------- Income (loss) before income taxes (10,294) 159,700 285,585 266,606 Income tax (provision) benefit 60,000 0 0 0 ----------- ----------- ----------- ----------- Net Income $ 49,706 $ 159,700 $ 285,585 $ 266,606 =========== =========== =========== =========== Weighted average shares outstanding 7,944,797 6,591,000 7,546,735 6,591,000 =========== =========== =========== =========== Net income per share $ .01 $ .02 $ .04 $ .04
- 2 -
Accelr8 Technology Corporation Condensed Statements of Cash Flows (Unaudited) - ------------------------------------------------------------------------------------------------------- Six Months Ended January 31, January 31, 1997 1996 ----------- ----------- CASH FLOW FROM OPERATING ACTIVITIES: Net income $ 285,585 $ 266,606 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 54,746 56,410 Net change in assets and liabilities: Accounts receivable 99,158 195,628 Prepaid expenses and other (86,155) 1,170 Accounts payable 61,752 (21,049) Income taxes payable (18,000) 0 Accrued liabilities 101,974 0 Deferred consulting revenue (48,642) 0 Deferred maintenance revenue 7,221 (12,876) ----------- ----------- Net cash provided by operating activities 457,639 485,889 ----------- ----------- CASH FLOW FROM INVESTING ACTIVITIES: Software development costs (94,577) (40,603) Purchase of computer equipment (21,879) (1,431) Purchase of office furniture and equipment (2,448) 0 ----------- ----------- Net cash used in investing activities (118,904) (42,034) ----------- ----------- CASH FLOW FROM FINANCING ACTIVITIES: Net proceeds provided from sale of common stock 6,234,707 0 ----------- ----------- Net increase (decrease) in cash and cash equivalents 6,573,442 443,855 Cash and equivalents, beginning of year 1,407,026 437,425 ----------- ----------- Cash and equivalents, ending of year $ 7,980,468 $ 881,280 =========== ===========
- 3 - Accelr8 Technology Corporation Notes to Condensed Financial Statements For the six months ended January 31, 1997 and 1996 Note 1. Accounting Policies The financial information provided herein was prepared from the books and records of the Company without audit. The information furnished reflects all normal recurring adjustments which, in the opinion of the Company, are necessary for a fair presentation of the balance sheets, statements of operations, and statements of cash flows, as of the dates and for the periods presented. The Notes to Financial Statements included in the Company's 1996 Annual Report on Form 10-K should be read in conjunction with these consolidated financial statements. Certain 1996 amounts have been reclassified to conform to the 1997 presentation. Note 2. Shareholders' Equity Stock Option Plans - The Company has received shareholder approval to decrease the number of common shares reserved for issuance from 3,900,000 to 1,900,000 under its existing stock option plan for key employees, directors and others. This reduction was effected on November 8, 1996. Authorized Shares and Reverse Stock Split - On November 8, 1996, the Company received stockholder authorization to decrease the number of authorized common shares from 55,000,000 to 11,000,000. On November 18, 1996, the Company effected a one-for-four reverse stock split of its common stock. The financial statements for all periods presented have been restated to reflect retroactive application of the decrease in authorized common shares and the one-for-four reverse stock split. On November 22, 1996, the Company closed a public offering of 1,000,000 shares of its common stock. The 1,000,000 shares were sold at an offering price of $7.00 per share, and the Company realized net offering proceeds of $6,236,000 after deducting certain offering expenses. On December 4, 1996, the Company's underwriter exercised its over-allotment option and the Company realized $46,800 from the exercise of options and warrants to acquire 150,000 shares of the Company's common stock by employees of the Company. The Company did not receive any proceeds from the exercise of the over-allotment option by the underwriter. Following the reverse stock split, the public offering, and the exercise of the options and warrants, the Company had 6,642,500 shares of its common stock issued and outstanding. - 4 - Item 2. Management's Discussion and Analysis of Financial Condition and Result of Operations - -------------------------------------------------------------------------------- Changes in Results of Operations: Six months ended January 31, 1997 compared to Six months ended January 31, 1996 Total revenues for the six months ended January 31, 1997, were $871,816 an increase of $160,341 or 22.5%, as compared to the six months ended January 31, 1996. Consulting fees for the six months ended January 31, 1997, were $278,602 a decrease of $120,856 or 30.3% as compared to the six months ended January 31, 1996, and represented 32.0% of total revenues. Product license and customer support fees for the six months ended January 31, 1997, were $362,578 an increase of $169,422 or 87.7%, as compared to the six months ended January 31, 1996. Revenues from the resale of purchased software for the six months ended January 31, 1997, were $230,636, an increase of $111,775 or 94.0%, as compared to the six months ended January 31, 1996. The decrease in consulting fees is the result of the Company's emphasis on development of software tools for the Year 2000 solution. Both the technical and marketing areas have spent significant manhours and expense toward this end. A contract to conduct a complete Year 2000 Impact Analysis was awarded to the Company by an insurance company. The Company is currently performing "pilot studies" for Year 2000 analysis for two New York City banks which may result in significant future revenue. Management is hopeful that significant license revenue from its Navig8 Year 2000 tool set will be realized from hardware vendors and system integrators beginning in the next quarter; however, there can be no assurance that this objective will be achieved. Management believes that increased revenues in the other product lines reflects the markets continued acceptance of the Company's products and services. During the six months ended January 31, 1997, sales to the Company's two largest customers were $91,550 and $87,868 representing 10.5% and 10.1% respectively of the Company's revenues. In comparison, sales to the Company's two largest customers were $190,638 and $128,074, representing 26.7% and 18.0% of total revenues for the six months ended January 31, 1996. The loss of a major customer could have a significant impact on the Company's financial performance in any given year. Cost of services for the six months ended January 31, 1997, was $177,936, an increase of $47,879 or 36.8%, as compared to the six months ended January 31, 1996. Cost of services as a percentage of revenues from both consulting fees and product license and customer support fees increased from 21.94% for the six months ended January 31, 1996, to 27.75% for the six months ended January 31, 1997. This increase resulted from increased employee costs. Three additional individuals were employed during the current six month period to market and support the Year 2000 software and prepare for accommodating the increased sales anticipated in the next quarter. Cost of software purchased for resale for the six months ended January 31, 1997, was $69,332 an increase of $26,870 or 63.3%, as compared to the six months ended January 31, 1996. This increase was directly related to the increased resale of purchased software. General and administrative expenses for the six months ended January 31, 1997, were $225,570, an increase of $101,238 or 81.4%, as compared to the six months ended January 31, 1996. This increase was principally due to increased employee costs. Marketing and advertising expenses for the six months ended January 31, 1997, were $191,658, an increase of $42,525 or 28.5%, as compared to the six months ended January 31, 1996. This increase was principally due to increased employee costs, attendance at several major Year 2000 trade shows, production of marketing materials, and direct mailing costs. - 5 - Research and development expenses for the six months ended January 31, 1997, were $20,529 an increase of $5,260 or 34.4%, as compared to the six months ended January 31, 1996. This increase resulted from increased activities to develop new products. Interest income for the six months ended January 31, 1997, was $98,794, an increase of 503.2%, as compared to the six months ended January 31, 1996. This increase resulted from an investment of the net proceeds of the Company's public offering that closed on November 22, 1996, in interest bearing instruments. As a result of these factors, net income for the six months ended January 31, 1997, was $285,585, an increase of $18,979 or 7.1%, as compared to the six months ended January 31, 1996. Capital Resources and Liquidity At January 31, 1997 as compared to at July 31, 1996, the Company's current assets increased 326.20% from $2,011,196 to $8,571,636 and the Company's liquidity as measured by cash and cash equivalents, increased by 467.19% from $1,407,026 to $7,980,468. During the same period, shareholders' equity increased 336.15% from $1,939,716 to $8,460,007 primarily as a result of the completion of the Company's public offering. Changes in Results of Operations: Three months ended January 31, 1997 compared to January 31, 1996 Total revenues for the three months ended January 31, 1997 were $258,888, a decrease of $112,140 or 30.2%, as compared to the three months ended January 31, 1996. Consulting fees for the three months ended January 31, 1997, were $84,899, a decrease of $148,081 or 63.6% as compared to the three months ended January 31, 1996, and represented 32.8% of total revenues. Product license and customer support fees for the three months ended January 31, 1997, were $96,948 an increase of $20,607 or 27%, as compared to the three months ended January 31, 1996. Revenues from the resale of purchased software for the three months ended January 31, 1997, were $77,041, an increase of $15,334 or 24.8%, as compared to the three months ended January 31, 1996. The decrease in consulting fees is the result of the Company's emphasis on development of software tools for the Year 2000 solution. Both the technical and marketing areas have spent significant manhours and expense toward this end. A contract to conduct a complete Year 2000 Impact Analysis was awarded to the Company by an insurance company. The Company is currently performing "pilot studies" for Year 2000 analysis for two New York City banks which may result in significant future revenue. Management is hopeful that significant license revenue from its Navig8 Year 2000 tool set will be realized from hardware vendors and system integrators beginning in the next quarter; however, there can be no assurance that this objective will be achieved. Management believes that increased revenues in the other product lines reflects the markets continued acceptance of the Company's products and services. During the three months ended January 31, 1997, sales to the Company's largest customer was $42,800, representing 16.5% of the Company's revenues respectively. In comparison, sales to a single customer represented 27.0% of total revenues for the three months ended January 31, 1996. The loss of a major customer could have a significant impact on the Company's financial performance in any given year. Cost of services for the three months ended January 31, 1997, was $98,462 an increase of $32,292 or 48.8%, as compared to the three months ended January 31, 1996. Cost of services as a percentage of revenues from both consulting fees and product license and customer support fees increased from 21.39% for the three months ended January 31, 1996 to 54.145% for the three months ended January 31, 1997. This increase resulted from increased employee costs. Three additional individuals were employed during the current six month period to market and support the Year 2000 software and prepare for accommodating the increased sales anticipated in the next quarter. - 6 - Cost of software purchased for resale for the three months ended January 31, 1997, was $25,172 an increase of $6,066 or 31.7%, as compared to the three months ended January 31, 1996. This increase was directly related to the increased resale of purchased software. General and administrative expenses for the three months ended January 31, 1997, were $110,180, an increase of $55,353 or 100.96%, as compared to the three months ended January 31, 1996. This increase was principally due to increased employee costs. Marketing and advertising expenses for the three months ended January 31, 1997, were $103,174, an increase of $30,211 or 41.4%, as compared to the three months ended January 31, 1996. This increase was principally due to increased employee costs, attendance at several major Year 2000 trade shows, production of marketing materials, and direct mailing costs. Research and development expenses for the quarter ended January 31, 1997, were $11,218, an increase of $3,731 or 49.83%, as compared to the three months ended January 31, 1996. This increase resulted from increased activities to develop new products. Interest income for the quarter ended January 31, 1997, was $79,024, an increase of 756.6%, as compared to the three months ended January 31, 1996. This increase resulted from both increased cash flows from operations and investment of the net proceeds of the Company's public offering that was closed on November 22, 1996, in interest bearing instruments. As a result of these factors, the Company had net income for the three months ended January 31, 1997, of $49,706, a decrease of $109,994 or 68.88%, as compared to the three months ended January 31, 1996. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- a) Exhibits: There are no exhibits for the six months ended January 31, 1997. b) Reports on Form 8-K: There were no reports on Form 8-K filed for the six months ended January 31, 1997. - 7 - 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. Date: March 14, 1997 -------------- ACCELR8 TECHNOLOGY CORPORATION /s/ Harry J. Fleury ----------------------------------------- Harry J. Fleury, President - 8 - EX-27 2
5 6-MOS 3-MOS JUL-31-1996 JUL-31-1996 JAN-31-1997 JAN-31-1997 7,980,468 0 0 0 332,094 0 0 0 0 0 8,571,635 0 81,000 0 0 0 8,941,626 0 336,896 0 144,723 0 0 0 0 0 8,247,126 0 212,881 0 8,941,626 0 871,816 258,888 871,816 258,888 0 0 0 0 685,025 348,206 0 0 0 0 285,585 (10,294) 0 60,000 186,791 (89,318) 0 0 0 0 0 0 285,585 49,706 .04 .01 .04 .01
-----END PRIVACY-ENHANCED MESSAGE-----