-----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, G1r+gnjoaNYENwWZC7cYllS9DHY11j+5CY0PZRQxiPN6RjT8Or8tBRV9Cy1HY2T2 23YtHxel7/v5mtUL9hxRXQ== 0001000096-98-000151.txt : 19980317 0001000096-98-000151.hdr.sgml : 19980317 ACCESSION NUMBER: 0001000096-98-000151 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980131 FILED AS OF DATE: 19980313 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: SEC FILE NUMBER: 000-11485 FILM NUMBER: 98565669 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 FORM 10-QSB 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, 1998 ----------------- [ ] 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 of (IRS Employer 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, 1998 -------------------------- ------------------------------- Common Stock, no par value 7,969,500 Accelr8 Technology Corporation INDEX ----- Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets - as of January 31, 1998 and July 31, 1997 1 Statements of Operations for the three months and six months ended January 31, 1998 and 1997 2 Statements of Cash Flows for the six months ended January 31, 1998 and 1997 3 Notes to 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- FORM 10-QSB
PART I. FINANCIAL INFORMATION Item 1. Financial Statements Accelr8 Technology Corporation Balance Sheets January 31, July 31, 1998 1997 ASSETS (Unaudited) (Audited) ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $ 9,285,990 $ 7,877,932 Accounts receivable 2,187,737 910,334 Prepaid expenses and other 135,476 26,800 Deferred tax assets 181,400 181,400 ------------ ------------ Total current assets 11,790,603 8,996,466 ------------ ------------ PROPERTY AND EQUIPMENT: Computer equipment 262,987 231,254 Furniture and fixtures 100,600 32,476 ------------ ------------ Total property and equipment 363,587 263,730 Less accumulated depreciation (129,833) (96,594) ------------ ------------ Net property and equipment 233,754 167,136 ------------ ------------ SOFTWARE DEVELOPMENT COSTS: Software development cost less accumulated amortization: 1998 - $1,004,682; 1997 - $875,046 835,777 506,322 ------------ ------------ INVESTMENTS 181,580 179,020 ------------ ------------ Total assets $ 13,041,714 $ 9,848,944 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 185,176 $ 97,499 Income taxes payable 708,394 47,394 Accrued liabilities 80,489 56,360 Deferred consulting revenue -- 46,252 Deferred maintenance revenue 162,540 103,878 ------------ ------------ Total current liabilities 1,136,599 351,383 ------------ ------------ LONG TERM LIABILITIES: Deferred tax liabilities 203,400 203,400 ------------ ------------ Other long-term liabilities 181,580 141,520 ------------ ------------ SHAREHOLDERS' EQUITY Common stock, no par value; 11,000,000 shares authorized; 7,969,500 shares issued and outstanding 8,579,477 8,218,677 Contributed capital 315,049 41,449 Retained earnings 2,899,209 892,515 Shares held for employee benefit (273,600) -- ------------ ------------ Shareholders' equity - net 11,520,135 9,152,641 ------------ ------------ TOTAL $ 13,041,714 $ 9,848,944 ============ ============ - 1 - FORM 10-QSB
Accelr8 Technology Corporation Statements of Operations (Unaudited) Three Months Ended Six Months Ended ------------------------------ ------------------------------ January 31, January 31, January 31, January 31, 1998 1997 1998 1997 ----------- ----------- ----------- ----------- Revenues: Consulting fees $ 131,986 $ 84,899 $ 285,300 $ 278,602 Product license and customer support fees 2,335,375 96,948 3,672,422 362,578 Resale of software purchased 137,360 77,041 276,887 230,636 ----------- ----------- ----------- ----------- Total Revenues 2,604,721 258,888 4,234,609 871,816 ----------- ----------- ----------- ----------- Costs and Expenses: Cost of services 216,084 98,462 351,159 177,936 Cost of software purchased for resale 33,309 25,172 77,541 69,332 General and administrative 203,197 110,180 424,562 225,570 Marketing and advertising 261,500 103,174 397,562 191,658 Research and development 29,268 11,218 64,330 20,529 ----------- ----------- ----------- ----------- Total Expenses 743,358 348,206 1,315,154 685,025 ----------- ----------- ----------- ----------- Income from operations 1,861,363 (89,318) 2,919,455 186,791 Interest income 116,135 79,024 221,239 98,794 ----------- ----------- ----------- ----------- Income (loss) before income taxes 1,977,498 (10,294) 3,140,694 285,585 Income tax (provision) benefit (839,000) 60,000 (1,134,000) 0 ----------- ----------- ----------- ----------- Net Income $ 1,138,498 $ 49,706 $ 2,006,694 $ 285,585 =========== =========== =========== =========== Weighted average shares outstanding - basic 7,833,389 5,970,840 7,849,965 5,731,674 =========== =========== =========== Net income per share - basic $ .15 $ .01 $ .26 $ .05 =========== =========== =========== =========== Weighted average shares outstanding - diluted 8,166,213 7,495,582 8,212,191 8,292,247 =========== =========== =========== =========== Net income per share - diluted $ .14 $ .01 $ .24 $ .03 =========== =========== =========== =========== - 2 - FORM 10-QSB
Accelr8 Technology Corporation Statements of Cash Flows (Unaudited) Six Months Ended ------------------------------------- January 31, January 31, 1998 1997 ----------- ----------- CASH FLOW FROM OPERATING ACTIVITIES: Net income $ 2,006,694 $ 285,585 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 162,875 54,746 Net change in assets and liabilities: Accounts receivable (1,277,403) 99,158 Prepaid expenses and other (108,676) (86,155) Accounts payable 87,677 61,752 Income taxes payable 661,000 (18,000) Accrued liabilities 24,129 101,974 Deferred consulting revenue (46,253) (48,642) Deferred maintenance revenue 58,663 7,221 Other long-term liabilities 40,060 -- ----------- ----------- Net cash provided by operating activities 1,608,766 457,639 ----------- ----------- CASH FLOW FROM INVESTING ACTIVITIES: Software development costs (459,090) (94,577) Purchase of computer equipment (31,733) (21,879) Purchase of office furniture and equipment (68,124) -- Increase in investments (2,561) (2,448) ----------- ----------- Net cash used in investing activities (561,508) (118,904) ----------- ----------- CASH FLOW FROM FINANCING ACTIVITIES: Net proceeds provided from sale of common stock 360,800 6,234,707 ----------- ----------- Net increase in cash and cash equivalents 1,408,058 6,573,442 Cash and equivalents, beginning of period 7,877,932 1,407,026 ----------- ----------- Cash and equivalents, ending of period $ 9,285,990 $ 7,980,468 =========== =========== - 3 - FORM 10-QSB
Accelr8 Technology Corporation Notes to Financial Statements For the six months ended January 31, 1998 and 1997 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 1997 Annual Report on Form 10-K should be read in conjunction with these financial statements. Effective for the Company's financial statements for the period ended January 31, 1998, the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No. 128"), which replaces the presentation of primary earnings per share ("EPS") and fully diluted EPS with a presentation of basic EPS and diluted EPS, respectively. Basic EPS excludes dilution and is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS assumes the issuance of common stock for potentially dilutive equivalent shares outstanding. All prior-period EPS data have been restated. Note 2. Shareholders' Equity During the period ended January 31, 1998, the Company issued 137,000 shares of common stock resulting from the exercise of options for $360,800. In August 1997, the options and warrants held by the Chairman of the Board were exercised and placed into the "Rabbi" Trust discussed in Note 6 to the Company's fiscal 1997 financial statements. Such shares are issuable upon the occurrence of retirement, death or termination of the Chairman over a ten-year period after such occurrence. Because the Company owns the assets of the "Rabbi" Trust, the shares of the Company stock in the "Rabbi" Trust have been treated as treasury stock for financial reporting purposes. - 4 - FORM 10-QSB Item 2. Management's Discussion and Analysis of Financial Condition and Result of Operations - -------------------------------------------------------------------------------- Changes in Results of Operations: Six months ended January 31, 1998 compared to Six months ended January 31, 1997 Total revenues for the six months ended January 31, 1998, were $4,234,609, an increase of $3,362,793 or 386%, as compared to the six months ended January 31, 1997. Consulting fees for the six months ended January 31, 1998, were $285,300, an increase of $6,698 or 2.4%, as compared to the six months ended January 31, 1997, and represented 6.7% of total revenues. Product license and customer support fees for the six months ended January 31, 1998, were $3,672,422, an increase of $3,309,844 or 913%, as compared to the six months ended January 31, 1997, and represented 86.7% of total revenues. Revenues from the resale of purchased software for the six months ended January 31, 1998, were $276,887, an increase of $46,251 or 20.0%, as compared to the six months ended January 31, 1997, and represented 6.5% of total revenues. The small increase in consulting fees is the result of the Company's emphasis on marketing of software tools for the Year 2000 solution. The substantial increase in product license and support fees results from the market's increasing acceptance of the Company's Year 2000 tools and services as well as a three-year worldwide license agreement for the Company's Year 2000 tools with Digital Equipment Company. During the six months ended January 31, 1998, sales to the Company's four largest customers were $1,000,000; $604,840; $465,000; and $454,055 representing 23.6%; 14.3%; 11.0%; and 10.7%, respectively, of the Company's revenues. In comparison, sales to the Company's two largest customers were $91,550 and $87,868, representing 10.5% and 10.1% of total revenues for the six months ended January 31, 1997. 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, 1998, was $351,159, an increase of $173,223 or 97.4%, as compared to the six months ended January 31, 1997. Cost of services as a percentage of revenues from both consulting fees and product license and customer support fees decreased from 27.8% for the six months ended January 31, 1997, to 8.9% for the six months ended January 31, 1998. This decrease is the result of most sales being in product license and support which are less costly to provide. Cost of software purchased for resale for the six months ended January 31, 1998, was $77,541 an increase of $8,209 or 11.8%, as compared to the six months ended January 31, 1997. This increase was directly related to the increased resale of purchased software. General and administrative expenses for the six months ended January 31, 1998, were $424,562, an increase of $198,992 or 88.2%, as compared to the six months ended January 31, 1997. This increase was principally due to increased employee benefit costs which resulted from new hires, additional office space and costs associated with building infrastructure. Marketing and advertising expenses for the six months ended January 31, 1998, were $397,562, an increase of $205,904 or 107.4%, as compared to the six months ended January 31, 1997. This increase was principally due to increased employee costs and advertising the Company's Year 2000 tools in several trade publications as well as new product literature and web site expense. Research and development expenses for the six months ended January 31, 1998, were $64,330, an increase of $43,801 or 213.4%, as compared to the six months ended January 31, 1997. This increase resulted from increased activities to develop new products. - 5 - FORM 10-QSB Interest income for the six months ended January 31, 1998, was $221,239, an increase of $122,445, as compared to the six months ended January 31, 1997. This increase resulted from a greater amount of cash earning interest during the period. As a result of these factors, net income for the six months ended January 31, 1998, was $2,006,694, an increase of $1,721,109 or 603%, as compared to the six months ended January 31, 1997. Capital Resources and Liquidity At January 31, 1998, as compared to at July 31, 1997, the Company's current assets increased 31.1% from $8,996,466 to $11,790,603 and the Company's liquidity, as measured by cash and cash equivalents, increased by 17.9% from $7,877,932 to $9,285,990. During the same period, shareholders' equity increased 25.9% from $9,152,641 to $11,520,135 primarily as a result of net income for the period. Changes in Results of Operations: Three months ended January 31, 1998 compared to three monts ended January 31, 1997 Total revenues for the three months ended January 31, 1998 were $2,604,721, an increase of $2,345,833 or 906%, as compared to the three months ended January 31, 1997. Consulting fees for the three months ended January 31, 1998, were $131,986, an increase of $47,087 or 55.5%, as compared to the three months ended January 31, 1997, and represented 5.1% of total revenues. Product license and customer support fees for the three months ended January 31, 1998, were $2,335,375, an increase of $2,238,427 or 2,309%, as compared to the three months ended January 31, 1997, and represented 89.7% of total revenue. Revenues from the resale of purchased software for the three months ended January 31, 1998, were $137,360, an increase of $60,319 or 78.3%, as compared to the three months ended January 31, 1997, and represented 5.3% of total revenue. The increase in consulting fees is the result of assisting customers with analyzing and correcting their Year 2000 problem. The substantial increase in product and license support fees results from the market's increasing acceptance of the Company's Year 2000 tools and services as well as a three-year worldwide license agreement for the Company's Year 2000 tools with Digital Equipment Company. During the three months ended January 31, 1998, sales to the Company's largest customers were $1,000,000 and $465,000, representing 38.4% and 17.9% of the Company's revenues, respectively. In comparison, sales to a single customer represented 16.5% of total revenues for the three months ended January 31, 1997. 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, 1998, was $216,084, an increase of $117,622 or 120%, as compared to the three months ended January 31, 1997. Cost of services as a percentage of revenues from both consulting fees and product license and customer support fees decreased from 54.1% for the three months ended January 31, 1997 to 8.8% for the three months ended January 31, 1998. This decrease is the result of most sales being in product licenses and support which are less costly to provide. Cost of software purchased for resale for the three months ended January 31, 1998, was $33,309, an increase of $8,137 or 32.3%, as compared to the three months ended January 31, 1997. This increase was directly related to the increased resale of purchased software. General and administrative expenses for the three months ended January 31, 1998, were $203,197, an increase of $93,017 or 84.4%, as compared to the three months ended January 31, 1997. This increase was principally due to increased employee benefit costs which resulted from new hires, additional office space, and costs associated with building infrastructure. - 6 - FORM 10-QSB Marketing and advertising expenses for the three months ended January 31, 1998, were $261,500, an increase of $158,326 or 154%, as compared to the three months ended January 31, 1997. This increase was principally due to increased employee costs and advertising the Company's Year 2000 tools in several trade publications, as well as new product literature and web site expense. Research and development expenses for the quarter ended January 31, 1998, were $29,268, an increase of $18,050 or 161%, as compared to the three months ended January 31, 1997. This increase resulted from increased activities to develop new products. Interest income for the quarter ended January 31, 1998, was $116,135, an increase of 47.0%, as compared to the three months ended January 31, 1997. This increase resulted from a greater amount of cash earning interest during the period. As a result of these factors, the Company had net income for the three months ended January 31, 1998, of $1,138,498, an increase of $1,088,792 or 2,191%, as compared to the three months ended January 31, 1997. 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, 1998. b) Reports on Form 8-K: There were no reports on Form 8-K filed for the six months ended January 31, 1998. - 7 - FORM 10-QSB 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 12, 1998 -------------- ACCELR8 TECHNOLOGY CORPORATION /s/ Thomas V. Geimer --------------------------------------------- Thomas V. Geimer, Principal Financial Officer - 8 - FORM 10-QSB EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q FOR PERIOD ENDED JANUARY 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS 3-MOS JUL-31-1997 JUL-31-1996 NOV-01-1997 NOV-01-1996 JAN-31-1998 JAN-31-1997 9,285,990 0 0 0 2,187,737 0 0 0 0 0 11,790,603 0 363,587 0 129,833 0 13,041,714 0 1,136,599 0 384,980 0 0 0 0 0 8,894,526 0 2,625,609 0 13,041,714 0 0 0 2,604,721 258,888 0 0 743,358 348,206 0 0 0 0 (116,135) (79,024) 1,977,498 (10,294) 839,000 (60,000) 1,138,498 49,706 0 0 0 0 0 0 1,138,498 49,706 .15 .01 .14 .01
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