-----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, SC/arqOqTQZLqX5aCbHStclBtrBqxIzp5Bbfv0e/lY2l9AnIWU92hnT7x2a3DnMH f5V7V2CPVMpmbvoZRI2RAg== 0000910680-96-000356.txt : 19961120 0000910680-96-000356.hdr.sgml : 19961120 ACCESSION NUMBER: 0000910680-96-000356 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961118 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICROFRAME INC CENTRAL INDEX KEY: 0000754813 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 222413505 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-13117 FILM NUMBER: 96668170 BUSINESS ADDRESS: STREET 1: 21 MERIDIAN RD CITY: EDISON STATE: NJ ZIP: 08820 BUSINESS PHONE: 2014944440 MAIL ADDRESS: STREET 1: 21 MERIDIAN RD CITY: EDISON STATE: NJ ZIP: 08820 10QSB/A 1 AMENDMENT NO.1 TO FORM 10-QSB QE 9/30/96 U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB/A (Amendment No. 1) [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1996 or [_] Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from ______ to _______ Commission file number 0-13117 MICROFRAME, INC. ----------------------------------------------------------------- (Exact Name of Small Business Issuer as Specified in Its Charter) New Jersey 22-2413505 - ------------------------------- ------------- (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 21 Meridian Road, Edison, New Jersey 08820 ------------------------------------------ (Address of Principal Executive Offices) (908) 494-4440 ------------------------------------------ (Issuer's Telephone Number, Including Area Code) 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 [_] There were 4,819,142 shares of Common Stock outstanding at November 6, 1996 Transitional Small Business Disclosure Format: Yes [_} No [X] INTRODUCTION This Amendment is being filed (i) to correct the dollar amount of Inventory for the period ended September 30, 1996 and (ii) to reflect all of the exhibits being filed with this report. PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Information. The condensed consolidated financial statements included herein have been prepared by the registrant without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Although the registrant believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the registrant's latest Annual Report on Form 10-KSB. -2- MicroFrame, Inc. and Subsidiary Condensed Consolidated Balance Sheets - -------------------------------------------------------------------------------- (unaudited)
September 30, March 31, ASSETS 1996 1996 ------------ ------------ Current assets Cash and cash equivalents $ 729,096 $ 48,302 Accounts receivable, less allowance for doubtful accounts of $100,000 1,236,606 1,540,561 Inventory 1,224,619 1,084,870 Prepaid expenses and other current assets 122,641 77,426 ------------ ------------ Total current assets 3,312,962 2,751,159 Property and equipment at cost, net 382,004 409,866 Capitalized software, less accumulated amortization of $725,084 and $649,332, respectively 316,398 266,319 Goodwill, less accumulated amortization of $11,085 and $5,766, respectively 90,525 95,844 Security deposits 34,893 34,983 ------------ ------------ Total assets $ 4,136,782 $ 3,558,171 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Bank borrowings $ 40,433 $ 538,754 Accounts payable 255,186 395,619 Accrued payroll and related liabilities 235,624 285,651 Deferred income 247,330 258,856 Other current liabilities 330,135 435,215 ------------ ------------ Total current liabilities 1,108,708 1,914,095 ------------ ------------ Commitments and contingencies -- -- Long-term debt 52,073 72,833 Stockholders' equity Common stock - par value $.001 per share; authorized 50,000,000 shares, issued 4,819,542 shares and outstanding 4,819,142 shares at September 30, 1996; issued 3,718,075 shares and outstanding 3,717,675 shares at March 31, 1996 4,819 3,718 Preferred stock - par value $10 per share; authorized 200,000 shares, none issued -- -- Additional paid-in capital 6,187,756 4,856,924 Accumulated deficit (3,212,574) (3,285,399) ------------ ------------ 2,980,001 1,575,243 Less-Treasury stock, 400 shares, at cost (4,000) (4,000) ------------ ------------ Total stockholders' equity 2,976,001 1,571,243 ------------ ------------ Total liabilities and stockholders' equity $ 4,136,782 $ 3,558,171 ============ ============
The accompanying notes are an integral part of these condensed consolidated financial statements -3- MicroFrame, Inc. and Subsidiary Condensed Consolidated Statements of Operations - -------------------------------------------------------------------------------- (unaudited)
Six Months Ended Three Months Ended September 30, September 30, -------------------------- -------------------------- 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Net sales $ 3,437,511 $ 2,606,940 $ 1,661,176 $ 742,598 Cost of sales 1,253,890 1,165,874 648,831 425,027 ----------- ----------- ----------- ----------- Gross Margin 2,183,621 1,441,066 1,012,345 317,571 Research and development expenses 428,010 294,050 204,060 165,383 Selling, general and administrative expenses 1,683,019 1,906,137 779,724 947,624 ----------- ----------- ----------- ----------- Income (loss) from operations 72,592 (759,121) 28,561 (795,438) Interest income 21,101 3,062 10,833 244 Interest expense (20,868) (1,694) (6,669) (1,694) ----------- ----------- ----------- ----------- Income (loss) before income tax benefit 72,825 (757,753) 32,725 (796,888) Income tax benefit 0 0 0 (14,700) ----------- ----------- ----------- ----------- Net income (loss) $ 72,825 $ (757,753) $ 32,725 $ (782,188) =========== =========== =========== =========== Per share data Net income (loss) per share $ 0.02 $ (0.21) $ 0.01 $ (0.21) ----------- ----------- ----------- ----------- Weighted average number of common shares outstanding 4,680,003 3,689,773 4,823,524 3,692,321 ----------- ----------- ----------- -----------
The accompanying notes are an integral part of these condensed consolidated financial statements -4- MicroFrame, Inc. and Subsidiary Condensed Consolidated Statements of Cash Flows - -------------------------------------------------------------------------------- (unaudited)
Six Months Ended September 30, ------------- 1996 1995 ----------- ----------- Cash flows from operating activities Net income $ 72,825 $ (757,753) Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 177,845 150,006 Provision for bad debts 31,646 25,145 Provision for inventory obsolescence 17,500 22,877 (Increase) decrease in Accounts receivable 272,310 593,228 Inventory (157,249) (527,608) Prepaid expenses and other current assets (45,215) (35,017) Security deposits 90 (5,521) Increase (decrease) in Accounts payable (140,433) 65,014 Accrued payroll and related liabilities (50,027) (116,867) Deferred income (11,526) 12,456 Other current liabilities (105,080) 75,628 ----------- ----------- Net cash provided (used) by operating activities 62,686 (498,412) ----------- ----------- Cash flows from investing activities Capital expenditures (68,913) (187,238) Capitalized software (125,831) (149,818) Acquisition of European Business Associates 0 (39,736) ----------- ----------- Net cash used in investing activities (194,744) (376,792) ----------- ----------- Cash flows from financing activities Proceeds of short-term borrowings 0 400,000 Repayments of debt (519,081) 0 Issuance of common stock 1,331,933 4,168 ----------- ----------- Net cash provided by financing activities 812,852 404,168 ----------- ----------- Net increase (decrease) in cash and cash equivalents 680,794 (471,036) Cash and cash equivalents - beginning of period 48,302 490,261 ----------- ----------- Cash and cash equivalents - end of period $ 729,096 $ 19,225 =========== ===========
The accompanying notes are an integral part of these condensed consolidated financial statements -5- MICROFRAME, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (Unaudited) Note 1 - Condensed Consolidated Financial Statements: - ----------------------------------------------------- The condensed consolidated balance sheets as of September 30, 1996 and March 31, 1996, the condensed consolidated statements of operations for the six month periods ended September 30, 1996 and 1995 and the condensed consolidated statements of cash flows for the six month periods then ended have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 1996 and 1995 have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto as of March 31, 1996 and for the year then ended. Note 2 - Inventory: - ------------------- Inventory consists of the following: September 30, 1996 March 31, 1996 ------------------ -------------- Raw materials $ 843,821 $ 676,120 Work in process 333,267 367,820 Finished goods 47,531 40,930 ---------- ---------- Total $1,224,619 $1,084,870 ========== ========== -6- MICROFRAME, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (Unaudited) Note 3 - Stockholders' Equity: - ------------------------------ During the six months ended September 30, 1996, stockholders' equity changed for the following items: Net income $ 72,825 Issuance of common stock of $1,331,933 In April, 1996, the Company sold 860,000 shares of common stock to unrelated investors, at $1.25 per share and received net proceeds of approximately $1,030,000. In conjunction with this sale, warrants to purchase 860,000 shares of common stock with an exercise price of $1.50 and warrants to purchase an additional 860,000 shares of common stock with an exercise price of $2.00 were issued. These warrants expire in April, 2000. In addition, the Company sold 241,467 shares of common stock at $1.25 per share to four current shareholders of record who held the contractual right to maintain their share of ownership. The Company received net proceeds of approximately $300,000. In conjunction with this sale, warrants to purchase 241,467 shares of common stock with an exercise price of $1.50 and warrants to purchase an additional 241,467 shares of common stock with an exercise price of $2.00 were issued. These warrants expire in April, 2000. Note 4 - Net Income Per Share: - ------------------------------ The computation of earnings per common and common equivalent share is based upon the weighted average number of common shares outstanding during the period plus (in periods in which they have a dilutive effect) the effect of common stock equivalents, comprised of outstanding stock options and warrants. Fully diluted earnings per share also reflect additional dilution related to outstanding stock options due to the use of the market price at the end of the period, when higher than the average price for the period. -7- MICROFRAME, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (Unaudited) Note 5 - Contingent Liabilities - ------------------------------- The Company is involved in proceedings with respect to certain sales tax matters. Total amounts included in other current liabilities related to these proceedings is $100,000 at September 30, 1996. In the opinion of management of the Company, amounts accrued for assessments in connection with sales tax are adequate and ultimate resolution of these matters will not have a material effect on the Company's consolidated financial position, results of operations or cash flows. Note 6 - Stock-Based Compensation - --------------------------------- In fiscal 1997, the Company will be required to adopt the provisions of Statement of Financial Standards No. 123, "Accounting for Stock-Based Compensation". This Statement requires companies to estimate the fair value of common stock, stock options, or other equity instruments ("Equity Instruments") issued to employees using pricing models which take into account various factors such as current price of the common stock, volatility and expected life of the Equity Instrument. The Standard permits companies to either provide pro forma footnote disclosure, or to adjust operating results, for the amortization of the estimated value of the Equity Instrument over the vesting period of the Equity Instrument. The Company has elected to account for stock options under Accounting Principles Board Opinion No. 15 and will disclose certain pro forma information beginning in fiscal 1997. -8- PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits: * 3.2 By-Laws of the Company. * 10.21 1994 Stock Option Plan (as amended on August 16, 1996). * 10.36 First Amendment to Consulting Agreement dated as of August 1, 1996 between David I. Gould and the Company. * 27.1 Financial Data Schedule. (b) Reports on Form 8-K: None. - ------------------------------------------- * Previously filed with the Company's Form 10-QSB for the quarter ended September 30, 1996. -9- SIGNATURES ---------- In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 14, 1996 MICROFRAME, INC. /s/ Stephen B. Gray ------------------------------ Stephen B. Gray, President and Chief Operating Officer /s/ Mark A. Simmons ------------------------------ Mark A. Simmons, Chief Financial Officer (Principal Financial Officer) -10- -----END PRIVACY-ENHANCED MESSAGE-----