-----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, QCJ+HL8c9ChwjTvmmuXbWgQcrhH5Yth2+juyONUsPpROJQHjmJCdR3N3JjIqx6RE 1QnI0JUsquhl7tq4XNgGSg== 0000932384-98-000138.txt : 19980522 0000932384-98-000138.hdr.sgml : 19980522 ACCESSION NUMBER: 0000932384-98-000138 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19980521 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DCX INC CENTRAL INDEX KEY: 0000783284 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 840868815 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10KSB/A SEC ACT: SEC FILE NUMBER: 000-14273 FILM NUMBER: 98629406 BUSINESS ADDRESS: STREET 1: 200 WEST FORSYTH STREET STREET 2: SUITE 800 CITY: JACKSONVILLE STATE: FL ZIP: 32202 BUSINESS PHONE: 904-346-1319 MAIL ADDRESS: STREET 1: PO BOX 569 STREET 2: PO BOX 569 CITY: FRANKTOWN STATE: CO ZIP: 80116 FORMER COMPANY: FORMER CONFORMED NAME: DOUGLAS COUNTY INDUSTRIES INC DATE OF NAME CHANGE: 19860109 10KSB/A 1 FORM 10KSB, AMENDMENT NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-KSB/A (Mark One) [X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended September 30, 1997 or [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the transition period from to ------------ ------------- Commission file number 0-14273 DCX, INC. ----------------------------- (Name of small business issuer) Colorado 84-0868815 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1597 Cole Boulevard, Suite 300B, Golden, Colorado 80401 (Address of principal executive offices) (Zip code) Issuer's telephone number (303) 274-8708 Securities registered pursuant to Section 12(g) of the Exchange Act: Title of each class Common Stock, no par value Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities and 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 Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ] The issuer's revenues for its most recent fiscal year were $71,098.03. As of December 31, 1997, the aggregate market value of the shares of the issuer's voting stock held by non-affiliates of the issuer based on the average of closing bid and asked prices of the Common Stock as reported on the NASDAQ Small Cap Market sm, was approximately $5,485,775. As of December 31, 1997, the issuer had outstanding 9,010,776 shares of Common Stock. Transitional Small Business Disclosure Format: Yes [ ] ; No [ X ] PART II Item 8- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. This Amendment No. 1 to Form 10-KSB for the fiscal year ending September 30, 1997, is filed to report certain changes to the Company's financial statements for fiscal 1997, attached hereto. PART IV Item 13- EXHIBITS AND REPORTS ON FORM 8-K (a) The following financial statements, schedules and exhibits are filed as a part of this report: 1. Financial Statements 2. Exhibit Index The following exhibits are filed as part of this Report:
Exhibit Number Exhibit Page - -------- --------- ------ Note 6 2.1a Acquisition Agreement between DCX, Inc. and PlanGraphics, Inc. Note 7 2.1b Asset Purchase Agreement between DCX, Inc. DCX-CHOL Enterprises, Inc. Note 8 3.1 Bylaws of DCX, Inc. Note 1 16 3.2a Amended and Restated Articles of Incorpor- ation of DCX, Inc., dated July 8, 1991. Note 2 3.2b Articles of Amendment to the Articles of Incorporation of DCX, Inc., dated November 6, 1996 Note 4 3.2c Articles of Amendment to the Articles of Incorporation of DCX, Inc., dated July 30, 1997 Note 9 4.1 Specimen Stock Certificate Note 1 4.2 DCX 1991 Stock Option Plan Note 5 4.3 DCX 1995 Stock Incentive Plan Note 5 4.4 DCX, Inc. Equity Incentive Plan Note 12 4.4 Warrant, dated January 15, 1997 issued to Transition Partners Limited. Note 3 4.5 Warrant, dated October 15, 1997, issued to Transition Partners Limited. Note 3 4.6 Warrant, dated January 15, 1997, issued to Copeland Consulting Group, Inc. Note 3 4.7 Warrant, dated October 15, 1997, issued to Copeland Consulting Group, Inc. Note 3 4.8 Warrant, dated June 19, 1997, issued to Spencer Edwards, Inc. Note 3 4.9 Warrant, dated November 8, 1996, issued to Coretech, Ltd. Note 3 4.10 Warrant, dated October 10, 1997, issued to SKB Corporation. Note 3 4.11 Warrant, dated October 24, 1997, issued to Gerald Alexander. Note 3 4.12 Form of Option Agreement, dated July 31, 1997, between the Company and the Pension Fund of Steven R. Perles. Note 10 4.13 Form of Option Agreement, dated July 31, 1997, between the Company and Hamilton & Faatz, P.C. Note 10 10.1 Executive Employment Agreement dated March 28, 1997 between the Company and G. Stephen Carreker. Note 11 10.2 Executive Employment Agreement dated March 28, 1997 between the Company and Frederick G. Beisser. Note 11 10.3 Executive Employment Agreement dated March 28, 1997 between the Company and D. Scott McReynolds. Note 11 10.4 Executive Employment Agreement dated September 22, 1997 between the Company and John C. Antenucci. Note 12 10.5 Executive Employment Agreement dated September 22, 1997 between the Company and J. Gary Reed. Note 12 17 21.1 List of Subsidiaries Page 18 27.1 Financial Data Schedule Note 12
NOTE: 1. Incorporated by reference from Registration Statements on Form S-18, file no. 33-1484. 2. Incorporated by Reference from the definitive Proxy Statement, dated May 3, 1991 3. Incorporated by Reference from the Company's Registration Statement on Form S-3 (Registration No. 333-39775) filed with the Commission on November 7, 1997. 4. Incorporated by Reference from Form 8K, dated November 12, 1996. 5. Incorporated by Reference from Form S-8, dated September 29, 1996 6. Incorporated by Reference from Form 10-Q for June 30, 1996, dated August 1, 1996. The agreement was terminated prior to completion. 7. Incorporated by Reference from Form 8-K, dated September 22, 1997. 8. Incorporated by Reference from Form 8-K, dated October 8, 1997. 9. Incorporated by Reference from Form 8-K, dated July 31, 1997. 10. Incorporated by Reference from Form S-8 (Registration No. 333-35293) dated September 5, 1997. 11. Incorporated by Reference from Form 10-QSB for the Quarter ended March 31, 1997. 12. Incorporated by Reference from Form 10-KSB for the fiscal year ended September 30, 1997. (b) Reports on Form 8-K. Following reports were filed on Form 8-K by the Company during fourth quarter of the fiscal year covered by this annual report. 1. Current Report on Form 8-K, dated July 31, 1997 reporting sale of convertible preferred stock under Regulation S. 2. Current Report on Form 8-K, dated August 13, 1997 reporting definitive agreement between the Company and PlanGraphics, Inc. 3. Current Report on Form 8-K as, dated September 9, 1997, reporting sale of convertible preferred stock pursuant to Regulation S. 4. Current Report on Form 8-K as amended, dated September 22, 1997, reporting completion of an acquisition agreement between the Company and PlanGraphics, Inc. Reports filed on Form 8-K subsequent to the end of the fiscal year: 1. Current Report on Form 8-K as amended, dated October 8, 1997, reporting divestiture of certain manufacturing assets to DCX-CHOL Enterprises, Inc. 2. Current Report on Form 8-K, dated October 14, 1997, reporting sale of convertible preferred stock pursuant to Regulation S. 3. Current Report on Form 8-K, dated November 3, 1997, reporting appointment of additional members to the Company's Board of Directors. 4. Current Report on Form 8-K/A, dated September 22, 1997. 5. Current Report on Form 8-K/A, dated October 8, 1997. 18 SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to Form 10-KSB to be signed on its behalf by the undersigned, thereunto duly authorized. DCX, INC. Date: 5/20/98 By: /s/ Robin Vail ----------------------------- Robin Vail, Chief Financial Officer 19 Exhibit 1 DCX, Inc. and Subsidiaries Index to Consolidated Financial Statements ================================================================================ Report of Independent Certified Public Accountants F-2 Consolidated Balance Sheet as of September 30, 1997 F-3 - F-4 Consolidated Statements of Operations for the Years Ended September 30, 1997 and 1996 F-5 Consolidated Statements of Stockholders' Equity for the Years Ended September 30, 1997 and 1996 F-6 - F-7 Consolidated Statements of Cash Flows for the Years Ended September 30, 1997 and 1996 F-8 Summary of Accounting Policies F-9 - F-13 Notes to Consolidated Financial Statements F-14 - F-28 F-1 Report of Independent Certified Public Accountants The Board of Directors and Stockholders DCX, Inc. and Subsidiaries Golden, Colorado We have audited the accompanying consolidated balance sheet of DCX, Inc. and subsidiaries as of September 30, 1997 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the two years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of DCX, Inc. and subsidiaries as of September 30, 1997 and the results of their operations and their cash flows for each of the two years then ended, in conformity with generally accepted accounting principles. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, has negative working capital, and may not be able to meet the payment of certain payables within the contractual terms of the agreements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /S/ BDO SEIDMAN, LLP Denver, Colorado January 9, 1998 F-2 DCX, Inc. and Subsidiaries Consolidated Balance Sheet ================================================================================ September 30, 1997 - -------------------------------------------------------------------------------- Assets (Note 5) Current: Cash and cash equivalents $ 582,326 Accounts receivable, less allowance of $188,161 for possible losses (Notes 2 and 4) 2,236,568 Amount due from sale of assets (Note 3) 1,100,000 Prepaid expenses and other 201,932 - -------------------------------------------------------------------------------- Total current assets 4,120,826 - -------------------------------------------------------------------------------- Property and equipment (Note 5): Land and building under capital lease 1,866,667 Land and building held for rental (Note 12) 1,415,058 Equipment and furniture 447,003 Leased assets 183,512 - -------------------------------------------------------------------------------- Less accumulated depreciation 429,597 - -------------------------------------------------------------------------------- Net property and equipment 3,482,643 - -------------------------------------------------------------------------------- Other assets: Goodwill 5,517,872 Capitalized software 258,855 Other 190,604 - -------------------------------------------------------------------------------- Total other assets 5,967,331 - -------------------------------------------------------------------------------- $13,570,800 ================================================================================ See accompanying summary of accounting policies and notes to consolidated financial statements. F-3 DCX, Inc. and Subsidiaries Consolidated Balance Sheet ================================================================================ September 30, 1997 - -------------------------------------------------------------------------------- Liabilities and Stockholders' Equity Current: Checks written against future deposits $ 269,587 Accounts payable 1,351,484 Accrued expenses 1,054,660 Deferred revenue 189,354 Notes payable - current portion (Note 5) 854,060 Notes payable - related party (Note 5) 158,928 Obligations under capital leases - current (Note 8) 134,794 Accrued litigation settlement (Note 6) 521,000 - -------------------------------------------------------------------------------- Total current liabilities 4,533,867 Notes payable, less current maturities (Note 5) 576,000 Notes payable - related party - non-current (Note 5) 446,256 Obligations under capital leases (Note 8) 2,037,673 - -------------------------------------------------------------------------------- Total liabilities 7,593,796 - -------------------------------------------------------------------------------- Contingencies (Notes 1, 6 and 8) Stockholders' equity: Preferred stock, $.001 par value, 20,000,000 shares authorized, 1,650 shares issued or outstanding (Note 9) 2 Common stock, no par value, 2,000,000,000 shares authorized 7,736,380, shares issued and outstanding (Note 9) 9,741,501 Additional paid-in capital 3,550,869 Accumulated deficit (7,315,368) - -------------------------------------------------------------------------------- Total stockholders' equity 5,977,004 - -------------------------------------------------------------------------------- $ 13,570,800 ================================================================================ See accompanying summary of accounting policies and notes to consolidated financial statements. F-4 DCX, Inc. and Subsidiaries Consolidated Statements of Operations ================================================================================ Years Ended September 30, 1997 1996 - -------------------------------------------------------------------------------- Revenues (Note 2) $ 71,098 $ -- Cost and expenses: Salaries and employee benefits 779,934 140,934 Direct contract costs 16,032 -- Other operating expenses 799,556 491,548 - -------------------------------------------------------------------------------- Total costs and expenses 1,595,522 632,482 - -------------------------------------------------------------------------------- Operating loss (1,524,424) (632,482) Other income (expense): Other income (Note 5) 19,603 25,936 Interest expense (126,263) (155,757) Life insurance proceeds (Note 14) 400,000 -- - -------------------------------------------------------------------------------- Total other income (expense) 293,340 (129,281) - -------------------------------------------------------------------------------- Loss before extraordinary gain (1,231,084) (762,303) Extraordinary gain on settlement of debt 278,019 82,826 - -------------------------------------------------------------------------------- Net loss from continuing operations (953,065) (679,477) Loss from discontinued operations (Note 3) (1,598,313) (374,177) - -------------------------------------------------------------------------------- Net loss $(2,551,378) $(1,053,654) - -------------------------------------------------------------------------------- Preferred stock dividends $ 9,674 $ -- Deemed preferred stock dividends $ 892,592 $ -- - -------------------------------------------------------------------------------- Net loss attributable to common stockholders $(3,453,644) $(1,053,654) Loss per common share: Loss before extraordinary item $ (.26) $ (.18) Extraordinary item $ .06 $ .02 Loss from continuing operations $ (.20) $ (.16) Loss from discontinued operations $ (.33) $ (.09) Loss attributable to common stockholders $ (.72) $ (.25) - -------------------------------------------------------------------------------- Weighted average number of shares of common stock outstanding 4,772,020 4,287,437 ================================================================================ See accompanying summary of accounting policies and notes to consolidated financial statements. F-5
DCX, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity ==================================================================================== Series A Years ended Preferred Stock Common Stock September 30, ------------------------- ------------------------ 1997 and 1996 Shares Amount Shares Amount - ------------------------------------------------------------------------------------ Balance, October 1, 1995 -- -- 4,115,621 $ 4,765,540 Sale of stock through options exercised -- -- 85,000 61,094 Stock issued for services -- -- 233,488 233,723 Net loss for the year -- -- -- -- - ------------------------------------------------------------------------------------ Balance, September 30, 1996 -- -- 4,434,109 5,060,357 Sale of stock through options exercised -- -- 171,394 231,804 Issuance of preferred stock (net of offering costs of $312,000) 2,150 2 -- -- Conversion of preferred stock into common stock (500) -- 499,732 450,000 Stock issued in acquisition -- -- 2,631,145 3,999,340 Stock warrants issued for services -- -- -- -- Stock options issued for: Acquisitions -- -- -- -- Services -- -- -- -- Forgiveness of subscrip- tion receivable -- -- -- -- Deemed dividend on preferred stock -- -- -- -- Deemed dividend on warrants issued in connection with preferred stock -- -- -- -- Net loss for the year -- -- -- -- - ------------------------------------------------------------------------------------ Balance, September 30, 1997 1,650 $ 2 7,736,380 $ 9,741,501 ==================================================================================== See accompanying summary of accounting policies and notes to consolidated financial statements. F-6 DCX, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity Continued ====================================================================================== Additional Paid-in Subscriptions Accumulated Capital Receivable Deficit Total - -------------------------------------------------------------------------------------- Balance, October 1, 1995 $ 329,384 $ (179,000) $(2,808,070) $ 2,107,854 Sale of stock through options exercised -- -- -- 61,094 Stock issued for services -- -- -- 233,723 Net loss for the year -- -- (1,053,654) (1,053,654) - -------------------------------------------------------------------------------------- Balance, September 30, 1996 329,384 (179,000) (3,861,724) 1,349,017 Sale of stock through options exercised -- -- -- 231,804 Issuance of preferred stock (net of offering costs of $312,000) 1,837,998 -- -- 1,838,000 Conversion of preferred stock into common stock (450,000) -- -- -- Stock issued in acquisition -- -- -- 3,999,340 Stock warrants issued for services 198,464 -- -- 198,464 Stock options issued for: Acquisitions 296,177 -- -- 296,177 Services 436,580 -- -- 436,580 Forgiveness of subscrip- tion receivable -- 179,000 -- 179,000 Deemed dividend on preferred stock 9,674 -- (9,674) -- Deemed dividend on warrants issued in connection with preferred stock 892,592 -- (892,592) -- Net loss for the year -- -- (2,551,378) (2,551,378) - -------------------------------------------------------------------------------------- Balance, September 30, 1997 $ 3,550,869 $ -- $(7,315,368) $ 6,052,004 ====================================================================================== See accompanying summary of accounting policies and notes to consolidated financial statements. F-7
DCX, Inc. and Subsidiaries Consolidated Statements of Cash Flows ================================================================================ Increase (Decrease) In Cash And Cash Equivalents Years Ended September 30, 1997 1996 - -------------------------------------------------------------------------------- Operating activities: Net loss $(2,551,378) $(1,053,654) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 98,298 114,202 Asset writedowns 179,000 -- Provision for losses on accounts receivable 158,161 -- Forgiveness of debt (278,069) (82,826) Provision for litigation -- 521,000 Provision for losses on inventory -- 60,000 Stock issued for services -- 258,723 Stock options issued for acquisitions and services 635,044 -- Loss on sale of assets 1,261,168 -- Changes in operating assets and liabilities: Accounts receivable (709,755) 1,066,891 Inventories -- (352,750) Other assets 178,798 9,915 Accounts payable 95,803 (82,360) Accrued expenses 526,883 (275,291) Deferred revenue 156,701 -- - ------------------------------------------------------------------------------- Net cash provided by (used in) operating activities (249,346) 183,850 - ------------------------------------------------------------------------------- Investing activities: Payments for business acquisitions, net of cash acquired (689,735) -- Additions to capitalized software (2,564) -- Restricted cash -- 154,985 - ------------------------------------------------------------------------------- Net cash provided by (used in) investing activities (692,299) 154,985 - ------------------------------------------------------------------------------- Financing activities: Proceeds from debt 576,000 325,000 Payments on debt (1,018,062) (641,136) Debt issue costs (101,226) -- Proceeds from the issuance of common stock 19,622 61,094 Proceeds from issuance of preferred stock net of offering costs 1,838,000 -- - ------------------------------------------------------------------------------- Net cash provided by (used in) financing activities 1,314,334 (255,042) - ------------------------------------------------------------------------------- Net increase in cash 372,689 83,793 Cash and cash equivalents, beginning of year 209,637 125,844 - ------------------------------------------------------------------------------- Cash and cash equivalents, end of year $ 582,326 $ 209,637 =============================================================================== See accompanying summary of accounting policies and notes to consolidated financial statements. F-8 DCX, Inc. and Subsidiaries Summary of Accounting Policies ================================================================================ Organization and Business These consolidated financial statements include the accounts of DCX, Inc. and those of its inactive wholly-owned subsidiaries, GeoStars International, Inc. and GeoNova US, Inc. ("GeoNova"), d/b/a GeoNova International, Inc., and PlanGraphics, Inc. (collectively the "Company"). DCX, Inc. provided services and products to aerospace, aviation, military, and commercial industries. DCX, Inc. was engaged in the engineering design, development, testing, and manufacturing of electronic and electro- mechanical devices and assemblies for use in the missile and aerospace industries, as well as the manufacturing of wire harnesses and cable assemblies for use by commercial computer and communications industries and the U.S. Government. PlanGraphics, Inc. is an independent consulting firm specializing in the design and implementation of Geographic Information Systems ("GIS") as well as advisory services in the United States and foreign markets. The customer base consists primarily of utilities, government agencies, and land and resource management organizations. All intercompany balances and transactions have been eliminated in consolidation. Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Revenue and Cost Recognition Revenues are recognized as services are rendered. Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as supplies, tools, repairs and depreciation costs. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Goodwill Goodwill represents the excess of the cost over the fair value of its net assets acquired at the date of acquisition and is being amortized on the straight-line method over fifteen years. Deferred Revenue Deferred revenue represents amounts received under certain contracts in excess of revenue recognized. F-9 DCX, Inc. and Subsidiaries Summary of Accounting Policies ================================================================================ Property, Equipment and Depreciation and Amortization Property and equipment are recorded at cost. Depreciation is provided on property and equipment by charging against earnings, amounts sufficient to amortize the costs of the assets over their estimated useful lives. The ranges of estimated useful lives in computing depreciation and amortization are as follows: ------------------------------------------------------- Building 31 years Leased assets Life of lease Furniture and equipment 5 to 7 years ------------------------------------------------------- Depreciation is computed principally on an accelerated method. Taxes on Income The Company accounts for income taxes under SFAS No. 109. Deferred income taxes result from temporary differences. Temporary differences are differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years. Net Loss Per Share Net loss per common share is based on the weighted average number of shares outstanding during each period presented after preferred stock and deemed dividends. Options to purchase stock are included as common stock equivalents, when dilutive. Concentrations of Credit Risk The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalent balances in excess of the insurance provided by governmental insurance authorities. The Company's cash and cash equivalents are placed with financial institutions and are primarily in demand deposit accounts. Fair Value of Financial Instruments Unless otherwise specified, the Company believes the book value of financial instruments approximates their fair value. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. F-10 DCX, Inc. and Subsidiaries Summary of Accounting Policies ================================================================================ Capitalized Software Costs Costs incurred internally in creating software products for resale are charged to expense until technological feasibility has been established upon completion of a detail program design. Thereafter, all software development costs are capitalized until the point that the product is ready for sale and subsequently reported at the lower of amortized cost or net realizable value. In accordance with Statement of Financial Accounting Standard No. 86, the Company recognizes the greater amount of annual amortization of capitalized software costs under 1) the ratio of current year revenues by product, to the product's total estimated revenues method or 2) over the products estimated economic useful life by the straight-line method. Software Revenue Recognition Revenue from licensing of software products is recognized upon shipment. Revenue from support and update service agreements is deferred at the time the agreement is executed and recognized ratably over the contractual period. The Company recognizes revenues from customer training and consulting services when such services are provided. All costs associated with licensing of software products, support and update services, and training and consulting services are expensed as incurred. Long-Term Assets The Company applies SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets." Under SFAS No. 121, long-lived assets and certain intangibles are reported at the lower of the carrying amount or their estimated recoverable amounts. Stock Option Plans The Company applied APB Opinion 25, "Accounting for Stock Issued to Employees", and the related Interpretation in accounting for all stock option plans. Under APB Opinion 25, no compensation cost has been recognized for stock options issued to employees as the exercise price of the Company's stock options granted equals or exceeds the market price of the underlying common stock on the date of grant. SFAS No. 123, "Accounting for Stock-Based Compensation", requires the Company to provide pro forma information regarding net income as if compensation cost for the Company's stock options plans had been determined in accordance with the fair value based method prescribed in SFAS No. 123. To provide the required pro forma information, the Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model. F-11 DCX, Inc. and Subsidiaries Summary of Accounting Policies ================================================================================ Recent Accounting Pronouncements The Financial Accounting Standards Board ("FASB") recently issued Statement of Financial Accounting Standards No. 128 "Earnings Per Share" ("SFAS 128") and Statement of Financial Accounting Standards No. 129 "Disclosure of Information About an Entity's Capital Structure ("SFAS 129"). SFAS 128 provides a different method of calculating earnings per share than is currently used in accordance with Accounting Board Opinion ("ABP") No. 15, "Earnings Per Share." SFAS 128 provides for the calculation of "Basic" and "Diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity, similar to fully diluted earnings per share. SFAS 129 establishes standards for disclosing information about an entity's capital structure. SFAS 128 and SFAS 129 are effective for financial statements issued for periods ending after December 15, 1997. Their implementation is not expected to have a material effect on the consolidated financial statements. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS 130), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. F-12 DCX, Inc. and Subsidiaries Summary of Accounting Policies ================================================================================ Also, in June 1997, FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" which supersedes SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise." SFAS No. 131 establishes standards for the way that public companies report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. SFAS No. 131 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. SFAS 130 and 131 are effective for financial statements for periods beginning after December 15, 1997 and requires comparative information for earlier years to be restated. Because of the recent issuance of the standard, management has been unable to fully evaluate the impact, if any, the standard may have on future financial statement disclosures. Results of operations and financial position, however, will be unaffected by implementation of the standard. In October 1997, Statement of Position 97-2, Software Revenue Recognition (SOP 97-2), was issued. The SOP provides guidance on when revenue should be recognized and in what amounts licensing, selling, leasing, or otherwise marketing computer software. SOP 97-2 is effective for transactions entered into in fiscal years after December 15, 1997. Because of the recent issuance of the SOP, management has been unable to fully evaluate the impact, if any, the SOP may have on future financial statement disclosure. Reclassifications Certain items included in the prior year's financial statements have been reclassified to conform to the current presentation. F-13 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ 1. Going Concern and Continued Existence As reflected in the accompanying financial statements, the Company has a working capital deficit of $413,041 and the Company has incurred net losses from operations of $953,065 and $679,477 for the years ended September 30, 1997 and 1996. The Company also incurred net losses from discontinued operations of $1,598,313 and $374,177 for the years ended September 30, 1997 and 1996. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans include, among other items, actively pursuing additional funding in both the debt and equity markets in order to meet working capital requirements and to provide for additional acquisitions. Additionally, the Company is negotiating the timing of and payment of certain payables to help improve the working capital position. There are no assurances that any of these events will occur or that the Company's plan will be successful. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties. 2. Business Acquisitions On September 22, 1997, the Company acquired all of the outstanding stock of PlanGraphics, Inc. for 2,631,145 shares of common stock at the agreed upon rate of $1.52 per share. The acquisition was accounted for under the purchase method of accounting. The results of operations of PlanGraphics, Inc. have been included in the accompanying statement of operations since the effective date of the acquisition. The total purchase price, including acquisition costs, was $5,517,872 and is recorded as goodwill. Unaudited proforma consolidated results of operations of the Company are shown in the following table as if the business was acquired as of the first day of each period presented, October, 1, 1995. This unaudited proforma information is based on the Company's accompanying Statements of Operations and the historical financial information of the acquired companies, and includes adjustments to income taxes, depreciation, and goodwill giving effect of the terms of the transaction as if the acquisitions had occurred on the first day presented. F-14 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ Unaudited proforma consolidated results of operations: September 30, 1997 1996 ------------------------------------------------------ Revenue $ 8,204,236 $ 7,985,750 Loss from operations (2,441,497) (178,905) Net loss (2,174,836) (509,811) Loss per common share before discontinued operations (0.46) (.07) ======================================================== The proforma information is not necessarily indicative of the combined results of operations that would have occurred had the acquisitions been completed for such periods. PlanGraphics has historically received greater than 10% of its revenues from one customer. The one customer accounted for 25% and 35% of revenues for the years ended September 30, 1997 and the nine month period ended September 30, 1996. 3. Discontinued Operations Effective September 30, 1997, the Company sold certain assets of its defense industry business unit to a third party for $1,100,000. The Company has subsequently collected this receivable. With the disposal of its defense industry business, the Company discontinued all of its operations in the defense industry. Therefore, it separately reported the losses from this business as discontinued operations for the years ended September 30, 1997 and 1996 as follows: September 30, 1997 1996 ------------------------------------------------------ Revenues from discontinued operations $ 5,186,936 $ 4,403,740 Loss from discontinued operations (337,145) (374,177) Loss on disposal (1,261,168) -- Net loss from discontinued operations $ (1,598,313) $ (374,177) ------------------------------------------------------ F-15 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ 4. Accounts Receivable The components of accounts receivable are as follows: September 30, 1997 ----------------------------------------------------- Contract receivables: Billed $ 1,228,389 Unbilled 1,196,340 ----------------------------------------------------- 2,424,729 ----------------------------------------------------- Less provision for losses 188,161 ----------------------------------------------------- Total accounts receivable $ 2,236,568 ===================================================== 5. Notes Payable September 30, 1997 ----------------------------------------------------- Note payable with interest of 14%, with monthly interest only payments, collateralized by a first lien on land and building held for rental and improvements, maturing on February 21, 2000 $ 576,000 Note payable to bank in monthly principal installments of $5,000, interest at 8.5% payable quarterly, collateralized by equipment, accounts receivable, a stock pledge agreement of shares at the PlanGraphics level, and an assignment of a $500,000 life insurance policy on an individual. Note matures on April 24, 1998 650,000 Line of credit with a bank, interest at 9.5% payable at maturity on August 7, 1997 collateralized by equipment and accounts of PlanGraphics and is guaranteed by a minority stockholder 180,000 Other 24,060 ---------------------------------------------------- 1,430,060 Less current maturities 854,060 ---------------------------------------------------- Notes payable - less current maturities $ 576,000 ==================================================== F-16 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ In June 1997, a discount of $278,019 was granted by the lender for full settlement of the outstanding balance. Final liquidation of the balance occurred during the Company's 4th quarter. In December 1995, a previously outstanding note payable was settled requiring a cash payment of $205,000. The settlement gain on forgiven debt of $82,826 was recorded in the year ended September 30, 1996. Notes Payable - Related Party Total amounts under related party notes to a minority shareholder were $605,184 at September 30, 1997. The Company restructured these notes on October 10, 1997 by converting $289,902 of the related party note payable into 170,531 shares of common stock, paying $150,000 in cash and issuing a note with an interest rate of 10%. The note requires monthly payments of $14,000 principal and interest through October 15, 1998 and the remaining balance of approximately $2,200 is due on November 15, 1998. Certain voting provisions relating to these related party notes were cancelled with the restructuring of the notes. Principal payments on all notes payable due subsequent to September 30, 1997 are as follows: Due September 30, 1997 ----------------------------------------------------- 1998 $ 1,012,989 1999 466,256 2000 576,000 ----------------------------------------------------- $ 2,035,245 ===================================================== 6. Litigation The Company had previously filed an appeal before the U.S. Court of Appeals for the Federal Circuit on a contract with the Defense Logistics Agency (DLA). The appeals court held for the DLA in the year ended September 30, 1996. As such, the Company has recorded a reserve for $521,000 for potential losses. F-17 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ The Company is engaged in various litigation matters from time to time in the ordinary course of business. In the opinion of management, the outcome of any such litigation will not materially affect the financial position or results of operations of the Company. 7. Taxes on Income The provision for income taxes consisted of the following: Year ended September 30, 1997 1995 ------------------------------------------------------ Deferred benefit: Federal $ 1,084,000 $ 301,000 State 104,000 29,000 ------------------------------------------------------ 1,188,000 330,000 Valuation allowance (1,188,000) (330,000) ------------------------------------------------------ $ -- $ -- ------------------------------------------------------ A reconciliation of the effective tax rates and the statutory U.S. federal income tax rates follows: 1997 1995 ------------------------------------------------------- U.S. federal statutory rates (34.0) % (34.0) % State income tax benefit, net of federal tax amount (3.3) (3.3) Increase in deferred tax asset valuation allowance 37.3 37.3 ------------------------------------------------------- Effective tax rate -- % -- % ------------------------------------------------------- F-18 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ Temporary differences that give rise to a significant portion of the deferred tax asset are as follows: 1997 ------------------------------------------------------- Net operating loss carryforward $ 1,472,000 Capital loss carryover 587,000 Compensation expense for common stock options 237,000 Accrued litigation 194,000 Vacation 159,000 Other 64,000 ------------------------------------------------------- Total gross deferred tax assets 2,713,000 Valuation allowance (2,713,000) ------------------------------------------------------- Net deferred tax asset $ -- ------------------------------------------------------- A valuation allowance equal to the net deferred tax asset has been recorded, as management of the Company has not been able to determine that it is more likely than not that the deferred tax assets will be realized. At September 30, 1997, the Company had net operating loss carryforwards of approximately $4,000,000 with expirations through 2013. The net operating losses are limited due to issuances of common stock. 8. Leases Obligation Under Capital Leases - Related Parties The Company leases an office facility from a related party, Capitol View Development, LLC, under a triple net commercial lease. An officer/shareholder owns approximately ten percent of Capitol View Development. The lease includes an annual base rent increasing over the term of the lease plus an adjustment based on Capitol View Development's rate of interest on its loan. The initial lease term is for a period of fifteen years with five renewal options for a term of one year each. Annual payments approximate $320,000 per year. F-19 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ The Company also leases certain equipment under capital leases from a related party. Original lease terms are for five years. The following is a schedule, by years, of future minimum payments required under these leases, together with their present value as of September 30, 1997. Land and September 30, Building Equipment Total ------------------------------------------------------- 1998 $ 327,261 $ 82,331 $ 409,592 1999 330,218 58,411 388,629 2000 335,635 32,523 368,158 2001 337,089 - 337,089 2002 338,133 - 338,133 Thereafter 2,500,429 - 2,500,429 ------------------------------------------------------- 4,168,765 173,265 4,342,030 Less: amount representing interest 2,155,571 13,992 2,169,563 ------------------------------------------------------- Present value of minimum lease payments 2,013,194 159,273 2,172,467 Less: current portion - - 134,794 ------------------------------------------------------- Obligations under capital leases after current portion $2,037,673 ======================================================= Operating Lease Commitments The Company leases certain office facilities and certain furniture and equipment under various operating leases. Lease terms range from one to five years. F-20 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ Rental expense for the years ending September 30, 1997 and 1996 totaled $10,000 and $0. Minimum annual operating lease commitments at September 30, 1997 are as follows: September 30, ------------------------------------------------------- 1998 $ 119,144 1999 102,365 2000 44,953 2001 12,956 ------------------------------------------------------- $ 279,418 ======================================================= 9. Equity Transactions Preferred Stock In November 1996, the Company amended its articles of incorporation to provide for a Series A 6% cumulative convertible redeemable preferred stock $.001 par value (Series A). The Company designated 1,000,000 shares Series A as part of the authorized class of preferred shares. The Company issued 500 shares of Series A with a stated value of $1,000 per share, with net proceeds to the Company of $450,000 in November 1996. The holders of these 500 shares of Series A converted the preferred into common stock at various times during the year in exchange for 499,732 shares of common stock. In August 1997, the Company sold 650 shares of its Series A with net proceeds of $547,500. In September 1997, the Company sold 1,000 shares of its Series A with net proceeds of $840,500. The Series A preferred stock and any accumulated and unpaid dividends are convertible at the option of the holder at the lesser of 75% of the average of the closing bid price per share of the Company's common stock for the 5 days prior to issuance or 75% of the average of the closing bid price per share of the Company's common stock for the five days preceding the date of conversion. Subsequent to September 30, 1997 holders of Series A converted 1,040 shares into 1,293,289 shares of common stock. Warrants issued to purchase 233,781 shares of common stock were issued in connection with the placement of the Series A. The warrants can be exercised at various prices from $1.6875 to $1.875 and expire from November 1998 to August 2000. The Company recognized deemed dividends of $175,925 in connection with issuing these warrants under the accounting provisions of SFAS 123. The Company also recognized $716,667 of deemed dividends due to the convertibility of the preferred stock at 75%. F-21 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ Subsequent to September 30, 1997, the Company sold 250 more shares of Series A with net proceeds of $212,500 in a continuation of the placement from September 1997. Common Stock During fiscal year 1997, the Company exchanged $212,182 in payables for the exercise price of 144,094 shares of common stock. Employees exercised options to purchase 27,300 shares with the Company recognizing proceeds of $19,622. The Company forgave the $179,000 subscription receivable in exchange for services rendered during the year ended September 30, 1997. During fiscal year 1996, as consideration for future service to be performed by the recipient of certain stock options, the exercise price on a portion of these stock options was below the fair market value of the stock on the date the options were granted. Accordingly, the Company recorded $148,750 in deferred charges for future services. In addition, the Company waived the exercise price on 224,000 shares under the stock option and recorded deferred charges for future services of $150,000. In March 1995, the Company issued options to purchase 250,000 shares to the same individual at an exercise price of $.75 per share and recorded $31,250 in deferred charges for future services. The options were exercised in April 1995. The Company amortized deferred compensation charges on a straight line basis over the service term. Amortization of approximately $97,000 and $118,000 was recorded during the years ended September 30, 1997 and 1996. At various times throughout the year ended September 30, 1996, options were exercised for a total of 85,000 shares for a total of $61,094. The Company issued 230,000 shares valued at fair market value of $231,215 to a financial advisor in exchange for services to be performed for a period of 12 months beginning in February 1996. F-22 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ Anti-dilution Provisions The Company has granted certain officers and consultants anti-dilution rights in employment and service agreements. The provision calls for the issuance of options at fixed prices at each date more stock is issued to enable the party to retain their ownership percentage. Under the accounting provisions of SFAS 123 and APB 25, the Company realized costs of approximately $406,000 for the 380,340 options and 164,298 warrants issued during the year. Stock Options ------------- The Company's Board of Directors have reserved 300,000 and 750,000 shares under two stock option plans (1991 and 1995 respectively). The Company grants options under the Plan in accordance with the determinations made by the Option Committee. The Option Committee will, at its discretion, determine individuals to be granted options, the time or times at which options shall be granted, the number of shares subject to each option and the manner in which options may be exercised. The option price shall be the fair market value on the date of the grant and expire five years subsequent to the date of grant. 1991 Plan --------- In May 1992, the Company issued options for the purchase of 140,000 shares at $1.22 per share. Of the total issued, 125,000 were issued to officers and directors. In February 1995, 20,000 options were cancelled. Options to purchase 175,000 shares at $.71875 were issued to officers of the Company in April 1995. The Company granted 30,000 options to purchase common stock at $.72 in the year ended September 30, 1997. To date, none of these options have been exercised. 1995 Plan --------- In April 1995, the Company issued options to purchase 269,000 shares at $.71875 per share, of the total issued, 60,000 were issued to an officer. Through September 30, 1996, options to purchase 85,000 shares were exercised resulting in proceeds to the Company of $61,094. The Company granted 169,789 options to purchase common stock at prices ranging from $.72 to $1.75. Options to purchase 46,589 shares were exercised during the year. F-23 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ FASB Statement 123, "Accounting for Stock-Based Compensation" (SFAS No. 123"), requires the Company to provide pro forma information regarding net income and net income per share as if compensation costs for the Company's stock option plans and other stock awards had been determined in accordance with the fair value based method prescribed in SFAS No. 123. The Company estimated the fair value of each stock award at the grant date by using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in the year ended September 30, 1997: dividend yield of 0 percent for all years; expected volatility of 45 percent; risk-free interest rates between 6 and 6.4 percent; and expected option lives of five years. The Company did not grant any options in 1996. Under the accounting provisions for SFAS No. 123, the Company's net loss and net loss per share would have been adjusted to the following pro forma amounts: Years Ended September 30, 1997 1996 ----------------------------------------------------- Net loss As reported $ (2,551,378) $ (1,053,654) Pro forma (3,908,402) (1,053,654) Net loss per share As reported $ (.72) $ (.25) Pro forma (.89) (.25) ===================================================== A summary of the status of the Company's stock option plans and outstanding options as of September 30, 1997 and 1996 and changes during the years ending on those dates is presented below: F-24 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ 1997 1996 ================================================================================ Weighted Weighted Average Average Range of Exercise Range of Exercise Shares Price Shares Price - -------------------------------------------------------------------------------- Outstanding, beginning of year 478,000 $ 0.84 564,000 $ 0.83 Granted 3,495,623 1.38 -- N/A Cancelled 312,000 0.81 1,000 0.72 Exercised 195,729 1.39 85,000 0.72 - -------------------------------------------------------------------------------- Outstanding, end of year 3,465,894 $ 1.36 478,000 $ 0.84 ================================================================================ Options exercisable, end of year 3,465,894 $ 1.36 478,000 $ 0.84 Weighted average fair value of options granted during the year 2,002,367 $ 0.72 N/A $ N/A ================================================================================ The following table summarizes information about stock options outstanding at September 30, 1997: F-25 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ Options Outstanding Options Exercisable -------------------------------------------------------------------- Weighted Average Weighted Weighted Range of Number Remaining Average Number Average Exercise Outstanding Contractual Exercise Exercisable Exercise Prices at 9/30/97 Life Price at 9/30/97 Price -------------------------------------------------------------------- $0.58-1.00 836,603 3.41 $ 0.89 836,603 $ 0.89 1.13-1.39 1,243,658 4.27 1.15 1,013,658 1.16 1.63-4.25 1,385,633 4.76 1.83 1,160,633 1.97 --------------------------------------------------------------------- $0.58-4.25 3,465,894 4.22 $ 1.36 3,010,894 $ 1.35 ===================================================================== 10. Employee Benefit Plans 401(k) Plan DCX has a Section 401(k) profit sharing plan covering substantially all employees. Participants in the plan may contribute up to 15% of their compensation, subject to certain limitations. Under the plan, the Company makes matching contributions equal to 25% of the participants elected deferred contribution up to a maximum of 6% of compensation. Company matching contributions vest ratably over 5 years. Additional contributions may be made at the Company's discretion based upon the Company's performance. Total Company contributions under the plan were approximately $8,854 and $9,700 in 1997 and 1996. PlanGraphics has a qualified profit sharing plan with a 401(k) deferred compensation provision covering substantially all employees. The plan allows employees to defer up to 21% of their annual salary with a tiered matching contribution by the Company up to 1.75%. Additional contributions are at the Company's discretion. F-26 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ 11. Commitments Self Insurance The Company is partially self insured for employee medical liabilities which covers risk up to $20,000 per individual covered under the plan. The Company has purchased excess medical liability coverage for individual claims in excess of $20,000 and approximately $250,000 in aggregate with a national medical insurance carrier. Premiums and claim expenses associated with the medical self insurance program are included in the accompanying statements of income. Employment Agreements The Company has entered into employment agreements that extend from December 31, 1999 through June 30, 2000 with four of its officers. The employment agreements set forth annual compensation to the four officers of between $60,000 and $175,000 each. 12. Lease Agreement of former Manufacturing Facility The buyer of the certain assets of the Company has agreed to lease the manufacturing facility for 6 months at a rate of $16,500 (for a total of $99,000 over the term). The buyer also holds options to renew the lease at terms similar to the original term for 32 months. The buyer also holds an option to purchase the buildings and real property for $1,500,000 during the original term or any extensions of the lease. 13. Significant Fourth Quarter Adjustments During the quarter ended September 30, 1997, the Company recorded an expense for the forgiveness of the subscription receivable in the amount of $179,000. The Company also recorded approximately $500,000 in expense for stock options granted throughout the year. During the quarter ended September 30, 1996, the Company recorded consulting fees expense of approximately $118,000 relating to the amortization of deferred marketing expense. 14. Life Insurance The Company recorded other income of $400,000 related to the proceeds of two company owned key man life insurance policies on a director of the Company during the year ended September 30, 1997. F-27 DCX, Inc. and Subsidiaries Notes to Consolidated Financial Statements ================================================================================ 15. Supplemental Schedule of Non-Cash Investing and Financing Activities 1997 1996 ------------------------------------------------------ Business acquired with common stock $ 3,999,340 $ - ====================================================== Preferred stock converted into common stock $ 450,000 $ - ====================================================== Common stock issued for services and debt $ 508,359 $ 233,723 ====================================================== Cash paid for interest $ 126,000 $ 114,000 ====================================================== F-28 EX-27 2 FDS
5 12-MOS SEP-30-1997 SEP-30-1997 582,326 0 3,524,729 188,161 0 4,120,826 201,932 429,597 13,570,800 4,533,865 0 2 0 9,741,501 (3,764,497) 13,570,800 0 71,098 0 1,595,522 (571,359) 0 126,263 (953,065) 0 (953,065) (1,598,313) 0 0 (3,453,644) (.72) (.72) Includes parent Company full year expenses for administration, acquisitions, legal and audit, and investment banking. Includes $892,592 of "deemed" dividend expenses computed on possible conversion of convertible preferred stock.
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