-----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, W1imgFlJcq+MNQI1aPqX6mgGm0e6bpEuomUTi+/J0TpZyWNKCebr8Ewc7GbIMdYk SXR63GzBL0KVzFZmFiP1TA== 0001000096-97-000804.txt : 19971107 0001000096-97-000804.hdr.sgml : 19971107 ACCESSION NUMBER: 0001000096-97-000804 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19971106 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: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-14273 FILM NUMBER: 97709415 BUSINESS ADDRESS: STREET 1: 1597 COLE BLVD STREET 2: STE 300B CITY: GOLDEN STATE: CO ZIP: 80401 BUSINESS PHONE: 3032742700 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 10QSB/A 1 FORM 10-QSB/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1996. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . -------------- -------------- Commission file number 0-14273 DCX, INC. ---------------------------------------------------- (Exact name of registrant as specified in its charter) COLORADO 84-0868815 - ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1597 Cole Boulevard, Suite 300B, Golden CO 80401 ------------------------------------------------ (Address of principal executive offices) (Zip Code) (303) 274-8708 -------------------------------------------------- (Registrant's telephone number, including area code) 3002 North State Highway 83, Franktown, CO 80016-0569 ----------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. [X] Yes [ ] No 4,450,409 Common Shares were outstanding as of December 31, 1996. Number of pages in this report is 8. PART I, FINANCIAL INFORMATION (Item 1, Financial Statements, of this part is replaced in its entirety with the following) Item 1. Financial Statements DCX, Inc. and Subsidiaries Condensed and Consolidated Balance Sheets December 31 September 30 1996 1996 - -------------------------------------------------------------------------------- (Unaudited) Audited - -------------------------------------------------------------------------------- Assets Current: Cash and Cash equivalents $ 90,928 $ 209,637 Accounts receivable 1,313,498 995,040 Inventories 887,099 1,103,672 Prepaid expenses 127,466 195,832 - -------------------------------------------------------------------------------- Total current assets 2,418,991 2,508,181 - -------------------------------------------------------------------------------- Property and equipment: At cost 2,039,534 2,039,534 Less: accumulated depreciation (790,210) (767,233) - -------------------------------------------------------------------------------- Net property and equipment 1,249,324 1,272,301 - -------------------------------------------------------------------------------- Other assets 44,000 44,000 - -------------------------------------------------------------------------------- $ 3,712,315 $ 3,820,482 ================================================================================ See accompanying summary of accounting policies and notes to financial statements 2 PART I, FINANCIAL INFORMATION Item 1. Financial Statements DCX, Inc. and Subsidiaries Condensed and Consolidated Balance Sheets December 31 September 30 1996 1996 (Unaudited) (Audited) - -------------------------------------------------------------------------------- Liabilities and Stockholders' Equity Current: Notes payable $ 1,267,146 $ 1,279,623 Accounts payable 215,480 494,646 Accounts payable - terminated contracts 0 66,377 Accrued expenses 55,154 85,759 Accrued litigation settlement 521,000 521,000 - -------------------------------------------------------------------------------- Total current liabilities 2,058,780 2,447,405 Long-term debt, less current maturities 24,060 24,060 - -------------------------------------------------------------------------------- Total liabilities 2,082,840 2,471,465 - -------------------------------------------------------------------------------- Commitments and Contingencies (Note below, and Note 1 to Form 10-KSB, September 30, 1996) Stockholders' Equity: Preferred stock, $.001 par value, 20,000,000 shares authorized, Series A, 6% Cumulative Convertible Redeemable Preferred Stock; 1,000,000 authorized, 500 issued and outstanding (Note 6) 1 0 Capital paid in excess of par value on preferred stock 449,999 0 Common stock, no par value, 2,000,000,000 shares authorized; shares issued and outstanding, 4,450,409 and 4,434,109 at December 31, 1996 and September 30, 1996, respectively 5,072,072 5,060,357 Subscriptions receivable (179,000) (179,000) Additional paid-in capital 329,384 329,384 Accumulated deficit (4,042,981) (3,861,724) - -------------------------------------------------------------------------------- Total stockholders' equity 1,629,475 1,349,017 - -------------------------------------------------------------------------------- $ 3,712,315 $ 3,820,482 ================================================================================ See accompanying summary of accounting policies and notes to financial statements 3 PART I, FINANCIAL INFORMATION Item 1. Financial Statements DCX, Inc. and Subsidiaries Condensed and Consolidated Statements of Operations (Amended, see Note 7) (Unaudited) Three months ended December 31 1996 1995 - -------------------------------------------------------------------------------- Net sales $ 865,112 $ 904,311 Cost of sales 690,654 608,013 - -------------------------------------------------------------------------------- Gross profit on sales 174,458 296,298 - -------------------------------------------------------------------------------- General and administrative expenses 324,720 232,698 - -------------------------------------------------------------------------------- Income (loss) from operations (150,262) 63,600 Other income (expense): Interest expense (30,150) (37,222) Investment and other income 1,071 10,357 Other expense (1,916) 0 Forgiveness of debt 0 87,826 - -------------------------------------------------------------------------------- Net income (loss) $ (181,257) $ 124,561 ================================================================================ Net income (loss) from operations per share $ (.03) $ .02 - -------------------------------------------------------------------------------- Net income (loss) attributable to common stock shareholders $ (347,923) $ 124,561 Net income (loss) attributable to common stock per share $ (.08) $ .03 ================================================================================ Weighted average number of shares of common stock outstanding 4,447,692 4,105,121 ================================================================================ See accompanying summary of accounting policies and notes to financial statements 4
PART I, FINANCIAL INFORMATION Item 1. Financial Statements DCX, Inc. and Subsidiaries Condensed and Consolidated Statements of Cash Flows (Unaudited) - ---------------------------------------------------------------------------------------------- For the Three-Month Periods Ended December 31, 1996 1995 Operating activities: Net income (loss) $ (181,257) $ 124,561 Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 23,977 21,552 (Increase) decrease in accounts receivable (318,458) 1,147,243 (Increase) decrease in inventory 216,573 (393,924) (Increase) decrease in prepaid expenses 68,366 (5,358) Decrease in other assets 0 15,000 Decrease in accounts payable (345,543) (226,006) Decrease in other liabilities (30,605) (81,242) Decrease in litigation settlement liability 0 (150,000) - ---------------------------------------------------------------------------------------------- Net cash provided by (used in) operating activities (567,947) 451,826 - ---------------------------------------------------------------------------------------------- Investing activities: Acquisition of property and equipment 0 6,999 - ---------------------------------------------------------------------------------------------- Net cash provided by (used in) investing activities 0 6,999 - ---------------------------------------------------------------------------------------------- Financing activities: Payments on long-term debt, net (12,477) (248,993) Issuance of common stock 11,715 0 Issuance of convertible preferred stock 450,000 0 - ---------------------------------------------------------------------------------------------- Net cash provided by (used in) financing activities 449,238 (248,993) Net increase (decrease) in cash (118,709) 209,832 - ---------------------------------------------------------------------------------------------- Cash and cash equivalents, beginning of period $ 209,637 $ 125,844 - ---------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 90,928 $ 335,676 ============================================================================================== See accompanying summary of accounting policies and notes to financial statements 5
DCX, INC. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Condensed Consolidated Financial Statements The condensed consolidated financial statements included herein have been prepared by DCX, INC. without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. DCX, INC. believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company's consolidated financial position as of December 31, 1996, the consolidated results of its operations for the three-periods ended December 31, 1996, and 1995 and statements of cash flows for the three-month periods then ended. The accounting policies followed by the Company are set forth in the annual report of September 30, 1996, filed on Form 10-KSB, and the audited consolidated financial statements therein with the accompanying notes thereto. While management believes the procedures followed in preparing these consolidated financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by DCX, INC. later in the year. The consolidated results of operations for the three-month period ended December 31, 1996, are not necessarily indicative of the results to be expected for the full year ending September 30, 1997. (2) Accounts Receivable Accounts receivable contain amounts computed under the cost-to-cost method to determine percentage of completion as described in the Form 10-KSB for September 30, 1996. (3) Provision for Income Taxes At the beginning of the fiscal year the Company had net operating loss carryforwards of $2,663,000 with expirations through 2011. At December 31, 1996, the amount of the net operating loss carryforward balance is estimated at $2,794,291. The Company expects to incur a minimal amount of alternative minimum tax for the fiscal year. Since the Company is unable to determine that deferred tax assets exceeding tax liabilities are more likely than not to be realized, it will record a valuation allowance equal to the excess deferred tax assets at fiscal year end. 6 (4) Litigation Claim for Breach of Contract. Following the termination of merger discussions between the Company and an unrelated company, Airtech International Corporation ("Airtech"), the Company filed a claim for resulting damages of approximately $400,000. During January, 1997, Airtech filed an answer to the claim denying the Company's claim and counter claiming for breach of contract, fraud and negligence claiming damages exceeding $27 million. The parties have agreed to dismiss their claims with prejudice and have released any claims. Terminated Contracts. As reported in the Form 10-KSB for September 30, 1995, and 1996, the Company and the Defense Logistics Agency (DLA) agreed to a final settlement in November, 1995, on two of three terminated contracts. The last partial payment, therefor, was received in January, 1996. A third contract with DLA required the Company to design, develop test and manufacture light sets to a specified schedule. Testing of the lights was subcontracted; scheduling delays caused the Company to miss a required submission date for the testing and resulted in termination of the contract in 1988. Vigorous litigation asserting the delay was government caused were pursued to the United States Supreme Court. The Company's petition for certiorari was denied in November, 1996. The Company recorded a reserve of $521,000 for the loss in June, 1996; which is believed to be sufficient for the possible reprocurement costs related to the difference between the Company's contract price and the price incurred by DLA from the next lowest vendor as provided for in the Federal Acquisition Regulations . The Company has filed with the Armed Services Board of Appeals an appeal of the reprocurement costs. No hearing date has been set. (See also Item 3, Legal Matters, and Note 5, Litigation, to the financial statements in Form 10-KSB for September 30, 1996.) (5) Lease Obligations The Company leases various equipment under capital leases that expire through June 2000 as noted in Note 7 to the Financial Statements in Form 10-KSB, September 30, 1996. (6) Subsequent Events Key Man Life Insurance Proceeds.On January 7, 1997, the Company recorded $400,000 of accounts receivable related to the proceeds of two Company owned key man life insurance policies on a director of the Company. Proceeds of $250,000 on one of the policies have been received; the Company is completing formalities related to the second policy in order to secure the proceeds of $150,000. Convertible Preferred Stock. On January 23, 1997, the holder of Series A, 6% Cumulative Convertible Redeemable Preferred Stock converted 100 shares into common stock in accordance with the issue agreement. Accordingly, the Company issued 123,308 shares of its common stock in exchange. 7. (Amended) Accounting for Preferred Stock Convertible at a Discount to the Market. The statement of operations has been amended to give effect for a discount of 25% of the common stock which would result and be deemed to be additional dividend to the holders of the Company's 6% convertible preferred stock sold on November 12, 1996. The convertible preferred stock is convertible into common stock at a 25% discount to the five day average market price of the common stock immediately preceding the conversion date which was lower than the five day average market price at the date of placement. This difference, $166,666, on the first possible date of conversion is an imputed discount and is deemed to be additional dividend available to the holders of the preferred stock which reduces income available to common stock shareholders. Accordingly, it was reduced from cumulative net income to arrive at net income attributable to common shareholders. 7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. D C X , I N C . Dated: November 6, 1997 /S/ Fred Beisser ------------------------------------------ Frederick G. Beisser Vice President-Finance & Administration, Secretary & Treasurer and Principal Financial Accounting Officer 8 -----END PRIVACY-ENHANCED MESSAGE-----