-----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, P7EZSiM++g5vXSc0EDzDxtBWqta9NhHdVLrhcg2mJE156I8TTXyKxYz/91PkMLf+ Tu2sInOS3zQHLQJ6DbLuow== 0000950148-96-002447.txt : 19961106 0000950148-96-002447.hdr.sgml : 19961106 ACCESSION NUMBER: 0000950148-96-002447 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960831 FILED AS OF DATE: 19961105 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DENSE PAC MICROSYSTEMS INC CENTRAL INDEX KEY: 0000784770 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 330033759 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14843 FILM NUMBER: 96654309 BUSINESS ADDRESS: STREET 1: 7321 LINCOLN WAY CITY: GARDEN GROVE STATE: CA ZIP: 92641 BUSINESS PHONE: 7148980007 MAIL ADDRESS: STREET 2: 7321 LINCOLN WAY CITY: GARDEN GROVE STATE: CA ZIP: 92641 10QSB/A 1 10QSB/A 1 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/ A-1 ( Mark One ) X Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended August 31, 1996 - 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 0-14843 DENSE-PAC MICROSYSTEMS, INC. (Exact Name of Small Business Issuer as Specified in Its Charter) CALIFORNIA 33-0033759 (State or other Jurisdiction of (IRS Employer Incorporation or Organization) Identification No.) 7321 LINCOLN WAY GARDEN GROVE, CALIFORNIA, 92641 (Address of Principal Executive Offices) (714) 898-0007 Issuer's Telephone Number, Including Area Code Not Applicable (Former Name, Former Address and Former Fiscal Year if Changed Since Last Year) 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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO APPLICABLE ONLY TO CORPORATE ISSUERS The number of shares of common stock, no par value, outstanding as of outstanding as of September 25, 1996 was 16,949,681. - -------------------------------------------------------------------------------- 2 Item 1 - Financial Statements This amendment is being made to reflect changes to the language of the line Balance Sheet and Summary of Operations, which occurred due to computer error. DENSE-PAC MICROSYSTEMS, INC. Balance Sheet
August 31, February 29, 1996 1996 ------------ ------------ (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 4,309,478 $ 4,579,840 Accounts receivable, net 2,443,343 3,574,822 Inventories 5,621,295 5,151,106 Deferred income tax 150,000 150,000 Other current assets 300,504 287,075 ----------- ----------- Total current assets 12,824,620 13,742,843 Property, net 4,108,137 3,448,860 Technology & marketing rights, net 372,652 409,048 Other assets 73,948 67,262 ----------- ----------- $17,379,357 $17,668,013 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt 390,897 413,851 Accounts payable 1,502,134 1,568,907 Accrued compensation 277,243 572,499 Other accrued liabilities 65,681 61,982 ----------- ----------- Total current liabilities 2,235,955 2,617,239 ----------- ----------- Note payable to related parties 1,900,000 1,900,000 ----------- ----------- Other long-term debt 772,678 699,134 ----------- ----------- Stockholders' equity Common stock 16,041,064 15,795,004 Accumulated deficit (3,570,340) (3,343,364) ----------- ----------- Net stockholders' equity 12,470,724 12,451,640 ----------- ----------- $17,379,357 $17,668,013 =========== ===========
2 3 DENSE-PAC MICROSYSTEMS, INC. Summary of Operations (Unaudited)
Quarter ended Six months ended August 31, August 31. 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Net Sales $3,643,713 $4,439,858 $7,708,135 $8,670,171 Cost of Sales 2,894,223 2,972,861 5,841,843 6,125,573 ----------- ----------- ----------- ----------- Gross Profit 749,490 1,466,997 1,866,292 2,544,598 ----------- ----------- ----------- ----------- Operating Expenses: Selling, general and administrative 789,459 820,159 1,608,006 1,457,587 Research and development 298,873 137,738 425,059 238,153 ----------- ----------- ----------- ----------- Earnings (loss) from Operations (338,842) 509,100 (166,773) 848,858 Other expenses: Interest expense, net 32,664 62,833 59,403 122,814 ----------- ----------- ----------- ----------- Earnings (loss) before income tax provision (371,506) 446,267 (226,176) 726,044 Provision for income taxes 800 800 800 800 ----------- ----------- ----------- ----------- Net income (loss) ($372,306) $445,467 ($226,976) $725,244 =========== =========== =========== =========== Net earnings (loss) per common share ($0.02) $0.03 ($0.01) $0.05 =========== =========== =========== =========== Weighted average common and common equivalent shares outstanding 16,950,000 15,845,000 16,950,000 15,547,000 =========== =========== =========== ===========
See accompanying notes to condensed financial statements. 3 4 DENSE-PAC MICROSYSTEMS, INC. Statements of Cash Flow (Unaudited)
For the six months ended August 31, August 31, 1996 1995 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income ($226,976) $725,244 Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and amortization 465,830 281,470 Changes in operating assets and liabilites: Accounts receivable 1,131,479 (145,398) Inventories (470,189) 117,735 Deferred income tax (13,429) (93,929) Other assets (6,686) Accounts payable (66,773) (240,334) Accrued compensation (295,256) Accrued liabilities 3,699 201,404 Deferred revenue (152,194) ---------- ---------- Net cash provided by operating activities: 521,699 693,998 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Property additions (1,088,711) (513,424) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on other long-term debt (105,935) (177,944) Proceeds from issuance of of other long-term debt 156,525 Proceeds from issuance of common stock 246,060 130,704 ---------- ---------- Net cash provided by (used in) financing activities 296,650 (47,240) ---------- ---------- NET INCREASE (DECREASE) IN CASH (270,362) 133,334 CASH AT BEGINNING OF YEAR 4,579,840 356,787 ---------- ---------- CASH AT END OF QUARTER $4,309,478 $490,121 ========== ========== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid $135,567 $125,899 ========== ========== Income taxes paid $800 $0 ========== ==========
See accompanying notes to condensed financial statements. 4 5 DENSE-PAC MICROSYSTEMS, INC. CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - Dense-Pac Microsystems, Inc. (the Company) is engaged in the design, development, manufacture and marketing of a full line of high density, miniaturized memory surface mount components and subsystems for a variety of commercial, industrial and military applications. NOTE 2 - As contemplated by the Securities and Exchange Commission under Item 310(b) of Regulation S-B, the accompanying financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. This report on Form 10-QSB for the period ended August 31, 1996 should be read in conjunction with the Company's Annual Report to Shareholders for the previous year. In the opinion of the Company, the accompanying unaudited condensed financial statements contain all adjustments (none of which were other than normal recurring accruals) necessary to present fairly its financial position as of August 31, 1996, the results of operations and its cash flows for the periods ended August 31, 1996 and 1995. Results for the interim period are not necessarily indicative of those to be expected for the full year. NOTE 3 - Inventories consisted of the following:
August 31, 1996 February 29, 1996 Raw Materials $ 1,303,247 $ 1,338,472 Work-in-process 3,044,995 2,650,086 Finished Goods 1,273,053 1,162,548 --------------- --------------- $ 5,621,295 $ 5,151,106
NOTE 4 - Accounting for Income Taxes The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," effective March 1, 1993. Deferred income taxes reflect the net tax effect of (a) temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss and tax credit carryforwards. The tax effects of significant items comprising the Company's net deferred tax asset as of February 29, 1996 are as follows: 5. 6 Deferred tax assets: Operating loss carryforwards, general business credits, etc. $ 1,807,810 Inventories 223,384 --------------- Total gross deferred assets 2,031,194 Deferred tax liability Depreciation & amortization (527,440) Valuation allowance (1,353,754) --------------- Net deferred income taxes $ 150,000 ===============
There was no change in the valuation allowance as of August 31, 1996. The Company is unable to determine whether it will be able to further utilize the gross deferred tax assets in fiscal year 1997. Further evaluation will be completed as part of the year end evaluation of the Company's income tax situation for the year ending February 28, 1997. As of February 29, 1996, the Company had net operating loss carryforwards of $4,466,000 for regular income tax and $4,557,000 for alternative minimum tax available to offset future Federal taxable income (a portion is subject to limitations of approximately $270,600), expiring at various dates through 2010. As of February 29, 1996, the Company had available tax credit carryforwards of approximately $164,000 to offset future Federal income taxes, which expire at various dates through 2006. NOTE 5 - Net income (loss) per common and common equivalent share is computed by dividing net income by the weighted average number of common and common equivalent shares (if applicable) outstanding during the periods. For the loss periods, common equivalent shares were anti-dilutive and were not included in the E.P.S. calculation. NOTE 6 - In October 1994, the Company borrowed $2,000,000 from a principal shareholder and director evidenced by a five year, interest only, eight percent note. The note is secured by all of the Company's assets. As consideration for the loan, the Company issued 1,000,000 warrants exercisable for five years at $2.00 per share for Company stock. The warrants were callable when the Company's stock reached a trading price of $4.50 for twenty consecutive days. On September 25, 2995, the Company called the warrants. On October 23, 1995, the Company received $1,900,000 for the exercise of the warrants and extinguished debt for $100,000. The Company also re-negotiated the interest rate on the $1,800,000 note to a rate of 5% per annum. In connection with the amended loan agreement, the Company issued four-year warrants to purchase 375,000 shares of the Company stock at $7.00 per share. At August 31, 1996, all of the warrants were outstanding and exercisable. NOTE 7 - In February 1996, the Company raised $4,297,000, net of offering costs, from the sale of 900,000 shares of common stock at $5.00 per share to private investors. 6. 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. DENSE-PAC MICROSYSTEMS, INC. (Small Business Issuer) November 4, 1996 James G. Turner - --------------------------- --------------------------- Date James G. Turner, Chairman of the Board and Chief Executive Officer November 4, 1996 - --------------------------- --------------------------- Date William M. Stowell, Chief Financial Officer 7. -----END PRIVACY-ENHANCED MESSAGE-----