-----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, NPYyvfC3ImpXx3SjskbheYEkISSULWZ/VZdOrHyq2969NJtaBrgZ55qidZrG5+0x sRKMBFYWiz17gu8hfFrxTQ== 0000796505-96-000025.txt : 19961107 0000796505-96-000025.hdr.sgml : 19961107 ACCESSION NUMBER: 0000796505-96-000025 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961106 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: APA OPTICS INC /MN/ CENTRAL INDEX KEY: 0000796505 STANDARD INDUSTRIAL CLASSIFICATION: OPTICAL INSTRUMENTS & LENSES [3827] IRS NUMBER: 411347235 STATE OF INCORPORATION: MN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16106 FILM NUMBER: 96654910 BUSINESS ADDRESS: STREET 1: 2950 NE 84TH LANE CITY: BLAINE STATE: MN ZIP: 55434 BUSINESS PHONE: 6127844995 MAIL ADDRESS: STREET 2: 2950 NE 84TH LN CITY: BLAINE MINNESOTA STATE: MN ZIP: 55449 10QSB 1 Page 1 of 7 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB X Quarterly report pursuant to Section 13 or 15(d) of the Securitie s Exchange Act of 1934 For the quarterly period ended September 30, 1996 or Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act 1934 For the transition period from to . Commission File Number 0-16106 APA Optics, Inc. (exact name of small business issuer as specified in its charter) Minnesota 41-1347235 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 2950 N.E. 84th Lane, Blaine, Minnesota 55449 (Address of principal executive offices and zip code) Issuer's telephone number, including area code: (612) 784-4995 Indicate whether the issuer (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 issuer was required to file such reports), and (2) has been subject to the filing requirement for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class: Outstanding at September 30, 1996 Common stock, par value $.01 8,304,624 Page 2 of 7 PART 1, FINANCIAL INFORMATION ITEM 1, FINANCIAL STATEMENTS APA OPTICS, INC. CONDENSED BALANCE SHEETS
ASSETS September 30 March 31 1996 1996 CURRENT ASSETS: (Unaudited) (Audited) * Cash and short-term investments $4,499,123 $2,256,309 Accounts receivable 824,961 406,852 Inventories: Raw materials 18,385 24,806 Work-in-process & finished goods 146,139 105,993 Costs in excess of billings on research contracts 0 210,658 Prepaid expenses 12,850 30,305 Bond reserve funds 17,500 66,667 TOTAL CURRENT ASSETS 5,518,958 3,101,590 PROPERTY AND EQUIPMENT, NET 1,234,307 1,157,570 OTHER ASSETS 2,835,645 497,189 $ 9,588,910 $ 4,756,349 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 152,517 $ 100,000 Accounts payable 59,884 112,857 Accrued expenses 107,724 91,264 TOTAL CURRENT LIABILITIES 320,125 304,121 LONG-TERM DEBT 3,950,574 345,000 SHAREHOLDERS' EQUITY Undesignated shares; 5,000,000 shares authorized; none issued - --- --- Common stock, $.01 par value; 15,000,000 shares authorized; 8,304,624 & 7,990,000 issued 83,046 79,900 Paid-in capital 8,208,943 6,930,826 Retained earnings (deficit) (2,973,778) (2,903,498) 5,318,211 4,107,228 $ 9,588,910 $ 4,756,349
Derived from audited financial statements Page 3 of 7 APA OPTICS, INC. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended Six months ended September 30 September 30 1996 1995 1996 1995 REVENUES $ 672,666 $ 682,828 $1,211,054 $1,274,845 COSTS AND EXPENSES: Cost of sales and services 442,328 547,409 799,068 992,735 Selling, general & administrative 157,263 126,732 306,489 279,359 Research & development 117,650 - --- 226,006 2,467 717,241 674,141 1,331,563 1,274,561 Gain/Loss from Operations: (44,575) 8,687 (120,509) 284 INTEREST INCOME & EXPENSE: Interest Income 94,355 15,465 115,543 17,910 Interest Expense (56,293) (9,107) (64,814) (19,386) 38,062 6,358 50,729 (1,476) INCOME (LOSS) BEFORE INCOME TAXES (6,513) 15,045 (69,780) (1,192) INCOME TAX EXPENSE (BENEFIT) 250 250 500 500 NET INCOME (LOSS) $ (6,763) $ 14,795 $ (70,280) $ (1,692) EARNINGS (LOSS) PER COMMON & COMMON EQUIVALENT SHARE (EXHIBIT 11) $ (.00) $ .00 $ (.01) $ (.00) WEIGHTED AVERAGE SHARES OUTSTANDING 8,160,736 7,623,839 8,081,197 7,482,477
Page 4 of 7 APA OPTICS, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended September 30 1996 1995 OPERATING ACTIVITIES Net income (loss) $ (70,280) $ (1,692) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 219,768 215,689 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (418,109) (361,021) (Increase) decrease in inventories and prepaid expenses 32,897 83,375 Costs in excess of billings on research contracts 210,658 --- Increase (decrease) in accounts payable and accrued expenses 16,004 (56,055) Other 19,682 (57,538) Net cash provided by (used in) operating activities 10,620 (177,242) INVESTING ACTIVITIES Purchases of property and equipment (272,505) (32,039) Net cash (used in) investing activities (272,505) (32,039) FINANCING ACTIVITIES Proceeds from the sale of common stock 1,281,263 1,828,101 Long-term debt proceeds 3,722,483 --- Earnest money deposit on bond financing (315,000) --- Debt placement costs (286,869) --- Bond reserve funds (1,780,269) --- Repayment of long-term debt (116,909) (95,000) Net cash provided by financing activities 2,504,699 1,733,101 Increase in cash 2,242,814 1,523,820 Cash at Beginning of Period 2,256,309 401,034 Cash at End of Period $ 4,499,123 $ 1,924,854
NOTE TO CONDENSED FINANCIAL STATEMENTS 1. In the opinion of management, the information furnished reflects all adjustments which are necessary to a fair statement of the results of the interim periods presented. All adjustments were of a normal recurring nature. The result of any interim period are not necessarily indicative of results for the full year. Page 5 of 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations: Revenues for the second quarter of fiscal 1997 ended September 30, 1996 were $672,666, a decrease of 1% from the second quarter of fiscal 1996 ended September 30, 1995. The second quarter revenues of fiscal 1997 are up 25% as compared to the first quarter of fiscal 1997 attributed to additional contract revenues. Revenues for the first two quarters of fiscal 1997 are down five percent as compared to the first two quarters of fiscal 1996. The Company continues to devote personnel toward product development associated with the Aberdeen project. For the second quarter of fiscal 1997, the Company is reporting a loss of $6,763 as compared to a loss of $63,517 in the first quarter of fiscal 1997. For the first two quarters of fiscal 1997, the Company is reporting a loss of $70,280 as compared to a loss of $1,692 for fiscal 1996. Although the Company has an increased loss for the first six months of fiscal 1997 as compared to the first six months of fiscal 1996, the Company has increased its gross profit margin from 22% in fiscal 1996 to 34% in fiscal 1997. The main reason for the increased losses in spite of the increased gross profit margin in 1997, is the significant increase in internal research and development and administrative costs relative to the move toward product manufacturing. Research and development costs have increased from $ 2,467 for the first six months of fiscal 1996 to $226,006 for the first six months of fiscal 1997. The Company plans to continue these IR&D costs attributed to further development of the WDM receiver in the following quarters. Liquidity and Capital Resources: The Company's cash balance at September 30, 1996 is $4,499,123 compared to $2,256,309 at March 31, 1996. The Company's account receivable balance has increased to $824,961 at September 30, 1996 compared to $406,852 at March 31, 1996. The increase in receivables is due to the delay in payment on government contracts, which will all be paid during the third quarter of fiscal 1997. The cash increase during the second quarter can be attributed to the Company completing additional financing with Aberdeen, South Dakota. The Company received an additional $700,000 in equity financing and $75,000 in loans during the second quarter. Following the end of the second quarter the Company began Construction of the Aberdeen facility and plans to complete construction by March 1997. Page 6 of 7 PART II. OTHER INFORMATION ITEMS 1 - 5. Not Applicable. ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibit 11: Statement RE: Computation of per share earnings. (b) Exhibit 27: Financial Data Schedules There were no reports on Form 8-K filed during the three months ended September 30, 1996. Signatures In accordance with the requirements of the Securities Exchange Act of 1934, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. APA OPTICS, INC. November 6, 1996 Anil K. Jain Date Anil K. Jain President Principal Executive Officer Treasurer & Principal Financial Officer November 6, 1996 Randal J. Becker Date Randal J. Becker Principal Accounting Officer EX-27 2
5 6-MOS MAR-31-1997 SEP-30-1996 4,499,123 0 824,961 0 164,524 5,518,958 1,234,307 219,768 9,588,910 320,125 0 0 0 83,046 5,235,165 9,588,910 1,211,054 1,211,054 799,068 799,068 532,495 0 64,814 (69,780) 500 (70,280) 0 0 0 (70,280) (.01) (.01)
EX-11 3 Exhibit 11 APA OPTICS, Inc. Statement RE: Computation of Per Share Earnings
Three months ended Six months ended September 30 September 30 1996 1995 1996 1995 Average common shares outstanding 8,160,736 7,583,161 8,081,197 7,482,477 Dilutive stock options and warrants (A) 0 40,678 0 0 Total 8,160,736 7,623,839 8,081,197 7,482,477 Net income (loss) $ (6,763) $ 14,795 $ (70,280) $ (1,692) Per share amount $(.00) $.00 $(.01) $(.00)
(A) Calculated using the "treasury stock" method. -----END PRIVACY-ENHANCED MESSAGE-----