-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, NrGzFHEt/tHkQXemoei511W0XmZGxm45E6dJD6CsZcnSoHd78X1XlENrKnjDInV6 MyDM2/RFrjJgFRpyflqyXQ== 0000912057-95-003887.txt : 19950516 0000912057-95-003887.hdr.sgml : 19950516 ACCESSION NUMBER: 0000912057-95-003887 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAZTEC INTERNATIONAL INC CENTRAL INDEX KEY: 0000801354 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 330178457 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-15353 FILM NUMBER: 95539659 BUSINESS ADDRESS: STREET 1: 6700 CORPORATE DR CITY: KANSAS CITY STATE: MO ZIP: 64120 BUSINESS PHONE: 8164836900 MAIL ADDRESS: STREET 1: 6700 CORPORATE DRIVE CITY: KANSAS CITY STATE: MO ZIP: 64120 10QSB 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 1995 Commission File Number 0-15353 SAZTEC INTERNATIONAL, INC. CALIFORNIA 33-0178457 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 43 MANNING ROAD, BILLERICA, MA 01821 (Address of Principal Executive Offices and Zip Code) (508) 262-9600 (Registrant's Telephone Number) --------------- 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 and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The number of shares outstanding of registrant's Common Stock at May 5, 1995 was 12,543,851 shares. SAZTEC INTERNATIONAL, INC. FORM 10-QSB QUARTER ENDED MARCH 31, 1995 CONTENTS DESCRIPTION PAGE PART I - FINANCIAL INFORMATION Consolidated Balance Sheets 3 - 4 Consolidated Statements of Operations and Accumulated Deficit 5 - 6 Consolidated Statements of Cash Flow 7 - 9 Notes to Consolidated Financial Statements 10-11 Management's Discussion and Analysis of Financial Condition and Results of Operations 12-13 PART II - OTHER INFORMATION Legal Proceedings 14 Changes in Securities Not Applicable Defaults Upon Senior Securities Not Applicable Submission of Matters to a Vote of Security Holders 14 Other Information 14 Exhibits and Reports on Form 8-K 14 Signatures 15 2 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 1995 AND JUNE 30, 1994
MAR 31, JUNE 30, 1995 1994 ---- ---- (Unaudited) CURRENT ASSETS Cash and short term investments $ 1,062,478 $ 386,263 Restricted cash 67,567 136,453 Accounts receivable, less allowance for doubtful accounts 2,327,238 3,428,679 Work in process 463,780 572,944 Prepaid expenses and other current assets 350,650 364,196 ------------ ------------ Total current assets 4,271,713 4,888,535 PROPERTY AND EQUIPMENT, NET 1,436,142 2,007,078 OTHER ASSETS Deposits and other assets 164,451 108,707 Goodwill and other intangible assets, less accumulated amortization 225,635 507,546 ------------ ------------ TOTAL ASSETS $ 6,097,941 $ 7,511,866 ------------ ------------ ------------ ------------
See accompanying notes. 3
SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 1995 AND JUNE 30, 1994 LIABILITIES AND STOCKHOLDERS' EQUITY MAR 31, JUNE 30, 1995 1994 ---- ---- (Unaudited) CURRENT LIABILITIES Notes payable $ 745,153 $ 1,090,664 Common stock subject to repurchase 80,000 80,000 Accounts payable 947,253 1,293,779 Accrued liabilities 1,124,824 984,606 Customer deposits 1,027,974 501,426 Income taxes payable 47,702 45,377 Current portion of long term debt and capital lease obligations 262,322 274,824 ------------ ------------ Total current liabilities 4,235,228 4,270,676 LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 342,568 296,497 COMMON STOCK SUBJECT TO REPURCHASE 20,000 80,000 COMMITMENTS AND CONTINGENT LIABILITIES --- --- STOCKHOLDERS' EQUITY Preferred stock-no par value; 1,000,000 shares authorized and no shares issued at March 31, 1995 and June 30, 1994 --- --- Common stock-no par value; 20,000,000 shares authorized; 12,253,851 shares issued at March 31, 1995 and 10,687,799 shares issued at June 30, 1994, respectively 10,947,311 10,163,998 Contributed capital 14,498 14,498 Accumulated deficit (9,316,612) (7,112,053) Cumulative translation adjustment (145,052) (201,750) ------------ ------------ Total stockholders' equity 1,500,145 2,864,693 ------------ ------------ Total liabilities and stockholders' equity $ 6,097,941 $ 7,511,866 ------------ ------------ ------------ ------------
See accompanying notes. 4
SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED) 1995 1994 ---- ---- Revenues $ 3,501,719 $ 4,277,463 Direct costs of revenue 2,772,882 3,335,766 -------------- -------------- Gross profit 728,837 941,697 Selling, general & administrative expenses 1,589,257 1,105,380 -------------- -------------- Operating income (loss) (860,420) (163,683) Other income (expense): Loss on disposal of division (Note 3) (401,763) --- Interest expense (64,296) (29,077) -------------- -------------- Loss from operations before provision (benefit) for income taxes and extraordinary item (1,326,479) (192,760) Provision (benefit) for income taxes (21,616) 57,097 -------------- -------------- Loss before extraordinary item (1,304,863) (249,857) Extraordinary item: Gain on extinguishment of debt ---- 71,119 -------------- -------------- Net loss (1,304,863) (178,738) Provision for dividends on preferred stock --- --- -------------- -------------- Net loss applicable to common shareholders (1,304,863) (178,738) Accumulated deficit at beginning of period (8,011,749) (6,413,775) -------------- -------------- Accumulated deficit at end of period $ (9,316,612) $ (6,592,513) -------------- -------------- -------------- -------------- Primary loss per share of common stock: Loss from operations $ (.11) $ (.03) -------------- -------------- -------------- -------------- Extraordinary item $ --- $ .01 -------------- -------------- -------------- -------------- Net loss applicable to common shareholders $ (.11) $ (.02) -------------- -------------- -------------- -------------- Weighted average number of shares 12,075,184 9,883,191 ------------- -------------- ------------- --------------
See accompanying notes. 5 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED)
1995 1994 ---- ---- Revenues $ 10,669,163 $ 13,853,299 Direct costs of revenue 8,671,924 10,564,356 ------------- ------------- Gross profit 1,997,239 3,288,943 Selling, general & administrative expenses 3,671,182 3,265,699 ------------- ------------- Operating income (loss) (1,673,943) 23,244 Other income (expense): Loss on disposal of division (Note 3) (401,763) --- Interest expense (128,853) (180,558) ------------- ------------- Loss from continuing operations before benefit for income (2,204,559) (157,314) taxes and extraordinary item Provision (benefit) for income taxes --- 166,256 ------------- ------------- Loss before extraordinary item (2,204,559) (323,570) Extraordinary item: Gain on extinguishment of debt --- 71,119 ------------- ------------- Net loss (2,204,559) (252,451) Provision for dividends on preferred stock --- (85,000) ------------- ------------- Net loss applicable to common shareholders (2,204,559) (337,451) Accumulated deficit at beginning of period (7,112,053) (6,255,062) ------------- ------------- Accumulated deficit at end of period $ (9,316,612) $ (6,592,513) ------------- ------------- ------------- ------------- Primary loss per share of common stock: Loss from continuing operations $ (.19) $ (.05) ------------- ------------- ------------- ------------- Extraordinary item $ --- $ .01 ------------- ------------- ------------- ------------- Net loss applicable to common shareholders $ (.19) $ (.05) ------------- ------------- ------------- ------------- Weighted average number of shares 11,361,643 6,492,015 ------------- ------------- ------------- -------------
See accompanying notes. 6 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED)
1995 1994 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,204,559) $ (252,451) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,053,884 795,009 Loss on sale of equipment 345,457 5,583 Interest forgiven --- (39,286) Gain on extinguishment of debt --- (71,119) Other 16,286 (20,658) Provision for bad debts 14,198 30,569 Change in assets and liabilities net of the effects of acquisitions: Accounts receivable 1,154,890 19,144 Work in process 123,798 155,704 Prepaid expenses and other assets (121,349) 28,642 Deposits and other assets 1,290 24,924 Accounts payable (340,786) (268,869) Accrued liabilities 97,990 (122,629) Customer deposits 499,561 (80,043) Bank overdraft --- (146,850) Income taxes payable --- 166,255 --------------- --------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 640,660 223,925 --------------- --------------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment (252,618) (163,435) Proceeds from sales of equipment 30,644 156,267 --------------- --------------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (221,974) (7,168) --------------- ---------------
See accompanying notes. 7 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED) (CONTINUED)
1995 1994 ---- ---- CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in restricted cash $ 71,021 $ 209,097 Payments received on notes receivable 93,413 77,797 Payments on stockholder's note --- (40,000) Principal payments on long-term debt and capital lease obligations (412,227) (889,991) Borrowings on notes payable 3,951,143 6,152,450 Payments on notes payable (4,124,588) (6,728,862) Net proceeds from issuance of common stock 729,688 1,172,967 Payments on common stock repurchase obligation (60,000) (60,000) -------------- -------------- Net cash provided by (used in) financing activities 248,450 (106,542) -------------- -------------- Effect on exchange rate changes in cash 9,079 12,088 -------------- -------------- Net increase in cash 676,215 122,303 Cash and short-term investments at beginning of period 386,263 673,625 -------------- -------------- Cash and short-term investments at end of period $ 1,062,478 $ 795,928 -------------- -------------- -------------- -------------- Supplemental disclosures of cash flow information: Purchase of property and equipment through capital lease obligations $ 205,061 $ 295,092 -------------- -------------- -------------- -------------- Cash paid during the period for: Interest $ 124,420 $ 290,413 -------------- -------------- -------------- -------------- Income taxes $ --- $ --- -------------- -------------- -------------- -------------- Purchase of outstanding minority interest of Saztec Europe, Ltd. through issuance of common stock: Increase in goodwill $ 53,625 $ --- -------------- -------------- -------------- --------------
See accompanying notes. 8 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE NINE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED) (CONTINUED)
1995 1994 Conversion of preferred stock into common stock $ --- $ 1,822,188 Payment of accrued dividends through the issuance of common stock --- 85,000 Write-off of unamortized debt issue costs --- (21,093) -------------- -------------- Increase in common stock $ --- $ 1,886,095 -------------- -------------- -------------- -------------- Conversion of convertible debt into common stock $ --- $ 1,750,000 Payment of accrued interest through the issuance of common stock $ --- $ 18,812 -------------- -------------- Increase in common stock $ --- $ 1,768,812 -------------- -------------- -------------- -------------- Conversion of account payable into long-term debt $ --- $ 318,104 -------------- -------------- -------------- -------------- Reduction of account payable in exchange for investment in SAZTEC Philippines, Inc. $ --- $ 68,525 -------------- -------------- -------------- --------------
9 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1995 AND 1994 (UNAUDITED) NOTE 1. ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and changes in cash flows. Results of operations for interim periods are not necessarily indicative of results to be expected for a full year. Certain reclassifications have been made in the fiscal 1994 financial statements to conform with the current year's presentation. NOTE 2. COMMON STOCK On October 5, 1994, the Company sold 1,226,052 shares of unregistered Common Stock of the Company for $750,000, to Tallard B.V. ("Tallard") pursuant to a Stock Purchase Agreement (the "Agreement"). The proceeds from the sale were received in installments through December 31, 1994. The proceeds were used to fund capital equipment acquisitions and working capital requirements of the Company. With this purchase, Tallard and its affiliates owned 4,129,364 shares of Common Stock of the Company on March 31, 1995. ISSUANCE OF COMMON STOCK During the quarter ended March 31, 1994, the Company completed three separate private placements generating $1,051,729, net of issuance costs, in exchange for 1,100,000 unregistered shares of the Company's Common Stock and warrants to issue an additional 1,287,500 shares at $1.375 per share. One of the private placements of 750,000 shares was with a group of individuals unrelated to the Company ("the Meyerson Group"). One of the transactions representing 250,000 shares was with Tallard, B.V., a greater than 5% stockholder of the Company. The remaining transaction for 100,000 shares was with a member of the Company's Board of Directors. Subsequent to the completion of these transactions, certain members of the Meyerson Group alleged certain disclosure violations by the Company in the offering documents relating to the Meyerson Group offering. The Company denied the allegations and believes they were without merit. However, in order to avoid the potential cost of litigation, the Company agreed to issue additional unregistered Common Stock of 250,000 shares to the Meyerson Group, 83,333 shares to Tallard, and 33,333 shares to the member of the Board. The Company has also agreed to decrease the warrant price to $1.125 per share for all of the underlying warrants. In exchange for these modifications to the original private placements, the purchasers have agreed to release the Company from all claims arising out of the three private placements. Additionally, the Company granted certain demand registration rights to the Meyerson Group on the 1,000,000 shares they now own. On February 1, 1995, the Company received notification from the Meyerson Group of the exercise of this registration right. 10 NOTE 3. LOSS ON DISCONTINUED DIVISION In February, 1995, management decided to discontinue the Financial Transaction Processing Division ("FTP"). Management is currently in negotiations to sell the division. The disposal is expected to be completed by June, 1995. During the quarter ended March 31, 1995, the Company recorded an expected loss on the disposal of $401,763. The expected loss on disposal included an estimated loss of $63,108 from operations for March 31, 1995 until the final disposal date. At March 31, 1995, current assets and total assets of the FTP division were $226,099 and $302,999, respectively. At June 30, 1994, current assets and total assets were $287,593 and $704,520, respectively. The operating results for FTP for the three and nine month periods ended March 31, 1995 and 1994 are as follows: FOR THE THREE MONTHS ENDED MARCH 31, 1995 1994 ---- ---- Revenue $ 247,298 $ 421,486 Gross Profit (Loss) (32,238) 42,433 Operating Income (Loss) $ (78,056) $ 41,522 FOR THE NINE MONTHS ENDED MARCH 31, 1995 1994 ---- ---- Revenue $ 1,029,488 $ 1,091,456 Gross Profit (Loss) (31,889) 10,826 Operating Income (Loss) $ (126,455) $ (275) 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Revenue for the nine months ended March 31, 1995, decreased to $10,669,163 from $13,853,299. Revenue for the quarter ended March 31, 1995 decreased to $3,501,719 from $4,277,463 for the same period in the prior year. These decreases are primarily due to the decreases in revenue from the electronic publishing industry. The electronic publishing industry generated revenue of $4,784,248 and $1,573,279 for the nine month and third quarter periods of fiscal 1995 compared to $6,885,933 and $2,009,053 for the same periods in the prior year. For the nine months ended March 31, revenue from the electronic publishing industry included $257,776 in 1995, and $1,163,138 in 1994, from separate projects for one domestic client. These projects are essentially completed, but are expected to provide an additional $50,000 of revenue during the remaining months of fiscal 1995. The decline in electronic publishing revenue is due primarily to the completion of major projects which have not yet been replaced. Included in the electronic publishing industry, the Company has anticipated an increase in the compound document conversion marketplace. However, this emerging market is subject to ongoing evaluations by end users and, consequently, the demand for the Company's services has not met expectations. Management currently anticipates the domestic revenue from the electronic publishing industry will be approximately $250,000 for the fourth quarter of fiscal 1995. For the nine months ended March 31, 1995, the revenue generated by the domestic electronic publishing industry was $745,443. For the year ended June 30, 1994, the revenue generated by the domestic electronic publishing industry was $2,387,000. Revenue from other industries for the nine and three month periods ended March 31, 1995 was $3,099,348 and $1,235,584, respectively. The revenue generated during the same periods in the prior year was $3,698,295 and $1,064,247, respectively. Part of the nine month decrease was due to the Company's sale of the Kansas City Data Entry and the Scanning America divisions in October, 1993. For the nine months ended March 31, 1994, these divisions generated revenue of $292,011. Another reason for the decline was a drop in services performed for medical claims processing clients. For the nine months ended March 31, 1994, medical claims processing services generated aggregate revenue of $262,312 for three insurance companies. Due to technological advancements by the insurance companies that replaced the need for the Company's services, these clients did not generate revenue during the nine months ended March 31, 1995. The remainder of the decline in revenue was not due to any specific occurrence. Management currently expects revenue from other industries to return to near its historic levels as reflected in the three month results. Revenue from other services for the nine and three month periods ended March 31, 1995 was $2,785,517 and $692,857, respectively. The revenue generated for the same periods in 1994 was $3,269,071 and $1,064,247, respectively. Included in revenue from other services is the revenue generated by the Company's Financial Transaction Processing (FTP) division. During the first quarter of fiscal 1995, the Company was notified by two clients that they were not renewing the contracts scheduled to expire in January 1995. In February, 1995, the Company decided to discontinue the FTP division. The disposal is expected to be completed by June 30, 1995. During the quarter ended March 31, 1995, the Company recognized an estimated loss on the disposal of $401,763 including an estimate of the operating loss of $63,108 for the quarter ending June 30, 1995. The revenue and operating losses generated by the FTP division for the nine and three month periods ended March 31, 1995 were $1,029,488 and $(126,455), and $247,298 and $(78,056), respectively. The revenue and operating income or (loss) for the nine and three month periods ended March 31, 1994 were $1,091,456 and $(275), and $421,486 and $41,522, respectively. 12 During the past three years, the Company has closed or sold non-profitable operations. This is a continuing effort by the Company to evaluate the profitability prospects of each of its services and divisions and to eliminate those that are not likely to attain profitability in the foreseeable future. During the five year period ending June 30, 1994, the revenue generated from foreign sources has ranged from 14% to 51%. Management currently expects SAZTEC Europe, Ltd. and its subsidiaries to generate approximately 55% of the expected fiscal 1995 revenue. For the nine months ended March 31, 1995, revenue from foreign sources was 53% of the Company's total revenue compared to 50% for the same period in the prior year. For the nine months ended March 31, 1995, the gross profit percentage was 19% as compared to 24% for the same period in the prior year. During the quarter ended September 30, 1994, management decided to close the Dayton office and consolidate the compound document imaging services into Advanced Automation Associates, a wholly owned subsidiary located in the New England area. As a result, $116,800 was charged to cost of revenues for the lease abandonment and severance costs. The gross profit percentage was also adversely affected by the decline in revenue and the fixed nature of certain of the costs of revenue. As a percentage of revenue, selling, general and administrative (SG&A) expenses increased to 34% of revenues in the nine months of fiscal 1995 from 24% in 1994. As a dollar amount, SG&A expense increased to $3,671,182 compared to $3,265,699 for the same period in the prior year. However, included in the quarter ended March 31, 1995 was $411,134, in aggregate, from one time charges. These charges are primarily attributable to the accelerated amortization of the intangible assets that were recorded pursuant to the acquisition of Castle Microfilm, Ltd., a wholly owned subsidiary of Saztec Europe, Ltd., in November, 1991, lease abandonment charges from the consolidation of facilities for Castle Microfilm, and employee termination costs. CAPITAL RESOURCES AND LIQUIDITY On October 5, 1994, the Company entered into a private placement agreement with Tallard B.V., a Netherlands Corporation, ("Tallard") whereby the Company issued an aggregate of 1,226,052 shares of unregistered Common Stock in exchange for $750,000. The proceeds were received in installments with the final installment received on December 31, 1994. The proceeds from the private placement were used to reduce debt, fund fixed asset acquisitions and working capital requirements. The Company's primary credit facility provides for borrowings of up to $750,000 based on a percentage of outstanding domestic trade receivables. On May 8, 1995, the Company had borrowed $747,356 under its revolving credit agreement and had qualified for additional borrowings of $2,644. The revolving credit agreement is secured by substantially all domestic assets of the Company, including the stock of subsidiaries, and is scheduled to expire on May 22, 1995. The lender has indicated it does not presently intend to renew the credit agreement under the existing terms due to the Company's planned relocation of its headquarters to the New England area. Management is having ongoing discussions with the lender in order to negotiate an extension of the revolving credit agreement with acceptable terms. Management has also initiated discussions with other lenders in the New England area. As shown in the Consolidated Statements of Cash Flows, the Company incurred a positive cash flow from operations of $640,660 in fiscal 1995 compared with $223,925 for the prior year. The increase in cash flow is due to collections of accounts receivable and customer deposits partially offsest by payments of accounts payable. The liquidity of the Company could be adversely affected in the fourth quarter of fiscal 1995 by (i) the scheduled maturity of the revolving credit facility on May 22, 1995, and (ii) additional working capital requirements to support projected revenue increases during the remainder of fiscal 1995 and beyond. The Company is exploring and will continue to explore opportunities to alleviate the liquidity pressures, including replacement of the revolving credit facility and additional private placements. There can be no assurances that the Company will be successful in these or any other efforts. The failure of the Company to solve its short-term liquidity pressures could directly affect the ability of the Company to operate as a going concern. 13 SAZTEC INTERNATIONAL, INC. MARCH 31, 1995 FORM 10-QSB PART II - OTHER INFORMATION ITEM 3. LEGAL PROCEEDINGS During May 1992, an action was brought against the Company in Federal Court by a former employee of a subsidiary of the Company alleging breach of contract by the Company in connection with the employment and termination of the employee. In October, 1993, the action was dismissed by the Court. In December, 1993, the former employee refiled the action in State Court. The Company is vigorously defending itself in this matter and a trial date has been scheduled for June, 1995. At present, management and counsel believes that if the Company were to lose, the outcome of this action, if any, will not exceed $100,000 in damages plus the former employee's legal fees. However, management and counsel believe the Company will prevail. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER The Annual Meeting of Shareholders was held on February 15, 1995. All Directors were re-elected to serve for another year. There was no solicitation in opposition to management nominees. The results of the other actions at the meeting are as follows: 1. Proposal to amend the Bylaws: For: 9,986,079 Against: 71,900 Abstain: 19,750 2. Proposal to approve the Saztec International, Inc. 1995 Stock Option Plan: For: 6,887,813 Against: 138,893 Abstain: 26,000 3. Proposal to approve the Saztec International, Inc. 1995 Non-Employee Directors Stock Option Plan: For: 6,909,085 Against: 121,325 Abstain: 25,220 ITEM 5. OTHER INFORMATION CHIEF FINANCIAL OFFICER On April 25, 1995, Mr. Donald Campbell was appointed Chief Financial Officer and Treasurer. The prior Treasurer, David Roberts will be leaving the Company at the end of June in connection with the Company's relocation of its corporate headquarters to the New England area. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS: ITEM NUMBER UNDER REGULATIONS S-K ITEM 601 DESCRIPTION OF EXHIBIT PAGE (11) Statement Re: Computation 16 Per Share Earnings (b) REPORTS ON FORM 8-K None 14 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. SAZTEC INTERNATIONAL, INC. (REGISTRANT) DATE: MAY 11, 1995 BY: /S/ DONALD CAMPBELL ------------------------------------- DONALD CAMPBELL CHIEF FINANCIAL OFFICER, TREASURER BY: /S/ DAVID W. ROBERTS ------------------------------------ DAVID W. ROBERTS SENIOR VICE PRESIDENT 15 SAZTEC INTERNATIONAL, INC. MARCH 31, 1995 FORM 10-QSB COMPUTATION OF SHARES USED FOR EARNINGS PER SHARE CALCULATION OF COMMON STOCK OUTSTANDING
Common Days Weighted For the Nine Months Ended March 31, Stock Outstanding Average ----- ----------- ------- 1995 - ---- July 1 - March 31 10,687,799 274 10,687,799 Repurchase of common stock (30,000) various (19,927) Shares issued pursuant to a private placement 1,226,052 various 630,925 Shares issued pursuant to a price adjustment to a private placement 250,000 54 49,270 Share issued pursuant to the achievement of earn out targets 120,000 31 13,576 --------------- 11,361,643 --------------- --------------- 1994 - ---- July 1 - March 31 4,766,384 274 4,766,384 Repurchase of common stock (30,000) various (19,927) Shares issued pursuant to private placements 1,113,333 various 122,871 Shares issued pursuant to stock options exercised 76,800 various 54,380 Issuance pursuant to market value adjustment 10,000 146 5,328 Shares issued pursuant to conversion of convertible debt and accrued interest 2,353,312 91 781,575 Shares issued pursuant to conversion of preferred stock and accrued dividends 2,352,800 91 781,404 --------------- 6,492,015 --------------- --------------- For the three months ended March 31, 1995 - ---- January 1 - March 31 11,893,851 90 11,893,851 Repurchase of common stock (10,000) 90 (10,000) Shares issued pursuant to a price adjustment to a private placement 250,000 54 150,000 Share issued pursuant to the achievement of earn out targets 120,000 31 41,333 --------------- 12,075,184 --------------- --------------- 1994 - ---- January 1 - March 31 9,550,829 90 9,550,829 Repurchase of common stock (10,000) 90 (10,000) Shares issued pursuant to private placement 1,113,333 Various 342,222 Shares issued pursuant to stock options exercised 1,800 7 140 --------------- 9,883,191 --------------- ---------------
16 EX-27 2 EXHIBIT 27
5 9-MOS JUN-30-1994 JUL-01-1994 MAR-31-1995 1,062,478 0 2,358,708 (31,470) 463,780 4,271,713 5,486,790 4,050,648 6,097,941 4,235,228 0 10,947,311 0 0 (130,554) 6,097,941 0 10,669,163 0 8,671,924 4,028,746 44,199 128,853 (2,204,559) 0 (2,204,559) 0 0 0 (2,204,559) (.19) 0
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