-----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, LQXAylI2R9PY8JZe1KclinBeiOuIhElkWUglUG2/RQGZnaEkA+JvUIHJCYDdkvKi grv0qUiYLXboH0S48h6+pg== 0000008065-98-000002.txt : 19980205 0000008065-98-000002.hdr.sgml : 19980205 ACCESSION NUMBER: 0000008065-98-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980204 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASTROSYSTEMS INC CENTRAL INDEX KEY: 0000008065 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823] IRS NUMBER: 135691210 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-03344 FILM NUMBER: 98520906 BUSINESS ADDRESS: STREET 1: 1220 MARKET STREET STREET 2: SUITE 603 CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: (302) 652- MAIL ADDRESS: STREET 1: 1220 MARKET STREET STREET 2: SUITE 603 CITY: WILMINGTON STATE: DE ZIP: 19801 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1997 ___________________________________________ or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended to Commission File Number: 0-3344 __________________________________________________ ASTROSYSTEMS, INC. __________________________________________________________________________ (Exact name of registrant as specified in its charter) Delaware 13-5691210 ____________________________________________________ ___________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1220 Market Street, Suite 603, Wilmington, Delaware 19801 ____________________________________________________ ___________________ (Address of principal executive offices) (Zip Code) (302) 652-3115 __________________________________________________________________________ (Registrant's telephone number, including area code) N/A __________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) has 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 registrant 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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Check whether the issuer has filed all documents and reports required to be filed by Sections 12, 13 or 15 (d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes No APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares outstanding of the issuer's common stock as of January 27, 1998 is 5,827,485. ASTROSYSTEMS, INC. AND SUBSIDIARIES INDEX Page No. ________ Part I - FINANCIAL INFORMATION Item 1. Consolidated Statement of Net Assets in Liquidation 4 December 31, 1997 Consolidated Statement of Changes in Net Assets 5 in Liquidation Six Months Ended December 31, 1997 and 1996 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis or Plan of Operation 9 Part II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 12 Page 2 PART I - FINANCIAL INFORMATION ASTROSYSTEMS, INC. AND SUBSIDIARIES The financial information herein is unaudited. However, in the opinion of management, such information reflects all adjustments (consisting of normal recurring accruals and revisions to estimations) necessary to a fair presentation for the period being reported. On February 2, 1996, the Stockholders of the Company approved a Plan of Complete Liquidation and Dissolution (the "Plan"). Therefore, the financial statements are presented in accordance with the liquidation basis of accounting. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their anticipated settlement amounts. Certain information and footnote disclosures normally included in financial statements prepared in accordance with the liquidation basis of accounting have been condensed or omitted. Accordingly, these condensed financial statements should be read in conjunction with the Registrant's financial statements included in the Company's Form 10-KSB for the year ended June 30, 1997. Page 3 ASTROSYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION (Amounts in thousands, except per share amounts) (Unaudited) December 31, 1997 ____________ Assets ______ Cash and cash equivalents $12,317 U.S. government securities 2,979 Other assets 2,250 _______ 17,546 Liabilities ___________ Deferred income taxes 5,041 Accrued expenses/contingency reserve 4,186 _______ Net assets in liquidation $8,319 ====== Number of common and common equivalent shares outstanding 5,828 ===== Net assets in liquidation per share $1.43 ===== The accompanying notes are an integral part of this statement. Page 4 ASTROSYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION (In thousands) (Unaudited) Six months Six months ended ended December 31, December 31, 1997 1996 ___________ ____________ Net assets in liquidation - beginning of period $5,497 $34,469 Increase in estimated liquidation values of net assets over liabilities 2,822 831 ______ _______ Net assets in liquidation - end of period $8,319 $35,300 ====== ======= The accompanying notes are an integral part of these statements. Page 5 Astrosystems, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Six Month Periods ended December 31, 1997 and 1996 NOTE A - BASIS OF PRESENTATION ______________________________ A Plan of Complete Liquidation and Dissolution (the "Plan") was adopted by the Company's Board of Directors (the "Board") on October 26, 1995 and approved by the holders of a majority of the Company's outstanding shares of common stock on February 2, 1996. The Plan provides for: (1) the payment of or provision for all of the Company's liabilities and obligations, (2) the distribution to the Company's shareholders in kind or of the proceeds from sale or other disposition of all of the Company's assets, (3) the transfer of any remaining assets to a liquidating trust by February 2, 2000, if applicable, and (4) the dissolution of the Company. The Company has adopted the liquidation basis of accounting for all periods subsequent to February 2, 1996. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values and liabilities are stated at their anticipated settlement amounts. Therefore, historical financial information is not comparable to the liquidation period financial information. The Company has set aside, as Accrued expenses/contingency reserve, an amount believed to be adequate for payment of all expenses and other known liabilities, as well as likely and quantifiable contingent obligations, including potential tax obligations. A portion of the Accrued expenses/contingency reserve is a reserve for other contingencies, aggregating $1,350,000 at December 31, 1997, which could be made available for distribution to stockholders if and when the Company determines it is no longer required. In the event that the reserve for other contingencies is not adequate for payment of the Company's expenses and liabilities, each stockholder could be held liable for pro rata payments to creditors in an amount not to exceed the stockholder's prior distributions from the Company. The valuation of assets and liabilities necessarily requires many estimates and assumptions, and there are substantial uncertainties in carrying out the provisions of the Plan. The actual value of any liquidating distributions will depend upon a variety of factors including, among others, the actual market prices of any securities distributed in kind, the proceeds from the sale of any of the Company's assets and the actual timing of distributions. The valuations presented in the accompanying statement of net assets in liquidation represent forecasts, based on present facts and circumstances, of the estimated realizable values of assets, net of liabilities and estimated costs associated with carrying out the provisions of the Plan. The actual values and costs could be higher or lower than the amounts recorded. On June 30, 1997, the Company declared an initial liquidating distribution of $5.00 per share in cash to stockholders of record as of August 15, 1997. The distribution was paid on September 8, 1997. The Board of Directors is currently unable to predict the precise amount or timing of any future distributions pursuant to the Plan. The actual amount and timing of, and record date for, all distributions will be determined by the Board of Directors, in its sole discretion, and will depend in part upon the Board's determination as to whether particular assets are to be distributed in kind or otherwise disposed of, and the amounts deemed necessary by the Board to pay or provide for all the Company's liabilities and obligations. Page 6 Astrosystems, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Six Month Periods ended December 31, 1997 and 1996 NOTE B - CHANGES IN NET ASSETS IN LIQUIDATION _____________________________________________ The changes in the estimated liquidation values of net assets over liabilities are as follows: December 31, December 31, 1997 1996 (in thousands) (in thousands) ____________ ____________ Proceeds from exercise of stock options $2,070 - Adjustment to Accounts Payable 946 - Estimated taxes on above adjustment (322) - Additional interest earned and estimated on cash and cash equivalents 425 $960 Change in the estimate of shut-down costs (356) - Other adjustments 59 (129) ______ ____ Increase in estimated liquidation values of net assets over liabilities $2,822 $831 ====== ==== NOTE C - ACCRUED EXPENSE/CONTINGENCY RESERVE ____________________________________________ Accrued expenses at December 31, 1997 include estimates of costs to be incurred in carrying out the Plan. The actual costs could vary significantly from the related provisions due to uncertainty related to the length of time required to complete the Plan and complexities and contingencies which may arise. Existing liabilities at December 31, 1997 consist of (amounts in thousands): Accounts payable, accrued expenses and miscellaneous $1,476 Minimum payments on nonrecourse obligation 88 Shutdown costs and estimated operating costs (including compensation) to administer the Plan through dissolution 2,529 Estimated interest income (557) Estimated tax benefit of losses through dissolution (700) Reserve for other contingencies 1,350 ______ $4,186 ====== Page 7 Astrosystems, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Six Month Periods ended December 31, 1997 and 1996 NOTE C (continued) ______ Accounts payable, accrued expenses and miscellaneous consist of deferred compensation payable to the officers of the Company, commissions payable, accrued professional fees and other accrued liabilities. The Company has set aside, as reserve for other contingencies, an amount believed to be adequate for payment of likely and quantifiable contingent obligations, including potential tax obligations. Any portion of the reserve for other contingencies which the Company determines is no longer required will be made available for distribution to its stockholders. In the event that the reserve for other contingencies account is not adequate for payment of the Company's expenses and liabilities, each stockholder could be held liable for pro rata payments to creditors in an amount not to exceed the stockholder's prior distributions from the Company. NOTE D - SALE OF OPERATING ASSETS _________________________________ As of February 7, 1996, all of the Company's operating assets were sold to two purchasers. The purchase prices are subject to adjustment based upon a final valuation of the transferred inventory and equipment. Pursuant to one of the purchase agreements, $1,000,000 of the purchase price of $3,706,700 was being held in escrow to provide for indemnification claims that may be asserted against the Company. At June 30, 1997, the amount held in escrow was reduced to approximately $773,000. On August 21, 1997, approximately $276,000 was released to the Company. The Company has recorded a receivable aggregating approximately $594,000 based upon the Company's valuation of inventory sold. The value of certain inventory items is currently being disputed; however, the Company does not believe that the final valuation will have a material effect on the value of the net assets in liquidation. NOTE E - OTHER ASSETS _____________________ Assumes no material value for the Company's holdings in AstroPower, Inc. On December 18, 1997, AstroPower, Inc. filed a registration statement for an initial public offering of 3,015,000 shares of common stock at a maximum offering price of $10.00 per share. If the offering is successful, the Company will own 1,193,750 shares (this number gives effect to a three- for-four reverse stock split prior to the issue). There can be no assurances regarding the success or price per share of this offering. In addition, the Company, along with the other major shareholders of AstroPower, Inc., has agreed not to sell any shares held for a six month period after the offering date. Page 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Liquidity, Capital Resources and Impact of Inflation ____________________________________________________ The Board of Directors adopted, and the stockholders approved on February 2, 1996, a Plan of Complete Liquidation and Dissolution (the "Plan") of the Company. See "Plan of CompleteLiquidation and Dissolution" below. The Company announced on March 26, 1996 a Board of Directors authorization for the repurchase of up to 500,000 shares of Common Stock to be made from time to time through openmarket and privately negotiated transactions (in addition to the 500,000 shares previously authorized on October 23, 1992). To date, 676,404 shares have been repurchased. On June 30, 1997, the Company declared an initial liquidating distribution of $5.00 per share in cash to stockholders of record as of August 15, 1997. The distribution was paid on September 8,1997. Although the Company has not established a firm timetable for additional liquidating distributions to stockholders, the Company will, subject to exigencies inherent in winding up the Company's business, make such distributions consistent with maximizing stockholder value. The actual amount and timing of, and record date for, all additional distributions will be determined by the Board of Directors, in its sole discretion, and will depend in part upon the Board's determination as to whether particular assets are to be distributed in kind or otherwise disposed of, and the amounts deemed necessary by the Board to pay or provide for all the Company's liabilities and obligations. Statement of Net Assets in Liquidation ______________________________________ Pursuant to the Plan, the Company consummated the sales of the assets of its three operating units (Military Division, Behlman Electronics subsidiary and Industrial Automation Division) as of February 7, 1996. The exact amount of the proceeds to the Company of such sales is dependent upon a final fixed asset and inventory valuation. The value of certain inventory items is being disputed; however, the Company does not believe that the final result will have a material effect on the value of the Net Assets in Liquidation. In connection with the sale of the Military and Behlman operations, approximately $500,000 of the purchase price currently is being held in escrow to provide for certain indemnification claims that the buyer may assert against the Company under the sale agreement. The Company has set aside, as Accrued expenses/contingency reserve, an amount believed to be adequate for payment of all expenses and other known liabilities as well as likely and quantifiable contingent obligations, Page 9 including potential tax obligations. Any portion of the contingency reserve which the Company determines is no longer required will be made available for distribution to its stockholders. In the event that the Accrued expenses/contingency reserve account is not adequate for payment of the Company's expenses and liabilities, each stockholder could be held liable for pro rata payments to creditors in an amount not to exceed the stockholder's prior distributions from the Company. The Company has therefore adopted a conservative policy in retaining sufficient assets to insure against any unforeseen and non-quantifiable contingencies. Statement of Changes in Net Assets in Liquidation _________________________________________________ From July 1, 1997 to December 31, 1997 there was an increase in Net Assets in Liquidation of $2,822,000. This increase was primarily due to the exercise of stock options and adjustment to accounts payable. Plan of Complete Liquidation and Dissolution ____________________________________________ On February 2, 1996, the stockholders of the Company approved a Plan of Complete Liquidation and Dissolution for the Company. Pursuant to the Plan, the Company has sold its three operating units and intends to sell such of its remaining assets as are not to be distributed in kind to its stockholders. The Company intends to provide for payment of all expenses, liabilities and obligations of the Company and liquidate via distributions to stockholders. On June 30, 1997, the Company declared an initial liquidating distribution of $5.00 per share in cash to stockholders of record as of August 15, 1997. The distribution was paid on September 8, 1997. The Board is currently unable to predict the precise amount of any additional distributions pursuant to the Plan. The actual amount and timing of, and record date for, all such distributions will be determined by the Board of Directors, in its sole discretion, and will depend in part upon the Board's determination as to whether particular assets are to be distributed in kind or otherwise disposed of, and the amounts deemed necessary by the Board to pay or provide for all the Company's liabilities and obligations. Page 10 AstroPower, Inc. ________________ The Company currently owns 32.3% of the common stock of AstroPower, Inc. ("AstroPower"), a company engaged in photovoltaic research and production. Assuming certain convertible preferred stock is converted into common stock by stockholders of AstroPower other than the Company, the Company's interest in AstroPower would be reduced to 22.3%. The Company has a zero basis in its AstroPower common stock. On December 18, 1997, AstroPower filed a registration statement for an initial public offering of 3,015,000 shares of common stock at a maximum offering price of $10.00 per share. If the offering is successful, the Company will own 1,193,750 shares (this number gives effect to a three-for- four reverse stock split prior to the issue). There can be no assurances regarding the success or price per share of this offering. In addition, the Company, along with the other major shareholders of AstroPower, Inc., has agreed not to sell any shares held for a six month period after the offering date. Year 2000 Issue _______________ The Year 2000 issue will not have a material effect on the Company's financial results. Page 11 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. _________________________________ (a) Exhibits. _________ 2. Plan of Complete Liquidation and Dissolution - incorporated by reference to Exhibit A to Proxy Statement of the Company dated January 12, 1996 with respect to Annual Meeting of Stockholders held February 2, 1996 (File No. 0-3344). 3. (a) Certificate of Incorporation - incorporated by reference to Exhibit 3(a) to the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1993 (File No. 0-3344). (b) By-Laws - incorporated by reference to Exhibit 3(b) to the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1993 (File No. 0-3344). 10. Asset Purchase Agreement dated as of January 11, 1996 by and among Astrosystems, Inc., Behlman Electronics, Inc., Orbit International Corp. and Cabot Court, Inc. - incorporated by reference to Exhibit B to Proxy Statement of the Company dated January 12, 1996 with respect to Annual Meeting of Stockholders held February 2, 1996 (File No. 0-3344). 27. Financial Data Schedule (b) Reports on Form 8-K. ____________________ None. No other reportable items Page 12 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ASTROSYSTEMS, INC. February 4, 1997 BY: /S/ ______________________________ ___________________________________ Date Gilbert H. Steinberg, Vice President February 4, 1997 /S/ ______________________________ ___________________________________ Date Gilbert H. Steinberg, Treasurer and Chief Financial Officer Page 13 EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 6-MOS 6-MOS JUN-30-1998 JUN-30-1998 JUL-01-1997 JUL-01-1997 DEC-31-1997 DEC-31-1997 12,317 12,317 2,979 2,979 0 0 0 0 0 0 17,546 17,546 0 0 0 0 17,546 17,546 9,227 9,227 0 0 0 0 0 0 5,828 5,828 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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