<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from __________________
Commission file number: 0-27803
COVOL TECHNOLOGIES, INC.
---------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 87-0547337
----------------------------- ---------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
3280 North Frontage Road, Lehi, Utah 84043
----------------------------------------------
(Address of principal executive offices (Zip Code)
(801) 768-4481
--------------------------------
(Registrant's telephone number, including area code)
---------------------------------------------------------
(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 14 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. Yes No X
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class of Stock Amount Outstanding
----------------------------- -------------------------------
$.001 par value Common Stock 7,215,158 Shares of Common Stock
at March 31, 1996
<PAGE> 2
COVOL TECHNOLOGIES, INC.
TABLE OF CONTENTS
Page No.
Part I - Financial Information
Item 1. Consolidated Financial Statements
Balance Sheet 3
Statement of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results Operations 7
Part II. - Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote
of Security Holders 11
Item 5. Other information 11
Item 6. Exhibits and Reports on Form 8-K 11
<PAGE> 3
COVOL TECHNOLOGIES, INC.
(FORMERLY ENVIRONMENTAL TECHNOLOGIES GROUP INTERNATIONAL)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
As of As of
March 31, September 30,
1996 1995
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $111,318 $583,757
Receivables 53,020 22,005
Inventories 22,208 0
Prepaid expenses 7,120 12,525
Total current assets 193,666 618,287
Property, plant and equipment,
net of accumulated depreciation 2,940,384 1,330,300
Other assets:
Restricted cash 0 500,000
Purchased technology and
trade secrets 0 0
Cash surrender value of
life insurance 145,862 139,612
Deferred tax asset 23,000 23,000
Deposits and other assets 138,622 39,463
Total other assets 307,484 702,075
Net assets
-discontinued operations 2,389,753 9,315
Total assets $5,831,287 $2,659,977
</TABLE>
<TABLE>
<CAPTION>
As of As of
March 31, September 30,
1996 1995
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 877,033 $ 747,137
Accrued liabilities 103,004 286,451
Capital Lease obligations - current 0 0
Notes payable - current 27,390 26,084
Notes payable - related parties,
current 0 39,035
Total current liabilities 1,007,426 1,098,707
Long-term liabilities:
Notes payable, non-current 165,140 176,601
Notes payable-related parties
non-current 0 0
Deferred compensation 207,188 201,901
Total long-term liabilities 372,328 378,502
Total liabilities 1,379,755 1,477,209
Commitments (Notes 10, 13 and 16)
Stockholders' equity:
Common stock; $0.001 par value;
authorized 25,000,000 shares
issued and outstanding 3,935,584 at
September 30, 1994, 5,260,042 at
September 30, 1995, and 6,979,626
at December 31,1995 7,215 5,260
Common Stock to be issued 175,000 shares
at September 30, 1994, 199,334
at September 30, 1995. 0 119
Capital in excess of par value 27,764,797 9,617,512
Capital in excess of par value
- common stock to be issued 0 581,881
Accumulated deficit (10,849,732) (7,360,156)
Notes receivable from issuance
of common stock (6,234,535) (240,000)
Deferred compensation from
stock options (6,236,213) (1,421,848)
Total stockholders' equity 4,451,532 1,182,768
Total liabilities and
stockholders' equity $5,831,287 $2,659,977
</TABLE>
<PAGE> 4
COVOL TECHNOLOGIES, INC.
(FORMERLY ENVIRONMENTAL TECHNOLOGIES GROUP INTERNATIONAL)
AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended March 31, Six Months Ended March 31,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Coal briquette sales $4,207 $8,213 $7,998 $9,798
Total revenues 4,207 8,213 7,998 9,798
Operating costs
and expenses:
Cost of coal
briquettes 51,941 0 51,941 0
Research and
development 486,429 200,971 921,323 306,358
Selling, general
and administrative 607,649 358,731 1,603,621 501,178
Compensation expense
on stock options 538,614 0 650,635 0
Total operating
costs and expenses 1,684,633 559,702 3,227,520 807,536
Operating loss (1,680,426) (551,489) (3,219,522) (797,738)
Other income (expense):
Interest income 4,270 0 22,762 0
Interest expense (21,777) (32,944) (36,049) (57,685)
Other income 25 0 57 40
Total other income
(expense) (17,482) (32,944) (12,713) (57,685)
Loss from continuing
operations before
income tax benefit
(provision) (1,697,908) (584,433) (3,232,235) (855,423)
Income tax benefit
(provision) 0 31,000 0 76,000
Loss from continuing
operations (1,697,908) (553,433) (3,232,235) (779,423)
Discontinued operations:
Income (loss) from
discontinued
operations
(less applicable
income tax
(provision) benefit
of $0, $(31,000), $0,
$(76,000), and $0
respectively) (257,341) 62,855 (257,341) 156,851
Net (loss) ($1,955,249) ($490,578) ($3,489,576) ($622,572)
Net (loss) per
common share:
Loss per share from
continuing operations ($0.24) ($0.13) ($0.49) ($0.19)
Income (loss) per
share from discontinued
operations (0.04) 0.01 (0.04) 0.04
Net (loss) per share ($0.28) ($0.12) ($0.53) ($0.15)
Weighted average
shares outstanding 7,084,704 4,262,609 6,546,244 4,189,613
</TABLE>
<PAGE> 5
<TABLE>
Three Months Ended March 31, Six Months Ended March 31,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Cash flows from
operating activities:
Net income (loss) ($1,955,249) ($595,278) ($3,489,576) ($622,572)
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization 73,454 24,030 111,480 40,873
Deferred income taxes 0 383,300 0 488,000
Common stock issued
for services 120,363 0 361,456 0
Amortization of deferred
compensation on stock
options 538,614 0 650,635 0
Increase (decrease) from
changes in assets and
liabilities:
of continuing operations:
Receivables 25,663 (6,930) (31,015) (1,059)
Inventories 19,917 (14,534) (22,208) (14,534)
Prepaid expenses 1,819 (4,275) 5,405 (4,275)
Deposits and other assets (99,159) 121 (99,159) 2,823
Accounts payable 401,654 (15,187) 129,896 113,448
Accrued liabilities (40,435) (97,872) (183,447) (80,569)
Deferred compensation 2,801 2,486 5,287 4,972
Discontinued operations
noncash charges and
working capital
changes (478,797) 130,561 (569,588) 94,303
Net cash provided by
(used in) operating
activities (1,389,355) (193,578) (3,130,834) 21,410
Cash flows from
investing activities:
Cash paid for property,
plant and equipment (1,464,723) (20,789) (1,721,564) (67,802)
Purchase of subsidiaries 0 0 0 (10,000)
Increase in cash surrender
value of life insurance 0 (6,250) (6,250) (12,500)
Investing activities of
discontinued operations (109,222) (239,717) (142,910) (178,854)
Net cash used in
investing activities (1,573,945) (266,756) (1,870,724) (269,156)
Cash flows from
financing activities:
Payment of capital lease
obligations 0 (7,600) 0 (27,345)
Payment of notes payable (2,537) (24,787) (10,155) (25,205)
Payment of notes payable
- related parties 0 (122,190) (39,035) (311,098)
Proceeds from note
receivable from issuance
of common stock 24,840 0 164,840 0
Proceeds from issuance of
common stock 3,244,237 522,565 5,581,409 522,565
Financing activities
of discontinued
operations (1,029,762) (303,558) (1,481,801) 28,179
Net cash provided by
financing activities 2,236,778 64,430 4,215,258 187,096
Net increase (decrease)
in cash (726,522) (395,904) (786,300) (60,650)
Total cash and cash
equivalents, beginning
of period: 1,231,388 607,137 1,291,166 271,883
Cash and cash equivalents,
end of period
Continuing operations:
Cash and cash
equivalents 111,318 151,648 111,318 151,648
Discontinued operations 393,548 59,585 393,548 59,585
Total cash and cash
equivalents,
end of period $504,866 $211,233 $504,866 $211,233
Supplemental schedule of
noncash investing and
financing activities:
Common stock issued for
notes receivable - - $6,159,375 -
Common stock issued
to repay advances $45,613
Common stock issued
to repay notes payable 100,000
Supplemental disclosure of
cash flow information:
Cash paid for interest:
Continuing operations $21,777 $32,944 $36,049 $57,685
Discontinued operations 79,278 25,137 135,236 61,889
</TABLE>
<PAGE> 6
COVOL TECHNOLOGIES, INC. AND SUBSIDIARIES
(FORMERLY ENVIRONMENTAL TECHNOLOGIES GROUP INTERNATIONAL)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Management Opinion:
The accompanying condensed consolidated financial statements of Covol
Technologies, Inc. and subsidiaries have been prepared without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Although, certain information normally included in financial
statements prepared in accordance with generally accepted accounting
principles has been condensed or omitted, the Company believes that the
disclosures are adequated to make the information presented not misleading.
The condensed financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's
registration statement on Form 10.
2. Loss Per Share Calculation.
Primary average shares include only common shares outstanding. The
computation of fully diluted net loss per common share was antidilutive
in each period for which a net loss was presented; therefore, the amounts
reported for primary and fully diluted loss are the same for those periods.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
Three months ended March 31, 1996 compared to three months ended
March 31, 1995
Revenues
Total revenues decreased by $4,006 or approximately 49% in the three months
ended March 31, 1996 from the $8,213 reported in the comparable period in
1995. During the 1995 period, the Company was in the process of
liquidating its "Clean Coal" inventory, which accounted for the revenue in
1995. The 1996 revenue was from testing fees related to the Company's
industrial coal product. This revenue is due to the Company's policy of
charging prospective buyers the cost of running sample material through
the briquetting process for testing. As described in "Liquidity and
Capital Resources" below, the Company has entered into a letter of intent
to sell its construction and limestone businesses. The revenues for the
construction and limestone businesses are included in the line item "Income
(loss) from operations of discontinued construction companies", for the
periods ended March 31, 1996 and 1995 the revenues for these entities are
included in the line item "Income (loss) from discontinued operations" .
Margins, Costs and Expenses
The Company's operating (loss) increased in the 1996 period from the
comparable period in 1995 due in part to the recognition of compensation
expense of $538,614 on stock options and the increased research and
development expenses of $285,458 or approximately 142% from the $200,971
expended in the comparable period in 1995.
General and administrative expenses increased by $248,918 or 69% during the
three months ended March 31, 1996 from the comparable period in 1995.
This increase is due to the Company's increase in staff, the related costs
associated with licensing and exploiting the Briquetting Technology and
the startup costs associated with the Geneva briquetting plant.
Net Loss
Net loss increased for the three months ended March 31, 1996 by $1,464,671
as compared to the three months ended March 31, 1995. The loss is
primarily due to increased general and administrative costs the Company
has incurred as a result of the increase in corporate staff, a charge to
income in the amount of $538,614 for the issuance of options at below
market value, and the startup costs of the Geneva briquetting plant.
The construction companies contributed a net loss of $257,341 to the
consolidated net loss for the three month period ended March 31, 1995.
Six months ended March 31, 1996 as compared to six months ended
March 31, 1995.
Revenues
Net revenues from the sale of "Clean Coal" and the testing of other coal
products decreased slightly by $1,800 in 1996 from the $9,798 reported in
the previous year. As described in "Liquidity and Capital Resources" below,
the Company has entered into a letter of intent to sell its construction
and limestone businesses. The revenues for the construction businesses are
included in the line item "Income (loss) from operations of discontinued
construction companies".
<PAGE> 8
Margins, Cost and Expenses
The Company's operating costs increased $2,419,984 from the $807,536
reported in 1995. This is due in part to the recognition of compensation
expense of $650,635 on stock options issued below market price.
The Company's research and development expenditures increased $614,965
or 201% for 1996 as a result of increased expenses relating to the coal and
revert Briquetting Technology.
General and administrative expenses increased by $1,102,443 or 220% during
1996 from the previous year. This increase is due to the Company building
infrastructure and increasing the corporate staff.
Net Loss
Net loss increased from $622,572 in 1995 to $3,489,576 in 1996. The
increased loss is primarily due to the increased research and development
costs associated with the Briquetting Technology, compensation expense on
stock options in the amount of $650,635 and the increase in general and
administrative costs. The construction companies contributed a net profit
of $156,851 in 1995 and a net loss of $257,341 in 1996 to the consolidated
net losses, which resulted in a consolidated net loss of $3,489,576 for
1996 as compared to a net loss of $622,572 for 1995.
Liquidity and Capital Resources
During the three months ended March 31, 1996, the Company was increasing
it's research and development expenditures, increasing it's staff and their
related costs, as well as starting up it's Geneva plant, and as a result
the Company's operating activities used $1,389,355 of cash as compared to
$193,578 cash used for the three months ended March 31, 1995. During
this same period expenditures for new property, plant and equipment
increased to $1,464,723 from $20,789 for the same periods. During the 1996
period the Company was making down payments on equipment to be used in its
coal briquetting plants as well as paying for the on site engineering costs
associated with these plants. The Company was able to fund this growth
through the issuance of common stock.
The Company has made a strategic decision to focus its efforts exclusively
on commercializing the Briquetting Technology and to divest itself of its
construction and limestone businesses. Accordingly, in February 1996, the
Company entered into a share purchase agreement with Mike McEwan and Jerry
Larson, former principles of the subsidiares, to sell all of the common
stock of the subsidiaries operating these businesses for $1,500,000. The
Company will however retain certain real property and other specified
assets of certain subsidiaries along with the related debt for such real
property. The Company will also provide a working capital loan in the
amount of $3,500,000 to secure the release of the Company from certain
loans and other obligations. The purchase price and the working capital
loan will be paid back at 6% interest over the next four years. As of
March 31, 1996, the Company had made advances of $1,877,440, leaving
$1,622,560 left to advance to the construction companies. No assurance
can be given that this transaction will be successfully consummated or, in
the event it is not consummated, that the Company can divest itself of the
construction and limestone businesses to another purchaser on favorable
terms or otherwise. Since these businesses generate a substantial
portion of the Company's revenues and cash flows, the Company will
require additional financing to exploit the Briquetting Technology.
<PAGE> 9
The Company is currently in negotiations to produce revert briquettes for
Geneva according to specifications supplied by Geneva. Cash flows from
operations, principally the gross profit from sales to Geneva under the
Geneva agreement, the sale of the Section 29 tax credits to third parties
and cash payments under the Greystone agreement, are expected to fund
working capital needs for approximately 18 months, excluding the capital
required to exploit the Briquetting Technology.
The Company is presently offering units of the Company's common stock to
accredited investors at a purchase price of $71.50 per unit in amounts of
$100,000 or greater. A unit consists of five shares of restricted common
stock and one A warrant with an exercise price of $25.00, one B warrant
with an exercise price of $30.00 and one C warrant with an exercise price of
$35.00. Such offering is made only by means of offering memorandum and
statements related to such offering herein are neither offfers to sell or
solicitations of offers to buy. During the three month period ended March
31, 1996, the Company raised $3,244,237 in this private placement of
Common Stock and is also exploring various sources of working capital to
fund the exploitation of the Briquetting Technology over the next 18 months,
including additional private or public offerings of equity or debt securities
and the outright sale of the coal agglomeration plants to third parties.
In May 1995, the Company secured financing in the form of an $825,000 master
equipment lease funded by a commercial bank to equip its initial briquetting
plant at Geneva's facilities and simultaneously entered into a lease with
Geneva wherein the Company has the right to operate the facility. The
Company has the option to purchase the equipment from the bank at the end
of the lease term. However, the Company will be required to obtain signi-
ficant financing to establish future commercial briquetting plants, whether
directly or through joint venture partners or licensees.
On December 28, 1995, the Company entered into Design and Construction
Agreements ("Agreements") with an engineering firm to design and build
twenty-two coal fines agglomeration facilities ("Facilities"). As required
by the Agreements, the Company has given notice to proceed on the first
contract for a Facility to be located in Utah. The Company has paid the
engineering firm an advance payment of $500,000 on the first Facility. The
total cost of the first Facility is contractually limited to $17,000,000.
In the event that the Agreement is terminated by the Company on the first
Facility, a penalty of 6% of the total cost of the Facility will be payable
to the engineering firm. The terms of the remaining twenty-one Agreements
are similar to the first Agreement, however, the Company did not provide
notice to the engineering firm in accordance with those Agreements.
On February 5, 1996, the Company and the engineering firm amended the
remaining Agreements to allow for notice to be provided to the engineering
firm by May 31, 1996. Essentially, for each Agreement which the Company
provides the required notice, the Company will be obligated for either the
total cost of the Facility if built (not to exceed $17,000,000), or 6% of
the total cost if the Agreement is terminated by the Company.
As of May 3, 1996, the Company does not have sufficient capital resources
available to implement the Agreement, including the 6% of the total cost of
the first facility.
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In May of 1995 the Company's wholly owned subsidiary, Larson Limestone
Company, Inc. ("Larson"), filed a complaint in the Fourth Judicial District
Court in and for the County of Utah, State of Utah against Farrell Larson,
Larson's former president and director. In January, 1996 the complaint was
amended to add the Company as a plaintiff. In addition Irene Larson, Gary
Burningham dba Burningham and Company, and Burningham Enterprises, Inc.
were added as defendants. The plaintiffs allege that defendants
misrepresented facts and made material omissions in connection with the
sale of 50% of Larson to the Company in 1994. Furthermore, plaintiffs
allege that the share purchase agreement was breached by defendant Farrell
Larson and that state securities laws were violated. The complaint seeks
to enjoin Farrell Larson from harassing the Company and seeks an order
releasing all collateral held to secure plaintiff's performance including
the 50% of Larson held in escrow as security for the note given by the
Company in the purchase of Larson, and damages of not less than $325,000,
treble damages in accordance with Utah securities laws, punitive damages of
$1,000,000 and costs. The suit is in the discovery phase. Subject to
conducting further discovery, the Company intends to vigorously pursue an
award of damages against the defendants in this case. In February 1996,
Farrell Larson and Irene Larson filed counterclaims against the Company
asserting breach of contract by the Company and Larson in respect to the
agreements through which the Company purchased Farrell Larson's 50%
interest in Larson; breach of the covenant of good faith and fair dealing
with respect to the same contracts; interference with contractual and
economic relations; defamation, which relates to alleged statements by the
Company concerning the litigation, either just prior to or during the
litigation; breach of fiduciary duty, alleging that the Company owed Farrell
Larson a fiduciary duty with respect to the conduct of business of Larson;
and violation of Larson's bylaws. In their counterclaim, Farrell Larson and
Irene Larson ask for the forfeiture of the shares of Larson acquired by the
Company, for management of Larson to be reinstated as directed by Farrell
Larson, for reimbursement of all attorney fees and costs incurred by Farrell
Larson, for an order allowing Farrell Larson to foreclose on collateral held
under the Share Purchase Agreement with the Company, for final payment of
$325,000 under other contracts between the Company and Farrell Larson, and
other unspecified amounts of actual and punitive damages. The Company
believes that all payments due to Farrell Larson have been made
or have been deposited with the court to be held pending the resolution of
the litigation. The Company intends to vigorously defend all counterclaims
filed against it. However, the Company is currently conducting further
discovery activities with respect to the counterclaims. The remaining
defendants have answered the complaint and did not assert counterclaims, but
may assert counterclaims in the future.
In connection with the facts at issue in the Company's action against
Farrell Larson, in January 1996 Farrell Larson and his wife, Irene Larson,
filed a new lawsuit in the Fourth Judicial District Court in and for Utah
County, State of Utah against, among other defendants, Michael Midgley (the
Chief Financial Officer of the Company and President and director of Larson),
Mark Hardman (a Vice-President and director of Larson), and Kenneth M. Young
(the Company's Chairman of the Board and former President). This complaint
includes three causes of action: (1) interference with Larson's business
relations, (2) defamation, and (3) breach of fiduciary duty. The factual
basis for these claims for relief are substantially the same as the facts at
issue in the Company's action against Farrell Larson. Accordingly, the
Court has consolidated these two cases at the Company's request so that all
of the related issues will be resolved together. The Company believes that
all acts alleged as basis for liability against Messrs. Midgley, Hardman and
Young were performed by them in the course and scope of their employment for
the Company and Larson.
<PAGE> 11
ITEM 2. CHANGES IN SECURITIES.
Effective January 23, 1996, the Company implemented a two-for-one stock split.
The Company's transfer agent has distributed or will distribute post-split
shares of common stock to the Company's stockholders. See Item 4.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Pursuant to a written consent of stockholders, the following matters were
approved by stockholder consent on approximately January 22, 1996:
1. The sale of the wholly-owned construction subsidiaries of the Company
was approved by Stockholders owning 1,909,558 shares of common stock,
or approximately 54.72% of the outstanding common stock on that date.
2. The amendment of the Company's 1995 Stock Option Plan (the "Plan") to
increase the number of shares of Common Stock available under the
plan from 450,000 shares to 1,200,000 shares was approved by
Stockholders owning 1,909,558 shares of common stock, or
approximately 54.72% of the outstanding common stock on that date.
3. The amendment of the Company's Certificate of Incorporation to provide
for a 2 for 1 common stock split and to maintain the authorized
common stock of the Company at 25,000,000 shares, $.001 par value,
was approved by Stockholders owning 2,051,014 shares of common stock,
or approximately 58.77% of the outstanding common stock on that date.
ITEM 5. OTHER INFORMATION.
On February 26, 1996, the Company filed a Registration Statement under the
Securities Exchange Act of 1934 on Form 10 registering the Company's common
stock under Section 12(g) of that Act. That Registration Statement became
effective as of April 25, 1996. Prior to that date the Company was not
subject to the reporting requirements of Section 13 or 15(d).
<PAGE> 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Those exhibits previously filed with the Securities and Exchange Commission as
required by Item 601 of Regulation S-K, are incorporated herein by reference
in accordance with the provisions of Rule 12b-32.
(b) Reports on Form 8-K
There have been no reports on Form 8-K filed during the quarter for which
this report is filed.
<PAGE> 13
SIGNATURE
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.
Date: May 10, 1996
COVOL TECHNOLOGIES, INC.
By: /s/ Kenneth M. Young
- -------------------------
Kenneth M. Young, Chairman of the Board,
Chief Executive Officer and Principal Executive Officer
By: /s/ Michael Midgley
- -----------------------
Michael Midgley, Principal Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 111,318
<SECURITIES> 0
<RECEIVABLES> 53,020
<ALLOWANCES> 0
<INVENTORY> 22,208
<CURRENT-ASSETS> 193,666
<PP&E> 3,265,886
<DEPRECIATION> 325,502
<TOTAL-ASSETS> 6,599,628
<CURRENT-LIABILITIES> 1,007,426
<BONDS> 0
0
0
<COMMON> 7,215
<OTHER-SE> 5,212,658
<TOTAL-LIABILITY-AND-EQUITY> 6,599,627
<SALES> (43,943)
<TOTAL-REVENUES> 7,998
<CGS> 51,941
<TOTAL-COSTS> 1,665,562
<OTHER-EXPENSES> 1,571,958
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36,049
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