<PAGE>
Appendix F
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended JUNE 30, 1999
___ 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 1-14160
HelpMate Robotics Inc.
(Exact name of small business issuer as
specified in its charter)
Connecticut 06-1110906
----------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Shelter Rock Lane; Danbury, Connecticut; 06810
----------------------------------------------
(Address of principal executive offices)
(203) 798-8988
(Issuer's telephone number)
-----------------------------------------------------------------
(Former name, former address and formal fiscal year, if changed
since last report)
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 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 PROCEEDING DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 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 registrant's common stock as of July 28,
1999 is 14,201,402 shares.
Transitional Small Business Disclosure Format (Check One) Yes____ No X
1
<PAGE>
HELPMATE ROBOTICS INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheet as of June 30, 1999 (unaudited) 3
Condensed Statements of Operations for the three months
ended June 30, 1999 and 1998 (unaudited) 4
Condensed Statements of Operations for the six months
ended June 30, 1999 and 1998 (unaudited) 5
Condensed Statement of Stockholders' Equity as of
June 30, 1999 (unaudited) 6
Condensed Statements of Cash Flows for the six months
ended June 30, 1999 and 1998 (unaudited) 7
Notes to Condensed Financial Statements (unaudited) 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
SIGNATURE 16
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
HelpMate Robotics Inc.
Condensed
Balance Sheet (Unaudited)
June 30, 1999
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash $ 763,406
Accounts receivable, net of allowance for doubtful accounts of $50,000 239,512
Inventory, net of reserve for obsolescence of $170,000 612,390
--------------
Total current assets 1,615,308
Installation costs, net of accumulated amortization of $683,415 31,009
Equipment leased to others, net of accumulated amortization of $1,084,945 720,244
Property and equipment, net of accumulated amortization of $887,818 265,597
Deposits 127,746
==============
$2,759,904
==============
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $66,973
Accrued expenses 493,289
Accrued compensation and employee benefits 110,334
Current portion of notes payable 178,776
Deferred revenue 147,960
--------------
Total current liabilities $ 997,332
Notes payable, less current portion 10,174
--------------
Total liabilities $1,007,506
Stockholders' equity:
Common stock, no par value; 40,000,000 shares authorized; 14,201,402 shares
issued and outstanding 19,573,937
Capital surplus 5,232,012
Accumulated deficit (23,053,551)
--------------
Total stockholders' equity 1,752,398
--------------
$2,759,904
==============
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
HelpMate Robotics Inc.
Condensed
Statements of Operations (Unaudited)
Three months ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1999 1998
---- ----
<S> <C> <C>
Revenues:
Sales revenues $ 72,091 $45,270
Rental revenues 581,273 780,099
Research and development contracts - 114,738
--------------------------------
Total revenues 653,364 940,107
--------------------------------
Cost of revenues:
Cost of sales 50,904 32,720
Cost of rental revenues 359,168 509,022
Cost of research and development contracts - 114,738
--------------------------------
Total costs of revenues 410,072 656,480
--------------------------------
Gross profit 243,292 283,627
Operating expenses:
Selling, general and administrative expenses 438,696 569,949
--------------------------------
Operating loss (195,404) (286,322)
Other income (expenses):
Interest income 8,457 6,003
Interest expense (13,831) (52,649)
Other income - 16,406
--------------------------------
Net loss before extraordinary income (220,778) (316,562)
Extraordinary item-vendor forgiveness of debt - 34,432
================================
Net loss $(220,778) $(282,130)
================================
Basic and diluted per share amounts:
Loss before extraordinary item $ (.01) $ (.03)
Extraordinary item - -
--------------------------------
Basic and diluted loss per share $ (.01) $ (.03)
================================
Weighted average number of shares of common stock
Outstanding 14,201,402 11,223,909
================================
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
HelpMate Robotics Inc.
Condensed
Statements of Operations (Unaudited)
Six months ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1999 1998
---- ----
<S> <C> <C>
Revenues:
Sales revenues $500,111 $ 102,817
Rental revenues 1,261,005 1,431,349
Research and development contracts - 225,915
-----------------------------
Total revenues 1,761,116 1,760,081
-----------------------------
Cost of revenues:
Cost of sales 162,360 51,082
Cost of rental revenues 774,066 972,236
Cost of research and development contracts - 225,915
-----------------------------
Total costs of revenues 936,426 1,249,233
-----------------------------
Gross profit 824,690 510,848
Operating expenses:
Selling, general and administrative expenses 898,327 1,078,088
-----------------------------
Operating loss (73,637) (567,240)
Other income (expenses):
Interest income 14,060 18,366
Interest expense (32,673) (131,030)
Other income - 19,755
-----------------------------
Net loss before extraordinary item (92,250) (660,149)
Extraordinary item-vendor forgiveness of debt - 88,227
=============================
Net loss $(92,250) $(571,922)
=============================
Basic and diluted per share amounts:
Loss before extraordinary item $ - (.07)
Extraordinary item - .01
-----------------------------
Basic and diluted loss per share - $ (.06)
=============================
Weighted average number of shares of common stock
Outstanding 14,169,898 9,024,054
=============================
</TABLE>
SEE ACCOMPANYING NOTES
5
<PAGE>
HelpMate Robotics Inc.
Condensed
Statements of Stockholders' Equity (Unaudited)
June 30, 1999
<TABLE>
<CAPTION>
Accumulated
Common Stock Capital Surplus Deficit Total
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1998 $19,509,049 $ 5,232,012 $ (22,961,301) $1,779,760
Conversion of accrued expenses to
common stock 64,888 - - 64,888
Net loss - - (92,250) (92,250)
-----------------------------------------------------------------------
Balance at June 30, 1999 $19,573,937 $5,232,012 $(23,053,551) $1,752,398
=======================================================================
</TABLE>
SEE ACCOMPANY NOTES
6
<PAGE>
HelpMate Robotics Inc.
Condensed
Statements of Cash Flows (Unaudited)
Six months ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1999 1998
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (92,250) $(571,922)
Adjustments to reconcile net loss to net cash used by operating
activities:
Vendor forgiveness of debt - (88,277)
Depreciation 302,933 416,721
Changes in operating accounts:
Decrease in accounts receivable 563,350 87,518
(Increase) decrease in inventory (216,415) 242,598
(Increase) decrease in other assets 2,414 (25,329)
Decrease in accounts payable and accrued expenses (117,062) (85,567)
Decrease in deferred revenue (119,694) (129,495)
Increase in customer advances - 211,349
------------------------------
Net cash provided by operating activities 323,276 57,596
------------------------------
INVESTING ACTIVITIES
Installation costs (15,597) (239,902)
Equipment leased to others 217,113 (301,792)
Purchase of property and equipment (1,268) (4,549)
------------------------------
Net cash provided by (used in) investing activities 200,248 (546,243)
------------------------------
FINANCING ACTIVITIES
Repayments of notes payable (200,497) (272,363)
Proceeds from issuance of notes - 222,000
------------------------------
Net cash used in financing activities (200,497) (50,363)
------------------------------
Net increase (decrease) in cash and cash equivalents 323,027 (539,010)
Cash and cash equivalents at beginning of period 440,379 807,278
------------------------------
Cash and cash equivalents at end of period $763,406 $268,268
==============================
Supplemental non-cash financing activities:
Conversion of notes, accounts payable, and accrued expenses to
Equity $ 64,888 $2,493,596
==============================
</TABLE>
SEE ACCOMPANYING NOTES.
7
<PAGE>
HelpMate Robotics Inc.
Notes to Condensed Financial Statements (Unaudited)
June 30, 1999
BASIS OF PRESENTATION
HelpMate Robotics Inc. ("HelpMate", "HRI", or the "Company"), was incorporated
in May 1984. The Company is primarily engaged in the design, manufacture and
sale of the Company's flagship product, the HelpMate(R) robotics courier system,
a trackless robotic courier used primarily in the healthcare industry to
transport materials. The Company derives revenue primarily from rentals and
sales of HelpMate robots. The Company also sells robotic components such as
LabMate, LightRanger and BiSight and performs research and development
contracts.
Historically, the Company has been dependent upon sources other than operations
to finance its working capital requirements. These sources include loans and/or
investments from stockholders and their affiliates, private placements of its
debt and equity securities.
The Company continues to actively seek additional financing alternatives in
order to strengthen its liquidity in the short term. Although the Company has
identified some potential sources of such financing, the Company has no current
commitments or agreements with respect to such and there can be no assurance
that any additional financing will be available to the Company on acceptable
terms, or at all. Such alternatives include, but are not limited to financed
rental transactions similar in nature to that entered into with LTI; (including
senior or subordinated debt). Further, additional equity financing may involve
substantial dilution of the stock ownership of the Company's existing
stockholders. Moreover, financial or other covenants imposed by future financing
sources might further adversely affect the Company's ability to pay dividends
and management's ability to control the Company. Additionally, by transferring
the title and rental agreements to a third party in Financed Rental transactions
for an immediate cash payment, the Company could lose all or a portion of its
opportunity to benefit from ongoing rentals in the future or from the residual
value of the units upon the expiration of the rental agreements. Finally, no
assurances can be given that any such financing will provide sufficient cash
required for the Company to attain an operating revenue stream of cash
sufficient to support the Company's continued operations. It is also not
anticipated that current stockholders will provide any additional financing.
The Company is liable for the payment of unpaid taxes not remitted by the
Company's former payroll company to the Internal Revenue Service as well as
interest and penalties assessed, if any. The Company has calculated these unpaid
taxes to approximate $1,000,000 exclusive of interest and penalties. (See
Management's Discussion and Analysis - Liquidity and Capital Resources)
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The matter discussed above raises substantial
doubt about the Company's ability to continue as a going concern.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Rule 310 of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of normal
recurring accruals, considered necessary for a fair presentation have been
included in the accompanying unaudited financial statements. Operating results
for the six month period ended June 30, 1999 are not necessarily indicative of
the results that may be expected for the full year ending December 31, 1999. For
further information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-KSB for the year ended
December 31, 1998.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
The Company develops, manufacturers and markets mobile robotic systems, which
are distinguished by their ability to navigate autonomously without the need for
fixed tracks or guide wires. The Company accomplishes this by employing state of
the art sensor technology, wireless radio and proprietary software to the
guidance of battery-powered vehicles of its own design. So equipped, these
autonomous vehicles can navigate from point to point, avoid stationary and
moving obstacles (including people), make almost instantaneous stops when
necessary, summon elevators to travel between floors, announce their arrival at
destinations, signal closed doors to open, and maintain communications with a
centrally located computer.
The Company also continues to sell, on a limited basis, components of its
autonomous mobile robotics technology to universities and other research
facilities, and has licensed some of its technologies for use in floor cleaning
and automated prescription filling applications. The Company also engages in
research and development contracts in the area of mobile robotics technology.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes the opportunity to establish the HelpMate robot as a
flexible, cost-efficient and preferred method for transporting materials within
hospitals and other healthcare facilities remains significant. Although the
Company does not presently have specific plans to purchase parts for builds of
new HelpMate robots, the Company will continue to maintain a sales presence in
the marketplace and book orders in anticipation of another release of HelpMate
units for production. Therefore, while the Company's near-term objective is to
stabilize and enhance its business at the level of the current customer base, it
will actively pursue additional means of financing that would be necessary to
resume expansion of its original aggressive marketing plans.
The remaining backlog at June 30, 1999 consists of approximately $150,000 of
annual rental revenues which should become operational by year end. At that
point, the Company expects to have 70 robots on rental in its US customer base,
providing a stream of on-going revenues. The two-armed, mobile, robot project
under contract to NASA was completed and delivered to NASA in September, 1998.
As a result of the termination of the Otis Elevator Company ("Otis") agreement,
the Company will receive seven robots from Otis during fiscal 1999 at a cost of
$1 each. During the first half of 1999 the Company has received six of these
robots. These robots will be included in the Company's marketing plan. In
addition, during the third and fourth quarters of 1999 the Company has the
option to repurchase up to nine robots, which are currently rented to hospitals,
from HTLP for an aggregate of $81,000. Assuming these rentals continue, the
Company estimates that these robots would generate approximately $100,000 in
rental revenue in 1999. Also, the Company believes it has in inventory most of
the parts necessary to perform routine maintenance and repairs on its rental
robots in 1999.
Although the Company is operating at below a cash break-even level, management
believes that at the Company's current level of operations, it will have
sufficient cash to maintain operations through year end.
9
<PAGE>
The Company continues to actively seek additional financing alternatives in
order to strengthen its liquidity situation in the short term. Although the
Company has identified some potential sources of such financing, the Company has
no current commitments or agreements with respect to such and there can be no
assurance that any additional financing will be available to the Company on
acceptable terms, or at all. Such alternatives include, but are not limited to
financed rental transactions similar in nature to that entered into with Leasing
Technologies International, Inc. ("LTI"); private placement of the Company's
securities in the United States or abroad; and/or mezzanine type financing
(including senior or subordinated debt). Further, additional equity financing
may involve substantial dilution of the stock ownership of the Company's
existing stockholders. Moreover, financial or other covenants imposed by future
financing sources might further adversely affect the Company's ability to pay
dividends and management's ability to control the Company. Additionally, by
transferring the title and rental agreements to a third party in financed rental
transactions for an immediate cash payment, the Company could lose all or a
portion of its opportunity to benefit from ongoing rentals in the future or from
the residual value of the units upon the expiration of the rental agreements.
Finally, no assurances can be given that any such financing will provide
sufficient cash required for the Company to attain an operating revenue stream
of cash sufficient to support the Company's continued operations. It is also not
anticipated that current stockholders will provide any additional financing. The
Company is also considering other alternatives, including making joint marketing
arrangements or a sale of the Company.
In October 1998 the Company announced that it is conducting an investigation to
determine the extent to which it has been defrauded by its former payroll
company. The payroll company, KPM, Inc., of Brookfield, Connecticut, did
business under the names Payroll Express and Compusystems. Based upon the
Company's preliminary investigation, the Company believes that KPM
misappropriated Company funds which KPM was required to pay to the Internal
Revenue Service with respect to Company employment taxes. As part of its
investigation, the Company has discovered that copies of the tax returns
provided by KPM to the Company differ materially from the actual returns which
KPM filed on the Company's behalf with the IRS. KPM was engaged as the Company's
payroll service from the late 1980's until August 1998. KPM filed for bankruptcy
in July 1998.
The Company understands from published reports that KPM may have similarly
misappropriated funds from a number of other KPM customers and that IRS Criminal
Investigation Division and the office of the United States Attorney are
currently investigating KPM.
Under the Internal Revenue Code, the Company is liable for the payment of these
unpaid taxes as well as interest and penalties assessed, if any. The Company has
calculated these unpaid taxes to approximate $1,000,000 exclusive of interest
and penalties. The Company anticipates that it will be able to negotiate a
settlement with the Internal Revenue Service not to exceed $150,000 and
therefore has recorded this amount in accrued expenses and selling, general and
administrative expenses in its 1998 financial statements. This amount remains
accrued at June 30, 1999.
The Company believes that this tax liability may have a material and adverse
affect on the Company's business, its financial condition and on the results of
its operations. The Company has taken the following actions; (a) filed a claim
in the KPM bankruptcy proceedings; (b) filed a claim under the Company's
insurance policy; the claim was denied; and (c) entered into discussion with the
Internal Revenue Service regarding a compromise of the Company's liability for
these employment taxes. In addition, the Company may need to use its available
cash and future revenues to liquidate its tax liability.
The Company is continuing to investigate this matter and expects to cooperate
fully with the ongoing IRS and United States Attorney investigations of KPM.
10
<PAGE>
Although the accompanying financial statements have been prepared assuming that
the Company will continue as a going concern, failure to reach a compromise on
this matter on terms favorable to the Company raises substantial doubt about its
ability to continue as a going concern.
RESULTS OF OPERATIONS
REVENUES
Total revenues, before research and development contracts, decreased $172,005 or
21% from the quarter ended June 30, 1998. Rental revenues decreased $198,826 or
25%, while sales revenues increased by $26,821 or 59%.
Total revenues, before research and development contracts, increased $226,950 or
15% from the six months ended June 30, 1998 compared to the six months ended
June 30, 1999.
Rental revenues decreased $170,344 of 11% while sales revenues increased
$397,294 or 386% from the six months ended June 30, 1998 compared to the six
months ended June 30, 1999.
The decrease in rental revenues for both the three and six months ended June 30,
1999 reflects the sale of five rental robots in late 1998 and the sale of three
robots in the first quarter of 1999, coupled with the net return of six robots
during the six months ended June 30, 1999. The total rental fleet at June 30,
1999 stands at 66 units.
Although a sale of a rental robot results in immediate revenue, such a sale
means that the Company will receive no further rental revenue from that robot.
The sales revenues increase is due to the sale of three robots and higher
component products sales during the six months ended June 30, 1999.
The Company also earned revenue and incurred costs from research and development
contracts of $114,738 and $225,915. There were no research and development
contracts in process in the three and six months ended June 30, 1999.
COST OF REVENUES
Total cost of revenues, before research and development contracts, decreased
$136,670 or 24% from the three months ended June 30, 1998 compared to the three
months ended June 30, 1999. Cost of revenues for the six months decreased
$86,892 which reflects a 217% increase in cost for sales of component products
and a decrease of $198,170 or 20% from cost of rental revenues. These changes in
cost of revenues reflects the changes in sales and rental revenues described
above.
GROSS PROFIT
Gross profit decreased by 14% or $40,355 from the three months ended June 30,
1998 compared to the three months ended June 30, 1999. Gross profit increased by
61% or $313,842 from the six months ended June 30, 1998 compared to the six
months ended June 30, 1999. The increase in gross profit percentage and dollars
reflects the sale of three robots in the first quarter of 1999, increased sale
of component products and the fact that several of the Company's rental units
are now fully depreciated.
11
<PAGE>
SELLING GENERAL AND ADMINISTRATIVE EXPENSES
Selling, General and Administrative Expenses decreased by $131,253 or 23% from
the three months ended June 30, 1998 compared to the three months ended June 30,
1999. Selling, General and Administrative Expenses decreased by $179,761 or 17%
from the six months ended June 30, 1998 compared to the six months ended June
30, 1999. The decrease reflects the Company's ongoing efforts to reduce costs.
INTEREST EXPENSE AND INTEREST INCOME AND OTHER INCOME
Net interest expense decreased $36,364 and $94,051 respectively for the three
months and six months ended June 30, 1998 compared to the three and six months
ended June 30, 1999.
The decreases reflect the reduction in financing obligations.
Vendor forgiveness of debt reflects the savings the Company realized when
certain vendors agreed to take less than the amount owed in 1998.
LOSSES
The Company incurred a net loss from continuing operations of $200,778 and
$282,130 for each of the three month periods ending June 30, 1999 and 1998,
respectively, and incurred a net loss from operations of $92,250 and $571,922
for each of the six month periods ending June 30, 1999 and 1998, respectively.
These losses were sustained primarily because the Company has not achieved the
volume of sales and rentals of HelpMates required to cover the overhead expenses
associated with the commercialization of its HelpMate systems. Although the
decrease in staffing and sales and marketing expenses have reduced losses in
fiscal 1998 and the first half of 1999, the Company anticipates that such losses
will continue until the volume of sales and rentals of HelpMates necessary to
cover overhead expenses is achieved. As noted above, the overall profitability
and cash flow of the Company is highly dependent upon its mix of robot rentals
and robot sales (i.e., more robot rentals than sales results in larger losses
and a quicker depletion of cash).
LOSS PER SHARE
Loss per share of common stock for the three months ended June 30, 1999 and 1998
was $0.01 and $0.03, respectively. Loss per share of common stock for the six
months ended June 30, 1999 and 1998 was $0.00 and $0.06, respectively. Basic and
diluted earnings (loss) per common share is computed according to SFAS 128. It
is based on the weighted average number of common shares and common stock
equivalent shares outstanding during the period, as adjusted for the stock split
that occurred in conjunction with the initial public offering. Shares from the
assumed exercise of options and warrants granted by the Company have been
included in the computations of earnings per share for all periods unless their
inclusion would be antidilutive.
OTHER
For the foreseeable future, the Company does not anticipate paying dividends and
the Company anticipates retaining any earnings to fund its operations. Moreover,
the ability of the Company to pay dividends is subject to contractual
restrictions through September 2001. Specifically, during that period, the
Company may not, unless otherwise approved by one of its lenders, directly or
indirectly declare, order, pay or reserve any sum or property for the payment of
any dividend or other distribution on the Company's capital stock until such
time as the Company has achieved a net profit for three consecutive fiscal
quarters.
12
<PAGE>
INFLATION
The Company does not believe that the relatively moderate levels of inflation
which have been experienced in the Untied States has had or will have a
significant effect on its revenues or operations.
Year 2000 Readiness
The Year 2000 issue affects computer and information technology ("IT") systems,
as well as non-IT systems which include embedded technology such as
micro-processors and micro-chips that have date sensitive programs that may not
properly recognize the year 2000. Systems that do not properly recognize such
information could generate inaccurate date or cause a system to fail, resulting
in business interruption. The Company is currently implementing a plan to
provide measured assurances that its computer and IT-systems and non-IT systems,
including analytical instruments and equipment, and those of third parties which
have a material relationship with the Company are or will be compliant.
The Company has completed testing of the HelpMate robotic courier system, and
determined that all components of the system are year 2000 compliant. The system
components tested consist of the HelpMate robot, HelpMate Elevator Interface,
HelpMate Monitor, and the HelpMate Supervisor. All installed versions of
HelpMate system software have been verified as compliant, so no action will be
necessary in the field.
Inventory and assessment of internal IT and non-IT systems are now complete. All
critical IT systems are now compliant. The Company's network servers and all
server based software, all accounting related workstations and all accounting
software have been tested and necessary upgrades have been applied to insure Y2K
compliance of these systems. All other workstations and software have been
tested and the Company will complete the installation of all necessary patches
or upgrades by August 31, 1999. All applicable non-IT systems have been tested
and confirmed as compliant. The non-IT systems, which were tested, are the
Company's telephone and voice messaging system and perimeter security system.
Finally, all analytical instruments required for manufacture and repair of the
HelpMate system have been verified as being compliant as well.
In February of 1999, the Company sent Y2K compliance surveys to all of its
customers, key vendors and suppliers. In this survey the Company requested
status of compliance awareness, assessment, renovation, validation, and
implementation for internal systems and infrastructure and for their key
vendors. All of the Company's key vendors and suppliers have responded and all
are either currently compliant or will be fully compliant prior to December 31,
1999. Approximately fifty percent of the Company's customers responded to our
initial survey request. In May of 1999, the Company sent a second request to the
remaining customers. The Company expects to have replies from all customers by
August 31, 1999. All customers who have responded thus far expect to have all
critical systems compliant prior to December 31, 1999. The Company will continue
to monitor the progress of our customers whose critical systems are not yet
compliant.
Although the Company has taken steps to address the year 2000 issue, there can
be no assurance that the failure of the Company and/or its material third
parties to timely attain year 2000 compliance or that the failures and/or the
impacts of broader compliance failures by telephone, mail, data transfer or
other utility or general service providers or government or private entities
will not have a material adverse effect on the Company. Further, based on the
information available, the Company cannot conclude that any failure of the
Company or third parties to achieve Year 2000 compliance will not adversely
effect the Company.
FORWARD LOOKING STATEMENTS
13
<PAGE>
Statements made in this report regarding (a) the projection of revenues, income,
earning per share, capital expenditures, dividends or other financial items, (b)
the plans and objectives of management for the Company's future operations, (c)
the future economic performance of the Company, and (d) statements regarding the
assumptions underlying or relating to the foregoing items are forward-looking
statements. Forward-looking statements are contained in this report, including
under the sections entitled "Basis of Presentation"; "Management's Discussion
and Analysis"; -- Liquidity and Capital Resources --- Net Losses; -- Other - and
"Year 2000 Readiness." There are important factors that could cause the actual
results to differ materially from those in the forward-looking statements. These
important factors include the following: (a) if the mix of robot rentals versus
sales changes; (b) if there are substantial returns of robots currently on
rental or if the Company is unable to place returned robots with new customers;
(c) if there is a substantial reduction in the aggregate number of hours for
which robots are rented; (d) if existing orders in backlog are canceled; (e) if
the Company's own order/installation forecast changes; (f) if the Company is
unable to purchase the robots from HTLP; (g) if the Company is unable to sustain
its current level of operations;(h) if the Company's financial condition
negatively impacts the Company's reputation in the marketplace and consequently
negatively impacts order receipts; (i) if the Company is unable in the
foreseeable future to secure additional financing or put into effect other
alternatives to improve its liquidity; (j) the Company is unable to reach an
agreement with a new strategic marketing partner in Europe; (k) if customers or
vendors have year 2000 issues which adversely affect the Company; and (l) the
impact of the payroll company matters described in "Liquidity and Capital
Resources."
14
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
NONE
15
<PAGE>
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned , thereunto duly
authorized.
HelpMate Robotics Inc.
Date: December 16, 1999 /s/ Joseph F. Engelberger
--------------------------
Joseph F. Engelberger
Chairman and Chief Executive Officer
