<PAGE>
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 SEPTEMBER 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 October
15, 1999 is 14,372,152 shares.
Transitional Small Business Disclosure Format (Check One) Yes____ No X
1
<PAGE>
HELPMATE ROBOTICS INC.
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C>
Item 1. Financial Statements
Condensed Balance Sheet as of September 30, 1999 (unaudited) 3
Condensed Statements of Operations for the three months
ended September 30, 1999 and 1998 (unaudited) 4
Condensed Statements of Operations for the nine months
ended September 30, 1999 and 1998 (unaudited) 5
Condensed Statement of Stockholders' Equity
as of September 30, 1999 (unaudited) 6
Condensed Statement of Cash Flows for the nine months
ended September 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 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURE
16
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
HelpMate Robotics Inc.
Condensed
Balance Sheet (Unaudited)
September 30, 1999
<TABLE>
ASSETS
Current assets:
<S> <C>
Cash $ 399,025
Accounts receivable, net of allowance for doubtful accounts of $50,000 239,498
Inventory, net of reserve for obsolescence of $170,000 576,881
-----------------
Total current assets 1,215,404
Installation costs, net of accumulated depreciation of $660,712 30,435
Equipment leased to others, net of accumulated depreciation of $1,017,644 706,863
Property and equipment, net of accumulated depreciation of $911,005 271,298
Deposits 113,189
-----------------
$2,337,189
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 121,428
Accrued expenses 382,986
Accrued employee benefits 115,516
Notes payable 98,086
Deferred revenue 96,890
-----------------
Total current liabilities $ 814,906
-----------------
Stockholders' equity:
Common stock, no par value; 40,000,000 shares authorized; 14,372,152 shares issued
and outstanding 19,602,994
Capital surplus 5,232,012
Accumulated deficit (23,312,723)
-----------------
Total stockholders' equity 1,522,283
-----------------
$2,337,189
=================
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
HelpMate Robotics Inc.
Statements of Operations (Unaudited)
Condensed
Three months ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Three months ended September 30,
1999 1998
---- ----
<S> <C> <C>
Revenues:
Sales revenues $ 19,015 $ 681,279
Rental revenues 545,881 746,212
Research and development contracts - 45,268
----------------- ----------------
Total revenues 564,896 1,472,759
----------------- ----------------
Cost of revenues:
Cost of sales 28,321 351,676
Cost of rental revenues 333,002 436,635
Cost of research and development contracts - 65,330
----------------- ----------------
Total costs of revenues 361,323 853,641
----------------- ----------------
Gross profit 203,573 619,118
Selling, general and administrative expenses 474,204 530,300
----------------- ----------------
Operating (loss) income (270,631) 88,818
Other income (expense):
Interest income 7,836 5,473
Interest expense (8,509) (28,428)
Other income 12,131 -
Vendor forgiveness of debt - 49,900
----------------- ----------------
Net (loss) income $ (259,173) $ 115,763
================= ================
Basic and diluted loss per share $ (.02) $ -
================= ================
Weighted average number of shares of common stock outstanding 14,296,629 13,770,530
================= ================
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
HelpMate Robotics Inc.
Statements of Operations (Unaudited)
Condensed
Nine months ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Nine months ended September 30,
1999 1998
---- ----
<S> <C> <C>
Revenues:
Sales revenues $ 519,127 $ 784,096
Rental revenues 1,806,886 2,177,561
Research and development contracts - 271,183
------------------- -----------------
Total revenues 2,326,013 3,232,840
------------------- -----------------
Cost of revenues:
Cost of sales 190,682 402,758
Cost of rental revenues 1,107,068 1,408,871
Cost of research and development contracts - 291,245
------------------- -----------------
Total costs of revenues 1,297,750 2,102,874
------------------- -----------------
Gross profit 1,028,263 1,129,966
Selling, general and administrative expenses 1,372,530 1,608,388
------------------- -----------------
Operating loss (344,267) (478,422)
Other income (expense):
Interest income 21,897 23,829
Interest expense (41,183) (159,458)
Other income 12,131 19,755
Vendor forgiveness of debt - 138,127
------------------- -----------------
Net loss $ (351,422) $ (456,169)
=================== =================
Basic and diluted loss per share $ (.03) $ (.04)
=================== =================
Weighted average number of shares of common stock outstanding 14,276,238 10,623,564
=================== =================
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
HelpMate Robotics Inc.
Condensed
Statement of Stockholders' Equity (Unaudited)
September 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
Exercise of stock options 29,057 - - 29,057
Net loss - - (351,422) (351,422)
-------------------------------------------------------------------
Balance on September 30, 1999 $19,602,994 $5,232,012 $(23,312,723) $1,522,283
===================================================================
</TABLE>
SEE ACCOMPANY NOTES
6
<PAGE>
HelpMate Robotics Inc.
Statements of Cash Flows (Unaudited)
Condensed
Nine months ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Nine months ended September 30,
1999 1998
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (351,422) $ (456,169)
Adjustments to reconcile net loss to net cash provided by operating
activities:
Depreciation 422,471 644,419
Vendor forgiveness of debt - (138,127)
Changes in operating accounts:
Decrease in accounts receivable 563,364 10,922
(Increase) decrease in inventory (180,906) 496,566
Decrease (increase) in deposits 16,971 (32,411)
(Decrease) increase in accounts payable and accrued expenses (167,728) 78,559
Decrease in deferred revenue (170,764) (218,695)
Increase in customer advances - -
---------------- --------------
Net cash provided by operating activities 131,986 385,064
---------------- --------------
INVESTING ACTIVITIES
Installation costs (35,649) (224,996)
Equipment leased to others 154,769 (351,638)
Purchase of property and equipment (30,156) (5,054)
---------------- --------------
Net cash provided by (used in) investing activities 88,964 (581,688)
---------------- --------------
FINANCING ACTIVITIES
Repayments of notes payable (291,361) (375,902)
Proceeds from exercise of stock options 29,057 -
Proceeds from issuance of notes - 222,000
---------------- --------------
Net cash used in financing activities (262,304) (153,902)
---------------- --------------
Net decrease in cash and cash equivalents (41,354) (350,526)
Cash and cash equivalents at beginning of period 440,379 807,278
---------------- --------------
Cash and cash equivalents at end of period $ 399,025 $ 456,753
================ ==============
Supplemental non-cash financing activities:
Conversion of accrued expenses to common stock $ 64,888 $ 2,475,793
================ ==============
</TABLE>
SEE ACCOMPANYING NOTES.
7
<PAGE>
HelpMate Robotics Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 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 announced on October 15, 1999 that it has agreed to sell
substantially all of its assets to Pyxis Corporation, a subsidiary of Cardinal
Health, Inc. of Dublin, Ohio ("Pyxis"). In consideration for the sale, the
Company will receive $12.5 million in cash and Pyxis will assume certain of the
Company's liabilities. The cash purchase price is subject to certain closing and
post-closing adjustments including required payments to third parties. Moreover,
$1.25 million of the cash purchase price will be held in escrow for a period of
approximately two years and would be available to settle potential
indemnification claims.
Below is a pro forma balance sheet reflecting the transaction as if it had
closed as of September 30, 1999.
8
<PAGE>
HelpMate Robotics Inc.
Pro Forma Balance Sheet
As of September 30, 1999
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
<S> <C> <C> <C>
ASSETS
Current Assets:
$ (399,025)
Cash $ 399,025 11,050,000 $ 11,050,000
Accounts receivable, net of allowance for
doubtful accounts 239,498 (239,498) -
Inventory, net of reserve for obsolescence 576,881 (576,881) -
--------------- -------------- --------------
Total current assets 1,215,404 9,834,596 11,050,000
Property and equipment, net of accumulated
depreciation 1,008,596 (1,008,596) -
Deposits 113,189 (113,189) -
Cash in escrow - 1,250,000 1,250.000
--------------- -------------- --------------
$2,337,189 $ 9,962,811 $ 12,300,000
=============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 121,428 $ (95,059) $ 26,369
Accrued expenses 498,502 550,356 1,048,858
Notes payable 98,086 - 98,086
Deferred revenue 96,890 (14,669) 82,221
--------------- -------------- --------------
Total current liabilities 814,906 440,628 1,255,534
Stockholders' equity 1,522,283 9,522,183 11,044.466
--------------- -------------- --------------
$2,337,189 $ 9,962,811 $ 12,300,000
=============== ============== ==============
</TABLE>
The closing of the transaction with Pyxis is subject to the approval of the
Company's shareholders and to other customary closing conditions. The Company
anticipates that the transaction will close prior to the end of its fourth
quarter ending December 31, 1999. The Company also anticipates distributing a
substantial portion of the closing proceeds during the first quarter of the
fiscal year 2000.
If the sale to Pyxis closes, the Company's management intends to pursue a
business plan aimed at effecting a business combination with an operating
business. Any such business combination would depend on the availability of
attractive candidates and the Company's ability to consummate such a business
combination. To date, the Company has not identified any such candidate. The
Company does not have any immediate plans to dissolve the Company if the sale of
substantially all of its assets to Pyxis closes and any such dissolution would
require the prior approval of the Company's shareholders.
9
<PAGE>
The terms and conditions of the proposed sale to Pyxis are contained in the
Asset Purchase Agreement, a copy of which has been filed as Exhibit 10.83 to the
Company's Current Report on Form 8-K dated October 15, 1999, and which is
incorporated herein by reference in its entirety. The description of the terms
and conditions of the proposed sale to Pyxis and of the Asset Purchase Agreement
is qualified in its entirety by, and made subject to, the more complete
information set forth in that Exhibit.
In light of its agreement with Pyxis, the Company is not seeking any type of
financing or sale alternatives.
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 nine month period ended September 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.
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.
AGREEMENT WITH PYXIS
The Company announced on October 15, 1999 that it has agreed to sell
substantially all of its assets to Pyxis Corporation, a subsidiary of Cardinal
Health, Inc. of Dublin, Ohio ("Pyxis"). In consideration for the sale, the
Company will receive $12.5 million in cash and Pyxis will assume certain of the
Company's liabilities. The cash purchase price is subject to certain closing and
post-closing adjustments including required payments to third parties. Moreover,
$1.25 million of the cash purchase price will be held in escrow for a period of
approximately two years and would be available to settle potential
indemnification claims.
The closing of the transaction with Pyxis is subject to the approval of the
Company's shareholders and to other customary closing conditions. The Company
anticipates that the transaction will close prior to the end of its fourth
quarter ending December 31, 1999. The Company also anticipates distributing a
substantial portion of the closing proceeds during the first quarter of the
fiscal year 2000.
10
<PAGE>
If the sale to Pyxis closes, the Company's management intends to pursue a
business plan aimed at effecting a business combination with an operating
business. Any such business combination would depend on the availability of
attractive candidates and the Company's ability to consummate such a business
combination. To date, the Company has not identified any such candidate. The
Company does not have any immediate plans to dissolve the Company if the sale of
substantially all of its assets to Pyxis closes and any such dissolution would
require the prior approval of the Company's shareholders.
The terms and conditions of the proposed sale to Pyxis are contained in the
Asset Purchase Agreement, a copy of which has been filed as Exhibit 10.83 to the
Company's Current Report on Form 8-K dated October 15, 1999, and which is
incorporated herein by reference in its entirety. The description of the terms
and conditions of the proposed sale to Pyxis and of the Asset Purchase Agreement
is qualified in its entirety by, and made subject to, the more complete
information set forth in that Exhibit.
In light of its agreement with Pyxis, the Company is not seeking any type of
financing or sale alternatives.
LIQUIDITY AND CAPITAL RESOURCES
The remaining backlog at September 30, 1999 consists of approximately $150,000
of annual rental revenues, one half of which should become operational by year
end and the remainder in the first quarter of next year. At that point, the
Company expects to have 64 robots on rental in its US customer base, providing a
stream of on-going revenues.
As a result of the termination of the Otis Elevator Company ("Otis") agreement,
the Company has received seven robots from Otis during the first three quarters
of 1999 at a cost of $1 each. In addition, during the third and fourth quarters
of 1999, the Company has repurchased 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.
In October 1998, the Company announced an investigation to determine the extent
to which KPM Inc. ("KPM"), the Company's former payroll service, misappropriated
Company funds which KPM was required to pay to the IRS with respect to Company
employment taxes. Under the Internal Revenue Code, the Company was liable for
the payment of these unpaid taxes, as well as interest and penalties assessed,
if any. The Company had initially estimated these unpaid taxes to be
approximately $1,000,000 exclusive of interest and penalties.
The Company announced on August 26, 1999 that it reached a settlement with the
Internal Revenue Service (the "IRS") regarding claims by the IRS for unpaid
payroll taxes arising out of the apparent misappropriation of funds by KPM. The
Company paid $100,067, including interest, to the Internal Revenue Service in
full payment of the IRS claims. In addition, the Company agreed with the IRS to
forego the use of $2,710,432 of net operating loss carryforwards.
At December 31, 1998, the Company had estimated that it could settle the IRS
claims for approximately $150,000 and this amount was included as part of
accrued expenses and selling, general and administrative expenses in the 1998
financial statements. The estimate exceeds the agreed to payment by $50,000.
This excess amount was credited to selling, general and administrative expenses
in the Company's financial statements in the third quarter ended September 30,
1999.
11
<PAGE>
RESULTS OF OPERATIONS
REVENUES
Total revenue before research and development contracts decreased by $862,595 or
60% from the three month period ended September 30, 1998 compared to the three
month period ended September 30, 1999. Rental revenues decreased by $200,331 or
27%; sales revenues decreased by $662,264 or 97%.
Total revenues decreased by $635,644 or 21% from the nine month period ended
September 30, 1998 compared to the nine month period ended September 30, 1999.
Rental revenues decreased by $370,675 or 17% and sales revenues decreased by
$264,969 or 34%.
Sales revenue in the three months ended September 30, 1999 included no robot
sales compared to four sales in 1998. The decrease in rental revenues for both
the three and nine months ended September 30, 1999 reflects the sale of three
rental robots in late 1998 and the sale of three robots in the first quarter of
1999, coupled with the net return of twelve robots during the nine months ended
September 30, 1999. The total rental fleet at September 30, 1999 stands at 60
units.
The Company also earned revenue from research and development contracts of
$45,268 and $271,183 for the three and nine months ended September 30, 1998.
There were no research and development contracts in process in the three and
nine months ended September 30, 1999.
COST OF REVENUES
Cost of revenues before research and development costs decreased by $426,988 or
54% from the three month period ended September 30, 1998 compared to the three
month period ended September 30, 1999. Cost of revenues decreased by $513,879 or
28% from the nine months ended September 30, 1998 compared to the nine months
ended September 30, 1999. These changes in cost of revenue reflect the changes
in sales and rental revenue discussed above.
GROSS PROFIT
Gross profit decreased by 67% or $415,545 from the three months ended September
30, 1998 compared to the three months ended September 30, 1999. Gross profit
decreased by 9% or $101,703 from the nine months ended September 30, 1998
compared to the nine months ended September 30, 1999. The decrease in gross
profit percentage and dollars reflects no robot sales and reduced component
product sales during the quarter ended September 30, 1999 and the fact that six
of the Company's rental units were returned during that quarter.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, General and Administrative Expenses decreased by $56,096 or 11% from
the three months ended September 30, 1998 compared to the three months ended
September 30, 1999. Selling, General and Administrative Expenses decreased by
$235,858 or 15% from the nine months ended September 30, 1998 compared to the
nine months ended September 30, 1999. The decrease reflects the Company's
ongoing efforts to reduce costs.
INTEREST EXPENSE, INTEREST INCOME AND OTHER INCOME
Interest expense decreased for both the three month and nine month periods
ending September 30, 1999 as compared to the same period ending September 30,
1998. The decrease reflects 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.
12
<PAGE>
NET INCOME/LOSS
The Company incurred a net loss from continuing operations of $259,173 compared
to net income of $115,763 for the three month periods ending September 30, 1999
and 1998, respectively, and incurred a net loss from operations of $351,422 and
$456,169 for the nine month periods ending September 30, 1999 and 1998,
respectively. These losses reflect the lower gross profit described above and
because the Company has not achieved the volume of sales and rentals of HelpMate
robots 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
nine months of 1999, the Company anticipates that such losses will continue
until the volume of sales and rentals of HelpMate robots 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).
NET INCOME/LOSS PER SHARE
Loss per share of common stock for the three months ended September 30, 1999 was
$.02 and for 1998 was $.00. Loss per share of common stock for the nine months
ended September 30, 1999 and 1998 was $.03 and $.04, 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. 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. See
discussion of proposed sale of substantially all the Company's assets as
discussed under the heading "Agreement with Pyxis."
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.
13
<PAGE>
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 has completed the installation of all necessary patches
or upgrades. 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 and have received responses from all of them. All customers
who have responded 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
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"; -- Agreement with Pyxis -- 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 to complete the sale of substantially all of its assets to
Pyxis; (j) if customers or vendors have year 2000 issues which adversely affect
the Company; (k) if the Company is unable to effect a business combination with
an operating company if the transaction with Pyxis closes; and (l) if the
Company's agreement with Pyxis is terminated under certain circumstances.
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
(A) EXHIBITs
Asset Purchase Agreement between the Company and Pyxis Corporation
dated October 14, 1999, incorporated by reference to Exhibit 10.83 of
the Company's current report on Form 8-K dated October 15, 1999.
(B) REPORTS ON FORM 8-K
A report on Form 8-K dated August 26, 1999 was filed with the SEC
reporting the Company's settlement with the Internal Revenue Service
(the "IRS') regarding claims by the IRS for unpaid payroll taxes
arising out of the apparent misappropriation of funds by KPM Inc. of
Brookfield, CT
A report on Form 8-K dated October 15, 1999 was filed with the SEC
reporting upon an agreement to sell the Company's assets to Pyxis
Corporation.
15
<PAGE>
SIGNATURE
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: November 5, 1999 /s/ JOSEPH F. ENGELBERGER
--------------------------
Joseph F. Engelberger
Chairman ,Chief Executive Officer
and Chief Financial Officer
16
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