|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: WELLPOINT HEALTH NETWORKS INC /CA/, 424B4, 1996-11-25 |
Next: THINK NEW IDEAS INC, SB-2/A, 1996-11-25 |
<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended September 30, 1996
or
[ ] 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 0-21061
Laminating Technologies, Inc.
(Exact name of registrant as specified in its charter)
Delaware 58-2044990
(State or other jurisdiction (IRS employer
of Incorporation) identification number)
7730 Roswell Road 30350-4862
Atlanta, Georgia (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (770) 396-3090
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes No X
----- ------
As of November 15, 1996, the Company had 3,185,000 shares of Common
Stock, par value $.01 per share, outstanding
<PAGE> 2
Laminating Technologies, Inc.
INDEX
Part I - Financial Information Page
----
Item 1. Financial Statements
Consolidated Statements of Loss for the Three and 3
Six Months Ended September 30, 1996 and 1995
Consolidated Balance Sheets as of September 30, 1996 4
and March 31, 1996
Consolidated Statements of Cash Flows for the Three 5
and Six Months Ended September 30, 1996 and 1995
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 8
Condition and Results of Operations
Part II - Other Information 11
2
<PAGE> 3
Laminating Technologies, Inc and Subsidiary
(a development stage company)
Consolidated Statements of Loss
<TABLE>
<CAPTION>
April 19, 1993
Three and Six Months Ended September 30, 1996 and 1995 (Commencement
of operations)
Three Months Ended Six Months Ended Through
September 30, September 30, September 30,
1996 1995 1996 1995 1996
---------------------------- --------------------------- -------------------
<S> <C> <C> <C> <C> <C>
Net sales - 61,988 - 108,441 341,785
Cost of sales - 78,571 - 123,027 1,015,773
-------- -------- ---------- -------- ----------
Gross (loss) - (16,583) - (14,586) (673,988)
Selling, general and administrative expenses 283,658 262,119 949,878 464,026 4,252,923
-------- -------- ---------- -------- ----------
Operating (loss) (283,658) (278,702) (949,878) (478,612) (4,926,911)
Interest expense 231,147 25,907 408,701 34,989 575,051
Cancellation of debt 7,968 - (45,273) - (167,011)
Loss on abandonment of fixed assets 5,808 5,808 2,537 104,184
-------- -------- ---------- -------- ----------
Net (loss) (528,581) (304,609) (1,319,114) (516,138) (5,439,135)
Cumulative dividend on preferred stock 12,500 12,500 25,000 25,000 150,000
-------- -------- ---------- -------- ----------
Net (loss) attributable to common stockholders (541,081) (317,109) (1,344,114) (541,138) (5,589,135)
======== ======== ========== ======== ==========
Supplementary pro forma:
Net (loss) per share of common stock (0.66) (0.39) (1.64) (0.66)
======== ======== ========== ========
Weighted average number of common shares outstanding 820,000 820,000 820,000 820,000
======== ======== ========== ========
</TABLE>
See notes to accompanying consolidated financial statements
3
<PAGE> 4
Laminating Technologies, Inc. and Subsidiary
(a development stage company)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, 1996 March 31, 1996
------------------ --------------
A S S E T S
<S> <C> <C>
CURRENT ASSETS
Cash $ 12,826 $ 1,347
Accounts receivable (net of allowance for doubtful 3,378 9,321
accounts of $20,000)
Other current assets 63,795 3,000
---------- ----------
Total current assets 79,999 13,668
Deferred financing and offering costs 333,948 -
Fixed assets, net 11,419 6,169
Other assets 1,341 692
---------- ----------
T O T A L $ 426,707 $ 20,529
---------- ----------
L I A B I L I T I E S
CURRENT LIABILITIES
Bridge financing notes payable $1,623,328 $ -
Notes payable-current 31,000 1,047,842
Notes payable-stockholders - 350,000
Due to stockholders 6,834 31,036
Accounts payable 323,496 315,156
Payroll taxes payable 54,024 89,779
Accrued expenses 90,819 182,798
Accrued interest 90,252 86,782
---------- ----------
Total current liabilities 2,219,753 2,103,393
Notes payable, less current maturities - 5,000
Due to related parties - 428,346
---------- ----------
Total liabilities 2,219,753 2,536,739
---------- ----------
C A P I T A L D E F I C I E N C Y
Series A convertible preferred stock, par value $.01
5,000,000 shares authorized, 250,000 shares issued
and outstanding (liquidation value of $625,000 and 2,500 2,500
$650,000)
Common stock, par value $.01, 20,000,000, shares
authorized, 679,764 and 1,045,514 shares issued
and outstanding 10,455 6,797
Additional paid in capital 3,889,087 1,850,466
Deficit accumulated during the development stage (5,695,088) (4,375,973)
---------- ----------
Total capital deficiency (1,793,046) (2,516,210)
---------- ----------
T O T A L $ 426,707 $ 20,529
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE> 5
Laminating Technologies, Inc. and Subsidiary
(a development stage company)
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
1996 1995 1996 1995
------------------------ --------------------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net (Loss) (528,581) (304,609) (1,319,114) (516,138)
Adjustments to reconcile net (loss) to net
cash (used in) operating activities:
Provision for doubtful accounts 1,100 1,100 5,000
Depreciation and amortization 63,959 10,500 133,420 21,047
Compensation recorded for fair value of
common shares issued in excess of
price paid by employee 12,707
Compensation recorded for stock options
issued by stockholders to an officer 386,000
Services contributed by stockholder
Noncash finance charge 167,616 293,328
Loss on disposal of fixed assets 5,808 5,808 2,537
Changes in current assets and liabilities 41,707 291,512 (193,182) 126,853
-------- -------- ---------- --------
Net cash (used) in operating activities (248,391) (2,597) (679,933) (360,701)
-------- -------- ---------- --------
Cash flows from investing activities:
Acquisitions of fixed assets (11,986) (12,493)
-------- -------- ---------- --------
Cash flows from financing activities:
Proceeds of notes payable 1,500,000 158,000
(Repayment) of notes payable (6,000) (8,000) (330,507) (52,118)
Proceeds of notes payable--stockholders 250,000
(Repayment) of notes payable--stockholders (3,685)
Advances from stockholders
Deferred financing and offering costs (52,411) (465,588)
(Repayment) of capital leases payable (2,035)
Proceeds from sale of common stock
Proceeds from sale of preferred stock
Proceeds from stock subscription receivable
Cash contributed by stockholder
-------- -------- ---------- --------
Net cash provided by financing activities (58,411) (8,000) 703,905 350,162
-------- -------- ---------- --------
NET INCREASE (DECREASE) IN CASH (318,788) (10,597) 11,479 (10,539)
Cash-beginning of period 331,614 1,894 1,347 1,836
-------- -------- ---------- --------
CASH-END OF PERIOD 12,826 (8,703) 12,826 (8,703)
======== ======== ========== ========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest 231,147 25,907 408,701 34,989
Noncash transactions:
Common stock subscribed
Common stock issued for developed technology
Common stock issued as settlement of note
payable to stockholder 90,000
Due to stockholder for shares purchased for treasury
Cancellation of debt obligation in exchange for fixed assets
Settlement of related party debt by capital contribution
Conversion of debt to equity 978,572
<CAPTION>
April 19, 1993
(Commencement of operations)
Through
September 30, 1996
------------------
<S> <C>
Cash flows from operating activities:
Net (Loss) (5,439,135)
Adjustments to reconcile net (loss) to net
cash (used in) operating activities:
Provision for doubtful accounts 21,100
Depreciation and amortization 281,565
Compensation recorded for fair value of
common shares issued in excess of
price paid by employee 273,763
Compensation recorded for stock options
issued by stockholders to an officer 386,000
Services contributed by stockholder 30,000
Noncash finance charge 145,263
Loss on disposal of fixed assets 128,183
Changes in current assets and liabilities 1,366,153
----------
Net cash (used) in operating activities (2,807,108)
----------
Cash flows from investing activities:
Acquisitions of fixed assets (246,798)
----------
Cash flows from financing activities:
Proceeds of notes payable 2,557,750
(Repayment) of notes payable (561,798)
Proceeds of notes payable--stockholders 458,700
(Repayment) of notes payable--stockholders (18,700)
Advances from stockholders 11,485
Deferred financing and offering costs (465,588)
(Repayment) of capital leases payable (41,367)
Proceeds from sale of common stock 612,500
Proceeds from sale of preferred stock 500,000
Proceeds from stock subscription receivable 1,250
Cash contributed by stockholder 12,500
Net cash provided by financing activities 3,066,732
----------
NET INCREASE (DECREASE) IN CASH 12,826
Cash-beginning of period
----------
CASH-END OF PERIOD 12,826
----------
Supplemental disclosures of cash flow information:
Cash paid during the period for interest 575,051
Noncash transactions:
Common stock subscribed 1,250
Common stock issued for developed technology 406,875
Common stock issued as settlement of note
payable to stockholder 135,000
Due to stockholder for shares purchased for treasury 19,551
Cancellation of debt obligation in exchange for fixed assets 54,279
Settlement of related party debt by capital contribution 307,457
Conversion of debt to equity 978,572
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
LAMINATING TECHNOLOGIES, INC. AND SUBSIDIARY
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying financial statements have been prepared on a consolidated
basis. They include the accounts of the Company and its wholly-owned
inactive subsidiary, Revenue Process Development, Inc. All intercompany
transactions and balances have been eliminated in consolidation.
In the opinion of management, the accompanying, unaudited, consolidated,
condensed financial statements contain all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial position
of the Company and its results of operations and cash flows for the interim
periods presented. Such financial statements have been condensed in accordance
with the applicable regulations of the Securities and Exchange Commission and
therefore, do not include all disclosures required by generally accepted
accounting principles. These financial statements should be read in conjunction
with the Company's audited financial statements for the year ended March 31,
1996.
Loss Per Share of Common Stock
Supplementary pro forma loss per share gives effect to the conversions of debt
to equity and preferred stock into common stock and excludes 410,000 shares held
in escrow.
NOTE 2 SUBSEQUENT EVENT
On October 14, 1996 the Company completed an initial public offering of
1,700,000 units, each unit consisting of one share of common stock, one Class
A Warrant and one Class B Warrant. On November 4, 1996, the underwriter
exercised its over-allotment option to purchase an additional 255,000 units. The
initial public offering resulted in total net proceeds to the Company of
approximately $8,000,000.
6
<PAGE> 7
A portion of the proceeds of this offering were used to repay (i) the principal
balance of and accrued interest on certain notes (the "Bridge Notes") issued in
connection with a private placement in April and May 1996 in the aggregate
amount of approximately $2,100,000 and (ii) the $150,000 cumulative dividends on
the Series A Preferred Stock. The 250,000 shares of Series A Preferred Stock
were converted to 184,486 shares of Common Stock on the closing of the offering.
In the quarter ending December 31, 1996, the Company will incur a charge to
earnings of approximately $520,000 relating to the repayment of the Bridge
Notes.
7
<PAGE> 8
LAMINATING TECHNOLOGIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company is a development stage company organized to develop, design, and
market value-added packaging and specialty display products. Since its
inception, the Company's efforts have been principally devoted to research,
development and design of products, marketing activities and raising capital.
The Company has had only limited sales, has generated minimal revenues from
operations and has incurred substantial operating losses from these activities.
Most of the Company's sales to date did not involve significant orders and the
Company believes that these customers were primarily evaluating the commercial
potential of the Company's products. The Company also incurred significant
costs associated with such sales in part because a large percentage of finished
product was distributed free of charge as samples. The Company's sales efforts
have also been adversely affected by periods with no operations, a lack of
continuity of management and inadequate capital.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1995 and 1996. Net sales decreased from
approximately $62,000 to zero during the three months ended September 30, 1995
("1995 Three Months") and September 30, 1996 ("1996 Three Months"),
respectively. The Company did not have any sales during the 1996 Three Months
primarily as a result of limited staffing and working capital to purchase
supplies, as well as a focus by management on preparing for the Company's
initial public offering which was consummated in October 1996 (See Notes to
Consolidated Financial Statements). Gross loss, which includes the costs of
items manufactured as well as the cost of samples, was approximately $17,000 in
the 1995 Three Months as compared to zero in the 1996 Three Months. Gross loss
was primarily attributable to the amount of product given away as samples.
Selling, general and administrative expenses increased 8% from the 1995 Three
Months to the 1996 Three Months.
Interest expense increased by approximately 792% from approximately $26,000 for
the 1995 Three Months to approximately $231,000 for the 1996 Three Months. The
increase is primarily attributable to interest on the $1,995,000 face value of
bridge notes payable issued in April and May 1996.
Net loss increased 74% from approximately $305,000 in the 1995 Three Months to
$529,000 in the 1996 Three Months, as a result of the foregoing factors.
8
<PAGE> 9
Six Months Ended September 30, 1995 and 1996. Net sales decreased from
approximately $108,000 in the six months ended September 30, 1995 ("1995 Six
Months") to zero in the six months ended September 30, 1996 ("1996 Six
Months"). Gross loss, which includes the costs of items manufactured as
well as the cost of samples, was approximately $15,000 in the 1995 Six Months
as compared to zero in the 1996 Six Months. The gross loss was primarily
attributable to the amount of product given away as samples.
Selling, general and administrative expenses increased by 105% from
approximately $464,000 in the 1995 Six Months to approximately $950,000 in the
1996 Six Months. This increase was due primarily to non-recurring charges of
(i) approximately $386,000 relating to the fair market value of stock options
granted by two principal stockholders of the Company to the Company's Chairman,
President and Chief Executive Officer and (ii) approximately $425,000 relating
to the Bridge Debt financing including approximately $293,000 for the
amortization of the Bridge Warrants and approximately $132,000 for amortization
of deferred financing costs, partially offset by a reduction of payroll and
management for a period of time during a portion of the 1996 Three Months due to
the temporary cessation of operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its activities through loans from principal stockholders
and private placements of equity and debt securities. As of September 30, 1996
the Company had a working capital deficit of approximately $1,793,000. On
October 15, 1996, the Company sold 1,700,000 units at $5 per unit in a public
offering (See Notes to Consolidated Financial Statements). Each unit consists
of one share of common stock, one Class A Warrant and one Class B Warrant. On
November 4, 1996 the underwriter exercised its over-allotment option to purchase
an additional 255,000 units at $5 per unit. The initial public offering resulted
in total net proceeds to the Company of approximately $8,000,000.
The remaining proceeds of the offering are intended to be used by the Company to
implement its business plan, which includes the development and testing of
products utilizing the LTI Processed method and sales and marketing activities.
The Company expects to continue to incur substantial research, development and
marketing costs in the future. Accordingly, the Company expects to continue to
incur operating losses for the foreseeable future.
In the event of the release of the Escrow Shares, the Company will recognize
during the period in which the earnings thresholds are probable of being met or
such stock price levels achieved, a substantial non-cash charge to earnings (not
deductible for income tax purposes) equal to the fair market value of such
shares on the date of their release, which would have the effect of
significantly increasing the Company's loss or reducing or eliminating earnings,
if any, at such time. There can be no assurance that the Company will attain
the targets which would enable the Escrow Shares to be released from escrow.
9
<PAGE> 10
At September 30, 1996 the Company had net operating loss carry-forwards for
federal Income tax purposes of approximately $5,400,000. The net operating loss
and credit carry-forwards expire from March, 2008 through March, 2011.
Additionally, the Company's ability to utilize its net operating loss
carry-forwards may be subject to annual limitations pursuant to Section 382 of
the Internal Revenue Code as a result of this Offering.
- --------------------------------------------------------------------------------
Statements herein that are not descriptions of historical facts are
forward-looking and subject to risk and uncertainties. Actual results could
differ materially from those currently anticipated due to a number of factors,
including those set forth in the Company's Securities and Exchange Commission
filings under "Risk Factors", including risks relating to the early stage of the
Company and its products under development; the uncertainty of market
acceptance; and the Company's dependence on third parties for manufacturing and
marketing activities.
10
<PAGE> 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - The following exhibit is filed with this report:
27.1 Financial Data Schedule (for SEC use only)
(b) No reports on Form 8-K were filed in the quarter ended
September 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
November 22, 1996 LAMINATING TECHNOLOGIES, INC.
By /s/ Michael E. Noonan
---------------------
Michael E. Noonan
Chief Executive Officer and President
By: /s/ Shirley Pigg
----------------
Shirley Pigg
Controller
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AND CONDENSED CONSOLIDATED STATEMENTS OF
LOSS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 12,826
<SECURITIES> 0
<RECEIVABLES> 3,378 <F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 79,999
<PP&E> 11,419 <F1>
<DEPRECIATION> 0
<TOTAL-ASSETS> 426,707
<CURRENT-LIABILITIES> 2,219,753
<BONDS> 0
0
2,500
<COMMON> 10,455
<OTHER-SE> (1,806,001)
<TOTAL-LIABILITY-AND-EQUITY> 426,707
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 949,878
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 408,701
<INCOME-PRETAX> (1,319,114)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,319,114)
<EPS-PRIMARY> (1.64)
<EPS-DILUTED> 0
<FN>
<F1> NET AMOUNTS
</FN>
</TABLE>
|
|