10-Q/A January 1995
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
AMENDMENT TO QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1995
Commission file number 1-8696
COMPETITIVE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its
Quarterly Report for the quarterly period ended January 31,
1995 on Form 10-Q as set forth in the pages attached hereto:
(List all such items, financial statements, exhibits or other
portions amended)
PART I Item 1. Condensed Financial Statements - Pages 3-19
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned hereunto duly
authorized.
COMPETITIVE TECHNOLOGIES, INC.
Registrant
Date: May 16, 1995
By: Frank R. McPike, Jr.
Vice President, Finance
Principal Financial Officer
and Authorized Signer
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION Page No.
Item 1. Condensed Financial Statements
A. Financial Statements
Consolidated Balance Sheets
January 31, 1995 and July 31, 1994 3
Consolidated Statements of Operations for the
three months ended January 31, 1995 and 1994 4
Consolidated Statements of Operations for the six
months ended January 31, 1995 and 1994 5
Consolidated Statement of Changes in
Shareholders' Interest for the six
months ended January 31, 1995 6
Consolidated Statements of Cash Flows for the
six months ended January 31, 1995 and 1994 7-8
Notes to Consolidated Financial Statements 9-12
B. Pro Forma Financial Information (Unaudited) 13
Pro Forma Consolidated Balance Sheet at
January 31, 1995 14-15
Pro Forma Consolidated Statement of Operations
for the three months ended January 31, 1995 16
Pro Forma Consolidated Statement of Operations
for the six months ended January 31, 1995 17
Notes to Pro Forma Consolidated Financial
Statements 18-19
PART I. FINANCIAL INFORMATION
COMPETITIVE TECHNOLOGIES, INC., INC. AND SUBSIDIARIES
Consolidated Balance Sheets
January 31, 1995 and July 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
January 31, July 31,
ASSETS 1995 1994
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,422,137 $ 1,134,633
Short-term investments, at market, January
31, 1995; at cost, July 31, 1994 1,210,349 1,232,341
Receivables:
Royalties 238,993 229,266
Computer-based education services 628,624 1,012,934
Other, including $63,386 and $45,469
receivable from related parties
in January and July, respectively 112,006 121,400
Prepaid expenses and other current assets 332,857 311,187
Total current assets 3,944,966 4,041,761
Property and equipment, net 793,977 629,508
Investments in affiliates 417,355 364,236
Excess of purchase price over net assets
acquired, net of accumulated amortization
of $697,949 and $622,587, respectively 848,186 923,548
Other assets 458,952 487,579
TOTAL ASSETS $ 6,463,436 $ 6,446,632
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INTEREST
<S> <C> <C>
Current liabilities:
Line of credit obligation $ -- $ 100,000
Accounts payable, including $3,938 and $22,626
payable to related parties in January
and July, respectively 308,498 353,456
Accrued liabilities, including $2,217
and $6,071 payable to related parties,
in January and July, respectively 351,888 324,030
Deferred revenues 1,161,007 980,596
Total current liabilities 1,821,393 1,758,082
Other noncurrent liabilities 102,736 108,379
Minority interest 519,139 430,396
Commitments and contingencies -- --
Shareholders' interest:
5% preferred stock, $25 par value 60,675 60,675
Common stock, $.01 par value 58,243 57,918
Capital in excess of par value 24,344,621 24,097,604
Less: treasury stock at cost: 12,208 shares (96,362) --
Net unrealized holding gains on available-
for-sale securities 11,735 --
Accumulated deficit (20,358,744) (20,066,422)
Total shareholders' interest 4,020,168 4,149,775
TOTAL LIABILITIES AND
SHAREHOLDERS' INTEREST $ 6,463,436 $ 6,446,632
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
for the three months ended January 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revenues:
Retained royalties $ 249,459 $ 264,714
Revenues under service contracts, including
$51,803 and $34,171 from related parties
in 1995 and 1994, respectively 73,559 34,171
Grant revenues 11,531 --
Computer-based education services 1,255,811 884,909
1,590,360 1,183,794
General and administration expenses,
including costs of technology management
business of which $36,896 and $20,194 were
paid to related parties in 1995 and 1994,
respectively 542,910 565,087
Research and development expenses 16,482 --
Costs of computer-based education
services, including $2,546 and
$8,459 paid to related parties 1,137,092 901,394
1,696,484 1,466,481
Operating loss (106,124) (282,687)
Interest income 21,575 26,895
Interest expense (8,624) (5,012)
(Losses) income related to equity
method affiliates (36,143) 267
Other, net 24,611 38,952
Loss from continuing operations before
income taxes and minority interest (104,705) (221,585)
Provision for income taxes 19,000 8,084
Loss from continuing operations
before minority interest (123,705) (229,669)
Minority interest in (income) losses of
subsidiaries (37,652) 12,797
Loss from continuing operations (161,357) (216,872)
Net gain on disposal of discontinued
operations -- 171,078
Net loss $ (161,357) $ (45,794)
Net income (loss) per share (primary and
fully diluted):
Continuing operations $ (0.03) $ (0.04)
Discontinued operations -- 0.03
Net loss per share of common stock $ (0.03) $ (0.01)
Weighted average number of common and
common equivalent shares outstanding
(primary and fully diluted): 5,806,994 5,778,416
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
for the six months ended January 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revenues:
Retained royalties $ 339,364 $ 356,663
Revenues under service contracts, including
$115,222 and $76,595 from related parties
in 1995 and 1994, respectively 156,472 76,595
Grant revenues 60,671 --
Computer-based education services 2,522,876 1,819,361
3,079,383 2,252,619
General and administration expenses,
including costs of technology management
business of which $53,254 and $31,762 were
paid to related parties in 1995 and 1994,
respectively 952,474 996,813
Research and development expenses 34,885 --
Costs of computer-based education
services, including $10,643 and
$12,047 paid to related parties 2,287,280 1,840,223
3,274,639 2,837,036
Operating loss (195,256) (584,417)
Interest income 39,462 50,984
Interest expense (17,261) (11,920)
(Losses) income related to equity
method affiliates (43,936) 8,551
Other, net 28,121 38,952
Loss from continuing operations before
income taxes and minority interest (188,870) (497,850)
Provision for income taxes 24,609 13,684
Loss from continuing operations
before minority interest (213,479) (511,534)
Minority interest in (income) losses of
subsidiaries (78,843) 18,814
Loss from continuing operations (292,322) (492,720)
Net gain on disposal of discontinued
operations -- 221,852
Net loss $ (292,322) $ (270,868)
Net income (loss) per share (primary and
fully diluted):
Continuing operations $ (0.05) $ (0.09)
Discontinued operations -- 0.04
Net loss per share of common stock $ (0.05) $ (0.05)
Weighted average number of common and
common equivalent shares outstanding
(primary and fully diluted): 5,802,885 5,739,338
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statement of Changes in Shareholders' Interest
For the six months ended January 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Net
Unrealized
holding
Preferred Stock gains on
Shares Common Stock Capital in Treasury stock available-
issued and Shares excess of Shares for-sale Accumulated
outstanding Amount issued Amount par value held Amount Securities Deficit
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance - July 31, 1994. . . 2,427 $60,675 5,791,824 $57,918 $24,097,604 -- $ -- $ -- $(20,066,422)
Effect of change in
accounting for available-
for-sale securities. . . 11,154
Stock issued under
Director's Stock
Participation Plan . . . 7,545 75 49,925
Stock issued to Knowledge
Solutions, Inc. in exchange
for 205,325 shares of
KSI's Class A common
stock . . . . . . 25,000 250 197,092
Change in net unrealized
holding gains on available-
for-sale securities . . . 581
Stock held by Knowledge
Solutions, Inc. considered
treasury stock. . . . . . (12,208) (96,362)
Net loss . . . . . . . . . (292,322)
Balance - January 31, 1995 . . 2,427 $60,675 5,824,369 $58,243 $24,344,621 (12,208) $(96,362) $11,735 $(20,358,744)
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
for the six months ended January 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (292,322) $ (270,868)
Continuing operations:
Noncash items included in net loss:
Depreciation and amortization 260,024 206,984
(Income) losses related to equity method
affiliates 43,936 (8,551)
Minority interest in income (losses) of
subsidiaries 78,843 (18,814)
Accrual for issuance of directors' stock 20,833 24,167
Accrual for stock retirement plan 37,500 25,000
Other noncash items included in net loss 44,966 60,137
Other 13,374 (1,444)
Net changes in various operating
accounts (see schedule) 416,942 (47,342)
Proceeds from disposal of discontinued operations, net -- (221,852)
Net cash flow from operating activities 624,096 (252,583)
Cash flow from investing activities:
Purchases of property and equipment, net (312,144) (194,180)
Proceeds from sales and redemptions of
short-term investments 1,108,428 14,446
Purchases of marketable securities and
short-term investments (1,047,094) (62,108)
Investments in affiliates and subsidiaries 5,218 (360)
Proceeds from disposal of discontinued
operations, net -- 221,852
Net cash flow from investing activities (245,592) (20,350)
Cash flow from financing activities:
Payments on line of credit obligation (100,000) --
Proceeds from subsidiary's issuance of stock 9,000 --
Payments on capital lease obligations (49,251)
Proceeds from issuance of common stock, net 524,757
Net cash flow from
financing activities (91,000) 475,506
Net increase in cash and cash
equivalents 287,504 202,573
Cash and cash equivalents at beginning
of period 1,134,633 1,948,241
Cash and cash equivalents at end of period $ 1,422,137 $ 2,150,814
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
for the six months ended January 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
Schedule of net changes in various
operating accounts:
<S> <C> <C>
Receivables:
Royalties $ (9,727) $ (49,960)
Computer-based education services 384,310 (99,954)
Other 9,394 30,695
Prepaid expenses and other current assets (56,440) (14,640)
Accounts payable (99,702) 19,775
Accrued liabilities 8,696 66,742
Deferred revenues 180,411 --
Net changes in various operating accounts $ 416,942 $ (47,342)
Supplemental cash flow information:
Cash paid for:
Interest $ 16,743 $ 9,674
Income taxes 14,795 21,957
Schedule of noncash investing activities:
Investments in affiliates and subsidiaries $ (205,325) $ --
Stock held by affiliates considered treasury stock 96,362 --
Schedule of noncash financing activities:
Stock issued for investments in affiliates and
subsidiaries $ 205,325 $ --
Stock held by affiliates considered treasury stock $ (96,362) $ --
Issuance of directors' stock $ 50,000 $ 59,999
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Interim Financial Statements
Interim financial information presented in the accompanying
financial statements and notes hereto is unaudited.
The year end balance sheet data was derived from audited financial
statements but does not include all disclosures required by generally
accepted accounting principles.
In the opinion of management, all adjustments which are necessary
to present the financial statements fairly in conformity with generally
accepted accounting principles, consisting only of normal recurring
adjustments, have been made.
The interim financial statements and notes thereto as well as the
accompanying Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended July 31, 1994.
2. Short-term Investments
Effective August 1, 1994 the Company adopted Statement of Financial
Accounting Standards No. 115 "Accounting for Certain Investments in Debt
and Equity Securities." As required by Statement No. 115, prior years'
financial statements have not been restated. The unrealized holding
gain for securities classified as available-for-sale as of August 1,
1994 has been reported as an adjustment of the balance of net unrealized
holding gains on available-for-sale securities in shareholders'
interest.
As of January 31, 1995 the components of the Company's available-
for-sale securities are as follows (in thousands):
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Aggregate Holding Holding Amortized Maturity
Security Type Fair Value Gains Losses Cost Basis Grouping
<S> <C> <C> <C> <C> <C>
U.S. Treasury Within
Bills $ 1,056 $ 9 -- $ 1,047 1 year
Mortgaged backed Present
securities 154 3 -- 151 through
2018
Total $ 1,210 $12 -- $ 1,198
</TABLE>
For the quarter ended January 31, 1995 proceeds from the sale of
available-for-sale securities were $1,074,158 which resulted in gross
realized gains of $24,611. For the six months ended January 31, 1995
proceeds from the sale of available-for-sale securities were $1,106,401
which resulted in gross realized gains of $25,582. In addition,
realized gains on sale of short-term investments classified as cash
equivalents were $2,026 in the quarter and six months ended January 31,
1995. Cost is based on specific identification in computing realized
gains.
3. University Communications, Inc. ("UCI")
Costs associated with UCI's computer-based education services for
the six months ended January 31 consist of the following:
1995 1994
Direct costs of providing
services $ 1,393,997 $ 1,039,362
Selling, general and administration
expenses (1)(2) 893,283 800,861
Total $ 2,287,280 $ 1,840,223
(1) Including $3,631 and $35,415, in 1995 and 1994, respectively,
charged by CTI for services provided to UCI.
(2) Including $46,157 and $46,521 in 1995 and 1994, respectively, of
amortization of excess purchase price over net assets acquired.
4. Investment in Knowledge Solutions, Inc.
In September 1994 Competitive Technologies, Inc. ("CTI"), formerly
University Patents, Inc., made an additional investment in Knowledge
Solutions, Inc. ("KSI") by acquiring 205,325 shares of KSI's Class A
common stock in exchange for 25,000 shares of its common stock valued at
$205,325. In addition, Safeguard Scientifics, Inc. ("SSI"), an
unaffiliated company, purchased 200,000 shares of Class A common stock
of KSI for $200,000 in cash. SSI also received warrants to purchase an
additional 100,000 shares of Class A common stock of KSI at $1.00 per
share through December 31, 1994, which warrants expired unexercised, and
133,333 shares of Class A common stock at $1.50 per share through
December 31, 1995. As a result of these and related transactions UPI's
ownership in KSI decreased to 48.8%.
Effective October 1994 Competitive Technologies of PA, Inc. ("CTI-
PA"), formerly Competitive Technologies, Inc., the Company's 80%-owned
subsidiary, granted KSI an exclusive ten-year license to its process
model for interactive multimedia training in exchange for royalties on
future sales.
5. Accrued Liabilities
Accrued liabilities consist of the following:
January 31, July 31,
1995 1994
Accrued compensation $ 117,536 $ 94,920
Other 234,352 229,110
$ 351,888 $ 324,030
6. Segment Data
The Company is engaged in two business segments: (a) technology
management services and (b) marketing interactive computer-based
education services.
Financial data relating to the Company's segments for the six months
ended January 31, 1995 and 1994 are as follows (in thousands):
<TABLE>
<CAPTION>
Computer-
Technology based
Management Education Other Total
(1)(2)
1995
<S> <C> <C> <C> <C>
Net revenues $ 556 $ 2,523 $ -- $ 3,079
Operating income (loss) (283) 250 (162) (195)
Identifiable assets 959 3,074 2,430 6,463
Depreciation and amortization 92 168 -- 260
Capital additions 72 240 -- 312
<CAPTION>
1994
<S> <C> <C> <C> <C>
Net revenues $ 434 $ 1,819 $ -- $ 2,253
Operating income (loss) (398) 6 (192) (584)
Identifiable assets 945 2,184 2,955 6,084
Depreciation and amortization 79 128 -- 207
Capital additions 33 162 -- 195
</TABLE>
(1) Other operating loss includes general corporate expenses.
(2) Other identifiable assets are corporate assets consisting primarily of
cash and cash equivalents, short-term investments, the directors'
escrow fund and investments in equity method affiliates unrelated to
an industry segment.
7. Contingencies
In November 1991, a suit was filed in Connecticut against CTI, its
wholly-owned subsidiary, Genetic Technology Management, Inc. ("GTM"),
its majority-owned subsidiary, UOP, and several present and former
directors on behalf of the 59 limited partners of Optical Associates,
Limited Partnership ("OALP"). The complaint alleges, among other
things, that the January 1989 sale of UOP's assets to Unilens violated
the partnership agreement and that OALP is entitled to the full proceeds
of the sale to Unilens. The complaint claims, among other things, money
damages and treble and punitive damages in an unspecified amount and
attorneys' fees. The Company believes that the asserted claims are
without merit and intends to defend the action instituted by plaintiffs
vigorously. In August 1994 the defendants filed a motion for summary
judgment for dismissal of the case. The motion for summary judgment was
argued on March 6, 1995 and the court has not yet ruled on the motion.
8. Subsequent Events
On February 15, 1995, Barden Companies, Inc. (to which Barden
Communications, Inc. had assigned its rights and interests) exercised
its option to purchase from CTI additional shares of UCI common stock.
Barden Companies, Inc. ("Barden") paid $3,227,372 ($1.375 per share) in
cash for 2,347,180 shares held by CTI. Before the transaction Barden
owned 7.4% and CTI owned 55.1% of the outstanding common stock of UCI.
Upon consummation of the transaction Barden owned 50.1% and CTI owned
12.4% of the outstanding common stock of UCI.
CTI intends to offer all UCI shareholders other than Barden the
opportunity to participate in the transaction on a pro rata basis.
Pursuant to this offer, CTI would offer to purchase from the other UCI
shareholders a maximum of approximately 950,000 shares at $1.375 per
share, the same price CTI received from Barden. CTI expects to report
a gain on the sale of UCI shares of between $1,600,000 and $2,700,000 in
the fiscal year ending July 31, 1995. The amount of CTI's gain is
dependent on the level of participation in the offer, which is not
currently determinable.
In February 1995 CTI purchased 250,000 shares of Class A common
stock of Equine Biodiagnostics, Inc. ("EBI") for $25,000 in cash. EBI
was organized by Kentucky Technology Incorporated, a wholly-owned
technology management company formed by the University of Kentucky, to
provide diagnostic laboratory services for the equine industry. EBI's
initial product is a test for equine protozoal myeloencephalitis, a
neurological disease. After this investment CTI owns 37.5% of the
outstanding common stock of EBI and will account for its investment in
EBI on the equity method. EBI stock is not publicly traded and there is
no quoted market price for its stock.
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Pro Forma Financial Information
(unaudited)
On February 15, 1995, Barden Companies, Inc. (to which Barden
Communications, Inc. had assigned its rights and interests) exercised
its option to purchase from Competitive Technologies, Inc. ("CTI")
additional shares of University Communications, Inc.'s ("UCI") common
stock. Barden Companies, Inc. ("Barden") paid $3,227,372 ($1.375 per
share) in cash for 2,347,180 shares held by CTI. Before the transaction
Barden owned 7.4% and CTI owned 55.1% of the outstanding common stock of
UCI. Upon consummation of the transaction Barden owned 50.1% and CTI
owned 12.4% of the outstanding common stock of UCI.
CTI intends to offer all UCI shareholders other than Barden the
opportunity to participate in the transaction on a pro rata basis.
Pursuant to this offer, CTI would offer to purchase from the other UCI
shareholders a maximum of approximately 950,000 shares at $1.375 per
share, the same price CTI received from Barden. CTI expects to report
a gain on the sale of UCI shares of between $1,600,000 and $2,700,000 in
the fiscal quarter ending April 30, 1995. The amount of CTI's gain is
dependent on the level of participation in the offer, which is not
currently determinable. Accordingly the accompanying pro forma
financial information has been prepared as if there were no
participation of other UCI shareholders.
The following pro forma balance sheet reflects the sale as if it had
occurred on January 31, 1995.
The following pro forma statements of operations for the Company for
the three and six months ended January 31, 1995 reflect CTI's sale of
2,347,180 shares of UCI stock as if it had occurred on August 1, 1993.
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Pro Forma Consolidated Balance Sheet
January 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Historical
Competitive
Technologies, Inc. Pro Forma
January 31, Pro Forma Balance
ASSETS 1995 Adjustments Sheet
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 1,422,137 $ 2,434,820 (A)(B) $ 3,856,957
Short-term investments, at
market 1,210,349 -- 1,210,349
Receivables:
Royalties 238,993 238,993
Computer-based education
services 628,624 (628,624) (A) --
Other, including $63,386
receivable from related
parties (pro forma: $63,386) 112,006 (2,000) (A) 110,006
Loans, advances and interest
from affiliate 318,253 (A) 318,253
Prepaid expenses and other
current assets 332,857 (210,375) (A) 122,482
Total current assets 3,944,966 1,912,074 5,857,040
Property and equipment, net 793,977 (668,386) (A) 125,591
Investments in affiliates 417,355 46,962 (A)(B) 464,317
Excess of purchase price over
net assets acquired, net of
accumulated amortization
of $697,949 (pro forma: $125,688) 848,186 (659,643) (A) 188,543
Other assets 458,952 (9,971) (A) 448,981
Total assets $ 6,463,436 $ 621,036 $ 7,084,472
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Pro Forma Consolidated Balance Sheet
January 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Historical
Competitive
Technologies, Inc. Pro Forma
January 31, Pro Forma Balance
1995 Adjustments Sheet
LIABILITIES AND SHAREHOLDERS' INTEREST
<S> <C> <C> <C>
Current liabilities:
Accounts payable, including
$3,938 payable to related
parties (pro forma: $3,938) $ 308,498 $ (255,191) (A) $ 53,307
Accrued liabilities, including
$2,217 payable to related
parties (pro forma: none) 351,888 (115,128) (A) 236,760
Deferred revenues 1,161,007 (1,118,231) (A) 42,776
Total current liabilities 1,821,393 (1,488,550) 332,843
Other noncurrent liabilities 102,736 (102,736) (A) --
Minority interest 519,139 (519,139) (A) --
Shareholders' interest:
5% preferred stock, $25 par value 60,675 -- 60,675
Common stock, $.01 par value 58,243 -- 58,243
Capital in excess of par value 24,344,621 -- 24,344,621
Less: treasury stock at cost:
12,208 shares (96,362) -- (96,362)
Net unrealized holding gains on
available-for-sale securities 11,735 -- 11,735
Accumulated deficit (20,358,744) 2,731,461 (B) (17,627,283)
Total shareholders' interest 4,020,168 2,731,461 $ 6,751,629
Total liabilities and
shareholders' interest $ 6,463,436 $ 621,036 $ 7,084,472
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
for the three months ended January 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Historical
Competitive
Technologies, Inc.
January 31, Pro Forma Pro Forma
1995 Adjustments Results
<S> <C> <C> <C>
Revenues:
Retained royalties $ 249,459 $ -- $ 249,459
Revenues under service contracts,
including $51,803 from
related parties 73,559 -- 73,559
Grant revenues 11,531 -- 11,531
Computer-based education services 1,255,811 (1,255,811) (C) --
1,590,360 (1,255,811) 334,549
General and administration expenses,
including costs of technology
management business of which
$36,896 was paid to related
parties 542,910 -- 542,910
Research and development expenses 16,482 -- 16,482
Costs of computer-based education
services, including $2,546 paid
to related parties 1,137,092 (1,137,092) (C) --
1,696,484 (1,137,092) 559,392
Operating loss (106,124) (118,719) (224,843)
Interest income 21,575 (2,106) (C)(F) 19,469
Interest expense (8,624) 8,624 (C) --
Losses related to equity method
affiliates (36,143) 5,840 (C) (30,303)
Other, net 24,611 -- 24,611
Loss from continuing operations
before income taxes and
minority interest (104,705) (106,361) (E) (211,066)
Provision for income taxes 19,000 (16,000) (C) 3,000
Loss from continuing operations
before minority interest (123,705) (90,361) (214,066)
Minority interest in (income)
losses of subsidiaries (37,652) 40,552 (D) 2,900
Net loss $ (161,357) $ (49,809) $ (211,166)
Net loss per share of
common stock
(primary and fully diluted) $ (0.03) $ (0.04)
Weighted average number of common
and common equivalent shares
outstanding
(primary and fully diluted) 5,806,994 5,806,994
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
for the six months ended January 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Historical
Competitive
Technologies, Inc.
January 31, Pro Forma Pro Forma
1995 Adjustments Results
<S> <C> <C> <C>
Revenues:
Retained royalties $ 339,364 $ -- $ 339,364
Revenues under service contracts,
including $115,222 from
related parties 156,472 -- 156,472
Grant revenues 60,671 -- 60,671
Computer-based education services 2,522,876 (2,522,876) (C) --
3,079,383 (2,522,876) 556,507
General and administration expenses,
including costs of technology
management business of which
$53,254 was paid to related
parties 952,474 -- 952,474
Research and development expenses 34,885 -- 34,885
Costs of computer-based education
services, including $10,643 paid
to related parties 2,287,280 (2,287,280) (C) --
3,274,639 (2,287,280) 987,359
Operating loss (195,256) (235,596) (430,852)
Interest income 39,462 (1,409) (C)(F) 38,053
Interest expense (17,261) 17,261 (C) --
Losses related to equity method
affiliates (43,936) 6,098 (C) (37,838)
Other, net 28,121 -- 28,121
Loss from continuing operations
before income taxes and
minority interest (188,870) (213,646) (E) (402,516)
Provision for income taxes 24,609 (16,000) (C) 8,609
Loss from continuing operations
before minority interest (213,479) (197,646) (411,125)
Minority interest in (income)
losses of subsidiaries (78,843) 88,743 (D) 9,900
Net loss $ (292,322) $ (108,903) $ (401,225)
Net loss per share of
common stock
(primary and fully diluted) $ (0.05) $ (0.07)
Weighted average number of common
and common equivalent shares
outstanding
(primary and fully diluted) 5,802,885 5,802,885
</TABLE>
See accompanying notes
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Pro Forma Consolidated Balance Sheet
(Unaudited)
The pro forma condensed consolidated balance sheet reflects
CTI's sale of 2,347,180 shares of UCI stock for $3,227,372 in cash
as if it had occurred on January 31, 1995. The historical
consolidated balance sheet of CTI reported UCI as a consolidated
subsidiary. The pro forma consolidated balance sheet reflects
CTI's remaining 12.4% investment in UCI on the cost method. The
specific pro forma adjustments to achieve this change are as
follows:
(A) This entry removes the assets and liabilities of UCI,
including its minority shareholders' interest in those net
assets, as reflected in the historical consolidated balance
sheet at January 31, 1995 and records CTI's investment in UCI
as it would have been reflected on January 31, 1995 if UCI
were not a consolidated subsidiary.
(B) This entry reflects CTI's sale of part of its investment in
UCI for $3,227,372 in cash, the reduction of its investment
in UCI and the resulting gain that would have been recorded
if the sale had occurred on January 31, 1995.
COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Pro Forma Consolidated
Statements of Operations
(Unaudited)
The pro forma condensed consolidated statements of operations
treat CTI's sale of 2,347,180 shares of UCI stock for $3,227,372 in
cash as if it had occurred on August 1, 1993.
CTI intends to offer all UCI shareholders other than Barden
the opportunity to participate in the transaction on a pro rata
basis. Pursuant to this offer, CTI would offer to purchase from
the other UCI shareholders a maximum of approximately 950,000
shares at $1.375 per share, the same price CTI received from
Barden. CTI expects to report a gain on the sale of UCI shares of
between $1,600,000 and $2,700,000 in the fiscal quarter ending
April 30, 1995. The amount of CTI's gain is dependent on the level
of participation in the offer, which is not currently determinable.
The historical consolidated statements of operations of CTI
reported UCI as a consolidated subsidiary. The pro forma
consolidated statements of operations reflect CTI's remaining 12.4%
investment in UCI on the cost method. Since UCI incurred losses
from its inception through the fiscal year ended July 31, 1994, it
has declared no dividends to date. UCI may not declare or pay
dividends during the term of its current credit facility (see Note
2 to Consolidated Financial Statements in CTI's Annual Report on
Form 10-K for the year ended July 31, 1994).
(C) This entry removes the revenues and expenses of UCI as
reflected in the historical consolidated statements of
operations for the periods presented.
(D) This entry adjusts for UCI's minority shareholders' interest
in UCI's net income or loss for the period presented.
(E) No pro forma adjustment has been recorded to reflect CTI's
sale of part of its investment in UCI for $3,227,372 in cash
or the resulting gain. This transaction, including CTI's gain
on its sale of part of its investment in UCI, will be
recognized in the third quarter of fiscal 1995 when the sale
is consummated.
(F) No pro forma adjustment has been recorded to reflect interest
which would have been earned on the proceeds of the sale if
it had occurred on August 1, 1993 and the proceeds had been
invested throughout the period. If the proceeds had been
invested at the weighted average interest rate available on
its short-term investment account throughout the period, CTI
estimates it would have earned approximately $44,000 and
$81,000 in the three and six months ended January 31, 1995,
respectively.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
FDS for Form 10-Q/A for January 31, 1995
</LEGEND>
<CIK> 0000102198
<NAME> COMPETITIVE TECHNOLOGIES, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JAN-31-1995
<CASH> 1,422,137
<SECURITIES> 1,210,349
<RECEIVABLES> 979,623
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,944,966
<PP&E> 1,540,130
<DEPRECIATION> (746,153)
<TOTAL-ASSETS> 6,463,436
<CURRENT-LIABILITIES> 1,821,393
<BONDS> 0
<COMMON> 58,243
0
60,675
<OTHER-SE> 3,901,250
<TOTAL-LIABILITY-AND-EQUITY> 6,463,436
<SALES> 0
<TOTAL-REVENUES> 3,079,383
<CGS> 0
<TOTAL-COSTS> 3,274,639
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (17,261)
<INCOME-PRETAX> (188,870)
<INCOME-TAX> 24,609
<INCOME-CONTINUING> (292,322)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (292,322)
<EPS-PRIMARY> $(0.05)
<EPS-DILUTED> $(0.05)
</TABLE>
