UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the fiscal year ended April 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from ___________ to __________
Commission File Number 0-8422
-----------------------------
TRANSACT INTERNATIONAL INC.
---------------------------
(Name of small business issuer in its charter)
CONNECTICUT 06-0732124
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22 THORNDAL CIRCLE, DARIEN, CONNECTICUT 06820
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (203) 656-0777
--------------
Securities registered under Section 12(b) of the Exchange Act:
NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, NO PAR VALUE
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained to the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment of this Form 10-KSB. [X]
Revenues for the fiscal year ended April 30, 1999 were $2,581,621.
The aggregate market value of the voting and non-voting stock held by
non-affiliates of the registrant at July 9, 1999 was $137,637.
The number of shares outstanding of the registrant's common stock at July
9, 1999 was 6,123,235.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information from Transact International Inc.'s (i) Proxy Statement
for the Annual Meeting of Stockholders to be held on October 14, 1999 is
incorporated by reference into Part III of this Form 10-KSB (a definitive proxy
statement will be filed with the Securities and Exchange Commission within 120
days after the end of the fiscal year covered by this Form 10-KSB).
Transitional Small Business Disclosure Format. YES [ ] NO [X]
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(A) GENERAL DEVELOPMENT OF BUSINESS
-------------------------------
Transact International Inc. (formerly Gram Industries Inc.), a
Connecticut corporation ("Transact" or the "Company"), was incorporated in 1958.
The Company operates in one business segment, the sale, design, manufacture and
installation of air cargo materials handling systems and equipment. The air
cargo handling systems and equipment operate in air cargo terminals to
facilitate the storage and movement of the unitized loads and containers in
which air cargo is shipped. Transact also renders consulting and engineering
services related to such systems and equipment.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS AND EXPORT SALES
--------------------------------------------------------------
The Company operates in one business segment, the sale, design,
manufacture and installation of air cargo materials handling systems and
equipment. In 1999, two customers accounted for 21% (domestic airline), 19% (a
domestic development company), respectively of net sales (excluding licensing
fees). In 1999 and 1998 the Company received $480,000 and $200,000 respectively
from a Chinese manufacturer for licensing fees of certain technology. In 1998,
three customers accounted for 14% (U.S. Government), 13% (Alaska Airlines) and
11% (United Parcel Service), respectively, of net sales. In 1997 three customers
accounted for 32% (United Parcel Service), 29% (U.S. Government) and 18%
(Agricultural and Processed Food Products Export Development Authority
["Apeda"]), respectively, of net sales.
Sales to the U.S. Government were $97,670 in 1999, $492,106 in 1998,
and $2,099,000 in 1997. All of the Company's operations are in the United
States. Export sales to the Far East accounted for 9%, 8% and 20%, of net sales
in 1999, 1998 and 1997, respectively.
(C) NARRATIVE DESCRIPTION OF BUSINESS PRINCIPAL PRODUCTS AND SERVICES
-----------------------------------------------------------------
Transact has developed various components comprising a basic cargo
handling system. This system consists of items of specialized equipment that may
be customized to a customer's requirements. These items of equipment may be
purchased separately and are categorized by the location of their use into two
basic groups: terminal equipment and ramp equipment. The majority of sales are
direct to the end user; however, occasionally the Company sells to a general
contractor who has a contract with the end user.
Terminal equipment includes truck dock lifts, transfer vehicles,
elevating transfer vehicles, decks, and storage racks which are installed in a
cargo terminal and are used to receive and store cargo containers and to
retrieve such containers and position them for loading on aircraft by ramp
equipment. Transact terminal equipment systems have been installed in more than
60 locations. Terminal equipment accounted for approximately 63% of Transact's
net sales in 1999 excluding licensing fee income of $480,000.
Ramp equipment is completely mobile and accepts cargo containers at
the ramp area adjacent to the cargo terminal, transports such containers to the
aircraft and loads them into the aircraft by means of conveyance devices. Ramp
equipment includes transporters and loaders. ramp equipment accounted for
approximately 4% of Transact's net sales in 1999 excluding licensing for income
of $480,000.
2
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS -- CONTINUED
PRINCIPAL PRODUCTS AND SERVICES -- CONTINUED
--------------------------------------------
Transfer balls are used in decks to facilitate the manual movement of
air cargo containers. Spare parts are sold as replacement parts for ramp
equipment and terminal equipment. Transfer balls and spare parts accounted for
approximately 33% of Transact net sales in 1999 (excluding licensing fee income
of $480,000). In June 1999 the Company has agreed to sell its spare parts
business to an unaffiliated company. The sale is subject to due diligence and
the execution of a definitive agreement among other contingencies. The terms of
sale provide that Transact sell approximately $110,000 of spare parts inventory
and applicable drawings, customer lists and phone numbers, in exchange for
$130,000 at closing, $60,000 of spare parts Transact is contractually obligated
to provide to project customers and a 5% royalty on future sales up to $300,000
in royalties.
Transact also provides consulting and engineering services to assist
customers in planning, designing and adapting cargo handling systems and in
selecting equipment items based upon their particular requirements. Generally,
no more than two Transact employees are engaged in rendering these services at
any point in time. These services have enabled Transact to gain access to
customers at the planning stage for future systems projects. During 1999
Transact had no income from consulting and engineering services.
SIGNIFICANT CUSTOMERS/PRINCIPAL MARKETS
---------------------------------------
The Company produces air cargo handling systems and equipment for
airlines, air express and freight companies, airport authorities and the U.S.
Air Force. Sales of air cargo handling systems are comprised of several large
contracts. Therefore, it is not unusual for a few customers to account for a
significant percentage of revenues. Sales to major customers for the three years
ended April 30, 1999 are outlined in Item 1 (b) herein. The loss of any of these
customers, if not replaced with another customer, could have a material adverse
effect on the Company.
RAW MATERIALS AND SUBCONTRACTORS
--------------------------------
During 1993, the Company closed its Memphis, Tennessee manufacturing
facility. The Company is renting a smaller facility in Somerville, Tennessee and
is subcontracting a significant portion of the production of its equipment to
selected manufacturers within the industry. The Company subcontracted
approximately 45% of its cost of sales in 1999. The Company obtains bids from
qualified bidders and determines who will be awarded the subcontract based both
on price and technical ability. Transact's review of potential subcontractors
and the monitoring of their quality control standards minimizes the
subcontracting risk. The materials required are generally available from a large
number of sources. The Company has not experienced any unusual difficulties in
obtaining the raw materials necessary to manufacture its products.
CONTRACTING RISKS
-----------------
Most contracts for the sale of Transact air cargo handling systems and
equipment are the result of competitive bidding. If accepted, the bid price,
which is effective to a certain date and for certain equipment, becomes the
fixed contract price, and is generally not subject to price renegotiations
unless the customer either accepts the bid after its expiration date or changes
the scope of the project by requiring additional or different equipment. In
preparing its bid price, Transact normally includes a margin for estimated
supplier price and subcontractor cost increases; however, Transact's margins,
and accordingly its estimated gross profit, may be adversely impacted by
increases in costs which exceed those anticipated or provided for in its bid.
Transact faces an additional risk of non-payment from a contractor when, on rare
occasions, Transact operates as a sub-
3
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS -- CONTINUED
CONTRACTING RISKS - CONTINUED
-----------------------------
contractor. Specifically, Transact risks delay in payment due to the incomplete
or faulty performance of the contractor. Standard provisions in contracts with
the U.S. Government allow termination at the Government's option provided the
Government and the Company agree on the final termination settlement. As of
April 30, 1999 the Company's backlog with the U.S. Air Force was approximately
$55,000. Transact's fabrication contracts may contain substantial per diem
penalty clauses for delays in completion resulting from the actions of Transact
or of its subcontractors. Transact, however, has incurred no substantial
liability resulting from either the non-payment by general contractors or from
the penalty clauses.
BACKLOG
-------
The Company's sales order backlog was $2.4 million as of April 30,
1999. This compares to $2.6 million as of April 30, 1998 and $3.1 million as of
April 30, 1997. All of these orders are supported by signed contracts. The
backlog is expected to be completed and invoiced in the year ended April 30,
2000.
Transact booked approximately $1,200,000 of orders in 1999. This
compares to approximately $3,100,000 of orders in 1998 and $5,700,000 of orders
booked in 1997.
COMPETITION
-----------
Transact's primary competitors in terminal equipment systems are three
German firms and the U.S. subsidiary of one of these German firms, all of which
are greater in size and financial resources than Transact. Therefore, the
relationship of the United States dollar to the German Deutsche Mark affects
Transact's competitive position in obtaining new contracts. In the area of ramp
equipment, there are numerous domestic and international competitors, some
larger, some smaller than Transact. Transact competes primarily in the area of
product and systems design, technological change and price. In the area of
transfer balls there are a few domestic and international competitors, some
larger, some smaller than Transact. Transact competes primarily in the area of
product design and price.
PATENTS AND WARRANTIES
----------------------
Transact systems and equipment are not covered by patents. The
industry is one in which rapid technological advances result in frequent changes
to designs and concepts. These frequent changes provide Transact's principal
protection against competition from unauthorized use of its designs and
concepts.
Transact warrants the design, workmanship and material of it's
terminal and ramp equipment for one year. Transact includes in its bid the
warranty work which it estimates will be required by each systems contract.
SEASONALITY
-----------
The demand for Transact systems and equipment is not subject to
seasonal change. Transact's sales volume, however, is directly affected by
capital expenditure budgets of the U.S. Government, the air cargo industry and
the overnight package delivery segment of such industry.
WORKING CAPITAL
---------------
For information relating to working capital, see Liquidity and Capital
Resources included in Item 7 herein entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
4
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS - CONTINUED
RESEARCH AND DEVELOPMENT
------------------------
The cost of Company sponsored research and development was not
material in the last three years. Major research and development is undertaken
in connection with specific contracts for cargo handling systems or equipment.
The majority of the cost of research and development is incorporated into the
contract price. This practice enables the Company to utilize the results of
research and development conducted for, and paid for by, specific customers in
the overall improvement and updating of its equipment.
ENVIRONMENTAL MATTERS AND REGULATIONS
-------------------------------------
Capital expenditures by the Company for environmental control in the
current year were not material, and the Company does not anticipate that such
expenditures will become material in the next two years. Compliance by the
Company with existing environmental laws and regulations has not had, and is not
anticipated in the next two years to have, any material effect upon the capital
expenditures, earnings or competitive position of the Company.
EMPLOYEES
---------
The Company has approximately 12 employees as of April 30, 1999.
GOVERNMENTAL APPROVAL/REGULATIONS
---------------------------------
The Company is not required to obtain, and is not awaiting, any
governmental approval for the manufacture and sale of any of its products. The
Company does not believe that any existing or probable governmental regulations
have or will have any material effect on the Company.
ITEM 2. PROPERTIES
The Company does not own or invest in any real estate or office
facilities. The principal leased facilities of the Company are as follows:
Darien, Connecticut - Office space including the Company
headquarters located in a 3,312 square foot
facility leased by the Company. The lease
expires September 30, 1999.
Somerville, Tennessee - Manufacturing and office space located in a
8,350 square foot facility leased by the
Company. The lease expires September 30, 2000.
Management believes that all properties are in satisfactory condition
and are adequate for existing and projected operations.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending or contemplated legal proceedings to
which the Company is a party or by which the Company or any of its property is
subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
last quarter of 1999.
5
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's stock is currently traded on the OTC Bulletin Board. As
of July 9, 1999 there were 6,123,235 shares of Common Stock outstanding, held by
approximately 2,100 stockholders of record. The over-the-counter stock
quotations below were obtained through the Internet by accessing America On Line
and retrieving historical stock price quotes from PC Quote (pcquote.com). Such
quotations reflect inter-dealer prices without retail mark-up or mark-down or
commissions and may not necessarily represent actual transactions. The Company
has not paid dividends on its common stock during the two most recent years and
does not anticipate that any dividends will be paid in the near future.
1999 1998
-------------------- ---------------------
High Low High Low
-------- -------- -------- --------
1st Quarter $.13 $.06 $.25 $.13
2nd Quarter $.13 $.02 $.13 $.13
3rd Quarter $.07 $.02 $.22 $.13
4th Quarter $.05 $.04 $.13 $.09
ITEM 6. FIVE YEAR FINANCIAL SUMMARY
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-----------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
(In thousands of dollars, except per share)
SUMMARY OF OPERATIONS :
<S> <C> <C> <C> <C> <C>
Net revenues $ 2,581 $ 3,575 $ 7,252 $ 7,208 $ 8,086
Net (loss) $ (506) $ (803) $ (209) $ (791) $ (230)
Net (loss) per common share $ (.08) $ (.13) $ (.03) $ (.13) $ (.04)
Cash dividends declared $ NONE None None None None
BALANCE SHEET DATA :
Total assets $ 909 $ 1,066 $ 1,400 $ 2,178 $ 2,602
Long-term debt including current
maturities $ 24 $ 24 $ 47 $ 82 $ 185
</TABLE>
6
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL DISCUSSION
Transact operates in one business segment which includes the design,
installation, manufacture and service of products and systems for handling air
cargo. These products and systems are sold to airlines, air express and freight
companies, airport authorities and the U.S. Air Force. However the Company has
designed and developed equipment and systems to handle marine containers. The
Company has received a number of patents and has agreed to license the patents
and technology it developed for marine container Storage and Retrieval Systems
to Seaport Technologies, Inc. (see page 22).
The Company subcontracts a significant portion of the production of
its systems and equipment to selected manufacturers within the industry thereby
shifting the risk of cost overruns associated with the manufacturing process
from the Company to the subcontractor and reducing the financial impact of
changes in workload. In addition, in many instances the payment terms of the
prime contract are passed on to the subcontractor. As a result, the contract is,
in effect, financed by the subcontractor and not the Company.
The Company's sales contracts are primarily the result of competitive
bids at fixed prices for specified equipment. At the time of bidding, the
Company provides for estimated cost increases for materials and subcontractors
based upon its past experience with similar contracts. However, increases in
costs which exceed those anticipated or provided in its bid adversely effect
gross profit.
The Company's present principal competitors for terminal projects are
German-based companies and in one case a U.S. subsidiary of a German based
company. Therefore, the relationship of the U.S. dollar to the German Mark
affects the Company's competitive position in obtaining new contracts. The
Company's principal competitors for ramp equipment and transfer balls are U.S.
businesses.
RESULTS OF OPERATIONS
SALES
Sales of air cargo handling systems are comprised of several large
contracts. Therefore it is not unusual for a few customers to account for a
significant percentage of net sales. The U.S. Air Force has been a significant
customer for the last three years, accounting for 4%, 14% and 29% of net sales
in 1999, 1998 and 1997, respectively. United Parcel Service, a domestic
commercial customer accounted for 11% and 32% of 1998 and 1997 sales,
respectively. Two customers located in India, accounted for 6%, 5% and 18% of
1999, 1998 and 1997 sales, respectively. Alaska Airlines, a domestic commercial
customer, accounted for 13% of 1998's sales. Export sales to the Far East
accounted for 9%, 8% and 20% of net sales in 1999, 1998 and 1997, respectively.
Sales to the U.S. Air Force for the next one to three years is anticipated to
remain low because of a decrease in spending by the U.S. Air Force for air cargo
handling equipment.
7
<PAGE>
RESULTS OF OPERATIONS -- CONTINUED
SALES -- CONTINUED
Sales by product type for each of the three years ended April 30,
1999, 1998, and 1997 were approximately as follows:
<TABLE>
<CAPTION>
1999 1998 1997
--------------------------------------------------
<S> <C> <C> <C>
Project Revenue $ 1.4 MILLION $ 1.9 million $ 4.8 million
Transfer Balls and Spare Parts $ .7 MILLION $ 1.4 million 2.4 million
Licensing $ .5 MILLION $ .2 million ---
Other $ -- MILLION $ .1 million .1 million
--------------------------------------------------
Total $ 2.6 MILLION $ 3.6 million $ 7.3 million
==================================================
</TABLE>
Project revenue in 1999 included approximately $.1 million of mobile
equipment while 1998 and 1997 each has less than $.3 million of mobile equipment
revenues. Large orders for transfer balls were shipped in 1997.
GROSS PROFIT
Gross profits (excluding licensing fees) were 0% in 1999, 3% in 1998
and 14% in 1997. The increase in 1997 was because of the increased sales of
transfer balls, which have higher gross profit margins than project revenues,
and the absence of the large cost overruns. The decrease in 1999 and 1998
results from cost overruns and/or delay penalties on certain projects and lower
sales volume to absorb the plant costs.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses decreased 12% in 1999 from 1998,
10% in 1998 from 1997 and 16% in 1997 from 1996. The 1999 decrease is primarily
a reduction in legal fees, bad debt expense, and other overhead expenses net of
an increase in salaries. The 1998 decrease was primarily from reduced officers
salaries, travel expenses and office rent. In 1997 the decrease was primarily
due to reduced officers compensation costs resulting from the retiring of one
officer.
SALES BACKLOG
The Company's sales order backlog was $2.4 million as of April 30,
1999. However, $1.5 million of the April 30, 1999 backlog relates to a project
in India which the Company anticipates will be substantially completed by
September 30, 1999. This compares to $2.6 million as of April 30, 1998 and $3.1
million as of April 30, 1997. All of these orders are supported by signed
contracts. The Company expects to complete and invoice all of its April 30, 1999
sales order backlog prior to April 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
In 1999 the working capital deficiency increased $494,399 resulting
primarily from the net loss for the year. Many suppliers have refused to extend
the Company credit which has created difficulties for the Company in selling
spare parts and transfer balls. In addition, for terminal projects the Company
must partner with a financially creditable and technically compatible partner in
order to compete for high dollar value projects. It is the Company's practice to
have its subcontractors subject to the same payment terms as the Company has
with its customer for terminal projects. Thus, portions of the Company's sales
contracts are financed by its subcontractor and not the Company. The Company
does not anticipate any material capital expenditures for 2000.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Company is presently seeking additional orders and is exploring
the sale or license of certain or all product lines that would enable the
Company to continue as a going concern. However, there is no assurance that the
Company will be successful in attaining additional profitable orders or in
selling or licensing any product lines. Therefore, there is no assurance that
the Company will be able to meet its obligations during the next year.
INFLATION
In management's opinion, the impact of inflation for the three most
recent years is not significant to the financial statements as reported.
ITEM 8. FINANCIAL STATEMENTS
The following financial statements of the Company, together with the
report of independent auditors are included herein:
(1) Financial Statements
--------------------
Page
----
Independent Auditors' Report 14
Balance Sheets--April 30, 1999 and 1998 15
Statements of Operations--Years ended April 30, 1999,
1998 and 1997 16
Statements of Cash Flows--Years ended April 30, 1999,
1998 and 1997 17
Notes to Financial Statements 18
All schedules for which provision is made in applicable accounting
regulations of the Securities and Exchange Commission are not required under the
related instructions or are not applicable and, therefore, have been omitted.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None; see Item 14(b) regarding changes in the Company's certifying
accountants.
9
<PAGE>
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Company's directors and officers, the principal occupation or
employment of each such person and the name and principal business of any
organization by which such person is employed, other than the Company, are as
follows: Frank B. Carder, Director and Chairman of the Board of the Company,
Bruno S. Frassetto, Director, President and Chief Executive Officer of the
Company, and Randall W. Sweeney, Director of the Company and President of DAI,
Inc., a consulting firm for government contractors. Additional information
required by this item is incorporated by reference herein to the section
entitled "Information Concerning Directors, Executive Officers, Promoters and
Control Persons" contained in the Company's Proxy Statement related to its 1999
Annual Meeting of Stockholders.
ITEM 11. EXECUTIVE COMPENSATION
The Company hereby incorporates by reference herein the information
with respect to executive compensation which is contained in the section
entitled "Executive Compensation" set forth in the Company's Proxy Statement
related to its 1999 Annual Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company hereby incorporates by reference herein the information
with respect to security ownership of certain beneficial owners and management
from the section entitled "Security Ownership of Certain Beneficial Owners and
Management" set forth in the Company's Proxy Statement related to its 1999
Annual Meeting of Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company hereby incorporates by reference herein the information
with respect to certain relationships and related transactions which is
contained in the section entitled "other Information Concerning Directors and
Executive Officers" set forth in the Company's Proxy Statement related to its
1999 Annual Meeting of Stockholders.
10
<PAGE>
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
(a) (3) The exhibits filed with this report pursuant to Item 601 of
Regulation S-B are as follows:
3(i) Amended and Restated Certificate of Incorporation of
Transact International Inc. (10/19/83). This exhibit is
incorporated by reference to Exhibits 3.1 and 3.2 to the
Company's Annual Report on Form 10-K for the fiscal year
ended April 30, 1987 Commission File No. 0-8422 (the "1987
10-K").
3(ii)The By-Laws of Transact International Inc. (formerly Gram
Industries Inc.). This exhibit is incorporated by reference
to Exhibit 3.3 to the 1987 10-K.
10.1 The 1978 Employee's Stock Option Plan. This exhibit is
incorporated by reference to Exhibit 10.1 to the 1987 10-K.
10.2 Transact International Inc. 401(k) Profit Sharing Plan. This
exhibit is incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the fiscal year
ended April 30, 1992 Commission File No. 0-8422 (the "1992
10-K").
10.3 Transact International Inc. Money Purchase Pension Plan.
This exhibit is incorporated by reference to Exhibit 10.3 to
the 1992 10-K.
10.4 Transact Employment Agreement, dated as of August 1, 1991
between Transact International Inc. and Frank B. Carder.
This exhibit is incorporated by reference to Exhibit 10.4 to
the Company's Annual Report on Form 10-KSB for the fiscal
year ended April 30, 1995, Commission File No. 0-8422 (the
"1995 10-KSB").
10.5 Transact Employment Agreement, dated as of August 1, 1991
between Transact International Inc. and Bruno S. Frassetto.
This exhibit is incorporated by reference to Exhibit 10.5 to
the Company's 1995 10-KSB.
10.6 Transact Employment Agreement, dated as of June 24, 1991
between Transact International Inc. and Axel Coelln. This
exhibit is incorporated by reference to Exhibit 10.6 to the
Company's 1995 10-KSB.
27. Financial Data Schedule.
(b) No reports on Form 8-K were filed during the fourth quarter of
the Company's most recent year. However, in the first quarter of
fiscal 1998 Form 8-K was filed for the Changes in the Company's
Certifying accountants.
11
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
TRANSACT INTERNATIONAL INC.
Date: July 23, 1999 By: /s/ BRUNO S. FRASSETTO
----------------------
Bruno S. Frassetto
President and Principal Financial
and Accounting Officer
12
<PAGE>
In accordance with the Securities Exchange Act of 1934, this Report on
Form 10-KSB has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated:
Date: July 23, 1999 /s/ FRANK B. CARDER
-------------------------------
Frank B. Carder
Director, Chairman of the Board
Date: July 23, 1999 /s/ BRUNO S. FRASSETTO
-------------------------------
Bruno S. Frassetto
Director, President
Date: July 23, 1999
-------------------------------
Randall W. Sweeney
Director
13
<PAGE>
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Board of Directors and Stockholders
Transact International Inc.
22 Thorndal Circle
Darien, Connecticut 06820
UNABLE TO FILE THIS INDEPENDENT AUDITORS' REPORT AT THIS TIME. SEE FORM 12B-25
14
<PAGE>
TRANSACT INTERNATIONAL INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 30,
1999 1998
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash $ 38,388 $ 53,307
Accounts receivable, net of allowance for doubtful
accounts of $30,000 and $58,000, respectively 458,867 643,109
Inventories 135,878 209,121
Costs and estimated earnings in excess of billings on
uncompleted contracts
242,109 114,602
Prepaid expenses and other current assets 19,687 20,382
TOTAL CURRENT ASSETS 894,929 1,040,521
PROPERTY, PLANT AND EQUIPMENT, AT COST 304,118 301,628
Less accumulated depreciation 292,698 278,677
11,420 22,951
------------ ------------
OTHER ASSETS 2,300 2,300
$ 908,649 $ 1,065,772
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Bank borrowings $ -- $ 56,250
Note payable to stockholder 65,000 85,000
Note payable to affiliate 160,000
Trade accounts and notes payable 1,624,114 1,328,721
Accrued expenses 581,442 354,065
Current portion of long-term debt 23,657 23,657
Billings in excess of costs and estimated earnings on
uncompleted contracts 160,094 417,807
------------ ------------
TOTAL CURRENT LIABILITIES 2,614,307 2,265,500
STOCKHOLDERS' DEFICIENCY
Preferred stock, no par value, authorized 2,000,000 shares,
none issued -- --
Common stock, no par value, authorized 12,000,000 shares,
issued 6,201,735 shares
852,541 852,541
Additional paid-in capital 5,224,726 5,224,726
Treasury stock, at cost : 78,500 shares (29,606) (29,606)
Deficit (7,753,319) (7,247,389)
------------ ------------
TOTAL STOCKHOLDERS' DEFICIENCY (1,705,658) (1,199,728)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 908,649 $ 1,065,772
============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
TRANSACT INTERNATIONAL INC.
STATEMENTS OF OPERATIONS
YEAR ENDED APRIL 30,
-------------------------------------------
1999 1998 1997
REVENUE
Net Sales $ 2,101,621 $ 3,374,893 $ 7,252,035
Licensing Fees 480,000 200,000 --
----------- ----------- -----------
TOTAL REVENUE 2,581,621 3,574,893 7,252,035
COSTS AND EXPENSES
Cost of sales 2,102,591 3,262,404 6,238,196
Selling and administrative 944,482 1,072,878 1,192,975
----------- ----------- -----------
3,047,073 4,335,282 7,431,171
----------- ----------- -----------
LOSS FROM OPERATIONS (465,452) (760,389) (179,136)
----------- ----------- -----------
OTHER (EXPENSE) INCOME
Interest expense (36,890) (46,273) (39,210)
Other (expense) income (3,587) 3,462 9,546
----------- ----------- -----------
(40,477) (42,811) (29,664)
----------- ----------- -----------
NET LOSS $ (505,929) $ (803,200) $ (208,800)
----------- ----------- -----------
NET LOSS PER SHARE OF COMMON STOCK
- BASIC AND DILUTED $ (.08) $ (.13) $ (.03)
=========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
TRANSACT INTERNATIONAL INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30
-------------------------------------
1999 1998 1997
--------- --------- ---------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $(505,929) $(803,200) $(208,800)
Adjustments to reconcile net loss to cash (used in)
provided by operating activities :
Depreciation of property, plant and equipment 14,021 26,384 36,645
(Decrease) / Increase in allowance for doubtful accounts (13,000) 15,000 16,175
Changes in assets and liabilities :
accounts receivable 197,242 (198,844) 545,880
Inventories 73,243 102,848 94,781
Prepaid expenses and other current assets 694 (2,430) 2,159
Costs and estimated earnings in excess of billings on
uncompleted contracts - net (385,220) 690,083 (267,524)
Accounts payable and accrued expenses 522,770 160,811 (401,453)
--------- --------- ---------
NET CASH (USED IN) OPERATING ACTIVITIES (96,179) (9,348) (182,137)
--------- --------- ---------
INVESTING ACTIVITIES
Capital expenditures (2,490) (9,053) (14,848)
Repayment of note receivable -- -- 48,152
--------- --------- ---------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (2,490) (9,053) 33,304
--------- --------- ---------
FINANCING ACTIVITIES
Proceeds from stockholder loan -- 100,000 --
Proceeds from loan payable to affiliate 310,000 -- --
Repayment of loan payable to affiliate (150,000) -- --
Repayment of bank borrowings (56,250) (75,000) (18,750)
Repayment of stockholder loan (20,000) (15,000) --
Repayment of debt -- (23,662) (35,033)
--------- --------- ---------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES 83,750 (13,662) (53,783)
--------- --------- ---------
NET (DECREASE) IN CASH (14,919) (32,063) (202,616)
CASH, BEGINNING OF YEAR 53,307 85,370 287,986
--------- --------- ---------
CASH, END OF YEAR $ 38,388 $ 53,307 $ 85,370
--------- --------- ---------
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 1,351 $ 19,145 $ 19,210
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- BASIS OF PRESENTATION
The accompanying financial statements have been prepared assuming that
Transact International Inc. (the "Company") will continue as a going concern.
The Company's ability to continue as a going concern is uncertain based on the
matters discussed below. The financial statements do not include any adjustments
relating to the recoverability and classification of assets or the amounts of
liabilities that might be necessary should the Company be unable to continue as
a going concern. The Company's continuation as a going concern is dependent upon
its ability to return to profitability and/or sell or license certain or all
product lines to generate sufficient cash flow to meet its obligations on a
timely basis.
The Company has a stockholders' deficiency and working capital
deficiency of $1,705,658 and $1,719,378, respectively, at April 30, 1999 and has
incurred losses for each of the years in the three year period ended April 30,
1999. Many suppliers are requiring the Company to pay on or before delivery of
parts, services and equipment. The Company is presently seeking additional
orders and is exploring the sale or license of certain or all product lines that
would enable the Company to continue as a going concern. However, there is no
assurance that the Company will be successful in attaining additional profitable
orders or in selling or licensing any product lines.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS:
The Company operates in one business segment, the sale, design,
manufacture and installation of air cargo materials handling systems and
equipment.
Sales to the U.S. Government were $97,670 in 1999, $492,106 in 1998
and $2,099,000 in 1997. All of the Company's operations are in the United
States. Export sales to the Far East accounted for 9%, 14% and 20%, of net sales
in 1999, 1998 and 1997, respectively.
REVENUE RECOGNITION:
The Company utilizes the percentage of completion method of accounting
measured by the percentage of cost incurred to date to estimated total cost of
each contract to record income on uncompleted contracts. Whenever it is
estimated that a loss will be incurred on a contract, the entire amount of the
estimated loss is recognized. Because of the inherent uncertainties in
estimating revenue and costs, it is at least reasonably possible that the
estimates used will change within the near term. All other revenue is recorded
upon shipment of the product or providing the service.
ACCOUNTS RECEIVABLE:
Accounts receivable include amounts currently due from customers. At
April 30, 1998, accounts receivable included $10,000 due from an
officer/stockholder which was paid in fiscal 1999.
INVENTORIES:
Inventories are stated at the lower of cost or market. Cost is
determined on a first in, first out basis. Inventories consist of raw materials
and manufacturing supplies.
PLANT AND EQUIPMENT:
Depreciation on plant and equipment is provided by the straight-line
method based on the estimated useful lives of the assets, ranging from 3 to 20
years.
18
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) PER SHARE DATA:
Amounts per share have been computed using the weighted average number
of common shares outstanding during each year (6,123,235 in 1999, 1998 and
1997). During the year ended April 30, 1998, the Company adopted Statement of
Financial Accounting Standards No. 128 "Earnings per share (SFAS 128)" which
establishes new standards for computing and presenting earnings per share. As
required by the standard prior period earnings per share data have been
restated.
Under SFAS 128, net income (loss) per share basic is computed based on
the weighted average number of shares of common stock outstanding. Net income
(loss) per share - diluted reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised and converted
into common stock or otherwise resulted in the issuance of common stock and is
computed similarly to "fully diluted" net income (loss) per share that was
reported under previous accounting standards. Dilutive potential common shares
did not have a significant dilutive effect.
INCOME TAXES:
The Company's deferred tax provision is determined under the liability
method. Under this method, deferred tax assets and liabilities are recognized
based on differences between the financial statement carrying amount and the tax
basis of assets and liabilities using presently enacted tax rates.
CONCENTRATION OF CREDIT:
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of trade receivables. The
Company's customers are concentrated in the aviation industry. The U. S.
Government accounted for 4% in 1999, 14% in 1998 and 29% in 1997, of net sales.
A domestic airline and a domestic development company accounted for 21% and 19%
respectively of net sales (excluding licensing fees) in 1999. Two customers
located in India accounted for approximately 6%, 5% and 18% of total revenue in
1999, 1998 and 1997, respectively. United Parcel Service, a domestic commercial
customer, accounted for 11%, of 1998 net sales and 32%, respectively, of 1997
net sales. Alaska Airlines accounted for 13% of 1998 net sales. The Company
routinely assesses the financial strength of its customers and as a consequence,
believes that its trade accounts receivable credit risk exposure is limited.
DISCLOSURE OF FAIR VALUE OF FINANCIAL INSTRUMENTS:
The carrying amounts reported in the balance sheets for cash, accounts
receivable and trade accounts and notes payable approximate their fair value
because of the immediate or short-term maturity of these financial instruments.
The Company's notes payable bear interest at 1% over the bank's prime lending
rate and therefore approximates fair value.
19
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
MANAGEMENT ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods. These estimates were based on a going concern entity. Actual results
could differ from those estimates.
NOTE 3 - LICENSING AGREEMENT
During fiscal 1999 the Company's licensing agreement, described below,
with CIMC - TianDa was revised. The revision provided for total compensation of
$680,000 of which $200,000 was recorded in April 1998 and $480,000 during fiscal
1999 when received. The Company has no further obligation to CIMC - TianDa
pursuant to this licensing agreement.
In April 1998 the Company entered into a licensing agreement with CIMC
- - TianDa, a Chinese manufacturer. The licensing agreement provided:
A. Transact will provide:
a. Existing drawings and bills of material for certain
equipment previously engineered by Transact.
b. Engineering/design and procurement assistance on an air
cargo handling project in Shanghai, China.
c. 1,000 hours of technical assistance.
B. CIMC - TianDa will pay to Transact a maximum of $1 million as
follows:
a. $300,000 upon receipt of existing drawings for certain
equipment per the agreement.
b. $200,000 if and when CIMC - TianDa is awarded the Shanghai
Airport project or a similar major project in China or is
awarded a contract from Transact for four sets of ETV's
(payable at a rate of $100,000 for each two sets with a
maximum payment of $200,000).
c. Balance of $500,000 in seven equal annual installments of
$50,000 and one payment of $150,000 eight years after CIMC -
TianDa is awarded either the Shanghai Airport project or a
similar major project in China.
At April 30, 1998 the Company recognized $200,000 of income for
existing drawings that were supplied to CIMC - TianDa and provided $10,000 for
engineering services to be supplied. The aforementioned $200,000 was received in
May 1998.
20
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 -- COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON
UNCOMPLETED CONTRACTS
The terms for billing contracts vary from contract to contract.
Billings are based on either a percentage of completion, costs incurred or
specific milestone payments. Costs and estimated earnings in excess of billings
on uncompleted contracts (net asset and liability) as of April 30, 1999 and 1998
are as follows :
1999 1998
----------- -----------
Costs incurred on uncompleted contracts $ 5,947,719 $ 4,741,908
Estimated earnings 822,239 503,374
----------- -----------
6,769,958 5,245,282
Less : billings to date 6,687,943 5,548,487
=========== ===========
$ 82,015 $ (303,205)
=========== ===========
The Company expects to complete the projects in process at April 30,
1999 within one year.
NOTE 5 -- PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment (at cost) at April 30, 1999 and 1998
consists of :
1999 1998
-------- --------
Machinery and equipment $ 55,708 $ 55,708
Furniture and fixtures 248,410 245,920
-------- --------
$304,118 $301,628
======== ========
NOTE 6 - BANK BORROWINGS AND NOTE PAYABLE TO STOCKHOLDER
In January 1997, the company converted its $150,000 short-term bank
note payable to a term loan payable, to the same bank, in twenty-four equal
monthly principal installments of $6,250 commencing February 15, 1997. During
fiscal 1999 the term loan was repaid in full.
On June 4, 1997, a stockholder of the Company loaned the Company
$100,000 payable October 31, 1997 with interest at 8% per annum. The Company was
unable to repay the loan on October 31, 1997 and subsequently reached an
agreement with the stockholder to pay seven $5,000 monthly payments with the
balance, including interest, payable from the proceeds of a project in India.
Such proceeds are to be paid directly from India to an account designated by the
stockholder. The entire outstanding balance of $65,000 is shown as a current
liability. A company owned by the stockholder has been engaged as the
subcontractor to complete this project in India. This subcontractor will be paid
directly from the Indian customer.
The current portion of long-term debt of $23,657 is payable to the
U.S. Air Force. This liability relates to an overpayment by the Air Force on a
contract in 1993 and bears interest as fixed by the Secretary of the Treasury,
pursuant to Public Law 95-563. The interest rate at April 30, 1999 was 6.75%.
21
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 - NOTES PAYABLE TO AFFILIATE
The Company owns patents for the handling of marine containers, that
is substantially different from the current methods of storing and retrieving
containers at marine terminals and rail intermodal yards. The Company has
entered into a licensing agreement with Seaport Technologies, Inc. ("Seaport")
to develop and market the patented system. The Company has entered into a
Technical Service Agreement with Seaport and as of January 1999 Seaport has
started modest funding in accordance with this Agreement.
Seaport is actively marketing the patented system to shipping lines,
marine terminal operators and rail intermodal operators. Under the licensing
agreement the Company will be entitled to a fee of 1% of the first $100 million
of revenue, 2% of the second $100 million of revenues and 3% of the third $100
million of revenues and then descending back to 1% of revenues after attaining
annual revenues of $500 million. The sole stockholder of Seaport has advanced
the Company $350,000 of which $150,000 was repaid and $40,000 was offset against
costs incurred by the Company on Seaport's behalf. The advances are pursuant to
notes, payable on demand with interest at 8 1/2% per annum and the advances are
secured by all of the Company's assets. The Company has invoiced Seaport
approximately $100,000 for the Company's management time in assisting Seaport to
market the patents and know-how. This $100,000 will be recognized as income when
received.
NOTE 8 -- ACCRUED EXPENSES
Accrued expenses at April 30, 1999 and 1998 consists of :
1999 1998
-------- --------
Compensation, vacation and severance $175,116 $ 84,350
Retirement plans 72,871 70,405
Directors' fees 85,334 71,533
Reserve for delay penalty and warranty 140,563 4,000
Other 107,558 123,777
-------- --------
$581,442 $354,065
======== ========
Accrued compensation includes $86,259 due to an officer and $25,000 to
a former officer and member of the board of directors. These amounts are related
to compensation deferred by the officer and the severance due to the former
officer.
22
<PAGE>
NOTE 9 -- LEASES
The Company leases certain facilities, furniture and automobiles under
noncancelable operating leases. The following is a schedule of the future
minimum rental commitments on such leases at April 30, 1999 :
Year Ending
April 30,
-----------
2000 76,459
2001 24,058
Rent expense was $101,926 in 1999, $97,664 in 1998 and $141,437 in
1997.
NOTE 10 -- STOCKHOLDERS' EQUITY AND STOCK OPTIONS
A net loss during each of the years in the three year period ended
April 30, 1999 was the only change in Stockholders' Equity.
The Company's 1978 Employee's Incentive Stock Option Plan ("1978
Plan") provides that options may be granted to acquire a maximum of 100,000
shares of the Common Stock at not less than 85% of market price on the date of
grant.
At April 30, 1999 and 1998 there were no options outstanding and no
options were exercised in either year. At April 30, 1997, there were 22,000
options outstanding and exercisable, with an option price of $1.50 per share.
There are 100,000 options subject to future grant and all options expire 10
years from the date of grant.
The salary of one officer was deferred for future payment by $70,000
in 1996 as a result of the Company's operating conditions. Of this amount,
$60,000 was waived by this officer in 1997. In addition, the salary of one
officer was reduced by $45,000 in 1997 and salaries of two officers were reduced
by $65,000 in 1996, as a result of operating conditions.
NOTE 11 -- EMPLOYEE RETIREMENT PLANS
The Company has a 401(k) Profit Sharing Plan and a Money Purchase
Plan. Employee participation in the 401(k) Profit Sharing Plan is voluntary.
Under the provisions of the 401(k) Plan, employees may defer up to 19% of their
annual compensation. Prior to freezing the Money Purchase Plan, (see paragraph
below) the Company was required to contribute an amount equal to 3% of the
employee's compensation. The Company accrued for the year ended April 30, 1995,
a matching discretionary contribution of 50% of the employees 401(k)
contributions, with a cap of 3% of the employees compensation. However, in
fiscal 1996, the Company discontinued such matching until business conditions
improve.
Effective June 1, 1996, the Company froze its Money Purchase Plan.
This action eliminates any future liability of the Company in respect to the
Plan while the Plan is frozen. This action does not constitute an effective
termination of the Plan.
23
<PAGE>
TRANSACT INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 12 -- INCOME TAXES
There is no benefit for income taxes in 1999, 1998 and 1997 as the tax
losses generated in those years cannot be carried back to offset income in prior
years.
The tax effects of temporary differences giving rise to the Company's
deferred tax assets are as follows :
APRIL 30,
------------------------
1999 1998
---------- ----------
Net operating loss carryforward $2,770,000 $2,640,000
Investment tax credit carryforward 2,000 2,000
Other reserves and liabilities 125,000 83,000
---------- ----------
2,897,000 2,725,000
Valuation allowance 2,897,000 2,725,000
========== ==========
$ -- $ --
========== ==========
Due to the Company's cumulative losses, management does not consider
that enough support to overcome the "more likely than not" criteria existed to
record a deferred tax asset. As a result, for financial reporting purposes,
deferred tax assets are reduced by a valuation allowance.
At April 30, 1999, the Company has operating loss carryforwards and
investment tax credit carryforwards for tax return purposes of approximately
$7,400,000 and $2,000 respectively, expiring in 2000 through 2012.
NOTE 13 -- OTHER DATA
The Company paid $8,898, $387,548 and $780,465 during 1999, 1998 and
1997, respectively, to a subcontractor that is owned by a stockholder of the
Company for the manufacturing of equipment for certain projects. This
subcontractor has issued letters of credit on behalf of the Company in
connection with two contracts executed by the Company.
NOTE 14 - SUBSEQUENT EVENT
In June 1999 the Company agreed to sell its spare parts business to an
unaffiliated Company. The sale is subject to due diligence and the execution of
a definitive agreement among other contingencies. The Company agreed to sell
approximately $110,000 of spare parts from inventory, drawings for spare parts,
customer lists, and phone numbers, in exchange for $130,000 at closing, $60,000
of spare parts that Transact designates, which are for terminal project
customers of Transact's, and royalties of 5% of future sales up to $300,000 in
royalties.
<PAGE>
TRANSACT INTERNATIONAL INC.
FORM 10-KSB
EXHIBIT LIST
3(i) Amended and Restated Certificate of Incorporation of Transact
International Inc. (10/19/83). This exhibit is incorporated by
reference to Exhibits 3.1 and 3.2 to the Company's Annual Report on
Form 10-K for the fiscal year ended April 30, 1987 Commission File No.
0-8422 (the "1987 10-K").
3(ii) The By-Laws of Transact International Inc. (formerly Gram Industries
Inc.). This exhibit is incorporated by reference to Exhibit 3.3 to the
1987 10-K.
10.1 The 1978 Employee's Stock Option Plan. This exhibit is incorporated by
reference to Exhibit 10.1 to the 1987 10-K.
10.2 Transact International Inc. 401(k) Profit Sharing Plan. This exhibit
is incorporated by reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 1992
Commission File No. 0-8422 (the "1992 10-K").
10.3 Transact International Inc. Money Purchase Pension Plan. This exhibit
is incorporated by reference to Exhibit 10.3 to the 1992 10-K.
10.4 Transact Employment Agreement, dated as of August 1, 1991 between
Transact International Inc. and Frank B. Carder. This exhibit is
incorporated by reference to Exhibit 10.4 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended April 30, 1995,
Commission File No. 0-8422 (the "1995 10-KSB").
10.5 Transact Employment Agreement, dated as of August 1, 1991 between
Transact International Inc. and Bruno S. Frassetto. this exhibit is
incorporated by reference to Exhibit 10.5 to the Company's 1995
10-KSB.
10.6 Transact Employment Agreement, dated as of June 24, 1991 between
Transact International Inc. and Axel Coelln. This exhibit is
incorporated by reference to Exhibit 10.6 to the Company's 1995
10-KSB.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> APR-30-1999
<CASH> 38
<SECURITIES> 0
<RECEIVABLES> 489
<ALLOWANCES> 30
<INVENTORY> 135
<CURRENT-ASSETS> 895
<PP&E> 304
<DEPRECIATION> 292
<TOTAL-ASSETS> 908
<CURRENT-LIABILITIES> 2,614
<BONDS> 0
<COMMON> 852
0
0
<OTHER-SE> (2,557)
<TOTAL-LIABILITY-AND-EQUITY> 908
<SALES> 2,101
<TOTAL-REVENUES> 2,581
<CGS> 2,102
<TOTAL-COSTS> 2,102
<OTHER-EXPENSES> 944
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37
<INCOME-PRETAX> (506)
<INCOME-TAX> 0
<INCOME-CONTINUING> (506)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (506)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
</TABLE>
