SECURITIES AND EXCHANGE COMMISSION
Washington, DC 25049
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended June 30, 1997
[ ] 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 0-21903
ORA ELECTRONICS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4607830
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(State or Other Jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
9410 Owensmouth Avenue 91311
- ---------------------- -----
(Address of Principal Executive Offices) (Zip Code)
(818) 772-2700
------------------------
(Registrant's Telephone Number, Including Area Code)
(No Change)
------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes ..X.. No .....
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Page 1 of 22 pages
<PAGE>
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes ..... No .....
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at August 13, 1997
- ------------------- ------------------------------
Common Stock, $.001 6,602,523 shares
par value
Exhibit Index on Page 20
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ORA ELECTRONICS, INC.
Form 10-Q
June 30, 1997
TABLE OF CONTENTS
Page
----
PART I - Financial Information 4
Item 1. Financial Statements 4
Balance Sheets as of June 30, 1997 and
March 31, 1997 4
Statements of Income and Retained
Earnings for the three month periods
ended June 30, 1997 and 1996 6
Statements of Cash Flows for the
Three Month Periods ended June 30,
1997 and 1996 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II - Other Information. 16
Item 1. Legal Proceedings. 16
Item 6. Exhibits and Reports on Form 8-K. 16
Signatures 19
Exhibit Index 20
Exhibits 21-22
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Part I - FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
ORA ELECTRONICS, INC.
Balance Sheets
June 30, March 31,
1997 1997
(Unaudited) (Audited)
----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 116,376 $ 321,647
Trade accounts receivable, less allowance
for sales returns and doubtful accounts of
$2,087,810 ($1,716,671 at March 31, 1997) 1,674,335 3,499,517
Inventories 5,340,135 5,449,028
Federal tax refund -- 219,927
Prepaid expenses 39,814 65,892
------------ ------------
Total current assets 7,170,660 9,556,011
Property and equipment, net 6,238,498 6,301,378
Other assets:
Loan receivable, officer 558,326 551,337
Deferred expenses 309,078 319,578
------------ ------------
Total assets $ 14,276,562 $ 16,728,304
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 63,312 $ 63,186
Notes payable 435,603 1,257,197
Trade payables 2,603,012 3,738,108
Accrued interest 97,770 110,717
Other accounts payable and
accrued expenses 1,563,553 1,556,906
------------ ------------
Total current liabilities 4,763,250 6,726,114
Long-term debt 5,628,694 5,601,516
------------ ------------
Total liabilities 10,391,944 12,327,630
============ ============
Commitments and contingencies (Note 3)
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Stockholders' equity:
Preferred stock, $.001 par value,
5,000,000 shares authorized,
none outstanding -- --
Common stock, par value $.001 per share,
authorized 30,000,000 shares, issued
and outstanding 6,600,719 shares at
June 30, 1997 and 6,589,068 shares at
March 31, 1997 6,601 6,589
Additional paid in capital 5,822,813 5,806,810
Retained (deficit) (1,944,796) (1,412,725)
------------ ------------
Total stockholders' equity 3,884,618 4,400,674
------------ ------------
Total liabilities and stockholders'
equity $ 14,276,562 $ 16,728,304
============ ============
See accompanying notes to financial statements.
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ORA ELECTRONICS, INC.
Statements of Income and Retained Earnings (Deficit)
(Unaudited)
Three Months
Ended
June 30,
1997 1996
---- ----
Net Sales $ 3,326,810 $ 3,022,662
Costs of goods sold 1,723,838 3,719,458
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Gross profit (loss) 1,602,972 (696,796)
----------- -----------
Operating expenses:
Selling and shipping 563,992 781,205
Administrative and general 1,372,814 926,564
----------- -----------
Total operating expenses 1,936,806 1,707,769
----------- -----------
Operating (loss) (333,834) (2,404,565)
Interest expense 198,236 237,559
----------- -----------
Net (loss) $ (532,070) $(2,642,124)
Retained earnings (deficit),
beginning of period (1,412,726) 1,268,217
----------- -----------
Retained (deficit),
end of period $(1,944,796) $(1,373,907)
=========== ===========
Per share information:
Net (loss) $ (532,070) $(2,642,124)
=========== ===========
Loss per share:
Primary $ (0.08) $ (2,642.12)
Number of shares used in the
per share calculation:
Primary
6,600,619 1,000
Pro forma per share information:
(Note 4) Pro forma loss per share:
Primary (0.08) (0.40)
Pro forma number of shares used in
the per share calculation:
Primary 6,600,719 6,600,719
See accompanying notes to financial statements.
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ORA ELECTRONICS, INC.
Statements of Cash Flows
For the Three Month Periods Ended June 30, 1997 and 1996
(Unaudited)
Three Months
Ended June 30,
1997 1996
---- ----
Cash flows from operating activities
Net loss $ (532,070) $(2,642,124)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 73,380 89,889
Provision for losses and sales returns 371,139 1,315,920
Changes in assets and liabilities:
Accounts receivable 1,454,043 721,703
Inventories 108,893 (155,681)
Prepaid expenses 246,005 210,569
Accounts payable, accrued interest and
other accrued expenses (1,141,396) 906,552
----------- -----------
Net cash provided by operating activities 579,994 446,828
----------- -----------
Cash flows from investing activities:
Capital expenditures -- (47,751)
Loan receivable, officer (6,990) (307,624)
----------- -----------
Net cash used in investing activities (6,990) (355,375)
----------- -----------
Cash flows from financing activities:
Additional paid in capital 15,999 --
Common stock 16 --
Repayment of line of credit (821,594) --
Repayment of notes payable -- (275,000)
Borrowing (repayment) of long-term debt 27,304 (16,093)
----------- -----------
Net cash used in financing activities (778,275) (291,093)
----------- -----------
Net decrease in cash and cash equivalents (205,271) (199,640)
Cash and cash equivalents, beginning of period 321,647 357,995
----------- -----------
Cash and cash equivalents, end of period $ 116,376 $ 158,355
=========== ===========
Supplemental disclosure of cash flow
information:
Interest paid $ 198,236 $ 237,559
----------- -----------
Income taxes paid $ -- $ --
----------- -----------
See accompanying notes to financial statements.
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ORA ELECTRONICS, INC.
Notes to Financial Statements
(Unaudited)
Note 1 - Description of Business
- ---------------------------------
ORA Electronics, Inc. (the "Company") is a wholesale distributor of
electronic parts and accessories with customers throughout the United
States. In addition, the Company undertakes research and development in
connection with its design and development of its own proprietary products.
The Company is organized into divisions comprised of cellular telephone
antennas and accessories, computer cables and inter-connect accessories,
stereo and video installation accessories and consumer electronic original
and replacement parts and accessories.
Note 2 - Basis of Interim Presentation
- ----------------------------------------
Interim financial statements and information are unaudited; however,
in the opinion of management all adjustments necessary for a fair
presentation of the interim results have been made. All such adjustments
were of a normal recurring nature. The results for the three months ended
June 30, 1997 are not necessarily an indication of results to be expected
for the entire fiscal year. The accompanying financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and the footnotes required by generally
accepted accounting principles for complete statements. All information
reported in this Form 10-Q should be read in conjunction with the Company's
annual financial statements and notes thereto for the fiscal year ended
March 31, 1997 included in the Company's Annual Report dated June 30, 1997
on Form 10-K filed with the Securities and Exchange Commission.
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
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Note 3 - Legal Proceedings
- --------------------------
The Company filed suit in 1994 seeking a declaratory judgment that
certain patents held by Telular Corporation ("Telular") are invalid.
Telular counterclaimed, contending that its patents are valid and infringed.
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On February 1, 1996, the United District Court for the Central
District of California (the "District Court") granted Telular's motion for
partial summary judgment against the Company, determining that Telular's
patents are valid and that CDL infringes, and permanently enjoining the
Company from further sales of CDL.
The Company appealed the issuance of the permanent injunction, and
the partial summary judgment order on which it is based, to the United
States Court of Appeals for the Federal Circuit (the "Federal Circuit").
The Company filed a motion in the Federal Circuit requesting a stay of the
permanent injunction pending appeal. The Federal Circuit granted the motion
in part, finding that the Company had established a strong likelihood that
it would prevail on the merits of its appeal at least as to whether CDL
units that are compatible with certain Motorola cellular telephones
infringe the patent. The Federal Circuit lifted the injunction with respect
to Motorola-compatible CDL's.
The Company filed its opening appellate brief on April 29, 1996.
Telular filed its opposition on July 25, 1996. The Company filed its Reply
Brief on August 26, 1996. The Federal Circuit heard oral argument on
January 28, 1997.
On April 29, 1997, the Federal Circuit issued an opinion affirming
the District Court's February 1, 1996 ruling against the Company. As a
result, the District Court's determination that Telular's patents are valid
and that CDL infringes, and that the Company is permanently enjoined from
further sales of CDL, have been upheld on appeal.
The case against the Company has been returned to the District Court
for a trial to determine the amount of damages to be assessed. The damages
phase of the trial will most likely result in a money judgment against the
Company. Because discovery on damages issues is pending, the Company is
unable to provide an estimate of the amount or range of potential damages
that will be assessed. However, the Company has assumed a minimum estimate
of damages to be approximately $200,000, and accordingly, accrued that
amount at March 31, 1997 as a reserve for this contingency. The potential
upper limit of damages may be much higher and could have a material adverse
affect on the Company's financial position, results of operations and cash
flow.
On August 4, 1997, Telular asked for summary judgment on the issues
of whether the case against the Company is an exceptional case and whether
the infringement by the Company was willful. If summary judgment is granted
on these issues, it is likely that the actual damage award will be trebled
and that Telular will be entitled to an award of attorneys' fees.
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The Company is involved in other legal proceedings, many of which
arise in the ordinary course of its business. While any litigation contains
an element of uncertainty, management believes that the outcome of such
proceedings will not have a material adverse effect on the Company's
results of operations.
Note 4 - Pro forma loss per share
- ---------------------------------
The pro forma loss per share data is presented to show the effect on
primary loss per share assuming the Company's merger with North American
Energy of Delaware, Inc. had occurred at the beginning of the three month
period ended June 30, 1996 instead of the actual merger date of December
20, 1996.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Management's discussion and analysis should be read in conjunction
with the Company's financial statements and the notes thereto.
RESULTS OF OPERATIONS FOR THREE MONTHS ENDED JUNE 30, 1997
COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
Net sales for the first fiscal quarter ended June 30, 1997 were
$3,326,810 compared to $3,022,662 in the same quarter of 1996, an increase
of 10.1%. Net sales in the first fiscal quarter of 1996 were significantly
impacted by the Company's reduction of the carrying value of its trade
accounts receivable by approximately $1,850,000. Excluding the effect of
that carrying value adjustment, which is considered non-recurring, net
sales for the first fiscal quarter of 1996 were approximately $4,872,662.
Accordingly, net sales for the first fiscal quarter ended June 30, 1997
decreased by $1,545,852, or 31.7%, as compared to the unadjusted net sales
for the fiscal quarter ended June 30, 1996. The decrease reflects a
continuation of a trend noted in the Company's March 31, 1997 annual
results, that consumer electronics retailers have reported same store sales
decreases and reductions in cellular telephone activations, which have
resulted in lower than expected orders. Retailers have reported that their
cellular telephone activations are lower as a result of reduced financial
incentives offered to them by cellular telephone carriers. The Company believes
that its traditional retail customers may face increased competitive pressures
from cellular service providers and that, consequently, orders for its cellular
products from such retailers may continue to decline. The Company is exploring
alternative channels of distribution.
Gross profit for the first fiscal quarter ended June 30, 1997 was
$1,602,972 compared to a gross loss of $696,796 in the same quarter of 1996.
Gross profit as a percentage of net sales was 48.2% for the quarter ended
June 30, 1997. Gross profit and gross profit as a percentage of net sales, for
the quarter ended June 30, 1996, were significantly impacted by the reduction
in carrying value of trade accounts receivable previously noted, and by a
reduction in the carrying value of inventory of approximately $821,000.
Excluding the effects of these carrying value adjustments to trade accounts
receivable and inventory, which are considered non-recurring, gross profit for
the first fiscal quarter ended June 30, 1996 was approximately $1,974,204 and
gross profit as a percentage of net sales was 40.5%. The increase in gross
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profit as a percentage of net sales from 40.5% to 48.2% reflects
the successful efforts of the Company to reduce the purchase costs of its
inventory.
Selling and shipping expenses decreased by $217,213, or 27.8%, to
$563,992 for the first quarter of fiscal 1998 compared with $781,205 in the
same period of the prior year. The decrease in selling and shipping
expenses is primarily attributable to the decrease in net sales.
Administrative and general expenses increased by $446,250, or 48.2%,
to $1,372,814 for the first quarter of fiscal 1998 compared with $926,564
in the same period of the prior year. The increase is primarily
attributable to an increase in the accrual of bad debt expenses of
approximately $300,000 and an increase in professional fees of
approximately $100,000.
Losses from operations decreased by $2,070,731 to $333,834 for the
first quarter of fiscal 1998 compared with an operating loss of $2,404,565
in the same period of the prior year. The decrease in operating losses is
primarily a result of the non-recurring carrying cost reductions of trade
accounts receivable and inventory during the quarter ended June 30, 1996.
Interest expense for the first quarter of fiscal 1998 was $198,236
compared with $237,559 in the same period of the prior year. This reduction
is primarily a result of decreased borrowings under the Company's line of
credit from a high of $4,000,000 during the quarter ended June 30, 1996
compared to a high of approximately $1,800,000 during the quarter ended
June 30, 1997.
The net loss was $532,070 for the first quarter of fiscal 1998 versus
a net loss of $2,642,124 in the same period of the prior year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are to fund working capital
needs, primarily accounts receivable and inventories. Historically, the
Company has satisfied these working capital requirements principally
through cash flow from operations and bank borrowings.
At June 30, 1997, the Registrant had $116,376 in cash and cash
equivalents with a working capital surplus of $2,407,410, contrasted to
$321,647 in cash and cash equivalents with a working capital surplus of
$2,829,897 at March 31, 1997. Net cash provided by operating activities was
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$579,994 for the first fiscal quarter ended June 30, 1997, compared with
net cash provided by operating activities of $446,828 for the first fiscal
quarter ended June 30, 1996. Working capital may vary from time to time as
a result of seasonality, new product introductions, capital expenditures
and changes in inventory levels.
To supplement cash flow from operations, if necessary, the Company
maintains a $5,000,000 revolving credit facility to be used for general
working capital purposes. The credit agreement (dated April 4, 1997) with
FINOVA Capital Corporation ("FINOVA") allows the Company to borrow funds at
Citibank N.A.'s reference rate plus 1% and there is an unused line fee of
0.5%. The Company's funds are swept daily and capital is made available
based on 70% of eligible accounts receivable and 35% of eligible inventory.
Based on the Company's level of underlying collateral and the formulas
utilized to calculate eligible collateral, the Company generally has
capital available of approximately $2,000,000 from this line of credit. The
FINOVA line of credit enabled the Company to pay off the $1,257,197 balance
owed to a bank with respect to its prior credit facility.
Under the FINOVA facility, the Company is required to maintain
various covenants, including meeting certain net worth requirements, a
liquidity ratio, a debt service coverage ratio and restrictions of capital
expenditures, additional indebtedness and the payment of dividends. At
various times during the quarter ended June 30, 1997, the Company was not
in compliance with the debt service coverage ratio or the net worth
requirement. On June 26, 1997, all covenant violations were waived by
FINOVA and the covenants were reset at levels that the Company believes can
be successfully maintained. However, the Company's ability to maintain such
covenants depends, in part, upon its ability to penetrate new distribution
channels. No assurances can be given as to the Company's ability to do so.
A loan from the Aid Association for Lutherans ("AAL") obtained by the
Company to purchase its headquarters and distribution facility in
Chatsworth, California is, by its terms, callable by AAL upon six months
notice. As of June 30, 1997, the outstanding principal balance of such loan
was $4,649,483. Such loan bears interest at 9.875% per year, is payable in
monthly installments of $43,418, representing both principal and interest,
matures in February 2019 and is secured by the real property on which the
facility is located.
Cash flows used in financing activities increased to $778,275 in the
first three months of fiscal 1998 from $291,093 for the first three months
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of fiscal 1997. This change is primarily a result of short term debt
reductions during the fiscal quarter ended June 30, 1997.
Net cash used in investing activities was $6,990 for the first three
months of fiscal 1998, compared with net cash used in investing activities
of $355,375 in the first three months of fiscal 1997. This change is
primarily attributable to a decrease in loans made to officers.
The Company is currently evaluating its management information
systems as part of its strategy and growth expectations for the future. The
likely result of this evaluation will be a systems conversion for the
Company's core business processes. Although, the ultimate cost of a systems
conversion has not yet been determined, the Company believes that it will
incur expenses of between $100,000 and $150,000 related to this project in late
fiscal 1998 or early fiscal 1999.
The Company is currently involved in a patent infringement lawsuit
whereby it has been enjoined from selling its Cellular Data Link ("CDL")
product line. A determination by the court as to money damages to be
assessed, based on the Company's prior sales of CDL products, has yet to be
made. Although the extent of the liability for this matter is presently
unknown, total damages, including attorneys' fees for both sides, could
have a material adverse impact on the Company's financial condition.
The Company believes that available cash, cash flow from operations
and available borrowings through its credit facility, will be sufficient to
meet operating needs and capital expenditure requirements for the
foreseeable future, although no assurances can be given.
SEASONALITY
The Company's markets are seasonal with sales typically higher in the
Company's third fiscal quarter due to increased demand from mass market
retailers during the year-end holiday season.
FORWARD LOOKING INFORMATION
This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of that term in the Private Securities Litigation Reform
Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934). Additional written or oral
forward-looking statements may be made by the Company from time to time, in
filings with the Securities Exchange Commission or otherwise. Statements
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contained herein that are not historical facts are forward-looking
statements made pursuant to the safe harbor provisions referenced above.
The matters discussed herein with respect to the introduction of new
products by the Company, the Company's ability to penetrate new
distribution channels, future sales levels, compliance with financial
covenants in loan agreements, the Company's ability to secure future
financing and the potential outcome of pending litigation involving the
Company, among others, are forward looking statements. In addition, when
used in this discussion, the words "anticipates," "expects," "intends,"
"plans" and variations thereof and similar expressions are intended to
identify forward-looking statements.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified based on
current expectations. Consequently, future events and actual results could
differ materially from those set forth in, contemplated by, or underlying
the forward-looking statements contained in this Quarterly Report.
Statements in this Quarterly Report, particularly in the Notes to
Financial Statements, "Part 1, Item 2, Management's Discussion
and Analysis of Financial Condition and Results of Operations," and "Part
II, Item 1, Legal Proceedings" describe certain factors, among others, that
could contribute to or cause such differences. Other factors that could
contribute to or cause such differences include, but are not limited to,
unanticipated developments in any one or more of the following areas: the
receptivity of consumers to new consumer electronics technologies, the rate
and consumer acceptance of new product introductions, competition, the
number and nature of customers and their product orders, pricing, foreign
manufacturing, sourcing and sales (including foreign government regulation,
trade and importation concerns and fluctuation in exchange rates),
borrowing costs, changes in taxes due to changes in the mix of U.S. and non
U.S. revenue, pending or threatened litigation, the availability of key
personnel and other risk factors which may be detailed from time to time in
the Company's Securities and Exchange Commission filings.
Readers are cautioned not to place undue reliance on any
forward-looking statements contained herein, which speak only as of the
date hereof. The Company undertakes no obligation to publicly release the
result of any revisions to these forward-looking statements that may be
made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unexpected events.
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Part II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As previously reported in the Company's Form 8-K filed on December
20, 1996 and the Company's Form 10-K filed on June 30, 1997, the Company is
currently involved in a lawsuit titled ALLIANCE RESEARCH CORPORATION v.
TELULAR CORPORATION, including the counterclaim entitled TELULAR
CORPORATION v. ALLIANCE RESEARCH CORPORATION, United States District Court
for the Central District of California, Case No. CV 94-1065-JSL.
On August 4, 1997, Telular filed a motion for summary judgment on the
issues of whether the case against the Company is an exceptional case and
whether the infringement by the Company was willful. If summary judgment is
granted on these issues, it is likely that the actual damage award will be
trebled and that Telular will be entitled to an award of attorneys' fees.
In addition to the above-described litigation, the Company is party
to other claims and litigation that arise in the normal course of business.
While any litigation contains an element of uncertainty, management
believes that the ultimate outcome of these claims and litigation will not
have a material adverse effect on the Company's results of operations or
financial condition.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
---------
Exhibit No. Description
- ----------- -----------
2.1 Plan of Reorganization of North American Energy
of Delaware, Inc. (1)
2.2 Agreement and Plan of Merger between ORA
Electronics, Inc., a Delaware corporation, and
North American Energy of Delaware, Inc., a
Delaware corporation. (2)
3.1 Restated Certificate of Incorporation of ORA
Electronics, Inc. (2)
3.2 Bylaws of ORA Electronics, Inc. (2)
4.1 Specimen Common Stock Certificate of ORA
Electronics, Inc. (2)
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4.2 Specimen Class A Warrant Certificate. (2)
4.3 Specimen Class B Warrant Certificate. (2)
4.4 Specimen Class C Warrant Certificate. (2)
4.5 Specimen Class D Warrant Certificate. (2)
4.6 Warrant Agreement between the Company and
Continental Stock Transfer & Trust Company (the
"Warrant Agent"), dated as of December 20,
1996. (2)
4.7 Letter Agreement, dated June 10, 1997, from
Sheppard, Mullin, Richter & Hampton LLP to the
Warrant Agent. (3)
10.1 Loan and Security Agreement, dated April 4, 1997,
by and between the Company and FINOVA Capital
Corporation ("FINOVA"). (3)
10.2 Amendment to Loan Agreement, dated April 4, 1997,
between the Company and FINOVA. (3)
10.3 Collateral Assignment, Patent Mortgage and
Security Agreement, dated as of April 4, 1997, by
and between the Company and FINOVA. (3)
10.4 Waiver and Second Amendment to Loan Agreement,
dated June 26, 1997, between the Company and
FINOVA. (3)
11 Statement re: Computation of Earnings Per Share.
27 Financial Data Schedule.
- ---------------
(1) Incorporated by reference from the Form 8-K/A filed on
December 20, 1996, by North American Energy of
Delaware, Inc., predecessor to the Registrant.
(2) Incorporated by reference from the Registrant's Form
8-K filed on December 20, 1996.
(3) Incorporated by reference from the
Registrant's Form 10-K filed on June 30,
1997.
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(b) Reports on Form 8-K.
--------------------
Two reports on Form 8-K were filed during the period covered by this
Quarterly Report on Form 10-Q.
The first Report on Form 8-K was filed on May 14, 1997, in connection
with a ruling issued by the United States Court of Appeal for the Federal
Circuit, affirming a lower court order in Alliance Research Corporation v.
Telular Corporation (Case No. 96-1225). The Company is successor by merger
to Alliance Research Corporation.
The second Report on Form 8-K was filed on June 12, 1997, in
connection with the Company's extension of the exercise deadline relating
to its Class A Warrants. By their terms, the Company's Class A Warrants now
entitle the holders thereof to purchase shares of the Company's common
stock at an exercise price of $5.00 per share on or prior to December 31,
1997.
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SIGNATURES
----------
Pursuant to the requirements 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.
ORA ELECTRONICS, INC.
(Registrant)
Dated: August 14, 1997 By: /s/ JOHN M. BURRIS
------------------------------
John M. Burris, Duly Authorized
Representative and Chief Financial
Officer
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EXHIBIT INDEX
Exhibit No. Description Page
- -----------------------------------------------------------------------------
11 Statement Re: Computation Of
Earnings Per Share 21
27 Financial Data Schedule 22
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EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
Three Months Ended June 30,
1997 1996
---- ----
Primary average shares
outstanding 6,600,719 1,000
Net loss $ (532,070) $(2,642,124)
=========== ===========
Primary loss per share $ (0.08) $ (2,642.12)
----------- -----------
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