<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[ X ] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 2000
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _________ to _________.
Commission file number: 333-79969
DURASWITCH INDUSTRIES, INC.
(Exact name of Small Business Issuer as Specified in Its Charter)
NEVADA 88-0308867
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
234 S. EXTENSION ROAD,
MESA, ARIZONA 85210
(Address of Principal Executive Office)
(480) 586-3300
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No_____
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes_____ No_____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 9,206,384 shares of common
stock outstanding as of June 30, 2000.
Transitional Small Business Disclosure Format (check one):
Yes_____ No X
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
DURASWITCH INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
ASSETS December 31, 1999 June 30, 2000
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,884,827 $ 18,573,652
Accounts receivable (net of allowance for doubtful accounts of
$40,000 in 1999 and 2000) 238,393 216,249
Inventory (Note 2) 536,494 478,998
Prepaid expenses and other current assets 235,252 331,149
-------------------------------
Total current assets 6,894,966 19,600,048
-------------------------------
Property and Equipment - Net (Note 3) 592,411 617,903
Goodwill - Net 589,805 553,322
Patents and other assets 160,878 386,783
-------------------------------
Total $ 8,238,060 $ 21,158,056
===============================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 242,551 107,652
Accrued salaries and benefits 462,014 249,153
Accrued expenses and other current liabilities 228,176 227,027
Current portion deferred licensing revenue -- 464,580
Line of credit 75,000 --
Current portion of notes and capital leases payable 234,893 40,606
-------------------------------
Total current liabilities
1,242,634 1,089,018
-------------------------------
LONG-TERM LIABILITIES:
Notes payable 63,985 --
Capital leases payable 60,713 70,439
Deferred licensing revenue -- 2,388,052
-------------------------------
Total long-term liabilities 124,698 2,458,491
-------------------------------
-------------------------------
Total liabilities 1,367,332 3,547,509
-------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value, 40,000,000 shares authorized in 1999 and 2000,
7,495,594 and 9,206,384 shares issued and
outstanding in 1999 and 2000, respectively 7,496 9,207
Preferred stock, $.001 par value, 10,000,000 shares authorized,
no shares issued and outstanding
Additional paid-in capital 13,273,927 25,950,844
Accumulated deficit (6,263,432) (8,349,504)
Note receivable (147,263) --
-------------------------------
Total stockholders' equity 6,870,728 17,610,547
-------------------------------
-------------------------------
TOTAL $ 8,238,060 $ 21,158,056
===============================
</TABLE>
See notes to consolidated financial statements.
<PAGE> 3
DURASWITCH INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000
<S> <C> <C> <C> <C>
Net sales $ 390,166 $ 504,933 $ 857,780 $ 1,229,784
Cost of goods sold 538,889 439,139 1,002,606 1,228,513
-----------------------------------------------------------------
Gross (loss) profit (148,723) 65,794 (144,826) 1,271
-----------------------------------------------------------------
Operating expenses:
Selling, General and Administrative 440,484 759,303 807,423 1,415,098
Research and Development 146,479 456,555 251,113 823,285
-----------------------------------------------------------------
Total Operating expenses 586,963 1,215,858 1,058,536 2,238,383
-----------------------------------------------------------------
Loss from operations (735,686) (1,150,064) (1,203,362) (2,237,112)
Other income (expense) - net (18,483) 98,684 (923) 151,040
-----------------------------------------------------------------
Net loss $ (754,169) $(1,051,380) $(1,204,285) $(2,086,072)
-----------------------------------------------------------------
Net loss per common share, basic and diluted $ (0.14) $ (0.14) $ (0.22) $ (0.27)
-----------------------------------------------------------------
Weighted average shares outstanding, basic and
diluted 5,391,512 7,770,831 5,390,206 7,636,909
-----------------------------------------------------------------
</TABLE>
<PAGE> 4
DURASWITCH INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1999 JUNE 30, 2000
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,204,285) $ (2,086,072)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 95,602 153,065
Gain on sale of equipment (12,500) 2,563
Stock option compensation expense 6,301 --
Issuance of stock for services 8,500 --
Changes in operating assets and liabilities:
Accounts receivable (68,809) 22,144
Inventory (173,371) 57,496
Prepaid expenses and other current assets (268,424) (95,897)
Accounts payable 186,388 (134,899)
Accrued salaries and benefits 121,685 (212,861)
Accrued expenses and other current liabilities 101,524 (1,149)
Deferred licensing revenue -- 2,852,632
--------------------------------
Net cash provided by operating activities (1,207,389) 557,022
--------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in patents and other assets (18,155) (235,887)
Loan to Camplex/Concept W Corporation (150,000) --
Proceeds from sale of equipment 12,500 --
Purchases of property and equipment (225,570) (99,855)
--------------------------------
Net cash used in investing activities (381,225) (335,742)
--------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of stock 1,199,594 11,544,290
Proceeds from note receivable -- 147,263
Proceeds from sale of warrant and option -- 1,134,338
Principal payments on notes payable and capital leases (63,713) (283,346)
Proceeds from notes payable to shareholders 300,000 --
Net (decrease) increase in line of credit 158,670 (75,000)
Net change in loans from officers (40,281) --
--------------------------------
Net cash provided by financing activities 1,554,270 12,467,545
--------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (34,344) 12,688,825
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 143,860 5,884,827
--------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 109,516 $ 18,573,652
================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
Cash paid for interest 34,944 25,008
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Acquisition of equipment through capital lease 57,873 34,800
Reduction of debt in connection with exercise of warrants 175,000 --
</TABLE>
<PAGE> 5
NOTES TO THE INTERIM FINANCIAL STATEMENTS
NOTE 1:
BASIS OF PRESENTATION
The accompanying interim financial statements have been prepared by the Company
in accordance with the rules and regulations of the Securities and Exchange
Commission for interim reporting. Accounting policies utilized in the
preparation of financial information herein presented are the same as set forth
in the Company's annual financial statements. Certain disclosures and
information normally included in financial statements have been condensed or
omitted. In the opinion of the management of the Company, these financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the interim financial
statements. Interim results of operations are not necessarily indicative of the
results of operations for the full year.
<TABLE>
<CAPTION>
NOTE 2: INVENTORIES DECEMBER 31, 1999 JUNE 30, 2000
<S> <C> <C>
Inventories consist of the following:
Raw materials $ 252,121 $ 191,994
Work in process 204,729 265,980
Finished goods 99,644 41,024
-------------------------------------
Subtotal 556,494 498,998
-------------------------------------
Less reserve for obsolete inventory (20,000) (20,000)
-------------------------------------
Total $ 536,494 $ 478,998
=====================================
</TABLE>
<TABLE>
<CAPTION>
NOTE 3: PROPERTY AND EQUIPMENT DECEMBER 31, 1999 JUNE 30, 2000
<S> <C> <C>
Property and Equipment consist of the following:
Computer equipment $ 207,110 $ 303,519
Other machinery and equipment 335,835 370,283
Leasehold Improvements 150,335 164,566
Office furniture and fixtures 75,663 75,663
-------------------------------------
Subtotal 768,943 914,031
-------------------------------------
Less accumulated depreciation and amortization (176,532) (296,128)
=====================================
Total $ 592,411 $ 617,903
=====================================
</TABLE>
NOTE 4: SIGNIFICANT TRANSACTIONS
On April 20, 2000, Delphi Automotive Systems LLC signed a licensing
agreement with us for exclusive rights to utilize and manufacture our
magnetically coupled switch technology for the automotive industry. The initial
term of the agreement runs through June 30, 2007 and during this period Delphi
is required to pay us minimum aggregate royalties of $12 million. Under this
Agreement, Delphi was also required to pay us a $4 million exclusive license
fee, which is nonrefundable and not creditable against royalties.
On April 20, 2000, we executed a short-term option agreement with
Delphi to purchase 1,651,846 million shares of non-registered common stock at
$7.00 per share. On June 19, 2000, Delphi exercised this call option to acquire
1,651,846 shares of Duraswitch common stock at $7.00 per share, representing
approximately 18 percent of Duraswitch outstanding shares.
On April 20, 2000, we also granted a warrant to Delphi to purchase
225,000 shares of our common stock at $7.00 per share. Based on Delphi
exercising the short-term option the warrant may be exercised at any time
before 11:59 p.m. on April 20, 2004.
<PAGE> 6
On May 18, 2000, Delphi paid us the $4.0 million cash for the exclusive
licensing fee, warrant and option. A valuation, using the Black-Scholes model,
of approximately $1.15 million for the warrant sold and the option executed with
Delphi on April 20, 2000 was recorded as equity on our books. We will similarly
report that amount as equity for tax purposes and therefore that portion of the
$4 million will be non-taxable. The $1.15 million valuation was applied against
the original $4.0 million licensing fee received and the remaining $2.85 million
will be recognized over the 7-year initial term of the license agreement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
We are currently transitioning to licensing manufacturers to produce and sell
products using our patented technologies, as opposed to our 1999 emphasis of
manufacturing and selling switch panels including our technologies.
THREE MONTHS ENDED JUNE 30, 2000 VS. THREE MONTHS ENDED JUNE 30, 1999
Net Sales:
We recorded net sales of $504,933 for the three months ended June 30,
2000, the "2000 Quarter", compared to $390,166 for the three months ended June
30, 1999, the "1999 Quarter". Sales during the 2000 Quarter consisted primarily
of switch panels produced with DuraSwitch technology for initial prototype
production and low volume production runs. Many of our past switch customers are
being transitioned to our licensees for production. Licensing revenue for the
2000 Quarter was approximately $68,000, consisting primarily of licensing
revenue from Delphi Automotive Systems LLC. See Item 5 for further details on
deferred revenue for Delphi.
Cost of Goods Sold:
Cost of goods sold was $439,139 for the 2000 Quarter, compared to
$538,889 for the 1999 Quarter. The decrease in cost of goods sold was primarily
due to some high margin licensing revenue and decreased manufacturing overhead.
The setup costs and low volume purchasing costs for prototype quantities were
partially offset by the high margin licensing revenue under our new licensing
business strategy.
Selling, General and Administrative expenses:
Selling, general and administrative expenses were $759,303 for the 2000
Quarter, compared to $440,484 for the 1999 Quarter. The increase in selling,
general and administrative expenses was primarily due to increased personnel and
travel costs incurred to implement and heighten the awareness of the licensing
program, conducting licensee training, and structuring the technology-licensing
agreements. We have also incurred costs in the 2000 Quarter related to being a
reporting public company, including investor relation activities that were not
necessary during the 1999 Quarter.
Research and Development:
Research and development expenses were $456,555 for the 2000 Quarter,
compared to $146,479 for the 1999 Quarter. The increased costs were attributed
to additional engineering personnel and facilities resources for increased
modeling, refinement and testing of new product applications for our patented
technologies. We expect these new product applications will generate future
license revenue as sold and manufactured by our licensees.
Loss from Operations:
As a result of the factors described above, loss from operations
increased to $1,150,064 for the 2000 Quarter, compared to $735,686 for the 1999
Quarter.
Other Income/Expense:
Net other income was $98,684 for the 2000 Quarter, compared to net
expense of $18,483 for the 1999 Quarter. The increased income resulted from the
investment of cash we received from our public equity offering on September 1,
1999, and $4 million we received from Delphi under the exclusive license,
warrant and option agreements completed during the 2000 Quarter, which are
discussed further in Item 5 below.
Net Loss:
As a result of the factors described above, net loss was $1,051,380 for
the 2000 Quarter, compared to $754,169 for the 1999 Quarter.
<PAGE> 7
SIX MONTHS ENDED JUNE 30, 2000 VS. SIX MONTHS ENDED JUNE 30, 1999
Net Sales:
We recorded net sales of $1,229,784 for the six months ended June 30,
2000, the "2000 Period", compared to $857,780 for the six months ended June 30,
1999, the "1999 Period". Sales during the 2000 Period consisted primarily of
switch panels produced with DuraSwitch technology for initial prototype
production and low volume production runs. Many of our past switch customers are
being transition to our licensees for production. Licensing revenue for the 2000
period was approximately $68,000 consisting primarily of licensing revenue from
Delphi. See Item 5 below for further details on deferred revenue from Delphi.
Cost of Goods Sold:
Cost of goods sold was $1,228,513 for the 2000 Period, compared to
$1,002,606 for the 1999 Period. The increase in cost of goods sold was primarily
due to increased sales, manufacturing overhead and application engineering
costs. The setup costs and low volume purchasing for prototype quantities, which
also drove up costs, were partially offset by the high margin licensing revenue
under our new licensing business strategy.
Selling, General and Administrative expenses:
Selling, general and administrative expenses were $1,415,098 for the
2000 Period, compared to $807,423 for the 1999 Period. The increase in selling,
general and administrative expenses was primarily due to increased personnel and
travel costs incurred to implement and heighten the awareness of our licensing
program, conducting licensee training, and structuring the technology-licensing
agreements. We have also incurred costs in the 2000 Period related to being a
reporting public company including investor relation activities that were not
necessary during the 1999 Period.
Research and Development:
Research and development expenses were $823,285 for the 2000 Period,
compared to $251,113 for the 1999 Period. The increased costs were attributed to
additional engineering personnel, and facilities resources for increased
modeling, refinement and testing of new product applications for our patented
technologies. We expect these new product applications will generate future
license revenue as sold and manufactured by our licensees.
Loss from Operations:
As a result of the factors described above, loss from operations
increased to $2,237,112 for the 2000 Period, compared to $1,203,362 for the 1999
Period.
Other Income/Income:
Net other income was $151,040 for the 2000 Period, compared to net
other expense of $923 for the 1999 Period. The increased income resulted from
the investment of cash we received from our public equity offering on September
1, 1999, and $4 million received from the exclusive license, warrant and option
agreements completed with Delphi during the 2000 period.
Net Loss:
As a result of the factors described above, net loss was $2,086,072 for
the 2000 Period, compared to $1,204,285 for the 1999 Period.
LIQUIDITY AND CAPITAL RESOURCES
The current ratio on June 30, 2000 was 18.0 to 1, compared to 5.5 to 1
on December 31, 1999. Working capital on June 30, 2000 was $18,511,030, compared
to $5,652,332 on December 31, 1999. The increase in working capital is
attributable to the execution of the exclusive license agreement for the
automotive industry and equity transactions with Delphi (see Item 5 of this
report for details).
Net cash provided by operating activities for the 2000 Period was
$557,022, which consisting primarily of net operating losses and offset by
proceeds from the license agreement with Delphi (see item 5 of this report for
details).
Net cash used in investing activities for the 2000 Period was $335,742,
which was used primarily for purchasing other assets and equipment.
<PAGE> 8
Net cash provided by financing activities for the 2000 Period was
$12,467,545, consisting primarily of net proceeds from the sale of stock of
$11,544,290, proceeds from the sale of a warrant and an option of $1,134,338 and
payment of $358,346 against our bank line of credit and other debt. For further
details on the issuance of stock and warrants see Items 2 and 5 of this report.
In December 1998, we obtained a $150,000 bank line of credit. In May
1999, we renegotiated the line of credit, which allows us to borrow up to a
total of $250,000 at the lender's prime rate plus 2%. Outstanding borrowings on
the line of credit are secured by a lien on our inventory, accounts receivable
and bank accounts. As of June 30, 2000, this line has been repaid in full and we
have chosen to not renew the line of credit.
During the three months ended June 30, 2000, we entered into a capital
lease for $34,800 for the purchase of property and equipment. As of June 30,
2000, future principal payments under our existing capital leases were
approximately $111,000. These capital leases bear interest at rates ranging from
11.7% to 24.0%.
At December 31, 1999, we had approximately $5,650,000 in net operating
loss carry forwards available for federal income tax purposes. We have not
recognized any benefit from these operating loss carry forwards, which are
subject to significant restriction under current tax law and begin to expire in
2011.
On August 26, 1999, the Company filed a registration statement with the
Securities and Exchange Commission to issue 2,000,000 shares of the Company's
common stock at $5.00 per share. The offering was concluded after all shares
available were sold. The underwriter of the stock offering was Cruttenden Roth.
The net proceeds from the offering were $8,196,312, which is net of $1,803,688
in costs paid by the Company related to the offering, of which $53,354 consisted
of direct or indirect payments to officers or directors of the Company. As of
June 30, 2000, the net proceeds have been used for the following: research and
development of $1,262,807, purchases of capital assets of $336,617, repayment of
indebtedness of $371,704, repayment of the bank line of credit of $158,670, and
sales and marketing, general corporate and working capital of $6,066,514, of
which $3,010,730 from the net proceeds remains in cash.
We have experienced significant operating losses since our inception.
We expect our capital expenditure and working capital requirements in the
foreseeable future to increase depending on the rate of our expansion, our
operating results, and other adjustments in our operating plan as needed in
response unexpected events. We believe our current cash and cash equivalents
will be sufficient to meet our anticipated cash needs for working capital,
capital expenditures and required debt payments through at least the next twelve
months.
NEW ACCOUNTING STANDARDS - In December 1999, the Securities and Exchange
Commission (the "SEC") issued the Staff Accounting Bulletin ("SAB") No. 101,
Revenue Recognition in Financial Statements. Subsequently, the SEC issued
amendments A and B to SAB No. 101. The second amendment delays the
implementation of SAB 101 until the fourth fiscal quarter of fiscal years
beginning after December 15, 1999. The Company does not believe that adopting
SAB No. 101 will have a material effect on its financial position and results of
operation when such statement is adopted.
PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
On April 20, 2000, we granted to Delphi Automotive Systems LLC an
option to purchase 1,651,846 shares of our common stock for $7.00 per share. On
June 19, 2000, Delphi and paid us $11,562,922 to exercise this option in its
entirety, representing approximately 18 percent of our outstanding shares. We
relied on the exemption in Section 4(2) of the Securities Act of 1933 to sell
these shares to Delphi. We did not engage in any general solicitation or
advertising in connection with this transaction, nor did we engage the services
of an underwriter.
On April 20, 2000, we also granted to Delphi a warrant to purchase
225,000 shares of our common stock at $7.00 per share. This warrant may be
exercised at any time before 11:59 p.m. on April 20, 2004. . We relied on the
exemption in Section 4(2) of the Securities Act of 1933 to issue this warrant to
Delphi. We did not engage in any general solicitation or advertising in
connection with this transaction, nor did we engage the services of an
underwriter.
<PAGE> 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
We held our annual meeting on June 19, 2000. At this meeting, John W.
Hail and William E. Peelle were each elected to a 3-year term on our board of
directors. The following directors R. Terren Dunlap, Anthony J. Van Zeeland and
Michael A. Van Zeeland continued after the annual meeting.
At the annual meeting, our shareholders also approved our 2000 Stock
Option Plan with 5,728,127 votes in favor, 605,454 opposed, 0 withheld, and
71,701 abstentions and broker non-votes.
At the annual meeting, our shareholders ratified our board of
directors' appointment of Deloitte & Touche LLP as our independent auditors for
the fiscal year ending December 31, 2000, with 6,402,090 votes in favor, 1,517
opposed, 0 withheld, and 1,675 abstentions and broker non-votes.
ITEM 5. OTHER INFORMATION.
On April 20, 2000, Delphi Automotive Systems LLC signed a licensing
agreement with us for exclusive rights to utilize and manufacture our
magnetically coupled switch technology for the automotive industry. The initial
term of the agreement runs through June 30, 2007 and during this period Delphi
is required to pay us minimum aggregate royalties of $12 million. Under this
Agreement, Delphi was also required to pay us a $4 million exclusive license
fee, which is nonrefundable and not creditable against royalties.
On April 20, 2000, we executed a short-term option agreement with
Delphi to purchase 1,651,846 million shares of non-registered common stock at
$7.00 per share. On June 19, 2000, Delphi exercised this call option to acquire
1,651,846 shares of Duraswitch common stock at $7.00 per share, representing
approximately 18 percent of Duraswitch outstanding shares.
On April 20, 2000, we also granted a warrant to Delphi to purchase
225,000 shares of our common stock at $7.00 per share. Based on Delphi
exercising the short-term option the warrant may be exercised at any time
before 11:59 p.m. on April 20, 2004.
On May 18, 2000, Delphi paid us the $4.0 million cash for the exclusive
licensing fee, warrant and option. A valuation, using the Black-Scholes model,
of approximately $1.15 million for the warrant sold and the option executed with
Delphi on April 20, 2000 was recorded as equity on our books. We will similarly
report that amount as equity for tax purposes and therefore that portion of the
$4 million will be non-taxable. The $1.15 million valuation was applied against
the original $4.0 million licensing fee received and the remaining $2.85 million
will be recognized over the 7-year initial term of the license agreement.
On May 19, 2000, we granted to AP Industrial, located in Tempe,
Arizona, a non-exclusive license for our patented PushGate push button switch.
AP Industrial is a manufacturer that specializes in serving companies with small
and medium volume orders.
On June 20, 2000, we granted to Add-Vision, located in Grass Valley,
California, a non-exclusive license for our patented PushGate push button
switch. Add-Vision is a developer and manufacturer of surface animation systems.
On July 14, 2000, we granted to Design Mark Industries, located in
Warham, Massachusetts, a non-exclusive license for our patented PushGate push
button switch. Design Mark Industries is a manufacturer of graphic overlays,
keyboard assemblies, and other products for original equipment manufacturers in
the electronic industry.
During July 2000, Carl G. Rausch, Director Marketing, Planning and
Business Development Delphi Automotive Systems, was named to our Board of
Directors.
<PAGE> 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
See attached exhibit list.
(b) Reports on Form 8-K.
On April 26, 2000, DuraSwitch filed a current report on Form 8-K with
the SEC pursuant to Item 5 thereof, in respect to the license, option and
warrant transaction with Delphi Automotive System LLC described in Item 5 above.
On June 23, 2000, DuraSwitch filed a current report on Form 8-K with
the SEC pursuant to Item 5 thereof, in respect to the option transaction with
Delphi Automotive System LLC described in Item 5 above.
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DuraSwitch Industries, Inc.
---------------------------
(Registrant)
Date: August 10, 2000 By: /s/ R. Terren Dunlap
---------------------------------------------------
R. Terren Dunlap, Chief Executive Officer and
Chairman of the Board (Principal Executive Officer)
Date: August 10, 2000 By: /s/ Robert J. Brilon
---------------------------------------------------
Robert J. Brilon, President, Chief Financial
Officer, Secretary and Treasurer
(Principal Financial and Accounting Officer)
<PAGE> 12
EXHIBIT INDEX
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<CAPTION>
Exhibit
No. Description Incorporated by Reference to: Filed Herewith:
<S> <C> <C> <C>
3.1 Amended and Restated FormSB-2 filed with the SEC
Articles of Incorporation of Registrant on August 26, 1999
3.2 Amended and Restated Bylaws Form 10-QSB filed with SEC on
November 15, 1999
4.1 Articles 3, 4, 5, and 7 of the Form SB-2 filed with the SEC
Amended and Restated on August 26, 1999
Articles of Incorporation of
DuraSwitch Industries, Inc.
(included in Exhibit 3.1)
4.2 Articles II, III, and VII of the Form SB-2 filed with the SEC
Amended and Restated on August 26, 1999
Bylaws of DuraSwitch
Industries, Inc.
(included in Exhibit 3.1)
4.3 Specimen Common Stock Form SB-2 filed with the SEC
Certification on August 26, 1999
10.1 Employment and Separation Form SB-2 filed with the SEC on
Agreement dated May 1, 1997 August 26, 1999
by and between Registrant and
R. Terren Dunlap
10.1.1 July 30, 1999 Amendment to Form SB-2 filed with the SEC on
R. Terren Dunlap Employment August 26, 1999
Separation Agreement
10.2 Employment and Separation Form SB-2 filed with the SEC on
Agreement dated May 1, 1997 August 26, 1999
by and between Registrant and
Anthony J. Van Zeeland
10.2.1 July 30, 1999 Amendment to Form SB-2 filed with the SEC on
Anthony J. Van Zeeland Employment August 26, 1999
Separation Agreement
10.3 Employment and Separation Form SB-2 filed with the SEC on
Agreement dated November 20, 1998 August 26, 1999
by and between DuraSwitch Industries,
Inc. and J. Thomas Webb
</TABLE>
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
10.4 Employment and Form SB-2 filed with the SEC on
Separation Agreement dated August 26, 1999
November 20, 1998 by and between
DuraSwitch Industries, Inc.
and Robert J. Brilon
10.4.1 Addendum #1 to Employment and Form 10-KSB filed with SEC on
Separation Agreement dated March 30, 2000
November 20, 1998 by and between
DuraSwitch Industries, Inc.
and Robert J. Brilon
10.5 Registrant's 1997 Stock Option Plan Form SB-2 filed with the SEC on
August 26, 1999
10.6 Form of Grant Letter pursuant to 1997 Form SB-2 filed with the SEC on
Stock Option Plan August 26, 1999
10.7 Registrant's 1999 Stock Option Plan Form SB-2 filed with the SEC on
August 26, 1999
10.8 Form of Representative's Warrants Form SB-2 filed with the SEC on
August 26, 1999
10.9 Series A Convertible Stock and Warrant Form SB-2 filed with the SEC on
Purchase Agreement dated June 30, August 26, 1999
1998 by and among DuraSwitch
Industries, Inc. and Blackwater
Capital Partners, L.P. and
Blackwater Capital Group, L.L.C.
10.10 Registration Rights Agreement dated Form SB-2 filed with the SEC on
June 30, 1998, by and between August 26, 1999
DuraSwitch Industries, Inc. and
Blackwater Capital Group, L.L.C.
10.11 Registration Rights Agreement dated Form SB-2 filed with the SEC on
June 30, 1998, by and between August 26, 1999
DuraSwitch Industries, Inc. and
Blackwater Capital Partners, L.P.
10.12 Letter agreement dated May 14, 1998, Form SB-2 filed with the SEC on
as amended July 14, 1998, by and August 26, 1999
between DuraSwitch Industries, Inc. and
Duff & Phelps Securities, LLC
10.12A Agreement to terminate dated Form 10-QSB filed with SEC on
September 13, 1999 between November 15, 1999
DuraSwitch Industries, Inc.
and Duff & Phelps Securities, LLC
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10.13 Promissory Note of DuraSwitch Form SB-2 filed with the SEC on
Industries, Inc. dated January 30, 1998, August 26, 1999
and amended December 31, 1998, in
The aggregate amount of $164,000
Payable to Anthony G. Shumway
10.14 Warrant to Purchase 42,871 shares Form SB-2 filed with the SEC on
of Common Stock of DuraSwitch August 26, 1999
Industries, Inc. issued June 30,
1998 and held by Duff & Phelps
Securities, LLC
10.15 Standard Sublease dated October 15, Form SB-2 filed with the SEC on
1998, as amended February 2 ,1999, August 26, 1999
by and between 234 South Extension,
L.L.C. and DuraSwitch Industries, Inc.
10.16 Management Services Agreement Form SB-2 filed with the SEC on
dated May 1, 1997 by and between August 26, 1999
Total Switch, Inc. and VanDun, LLC
10.17 Agreement for Assignment of Present Form SB-2 filed with the SEC on
and Future Inventions in Certain August 26, 1999
Subject Matter dated May 1, 1997 by
And between Total Switch, Inc. and
Anthony J. Van Zeeland
10.18 Ericsson, Inc. purchase order dated Form SB-2 filed with the SEC on
April 7, 1999 (portions of the exhibit August 26, 1999
have been omitted pursuant to a
request for confidential treatment)
10.18.1 Cancellation of Ericsson, Inc. Form 10-KSB filed with the SEC on
purchase order dated April 7, 1999 March 30, 2000
10.19.1 Licensing Agreement between Delphi Form 8-K filed with the SEC on
Automotive Systems LLC and April 26, 2000.
DuraSwitch Industries Inc dated
April 20, 2000
10.19.2 Option Agreement between Delphi Form 8-K filed with the SEC on
Automotive Systems LLC and July 12, 2000.
DuraSwitch Industries Inc dated
April 20, 2000
10.20 Registrant's 2000 Stock Option Plan Proxy Statement filed with the SEC on
May 12, 2000
27 Financial Data Schedule
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