Xedar Corporation
2500 Central Avenue
Boulder, CO 80301
November 10, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Pursuant to the requirements of the Securities Exchange
Act of 1934, we are transmitting herewith the attached
Form 10Q.
Sincerely,
Hans R. Bucher
Hans R. Bucher, President
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 26, 1998
_________________________________
( ) TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission File Number 0-8356
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XEDAR CORPORATION
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(Exact name of small business issuer as specified in its charter)
Colorado 84-0684753
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(State or other jurisdiction of
incorporation or organization) (IRS Employer Identification No.)
2500 Central Avenue, Boulder, CO 80301
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(Address of principal executive offices)
(303) 443-6441
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(Issuer's telephone number)
Check whether the Issuer (1) filed all documents and 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 No
X
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State the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date: No Par Value Common
Stock - 1,837,224 shares as of November 10, 1998.
Transitional Small Business Disclosure Format (check one):
Yes No
X
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XEDAR CORPORATION
INDEX
Page No.
PART I Financial Information
Item 1 Financial Statements
Condensed Balance Sheets,
September 26, 1998 and December 27, 1997 1
Condensed Statements of Operations, Nine
Months and three months ended September 26, 2
1998 and September 27, 1997
Condensed Statements of Cash Flows - Nine
Months and three months ended September 26, 3
1998 and September 27, 1997
Notes to Condensed Financial Statements 4
Item 2 Management's Discussion and Analysis of financial
Condition and Results of Operations 5
PART II Other Information 7
SIGNATURES 8
PART I - FINANCIAL INFORMATION
XEDAR CORPORATION
CONDENSED BALANCE SHEETS
September 26, 1998 and December 27, 1997
(Unaudited)
ASSETS
1997 1998
Current assets
Cash and cash equivalents $1,084,315 $ 874,213
Trade accounts receivable, net 12,695 16,023
Note receivable 95,000
Interest receivable 4,000
Inventories 32,603 32,869
Prepaid expenses 4,069 435
Refundable income taxes 3,206
Total current assets 1,235,888 923,540
Long term receivable 162,879 155,928
Property and equipment, at cost 139,949 172,081
Less accumulated depreciation 118,324 145,387
21,625 26,694
Patents, net 14,477 14,476
$1,434,869 $1,120,638
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable-trade $ 3,036 $ 4,507
Accounts payable-related party 6,293 4,048
Accrued liabilities
Vacation 35,027 35,269
Payroll and commissions 8,540 13,744
Payroll and other taxes 1,682 2,387
Unearned Revenue 5,584
---------- -----------
Total current liabilities $ 54,578 $ 65,539
Stockholders' equity
Common stock 1,617,617 1,617,617
Additional paid-in capital 40 40
Accumulated deficit (237,366) (562,558)
Total stockholders' equity 1,380,291 1,055,099
$1,434,869 $1,120,638
========== ==========
The accompanying notes are an integral part of these condensed
financial statements.
-1-
XEDAR CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended Three Months Ended
September 27, 1997 September 27, 1997
September 26, 1998 September 26, 1998
----------------- -------------------
1997 1998 1997 1998
Sales $509,223 $ 70,380 $281,369 $ 33,180
Cost of sales 434,649 202,016 220,382 69,308
Gross profit (loss) 74,574 (131,636) 60,987 (36,128)
Research and development costs 19,760 85,784 18,122 22,321
Selling, general and
administrative expenses 202,817 141,430 57,349 35,014
222,577 227,214 75,471 57,335
Operating loss (148,003)(358,850) (14,484) (93,463)
Other income 38,448 33,658 16,970 7,630
Income (loss) before income
taxes (109,555) (325,192) 2,486 (85,833)
Provision for income tax
expense (benefit) (59,936) (28,936)
Net income (loss) $ (49,619)$(325,192)$ 31,422 $(85,833)
======== ========= ======== ========
Weighted average shares
outstanding 1,837,224 1,837,224 1,837,224 1,837,224
Basic and diluted income
(loss) per common share $( .03) $( .18) $ .02 $( .05)
======= ======= ======= =======
The accompanying notes are an integral part of these condensed
financial statements.
-2-
XEDAR CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended Three Months Ended
September 27 and September 27 and
September 26 September 26
------------------- ------------------
1997 1998 1997 1998
------------------- ------------------
Net Income (loss) $(49,619)$(325,192) $ 31,422 $(85,833)
Adjustments to reconcile net income
(loss) to net cash used
by operating activities
Depreciation of property and
equipment 11,985 10,377 4,086 4,317
(Increase) decrease in assets
Trade accounts receivable 12,625 ( 3,328) (167,911) 32,855
Note receivable - 95,000 - -
Interest receivable ( 922) 4,000 1,200 3,000
Inventories ( 51,223) ( 266) 75,280 ( 544)
Prepaid income taxes ( 43,000) 3,206 ( 12,000) -
Refundable income taxes 74,831 - 74,831 -
Prepaid expenses 3,473 3,634 1,307 1,308
Increase (decrease) in liabilities
Accounts payable-trade ( 23,422) 1,471 ( 35,640)( 20,091)
Accounts payable-related party( 1,000) ( 2,245) - ( 2)
Accrued vacation 4,883 242 ( 276)( 623)
Accrued payroll 8,632 5,204 8,407 6,872
Payroll and other taxes ( 268) 705 ( 1,119) ( 242)
Advance billings ( 38,420) 5,585 - 5,585
--------- --------- --------- --------
Net cash used by operating ( 91,445) (201,607) ( 20,413) (53,398)
activities --------- --------- --------- --------
Cash flows provided (used) by
investing activities
Capital expenditures ( 12,468) (15,446) - -
Patents 5,182 - ( 1,101) -
Long term receivable-related
party 6,453 6,951 1,296 1,407
--------- -------- --------- --------
Net cash provided (used) by
investing activities ( 833) ( 8,495) 195 1,407
Net decrease in cash and cash
equivalents ( 92,278)(210,102) ( 20,218) (51,991)
Cash and cash equivalents at
beginning of period 1,110,297 1,084,315 - -
--------- ---------- --------- --------
Cash and cash equivalents at
end of period $1,018,019 $ 874,213 $( 20,218) $(51,991)
========== ========= ========== =========
The accompanying notes are an integral part of these condensed financial
statements.
-3-
XEDAR CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 26, 1998
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The condensed financial statements included herein are unaudited.
In the opinion of management, all adjustments, consisting of normal
recurring accruals, have been made which are necessary for a fair
presentation of the financial position of the Company at September 26,
1998 and the results of operations for the nine months and three months
ended September 26, 1998 and September 27, 1997. Quarterly results are
not necessarily indicative of expected annual results. For a more
complete understanding of the Company's operations and financial
position, reference is made to Management's Discussion and Analysis of
Financial Condition and Results of Operations herein and the financial
statements of the Company, and related notes thereto, filed with the
Company's annual report on Form 10-KSB for the year ended December 27,
1997, previously filed with the Securities and Exchange Commission.
NOTE 2: INVENTORIES
At September 26, 1998 inventories consisted of:
Raw materials $ 7,436
Work in process 25,433
----------
TOTAL $ 32,869
==========
NOTE 3: BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE
Basic and diluted income (loss) per common share amounts were computed
by dividing the net income (loss) by the weighted average number of
shares outstanding for the period. No options or warrants with a
dilutive effect were outstanding during the nine month and three month
periods ended September 26, 1998 and September 27, 1997.
-4-
XEDAR CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales and Gross Profit
Sales by product line for the first nine months and three months ended
for 1997 and 1998 were:
(Amounts in $000)
Nine Months Ended Three Months Ended
Sept.27 Sept.26 Increase Sept.27 Sept.26 Increase
1997 1998 (Decrease) 1997 1998 (Decrease)
Commercial products $ 30 $ 2 $( 28) $ - $ 1 $ 1
Design and development
contracts 468 68 (400) 276 32 (244)
Single customer
production programs 11 - ( 11) 5 - ( 5)
----- ---- ------ ----- ----- ------
Totals $ 509 $ 70 $(439) $ 281 $ 33 $(248)
===== ==== ====== ===== ===== ======
Xedar product sales decreased by $28,000 in the nine months ended
September 1998 as compared to the nine months ended September 1997. The
sales potential for the tube-based infrared cameras is non-existent and
the Company no longer offers this product. At this time, the Company is
not offering any standard product into the imaging market, but is
concentrating on development of special purpose imaging systems for OEM
and scientific applications.
Design and development contract sales decreased by $400,000 in the nine
months ended September 1998 as compared to the nine months ended
September 1997. The Company is pursuing several contract opportunities
with various potential customers, but to date has not been able to turn
these opportunities into contracts. Only one small consulting contract
has been obtained. This situation is reflected in the lack of sales of
design and development contracts and single customer production
programs.
The gross profit for the third quarter 1998 was negative due to reduced
sales volume and overhead costs being spread over a smaller sales base.
Research and Development
A total of $22,000 was expended during the third quarter 1998 or
$86,000 for the nine months ended September 26, 1998. These funds were
primarily used to evaluate high speed amplifiers for various
applications and to develop camera control software.
Selling, General and Administrative Expenses: Selling, general and
administrative expenses decreased by $22,000 in the third quarter 1998
as compared to the third quarter of 1997 and $61,000 for the nine months
ended September 26, 1998 compared to the nine months ended September 27,
1997. This decrease is primarily due to lower marketing and
administrative wages.
-5-
XEDAR CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES
The Company finances its current activities from cash reserves.
At September 26, 1998 the Company's working capital was $858,000.
The Company's liquidity position is necessary for anticipated production
financing, the expansion of the CCD camera manufacturing capability and
future in house research and development, to develop new product lines
and to develop new products for the commercial, scientific and medical
imaging market.
The Company has addressed the Year 2000 issues. The Company has
evaluated its computer systems and concluded that the software being
utilized is not date sensitive and adequately recognizes a four-digit
year. The Company presently believes that the Year 2000 problem will
not pose operational or financial problems for the Company's computer
systems as designed.
FORWARD-LOOKING STATEMENTS
Except for the historical information contained herein, the matters set
forth in this 10QSB are forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially. These
risks are detailed from time to time in the Company's periodic reports
filed with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10KSB, Quarterly Reports on Form 10QSB
and other periodic filings. These forward-looking statements speak only
as of the date hereof. The Company disclaims any intent or obligation
to update these forward-looking statements.
-6-
PART II - OTHER INFORMATION
NOT APPLICABLE
-7-
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
XEDAR CORPORATION
- -----------------------------
(Registrant)
November 10, 1998 Hans R. Bucher
Date......................... ...................................
(Hans R. Bucher, President)
-8-
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