UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OF 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended January 31, 1997
Commission File Number 0-3825
Computer Transceiver Systems, Inc.
(Exact name of registrant as specified in its charter)
New York 22-1842747
(State of Incorporation) (I.R.S. Employer Identification Number)
Registrant's Telephone Number: (201) 473-4700
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
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 court.
Yes X No
The number of shares outstanding of the registrant's Common Stock, par value
of $.001 per share, as of March 10, 1997 was 2,716,603.
-1-
<PAGE>
COMPUTER TRANSCEIVER SYSTEMS, INC.
FORM 10 - Q
January 31, 1997
INDEX
Page
Part I. Financial Information
Item 1. Financial Statements
Balance Sheets - January 31, 1997
and July 31, 1996 3
Statements of Discontinued Operations-
Three and Six Months ended January 31, 1997
and January 31, 1996 4
Statements of Cash Flows-
Six Months ended January 31, 1997
and January 31, 1996 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
II. Other Information
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
-2-
<PAGE>
<TABLE>
PART I Financial Information
Item 1. Financial Statements
COMPUTER TRANSCEIVER SYSTEMS, INC.
Balance Sheets
<CAPTION>
January 31, 1997 July 31, 1996
(unaudited) (audited)
(note 2)
------------------ ---------------
<S> <C> <C>
ASSETS
- ------
Current Assets:
- --------------
Marketable Securities--
Vertex Industries $ 3,052 $ 3,052
Total Assets $ 3,052 $ 3,052
Liabilities and Stockholders' Equity
- ------------------------------------
Commitments and Contingencies
Stockholders' Equity (Deficit)
- ------------------------------
Common stock, par value $.001 per share
authorized 15,000,000 shares; issued and
outstanding 2,716,603 shares at January 31,
1997 and at July 31, 1996, respectively 2,716 2,716
Capital in excess of par value 2,452,840 2,452,840
Accumulated deficit (2,450,156) (2,450,156)
Net unrealized loss on Marketable
Securities (2,348) (2,348)
----------- -----------
Total Stockholders' Equity 3,052 3052
----------- -----------
Total Liabilities and Stockholder' Equity $ 3,052 $ 3,052
============ ===========
<FN>
The accompanying notes are an integral part of these financial statements.
-3-
</TABLE>
<PAGE>
<TABLE>
COMPUTER TRANSCEIVER SYSTEMS, INC.
Statements of Discontinued Operations
<CAPTION> (Unaudited)
Three Months Ended Six Months Ended
January 31, January 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Income $ -- $ -- $ -- $ --
--------------- -------------- -------------- --------------
Retained (Deficit) at beginning of
period (2,450,156) (2,450,156) ( 2,450,156) (2,450,156)
--------------- -------------- -------------- --------------
Retained (deficit) at end of period (2,450,156) (2,450,156) ( 2,450,156) (2,450,156)
=============== ============== ============== ==============
Net Income per share $ -- $ -- $ -- $ --
- -------------------- =============== ============== ============== ==============
Weighted Average Number of Shares
Outstanding 2,716,603 2,716,603 2,716,603 2,716,603
=============== ============== ============== ==============
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
COMPUTER TRANSCEIVER SYSTEMS, INC.
Statements of Cash Flows
(Unaudited)
<CAPTION>
Six Months Ended
January 31, 1997 January 31, 1996
<S> <C> <C>
Cash Flows from Discontinued Operating
Activities:
Net Income $ -- $ --
Net Adjustments to Reconcile
Net Income to net cash used for
operating activities:
Increase (decrease) in liabilities:
Accrued expenses -- (43,000)
Net adjustments to reconcile net income
to net cash used for discontinued
operating activities -- (43,000)
----------
Net Cash used for discontinued operating
activities -- (43,000)
----------
Cash Flows From Financing Activities:
Proceeds from additional capital
contribution -- 43,000
----------
Net Cash Provided by Financing
Activities -- 43,000
----------
Net (Decrease) in Cash -- --
Cash at Beginning of Year -- --
---------------- ----------
Cash at End of Period $ -- $ --
================== ============
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
-5-
<PAGE>
COMPUTER TRANSCEIVER SYSTEMS, INC.
Notes to Financial Statements - Unaudited
January 31, 1997
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission, and reflect all adjustments which, in the opinion of the
management, are necessary for a fair statement of the results of the
interim periods presented. These financial statements do not include all
disclosures associated with annual financial statements, and accordingly
should be read in conjunction with the notes to financial statements
contained in the Company's Form 10-K Annual Report for the fiscal year ended
July 31, 1996.
Note 2 - SALE OF ASSETS TO VERTEX AND FUTURE PLANS
On August 31, 1994, pursuant to an "Asset Purchase Agreement" dated May 1,
1993 between the Company and Vertex Industries, Inc. ("Vertex"), the
Company's majority stockholder, and with the approval of the Company's
directors and shareholders, the Company sold all of its assets to Vertex and
Vertex assumed the Company's liabilities. The assets sold included inventory,
equipment, receivables, proprietary technology, goodwill and other intangibles.
The selling price of $1,699,580 was paid by Vertex through the offset and
cancellation of the Company's indebtedness to Vertex in the amount of
$1,257,001, with the balance of $442,579 being paid through the issuance of
236,042 shares of Vertex common stock to the Company. CTSI subsequently
distributed 233,170 shares of Vertex common stock in an exchange offer for
746,161 shares of CTSI's common stock. The Vertex shares reflected in the
balance sheet as marketable securities as of July 31, 1995 represents the
remaining shares of 2,872 which were not distributed to the CTSI
shareholders. After completion of the Exchange Offer, the number of
issued and outstanding shares of the Company was reduced from 3,462,764 to
2,716,603. As a result of the transaction, Vertex's ownership of the Company
is approximately 72.5%.
The Company's current business purpose is to seek out and obtain an
acquisition, and/or merger transaction, whereby its shareholders may
benefit by owning an interest in a viable enterprise. Since the Company
has no operations or significant assets as a result of the sale, its potential
for profits will come solely from operations it may undertake after any
acquisition or merger transaction. The Company has not received from, or made
any specific proposals to, any possible merger or acquisition candidate and
there is no guarantee that such transaction will occur. Vertex will be
responsible for, and shall be the source of, any funds necessary for the
Company to continue operating and to comply with any regulatory requirements,
taxes, and fees. It will fund any costs associated with pursuing merger or
acquisition candidates.
-6-
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
The Company ceased operations on Augus 31, 1994 and, therefore, has no
operating results for the three and six months ended January 31, 1997.
-7-
<PAGE>
COMPUTER TRANSCEIVER SYSTEMS, INC.
PART II
OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8K
(a) Exhibits: None
(b) There were no reports on Form 8K filed during the
quarter ended January 31, 1997
-8-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMPUTER TRANSCEIVER SYSTEMS, INC.
(Registrant)
Date: March 10, 1997 By: S/ Thomas J. Tully
Thomas J. Tully
President
Date: March 10, 1997 By: S/ Ronald C. Byer
Ronald C Byer
Treasurer
-9-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 0
<SECURITIES> 3052
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3052
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3052
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2716
<OTHER-SE> 336
<TOTAL-LIABILITY-AND-EQUITY> 3052
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
