<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (D)
OF THE SECURITIES EXCHANGE ACT 1934
FOR QUARTER ENDED DECEMBER 31ST, 1995
COMMISSION FILE NUMBER: 0-8951
COMPARATOR SYSTEMS CORPORATION
(Exact name of registrant as specified in charter)
Colorado 95-3151060
- ------------------------------- ------------------
(State or other jurisdiction of I.R.S. Employer
Incorporation or organization Identification No.
4350 Von Karman, Suite 180, Newport Beach, CA 92660
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(714) 851-4300
--------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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 the filing
requirements for at least the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the close of the period covered by this report.
Common Stock, $0.01 par value 591,630,619 shares
Preferred Stock, $5.00 par value 0 shares
- -------------------------------- ------------------
Title of Class Number of shares
Outstanding
December 31st 1995
Page 1 of 14
<PAGE>
<TABLE>
<CAPTION>
CONTENTS
--------
PART I Page Number
-----------
<S> <C>
Financial Information
Item 1 Financial Statements:
Condensed Unaudited Balance Sheets 3 & 4
Condensed Unaudited Statement of Operations
Three Months 5
Six Months 6
Statement of Changes of Shareholders' Equity 7
Condensed Unaudited Statement of Cash Flow
Three Months 8
Six Months 9
Notes to Condensed Unaudited Financial Statements 10, 11
Item 2 Management's Discussion and Analysis of Results
of Operations and Financial Condition 12
PART II Other Information 13
Signatures 14
</TABLE>
Page 2 of 14
<PAGE>
COMPARATOR SYSTEMS CORPORTION
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
SIX MONTHS FISCAL YEAR
ENDED ENDED
DEC 31st, 1995 JUNE 30th, 1995
-------------- ---------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 7,017 $ 34,871
Accounts Receivable 883,255 797,723
Inventory 79,054 79,054
---------- ----------
TOTAL CURRENT ASSETS 969,327 911,648
---------- ----------
PROPERTY & EQUIPMENT NET 405,956 363,799
---------- ----------
PATENTS & LICENSES NET 2,317,653 2,433,529
---------- ----------
OTHER ASSETS
Deposits & Prepaid expenses 146,645 146,644
Prepaid Fees 437,066 507,693
Investments 1,411,443 1,216,626
Notes Receivable 72,526 72,526
Accrued Interest Receivable 30,461 26,109
---------- ----------
TOTAL OTHER ASSETS 2,098,142 1,969,598
---------- ----------
TOTAL ASSETS $5,791,077 $5,678,574
========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 3 of 14
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED CONDENSED UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
SIX MONTHS FISCAL YEAR
ENDED ENDED
DEC 31st, 1995 JUNE 30th, 1995
-------------- ---------------
<S> <C> <C>
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 304,071 $ 241,171
Accrued Expenses 304,504 127,700
Accrued Payroll Taxes 7,790 7,790
Accrued Royalty Payable - 42,000
Accrued Salary 125,311 68,291
Accrued Professional Services Payable 9,800 9,800
Judgments & Claims 323,536 323,536
Accrued Interest payable-Judgments & Claims 171,205 155,028
Notes Payable 338,125 338,125
Accrued Interest Payable on Notes 218,632 202,776
Investment Notes Payable 29,898 31,431
------------ ------------
TOTAL CURRENT LIABILITIES 1,832,872 1,547,648
------------ ------------
LIABILITIES, OFFICERS & DIRECTORS
Accounts Payable 9,851 40,317
Accrued Salaries Payable 98,470 23,158
Notes Payable 322,374 322,374
Accrued Interest Payable on Notes 99,936 83,817
------------ ------------
TOTAL OTHER LIABILITIES 530,631 469,666
------------ ------------
TOTAL LIABILITIES 2,363,503 2,017,314
------------ ------------
SHAREHOLDERS' EQUITY
Common stock, $0.01 par value,
750,000,000 shares authorized,
shares issued, issuable and outstanding
591,630,619 at December 31st 1995
and 564,344,703 at June 30th, 1995 5,916,305 5,643,198
Treasury Shares 0 0
Preferred Stock, $5.00 par value,
50,000,000 authorized, no shares issued 0 0
Additional Paid In Capital 18,201,543 17,653,198
Retained Earnings (Deficit) (20,690,274) (19,635,764)
------------ ------------
SHAREHOLDERS' EQUITY 3,427,574 3,661,260
------------ ------------
$ 5,791,077 $ 5,678,574
============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 5 of 14
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS FISCAL YEAR
ENDED ENDED
DECEMBER 31st JUNE 30th
1995 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES $ 235,450 $ 5,926 $ 90,161
------------ ------------ ------------
COST & EXPENSES
Cost of sales 0 0 0
Selling expenses 306,254 31,362 121,855
Administrative expenses 307,794 184,874 1,439,763
Depreciation 8,431 7,251 34,490
Amortization 57,938 57,938 231,752
Interest expenses 25,501 25,515 109,030
------------ ------------ ------------
TOTAL COST & EXPENSES 705,917 306,940 1,936,890
LOSS BEFORE INCOME TAXES (470,467) (301,014) (1,846,729)
PROVISION FOR INCOME TAXES 0 0 0
------------ ------------ ------------
NET LOSS $ (470,467) $ (301,014) $ (1,846,729)
------------ ------------ ------------
NET LOSS PER SHARE $ (0.0008) $ (0.0006) $ (0.0035)
------------ ------------ ------------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 589,975,064 519,287,915 525,395,100
============ ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 5 of 14
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS FISCAL YEAR
ENDED ENDED
DECEMBER 31st JUNE 30th
1995 1994 1995
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES $ 256,376 $ 18,932 $ 90,161
------------ ------------ ------------
COST & EXPENSES
Cost of sales 0 0 0
Selling expenses 356,752 61,058 121,855
Administrative expenses 770,916 379,965 1,439,763
Depreciation 16,341 14,409 34,490
Amortization 115,876 115,876 231,752
Interest expenses 51,002 50,130 109,030
------------ ------------ ------------
TOTAL COST & EXPENSES 1,310,886 621,438 1,936,890
LOSS BEFORE INCOME TAXES (1,054,510) (602,506) (1,846,729)
PROVISION FOR INCOME TAXES 0 0 0
------------ ------------ ------------
NET LOSS $ (1,054,510) $ (602,506) $ (1,846,729)
------------ ------------ ------------
NET LOSS PER SHARE $ (0.0018) $ (0.0012) $ (0.0035)
------------ ------------ ------------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 582,994,555 517,262,915 525,395,100
============ ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 6 of 14
<PAGE>
COMPARATOR SYSTEMS CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
---------------------------
Additional Total
Number of $0.01 Paid-in Shareholders'
shares Par Value Capital Deficit Equity
----------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE @ JUNE 30TH 1993 409,213,452 4,092,135 13,726,865 (15,737,188) 2,081,812
Issuance of shares for:
Salaries 37,002,828 370,028 245,542 0 615,570
Services 12,779,683 127,797 454,640 0 582,437
Cash 23,422,368 234,224 1,718,868 0 1,953,092
Debt 19,393,157 193,932 123,954 0 317,886
Investment 5,000,000 50,000 450,000 0 500,000
Improper Issue 6,301,983 63,020 24,039 0 87,059
Net Loss for Period 0 0 0 (2,051,848) (2,051,848)
----------- ---------- ------------ ------------ -----------
BALANCE @ JUNE 30TH 1994 513,113,471 $5,131,136 $ 16,743,908 $(17,789,036) 4,086,008
Issuance of shares for:
Salaries 24,596,273 245,963 475,360 721,323
Services 5,595,749 55,957 82,339 138,296
Cash 22,971,097 229,711 369,772 599,483
Debt 797,097 7,971 6,530 14,501
Investment - - -
Stock Cancellation (2,728,984) (27,290) (24,331) (51,621)
Net Loss for Period (1,846,729) (1,846,729)
----------- ---------- ----------- ------------ -----------
BALANCE @ JUNE 30TH 1995 564,344,703 $5,643,448 $17,653,578 $(19,635,765) $ 3,661,260
Issuance of shares for:
Salaries 0
Services 6,393,333 63,933 127,867 191,800
Cash 3,200,000 32,000 64,000 96,000
Debt
Investment 7,578,661 75,786 157,574 233,360
Stock Cancellation -
Net Loss for Period (584,042) (584,042)
----------- ---------- ----------- ------------ -----------
BALANCE @ SEPT. 30TH 1995 581,516,697 $5,815,167 $18,003,019 $(20,219,807) $ 3,598,378
=========== ========== =========== ============ ===========
Issuance of shares for:
Salaries
Services 1,222,129 12,221 24,442 36,663
Cash 7,516,666 75,167 145,833 221,000
Debt 1,400,000 14,000 28,000 42,000
Investment -
Net Loss for Period (470,467) (470,467)
----------- ---------- ----------- ------------ -----------
BALANCE @ DEC. 31ST 1995 591,655,492 $5,916,554 $18,201,294 $(20,690,274) $ 3,427,574
=========== ========== =========== ============ ===========
</TABLE>
THE ACCOMANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 7 of 14
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS FISCAL YEAR
ENDED ENDED
DECEMBER 31st JUNE 30th
1995 1994 1995
--------- --------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS $(470,467) $(301,014) $(1,846,729)
--------- --------- -----------
ADJUSTMENTS TO RECONCILE NET
LOSS TO NET CASH USED IN
OPERATING ACTIVITIES
Depreciation & Amortization 66,369 65,189 390,242
Issuance of common stock for services 36,664 10,000 115,835
Issuance of common stock for salaries 0 0 721,323
Issuance of common stock for debt 42,000 0 14,501
Cancellation of common stock 0 0 (51,621)
Write off for Bad Debts/Assets 0 0 16,000
Accrued Interest on notes receivable (2,176) (2,176) (17,934)
Liabilities, officers & directors 16,821 71,506 (2,829)
CHANGES IN CYCLICLE ACCOUNTS:
Accounts receivable (85,133) (3,750) 2,447
Accounts payable 45,300 14,600 (7,115)
Accrued expenses 179,168 15,323 5,758
Sales Tax Payable 0 0 (1,476)
Accrued Payroll Taxes 0 0 (983)
Accrued Salary 25,946 40,610 61,593
Judgements & Claims & accrued interest thereon 8,088 8,103 24,372
Notes Payable & accured interest thereon 6,570 8,101 36,113
--------- --------- -----------
NET CASH USED IN OPERATING ACTIVITIES (130,850) (73,508) (540,503)
CASH FLOW FROM INVESTING ACTIVITIES
Cash paid for equipment (42,611) (5,575) (36,357)
Cash received/(paid) from/(to) deposits 9,566
--------- --------- -----------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (42,611) (5,575) (26,791)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of short term debt (44,817) 7,020
Proceeds from issuing common stock for cash 221,000 95,000 599,483
--------- --------- -----------
INCREASE/(DECREASE) IN cASH 2,721 22,937 32,189
CASH AT BEGINNING OF PERIOD 4,296 11,931 2,682
--------- --------- -----------
CASH AT END OF PERIOD $ 7,017 $ 34,868 $ 34,871
========= ========= ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 8 of 14
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS FISCAL YEAR
ENDED ENDED
DECEMBER 31st JUNE 30th
1995 1994 1995
----------- --------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS $(1,054,510) $(602,505) $(1,846,729)
----------- --------- -----------
ADJUSTMENTS TO RECONCILE NET
LOSS TO NET CASH USED IN
OPERATING ACTIVITIES
Depreciation & Amortization 132,218 130,285 390,242
Issuance of common stock for services 228,463 10,000 115,835
Issuance of common stock for salaries 0 0 721,323
Issuance of common stock for debt/investment 275,360 0 14,501
Cancellation of common stock 0 0 (51,621)
Write off for Bad Debts/Assets 0 5,300 16,000
Accrued Interest on notes receivable (4,352) (4,352) (17,934)
Liabilities, officers & directors (60,408) 141,228 (2,829)
CHANGES IN CYCLICLE ACCOUNTS:
Accounts receivable (85,532) (7,500) 2,447
Accounts payable 62,900 14,467 (7,115)
Accrued expenses 176,805 25,587 5,758
Sales Tax Payable 0 0 (1,476)
Accrued Payroll Taxes 0 0 (983)
Accrued Salary 57,020 78,190 61,593
Judgements & Claims & accrued interest thereon 16,177 9,068 24,372
Notes Payable & accured interest thereon 14,323 17,556 36,113
----------- --------- -----------
NET CASH USED IN OPERATING ACTIVITIES (241,538) (182,674) (540,503)
CASH FLOW FROM INVESTING ACTIVITIES
Cash paid for equipment (58,499) (11, 058) (36,357)
Cash received/(paid) from/(to) deposits 9,566
----------- --------- -----------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (58,499) (11,058) (26,791)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of short term debt (44,817) 7,020
Proceeds from issuing common stock for cash 317,000 218,900 599,483
----------- --------- -----------
INCREASE/(DECREASE) IN CASH (27,854) 32,186 32,189
CASH AT BEGINNING OF PERIOD 34,871 2,682 2,682
----------- --------- -----------
CASH AT END OF PERIOD $ 7,017 $ 34,868 $ 34,871
=========== ========= ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 9 of 14
<PAGE>
COMPARATOR SYSTEMS CORPORATION
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
THREE MONTHS ENDED DECEMBER 31ST 1995
1. Condensed Financial Statements
------------------------------
The condensed financial statements have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading.
It is suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto included in
the Company's Form 10-K on file with the Securities and Exchange Commission.
2. Significant accounting policies
-------------------------------
The carrying value of properties and equipment are at original cost. Other
significant accounting policies are as follows:
Property and Equipment
----------------------
Property and equipment are carried at cost. Depreciation is computed using
the straight line method over a five to seven-year life. When assets are
retired or otherwise disposed of the cost and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss
is recognized in income for the period. The cost of maintenance and repairs
is charged to expense as incurred; significant renewals and betterment are
capitalized. Deduction is made for retirements resulting from renewals or
betterments.
Patents and Licenses
--------------------
Patents and licenses are being amortized over a 17 year period using the
straight-line method and are carried at cost, less accumulated amortization.
Inventory Valuation
-------------------
Inventories are valued at the lower of cost or market on a first-in, first-
out basis.
Income Tax
----------
The Company has not provided for income taxes as, in the opinion of
management, no taxes are due except for minimal amounts applicable to
certain states. Investment tax credits are recognized when the related tax
benefits are realized.
Revenue Recognition
-------------------
The Company recognizes revenue when a machine is sold and approved by its
customer.
Net Loss per Share
------------------
Net loss per share is calculated using the weighted average number of shares
issued and outstanding. Common share equivalents and contingent shares
issuable are not considered as their effect is anti-dilutive.
Page 10 of 14
<PAGE>
<TABLE>
<CAPTION>
QUARTER ENDED FISCAL YEAR
DECEMBER 31st ENDED
1995 JUNE 30th 1994
------------- --------------
<S> <C> <C>
3. Inventories comprised the following:
------------------------------------
Raw Materials $ 30,780 $ 30,780
Work in Progress 36,179 36,179
Finished Goods 12,095 12,095
----------- ------------
Total Inventories $ 79,054 $ 79,054
=========== ============
4. Property and Equipment:
-----------------------
Equipment & Machinery $ 121,996 $ 121,996
Accum. Depreciation (97,482) (96,240)
Funiture & Fixtures 41,680 38,976
Accum. Depreciation (38,421) (38,329)
Molds & Prototypes 539,969 484,175
Accum. Depreciation (163,711) (149,054)
Vehicle 3,500 3,500
Accum. Depreciation (1,575) (1,225)
Total Assets 707,145 648,647
Total Accum. Depreciation (301,189) (284,848)
----------- ------------
Property & Equipment Net $ 405,956 $ 363,799
=========== ============
5. Patents and Licenses:
---------------------
Capitalized costs and accumulated amortization were as follows:
Original License Rights $ 225,586 $ 225,586
Patents 1989 (Green) 55,000 55,000
Patents 1989 (Froelich) 2,045,400 2,045,400
Licenses 1989 (TRI-G) 1,613,847 1,613,847
TOTAL 3,939,833 3,939,833
Less: Accum. Amortization (1,622,180) (1,506,304)
----------- -----------
Total Patents & Licenses $ 2,317,653 $ 2,433,529
=========== ===========
6. Investments:
------------
Capitalized costs were as follows:
Preferred Stock $ 250,000 $ 250,000
Valcorp Inc. 407,950 407,950
Sun Bird Tech 36,176 36,176
Interdec Corp 22,500 22,500
Wira Assets Sdn Bhd 500,000 500,000
International Financial Systems, Inc. 194,817 n/a
----------- -----------
TOTAL $ 1,411,443 $ 1,216,626
=========== ===========
</TABLE>
Page 11 of 14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE CONDENSED STATEMENT OF OPERATIONS
The following is Management's discussion and analysis of certain
significant factors which have affected the Company's earnings during the
periods included in the accompanying condensed statement of operations.
REVENUES
Revenue for the period resulted from fingerprint comparison system
operations and from sales of financial institution products by the Company's
wholly-owned subsidiary, International Financial Systems, Inc. The Company's new
software-based fingerprint comparison technology for identity verification,
which is designed both to verify a "known" person's identity, and to determine
the owner of a fingerprint presented to the system for identification is not yet
on the market, although production prototypes of the Company's new
identification systems were successfully introduced at the MILIPOL '95
Exposition in Paris in November. The Company's formal new product introduction
is scheduled for the CardTech/SecurTech Conference in Atlanta, Georgia in May
1996. The Company continues to receive assurance that the contract for a
fingerprint-secured identification card, on which it has been working for some
months with a foreign country, is proceeding toward signing and that political
developments in that country toward that end have gone favorably; the Company
nevertheless still has no absolute assurance of receiving the contract.
COSTS AND EXPENSES
Selling expenses continued to be incurred in furtherance of planned
domestic and international sales of the Company's newly-developed biometric
identification products; in furtherance of sales of newly-added computerized
time and attendance systems products; and in support of sales of credit union
and bank operating systems. Depreciation and Amortization are expensed
quarterly. Administration expenses reflect the Company's expanded operations,
and its engineering program to complete development of its new biometric
identification products. The Company now has twenty five employees and
consultants in the United States, one in Malaysia, and five in Honduras, where
the Company has established a sales and marketing subsidiary. During the
current quarter the Company recognized interest expense on unpaid notes and
judgements payable.
The Company continues to devote a major portion of the funds available to
it to the preparation for production of its latest biometric fingerprint
identity search and verification systems. The new design performs a "real-time"
scan of a finger and compares the resulting image with records stored in either
internal or remote system memory, or with a print encoded on a card, such as a
driver's license, passport, credit card, national identification card, resident
alien card, medical benefits card or welfare card. The design affords
significantly lower manufacturing costs, and permits very accurate identity
verification in less than one second, compared with up to four seconds for
earlier models.
The Company still operates on a limited budget, which situation has
continued to constrain its growth rate. Despite signed investment agreements, to
date funds promised to the Company under those agreements have not been
received. Negotiations are now underway with other sources of major financing
required to mount a full-scale sales and marketing program, and to establish
local manufacturing capability for which plans have been completed and preferred
facilities identified.
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 12 of 14
<PAGE>
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDING
----------------
There have been no changes in legal proceedings since the annual report
on Form 10-K for the year ended June 30th, 1995.
ITEM 2. CHANGES IN SECURITIES
---------------------
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not applicable
ITEM 4. SUBMISSION OF MATTERS OF A VOTE OF THE SECURITY HOLDERS
-------------------------------------------------------
Not applicable
ITEM 5. OTHER INFORMATION
-----------------
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
a. Exhibits: None
b. Reports on Form 8-K
(1) The Company filed a Current Report on Form 8-K dated August 3,
1995, with respect to the appointment of Richard E. Floegel to
the Board of Directors.
(2) The Company filed a Current Report on Form 8-K dated September
28, 1995, with respect to the acquisition of International
Financial Systems, Inc.
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 13 of 14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMPARATOR SYSTEMS CORPORATION
Date: February 8th, 1996 By: /s/ Gregory Armijo
-------------------------
Gregory Armijo
Vice President Operations
Date: February 8th, 1996 By: /s/ Robert Reed Rogers
-------------------------
Robert Reed Rogers
Chairman & Treasurer,
Chief Executive Officer
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 14 of 14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 JUN-30-1995
<PERIOD-START> OCT-01-1995 JUL-01-1994
<PERIOD-END> DEC-31-1995 JUN-30-1995
<CASH> 7,017 38,471
<SECURITIES> 0 0
<RECEIVABLES> 883,255 797,723
<ALLOWANCES> 0 0
<INVENTORY> 79,054 79,054
<CURRENT-ASSETS> 969,327 911,648
<PP&E> 405,956 363,799
<DEPRECIATION> 707,145 648,677
<TOTAL-ASSETS> 5,791,077 5,678,574
<CURRENT-LIABILITIES> 1,832,872 1,547,648
<BONDS> 0 0
0 0
0 0
<COMMON> 5,916,305 5,643,198
<OTHER-SE> (2,488,731) (1,981,938)
<TOTAL-LIABILITY-AND-EQUITY> 5,791,077 5,678,574
<SALES> 235,450 0
<TOTAL-REVENUES> 235,450 90,161
<CGS> 0 0
<TOTAL-COSTS> 306,254 121,855
<OTHER-EXPENSES> 399,663 1,815,035
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 25,501 109,030
<INCOME-PRETAX> (470,467) (1,846,729)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (470,467) (1,846,729)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (470,467) (1,846,729)
<EPS-PRIMARY> 0.001 (0.003)
<EPS-DILUTED> 0.001 (0.003)
</TABLE>
