<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT 1934
For Quarter ended March 31st, 1996
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 595,590,492 shares
Preferred Stock, $5.00 par value 0 shares
- -------------------------------- ------------------
Title of Class Number of shares
Outstanding
March 31st, 1996
Page 1 of 15
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
PART I
Financial Information
Item 1. Financial Statements:
Condensed Unaudited Balance Sheets 3 & 4
Condensed Unaudited Statement of Operations
Three Months 5
Nine Months 6
Statement of Changes of Shareholders' Equity 7
Condensed Unaudited Statement of Cash Flow
Three Months 8
Nine 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, 13
PART II Other Information 14
Signatures 15
</TABLE>
Page 2 of 15
<PAGE>
COMPARATOR SYSTEMS CORPORATION
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
NINE MONTHS FISCAL YEAR
ENDED ENDED
MARCH 31st, 1996 JUNE 30th, 1995
---------------- ---------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 4,099 $ 34,871
Accounts Receivable 939,183 797,723
Inventory 79,054 79,054
---------------- ---------------
TOTAL CURRENT ASSETS 1,022,336 911,648
---------------- ---------------
PROPERTY & EQUIPMENT NET 511,334 363,799
---------------- ---------------
PATENTS & LICENSES NET 2,259,715 2,433,529
---------------- ---------------
OTHER ASSETS
Deposits & Prepaid expenses 146,644 146,644
Prepaid Fees 406,066 507,693
Investments 1,391,455 1,216,626
Notes Receivable 72,526 72,526
Accrued Interest Receivable 32,637 26,109
---------------- ---------------
TOTAL OTHER ASSETS 2,049,328 1,969,598
---------------- ---------------
TOTAL ASSETS $5,842,713 $5,678,574
================ ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
Page 3 of 15
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED CONDENSED UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
NINE MONTHS FISCAL YEAR
ENDED ENDED
MARCH 31st,1996 JUNE 30th, 1995
--------------- ---------------
<S> <C> <C>
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 419,261 $ 241,171
Accrued Expenses 348,203 127,700
Accrued Payroll Taxes 7,790 7,790
Accrued Royalty Payable 0.00 42,000
Accrued Salary 148,878 68,291
Accrued Professional Services Payable 9,800 9,800
Judgments & Claims 308,536 323,536
Accrued Interest payable-Judgments & Claims 178,343 155,028
Notes Payable 338,125 338,125
Accrued Interest Payable on Notes 226,485 202,776
Investment Notes Payable 29,898 31,431
--------------- ---------------
TOTAL CURRENT LIABILITIES 2,015,319 1,547,648
--------------- ---------------
LIABILITIES, OFFICERS & DIRECTORS
Accounts Payable 2,141 40,317
Accrued Salaries Payable 138,703 23,158
Notes Payable 322,374 322,374
Accrued Interest Payable on Notes 107,995 83,817
--------------- ---------------
TOTAL OTHER LIABILITIES 571,213 469,666
--------------- ---------------
TOTAL LIABILITIES 2,586,532 2,017,314
--------------- ---------------
SHAREHOLDERS' EQUITY
Common stock, $0.01 par value,
750,000,000 shares authorized,
shares issued, issuable and outstanding
595,590,492 at March 31st 1996
and 564,344,703 at June 30th, 1995 5,955,655 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 18,280,243 17,653,826
Retained Earnings (Deficit) (20,979,717) (19,635,764)
--------------- ---------------
SHAREHOLDERS' EQUITY 3,256,181 3,661,260
--------------- ---------------
$ 5,842,713 $ 5,678,574
=============== ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Page 4 of 15
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS FISCAL YEAR
ENDED ENDED
MARCH 31st, JUNE 30th
1996 1995 1995
------------ ----------- ------------
<S> <C> <C> <C>
REVENUES $ 142,858 $ 17,923 $ 90,161
------------ ----------- ------------
COST & EXPENSES
Cost of sales 0 0 0
Selling expenses 181,677 31,012 121,855
Administrative expenses 142,150 187,751 1,439,763
Depreciation 25,984 7,474 34,490
Amortization 57,938 57,938 231,752
Interest expenses 24,551 25,935 109,030
------------ ----------- ------------
TOTAL COST & EXPENSES 432,300 310,110 1,936,890
LOSS BEFORE INCOME TAXES (289,442) (292,187) (1,846,729)
PROVISION FOR INCOME TAXES 0 0 0
------------ ----------- ------------
NET LOSS $(289,442) $(292,187) $(1,846,729)
------------ ----------- ------------
NET LOSS PER SHARE $ (0.0005) $ (0.0006) $ (0.0035)
------------ ----------- ------------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 594,253,952 526,087,166 525,395,100
============ =========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Page 5 of 15
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS FISCAL YEAR
ENDED ENDED
MARCH 31st JUNE 30th
1996 1995 1995
------------ ---------- ------------
<S> <C> <C> <C>
REVENUES $ 399,234 $ 36,855 $ 90,161
------------ ---------- ------------
COST & EXPENSES
Cost of sales 0 0 0
Selling expenses 538,429 92,070 121,855
Administrative expenses 913,067 567,716 1,439,763
Depreciation 42,325 21,883 34,490
Amortization 173,814 173,814 231,752
Interest expenses 75,553 76,065 109,030
------------ ----------- ------------
TOTAL COST & EXPENSES 1,743,188 931,548 1,936,890
LOSS BEFORE INCOME TAXES $(1,343,954) $ (894,693) $(1,846,729)
PROVISION FOR INCOME TAXES 0 0 0
------------ ----------- ------------
NET LOSS $(1,343,954) $ (894,693) $(1,846,729)
NET LOSS PER SHARE $ (0.0023) $ (0.0017) $ (0.0035)
------------ ----------- ------------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 586,747,687 520,204,332 525,395,100
=========== =========== ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
Page 6 of 15
<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
Issuance of shares for:
Salaries
Services
Cash 3,935,000 39,350 78,700 118,050
Debt ---
Investment ---
Net Loss for Period (289,442) (289,442)
------------ ---------- ----------- ------------ -------------
BALANCE @ MAR. 31 1996 595,590,492 $5,955,904 $18,279,994 $(20,979,716) $ 3,256,182
============ ========== =========== ============ =============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Page 7 of 15
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF CASHFLOWS
<TABLE>
<CAPTION>
THREE MONTHS FISCAL YEAR
ENDED ENDED
MARCH 31st JUNE 30th
1996 1995 1995
---------- ---------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS $(289,442) $(292,187) $ (1,846,729)
---------- --------- --------------
ADJUSTMENTS TO RECONCILE NET
LOSS TO NET CASH USED IN
OPERATING ACTIVITIES
Depreciation & Amortization 83,922 65,412 390,242
Issuance of common stock for services 0 3,000 115,835
Issuance of common stock for salaries 0 0 721,323
Issuance of common stock for debt 0 6,953 14,501
Cancellation of common stock 0 0 (51,621)
Write off for Bad Debts/Assets 0 (3,531) 16,000
Accrued Interest on notes receivable (2,176) (2,176) (17,934)
Liabilities, officers & directors 91,572 56,908 (2,829)
CHANGES IN CYCLICLE ACCOUNTS:
Accounts receivable (55,928) (3,750) (2,447)
Accounts payable 115,190 36,073 (7,115)
Accrued expenses 43,697 (21,706) 5,758
Sales Tax Payable 0 0 (1,476)
Accrued Payroll Taxes 0 0 (983)
Accrued Salary 23,567 32,343 61,593
Judgements & Claims & accrued interest thereon (7,861) 8,103 24,372
Notes Payable & accured interest thereon 7,853 2,704 36,113
------------ ---------- --------------
NET CASH USED IN OPERATING ACTIVITIES 10,394 (111,854) (540,503)
CASH FLOW FROM INVESTING ACTIVITIES
Cash paid for equipment (131,362) (13,360) (36,357)
Cash received/(paid) from/(to) deposits 9,566
------------ ---------- --------------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (131,362) (13,360) (26,791)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of short term debt
Proceeds from issuing common stock for cash 118,050 99,000 599,483
------------ ---------- --------------
INCREASE/(DECREASE) IN CASH (2,918) (26,214) 32,189
CASH AT BEGINNING OF PERIOD 7,017 34,868 2,682
------------ ---------- --------------
CASH AT END OF PERIOD $ 4,099 $ 8,654 $ 34,871
============ ========== ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Page 8 of 15
<PAGE>
COMPARATOR SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS FISCAL YEAR
ENDED ENDED
MARCH 31st JUNE 30th
1996 1995 1995
------------ ---------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS $(1,343,953) $ (894,693) $(1,846,729)
------------ ----------- ------------
ADJUSTMENTS TO RECONCILE NET
LOSS TO NET CASH USED IN
OPERATING ACTIVITIES
Depreciation & Amortization 216,139 195,697 390,242
Issuance of common stock for services 228,463 13,000 115,835
Issuance of common stock for salaries 0 110,533 721,323
Issuance of common stock for debt/investment 275,360 6,953 14,501
Cancellation of common stock 0 0 (51,621)
Write off for Bad Debts/Assets 0 1,768 16,000
Accrued Interest on notes receivable (6,528) (6,527) (17,934)
Liabilities, officers & directors 31,164 112,037 (2,829)
CHANGES IN CYCLICLE ACCOUNTS:
Accounts receivable (141,460) (11,250) 2,447
Accounts payable 178,090 50,540 (7,115)
Accrued expenses 220,501 3,881 5,758
Sales Tax Payable 0 0 (1,476)
Accrued Payroll Taxes 0 0 (983)
Accrued Salary 80,587 78,190 61,593
Judgements & Claims & accrued interest thereon 8,316 4,805 24,372
Notes Payable & accured interest thereon 22,176 42,236 36,113
----------- ---------- -----------
NET CASH USED IN OPERATING ACTIVITIES (231,145) (292,828) (540,503)
CASH FLOW FROM INVESTING ACTIVITIES
Cash paid for equipment (189,860) (26,118) (36,357)
Cash received/(paid) from/(to) deposits 9,566
----------- ---------- -----------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (189,860) (26,118) (26,791)
------------ ---------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of short term debt (44,817) 7,020
Proceeds from issuing common stock for cash 435,050 317,900 599,483
------------ ---------- -----------
INCREASE/(DECREASE) IN CASH (30,772) 5,972 32,189
CASH AT BEGINNING OF PERIOD 34,871 2,682 2,682
------------ ---------- -----------
CASH AT END OF PERIOD $ 4,099 $ 8,654 $ 34,871
============ ========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
Page 9 of 15
<PAGE>
COMPARATOR SYSTEMS CORPORATION
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31st, 1996
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 15
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<TABLE>
<CAPTION>
QUARTER ENDED FISCAL YEAR
MARCH 31st ENDED
1996 JUNE 30th 1995
--------------- ---------------
<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 (98,102) (96,240)
Funiture & Fixtures 48,994 38,976
Accum. Depreciation (38,576) (38,329)
Molds & Prototypes 664,017 484,175
Accum. Depreciation (188,744) (149,054)
Vehicle 3,500 3,500
Accum. Depreciation (1,750) (1,225)
----------- -----------
Total Assets 838,507 648,647
Total Accum. Depreciation (327,172) (284,848)
----------- -----------
Property & Equipment Net $ 511,335 $ 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 (1,680,118) (1,506,304)
----------- -----------
Total Patents & Licenses $ 2,259,715 $ 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. 174,829 n/a
----------- -----------
TOTAL $ 1,391,455 $ 1,216,626
=========== ===========
</TABLE>
Page 11 of 15
<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 primarily from sales of financial
institution operating and accounting systems to savings & loan organizations and
banks in the United States, and to cooperativas in Central America. The
Company's new 5000 Series software-based fingerprint identity verification
technology is now, after some years of research and development, ready for the
market. The Company believes that deliverable models of this product line are
functioning as planned, and meet the price and performance goals originally set
for them. The venue for the formal introduction to the world market of the 5000
Series is the CardTech/SecurTech Exhibition in Atlanta, Georgia on May 14-16,
1996. In anticipation of initiating pilot production of the 5000 Series in May
1996, the Company has to date entered into strategic marketing alliances with
three other corporations, into whose products elements of the 5000 are being
integrated. Negotiations with two foreign countries are now underway for
fingerprint-secured identification cards. Because of the size and nature of such
contracts, however, the Company has no assurance of receiving such contracts.
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 initiate production of its new biometric
identification products. The Company now has twenty nine employees and
consultants in the United States, Malaysia, and 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 ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 12 of 15
<PAGE>
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 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 accurate identity verification in about
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
major funds promised to the Company under those agreements have not been
received. Negotiations are 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; to date no agreements for such financing have been
entered into.
On Friday, May 3, 1996 the market price and the volume of sales of the
Company's common stock began a rapid rise from the 1/32 bid-1/16 asked at which
it had been trading most of the time since the Company was listed on NASDAQ in
February 1990. On May 3 the price reached a high of $0.51 on a volume of 144
million shares - a new NASDAQ trading volume record.
On May 6 the price reached a high of $1.09 on volume of 152 million shares. On
May 7 price reached a high of $1.87 on trading volume of 176 million shares. On
May 8 the stock closed at $0.57 on volume of 88 million shares. Trading was
suspended on May 9 to permit the NASD and the SEC to review the causes of the
unusual price and volume activity. That review is still proceeding as of this
date, and the suspension of trading remains in effect.
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
Page 13 of 15
<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 14 of 15
<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: May 17th, 1996 By: /s/ Gregory Armijo
------------------
Gregory Armijo
Vice President Operations
Date: May 17th, 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 15 of 15
