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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
----------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the transition period from _________________ to ____________________
Commission File Number 0-10329
AW COMPUTER SYSTEMS, INC.
-------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-1991981
-----------------------------------------------
(State or other jurisdiction of (IRS Employer Identifications No.)
incorporation or organization)
9000A Commerce Parkway, Mt. Laurel, New Jersey 08054
-----------------------------------------------------
(Address of principal executive offices)(Zip Code)
609-234-3939
------------
(Registrant's telephone number, including area code)
N/A
---
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
As of May 15, 1998, there were issued and outstanding 6,670,567 Class A Common
Shares of the Company.
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PART I
FINANCIAL INFORMATION
Item 1. Interim Financial Statements
Contents:
Consolidated Statements of Operations for three months ended March 31,
1998 and 1997.
Consolidated Statement of Assets and Liabilities in Liquidation as of
March 31, 1998.
Consolidated Statements of Cash Flow for three months ended March 31,
1998 and 1997.
Notes to Interim Consolidated Financial Statements for three months
ended March 31, 1998.
Item 2. Management's Discussion and Analysis of Plan of Operation
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AW COMPUTER SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
1 9 9 8 1 9 9 7
------- -------
Revenues $ 304,626 $ 188,854
Costs of revenues 367,069 309,606
---------- -----------
Gross (Loss) (62,443) (120,752)
---------- -----------
Selling, general, and administrative expenses 468,408 813,886
Development expense -- 18,357
Interest expense 21,455 13,117
Other (income) - net (208) (5,195)
---------- -----------
489,655 840,165
Loss before income taxes (552,098) (960,917)
Income tax (benefit) -- --
---------- -----------
Net (loss) $ (552,098) $ (960,917)
========== ===========
Basic Loss Per Share Computation:
Net (loss) $ (552,098) $ (960,917)
Preferred Stock Dividends Requirements 23,413 --
---------- -----------
Net Loss Available to Common Shareholders $ (575,511) $ (960,917)
========== ===========
Average shares outstanding 6,670,567 6,680,567
========== ===========
(Loss) Per Share $ (.09) $ (.14)
========== ===========
The accompanying notes are an integral part of the consolidation financial
statements.
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AW COMPUTER SYSTEMS, INC.
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES IN LIQUIDATION
MARCH 31, 1998
ASSETS
Current assets:
Cash and cash equivalents $ 29,991
Accounts and contract receivable, less allowance for
doubtful accounts of $12,817 23,891
Total current assets 53,882
Property and equipment, net 14,645
------
Total assets 68,527
------
LIABILITIES
Current liabilities:
Secured Notes Payable 95,448
Note Payable 773,750
Customer deposits 100,000
Accounts payable 181,263
Accrued liabilities 818,323
Accrued compensation 417,061
Redeemable Preferred Stock 913,700
Deferred Compensation Payable 181,078
-----------
Total current liabilities 3,480,623
---------
Commitments and contingent liabilities --
Net Liabilities - Liquidation Basis $(3,412,096)
===========
The accompanying notes are an integral part of the consolidation financial
statements.
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AW COMPUTER SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
1 9 9 8 1 9 9 7
------- -------
Cash flows from operating activities:
Net (loss): $ (552,098) $ (960,917)
Adjustments to reconcile net (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization -- 37,777
Decrease (increase) in:
Accounts receivable 154,935 7,556
Costs incurred and estimated earnings on
uncompleted contracts -- (12,434)
Inventories -- 1,500
Prepaid expenses 23,861 (5,748)
Increase (decrease) in:
Accounts payable 89,295 26,896
Accrued liabilities 153,498 (33,749)
Accrued cost -- --
Accrued compensation 46,263 62,500
Deferred compensation 7,500 --
Other current liabilities (25,556) 11,828
---------- -----------
Net cash (used in) operating activities (102,302) (864,791)
---------- -----------
Cash flows from investing activities:
Capital expenditures -- (4,391)
Capital disposals 25,355 --
---------- -----------
Net cash (used in) investing activities 25,355 (4,391)
---------- -----------
Cash flows from financing activities: Net borrowing
(payments):
Payments on long-term debt -- --
Payments on lease obligations -- --
Net (advances) repayments of related party loans -- --
Proceeds from issuance of common shares -- 45,050
---------- -----------
Net cash provided (used) by financing activities -- 45,050
---------- -----------
Increase (Decrease) in cash and equivalents (76,947) (824,132)
Cash and cash equivalents, beginning of year 106,938 919,621
---------- -----------
Cash and cash equivalents, end of period $ 29,991 $ 95,489
========== ===========
The accompanying notes are an integral part of the consolidated financial
statements.
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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
(UNAUDITED)
1. On May 6,1998 AW Computer Systems, Inc filed for court protection under
Chapter 11 of the Federal Bankrupcy Code. On March 10, 1998 the Company
adopted liquidation basis accounting. The accompaning consolidated
statement of assets and liabilities as March 31, 1998 has been prepared
using that basis.
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Item 2 Management's Discussion and Analysis of Plan of Operation
On May 6, 1998 AW Computer Systems, Inc., a New Jersey corporation
filed for court protection under Chapter 11 of the Federal Bankruptcy Code. As
previously reported, AW discontinued operations on March 10, 1998. The Company's
efforts to obtain long term financing had not been successful nor was the
company able to increase the sales of its products. Subsequently, the Company
has reached an agreement with the landlord to return the leased property for a
full release of all past due and future rent obligations. This agreement has
been finalized and the Company has vacated the property. The Company has sold
substantially all of its furniture and office equipment.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings - No material developments.
Item 2. Changes in Securities - None.
Item 3. Defaults Upon Senior Securities - None.
Item 4. Submission of Matters to a Vote of Security Holders - None.
Item 5. Other Information - None.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits - None.
b. Reports on Form 8-K - May 6, 1998
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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.
AW COMPUTER SYSTEMS, INC.
(REGISTRANT)
Date: July 15, 1997 \s\ Charles J. McMullin
------------- -----------------------
Charles J. McMullin
Chairman
Date: July 15, 1997 \s\ Charles F. Trapp
-------------- --------------------
Charles F. Trapp
Vice President, Finance
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial data extracted from the consolidated
balance sheet and the consolidated statement of operations and is qualified in
its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Mar-31-1998
<CASH> 29,991
<SECURITIES> 0
<RECEIVABLES> 36,708
<ALLOWANCES> 12,817
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,645
<DEPRECIATION> 0
<TOTAL-ASSETS> 68,527
<CURRENT-LIABILITIES> 2,566,923
<BONDS> 0
913,700
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 304,626
<TOTAL-REVENUES> 304,626
<CGS> 367,069
<TOTAL-COSTS> 835,477
<OTHER-EXPENSES> (208)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,455
<INCOME-PRETAX> (552,098)
<INCOME-TAX> 0
<INCOME-CONTINUING> (552,098)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (552,098)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> 0
</TABLE>
