SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
FORM 10-K (AMENDED 6 JANUARY 1997)
ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED: JUNE 30, 1996 COMMISSION FILE NO. 0-4076
EXOTECH INCORPORATED
(Exact name of Registrant as Specified in Charter)
State or Jurisdiction of
Incorporation or Organization: DELAWARE
IRS Identification No: 54-0700888
Address of Principal Office: 8502 Dakota Drive
Gaithersburg, MD. 20877
Registrant's Telephone Number: (301) 948-3060
SECURITIES REGISTERED PURSUANT TO
SECTION 12 (b) OF THE EXCHANGE ACT
None
SECURITIES REGISTERED PURSUANT TO
SECTION 12 (g) OF THE ACT
Common Stock par value $0.10 per share.
Indicate by checkmark 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
requirement for the past 90 days.
Yes [x] No [ ]
At June 30, 1996, 942,387 shares of Common Stock were outstanding, and the
aggregate market value of the Common Stock of Exotech Inc. held by nonaffiliates
was approximately $56,750.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
<PAGE>
PART I
ITEM 1. GENERAL DESCRIPTION AND BUSINESS ACTIVITIES
A. General - There have been no changes in the organization of the
Company during the past fiscal year. The Company has been neither a party to,
nor contemplates, any actions of bankruptcy, receivership, or reorganization
during the past or current fiscal years. No material assets were acquired, no
acquisitions or dispositions are anticipated. The basic nature and conduct of
the business is expected to continue as in the past.
B. Financial information about industry segments - In the opinion of
Management, the Company has one industry segment: (1) electro-optics and
electronic instrument systems and related services.
1. Electro-optics products - The Company's principal products are: (1)
a laser bacteria colony counter used in food and drug processing and laboratory
testing environments, (2) a printed circuit board (PCIB) which interfaces the
laser-scanner instrument with many models of the personal computers, (3) a
crystallographic scanner that evaluates the lattice structure orientation of
semiconductor crystals on the basis of surface morphology measurements, (4) a
hand-held four channel-ground truth radiometer used for earth resource studies
in conjunction with the LANDSAT satellite and also independent studies, and (5)
an automated spiral plater that precisely and rapidly dispenses microbial
samples onto rotating agar plates used in laboratories performing bacterial
enumeration work.
These products are currently marketed world-wide. Spiral Biotech, Inc.
is the exclusive representative of products 1, 2 and 5. These products and
related service work have accounted for up to approximately 93 percent of the
Company's sales in the last two fiscal years. The others are sold directly by
the Company. They are built for inventory in lots of 25 units, with two or more
lots of the well established products generally being sold in about one year. It
is intended that these products will be updated periodically to keep them
abreast of new technological developments and will remain products of the
Company. In December 1994 the Company accepted a contract from Spiral Biotech,
Inc. to design an automated spiral plater (Autoplate) to replace the model that
was being imported from Holland. In May 1995 a demonstration model of the
instrument was delivered and subsequently the Company received an order for 22
production units. This production was scheduled for the first six months of
fiscal year 1996. A modulation transfer function (MTF) tester, used for quality
control in the manufacture of low light level image intensifier tubes, is not in
regular production but would be manufactured to fill customers' orders. This
instrument was initially produced for the U. S. Army and delivered during fiscal
year 1979. The Company developed an adapter assembly for these test instruments
that updates them to test the latest versions of image intensifier tubes. Over
the past fifteen years the Company has provided support to the U. S. Army and
its contractors in the form of repair maintenance and calibration services. The
contracts for these services were fixed price. There was a government contract
for these services in the past fiscal year and purchase orders for calibration
services in the current fiscal year are being received from government
contractors using five of the MTF tester systems.
The Crystallographic Scanner, developed in fiscal year 1987, redesigned
into a manufacturing model in fiscal year 1988, was put into production in 1989.
The first unit was delivered to the customer in May 1989. An active marketing
effort through correspondence and personal contacts, as well as personal
presentations, is continuing to introduce this product to semiconductor crystal
growers,
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<PAGE>
processors and manufacturers. However, there have been no sales of this
instrument over the past four years. The Company is currently engaged with the
National Institute of Standards and Technology in a cooperative R&D agreement
with the objective to calibrate the Exotech Scanner method with respect to the
Bragg Angle method of determining crystal axis orientation. Validation of our
instrument's capability vis-a-vis the X-ray methods will overcome a persistent
impediment to sales of Exotech's Scanner to producers of semiconductor wafers.
There are well-known potential customers that show continued interest in the
scanner, but must be convinced of correlation with the traditional X-ray
results.
Some of the component parts for the products discussed above are
fabricated to the Company's specifications and design. Other parts are standard
electronic or optical components available off-the-shelf. The availability of
these components is dependent upon several independent manufacturers and
distributors. Delays due to strikes, material availability or scheduling
problems could adversely affect the Company's assembly and delivery schedules. A
few parts have only one source; however, the suppliers are proven, reliable
businesses. The Company does not rely on foreign sources for raw materials,
other than to the extent U. S. manufacturers acquire their supplies overseas. An
energy crisis or fuel shortage would have no more of an adverse effect on the
Company than on other firms requiring lighting, heat and modest amounts of
electric power for offices and shops.
Among its current electro-optical products the Company holds an
exclusive license and foreign patent applications on the Crystallographic
Scanner.
There are little or no seasonal variations in the business, other than
for radiometers which tend to attract greater interest during the spring and
fall seasons.
Working capital is a continuing problem for the Company. There is
currently no working capital financing available through a financial
institution, although producer loans made by Spiral Biotech, Inc. were used to
finance colony counter production in prior fiscal years. The limited
availability of working capital results in occasional cash on delivery orders or
delays in paying suppliers. All products are guaranteed as to parts and
workmanship for a period of six months to one year. The only warranty work
incurred in the past year was repair of two Model 4000 Autoplates and a Model
200 Vacuum Source at nominal cost.
The colony counter, Autoplate, crystallographic scanner and radiometer
products are used principally in the scientific research and high technology
manufacturing communities and therefore customers tend to be concentrated in
these areas of activities.
Sales in July and August 1996 amounted to $70,300, comprising
Autoplates, radiometers, vacuum sources and miscellaneous repair and calibration
services. Backlog in this segment at June 30, 1996 was $279,000.
Business performed for the Government is on a fixed-price basis and
therefore not subject to renegotiation; however, the contracts could be
terminated for non-delivery or failure to meet specifications. There are other
manufacturers of the Company's products, most of them larger and with greater
resources available to fund development and production. Competition is very keen
for the available market. The Company strives to improve its existing products
and produce highly reliable state-of-the-art instruments.
2. General Description of Business - Research and development by the
Company in the past
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affected four products: (1) bacteria colony counters; (2) four channel
radiometers, (3) data processors for bacteria colony counters and, (4) Model
500 Crystallographic Scanners. In fiscal year 1992, the Company, in
collaboration with Spiral Biotech, Inc., engaged in development of computer
controlled, stepper motor actuated automation for bacteria colony plating and
counting instruments. The applications comprise coordinated precise motions on
as many as four axes. The purpose of this work is to enhance the technological
excellence and competitive edge of the next generation of the Company's products
for the microbiological laboratory market. This work, completed in March, 1992,
resulted in a colony counter with automated features, and a proof-of-concept and
demonstration model of a new spiral plater instrument. Total expenditures for
the spiral plater effort amounted to $63,000 of which $20,000 was funded by
Spiral Biotech, Inc. The preliminary design of the new plating instrument was
completed, and produced by Melvezi-Prolion, a development and manufacturing firm
in Holland.
Following the termination of importing of the instrument from Holland,
the Company, early in 1995, designed a replacement instrument and, concurrent
with development work, began production of 12 units on an order from Spiral
Biotech, Inc. The order was increased to 22 units in November 1995, with the
final unit of this lot shipped in February 1996. A follow-on order for 25
instruments resulted in shipments of 18 more units prior to June 30, 1996.
In the biotechnology instruments business, autoplates, colony counters
and related equipment sales accounted for 82% of the year's sales, 5% from the
MTF parts, calibration and maintenance; and 13% from miscellaneous sales and
repair work.
For the fiscal year ended June 30, 1996, as has been the case for prior
years, the Company's independent auditors' report has included an explanatory
paragraph, following the opinion paragraph, describing the existence of a going
concern uncertainty. Management has been advised that the principal cause of the
going concern uncertainty is cash flow shortage which has caused delays in
meeting some current obligations. It is the opinion of Management that progress
in resolving cash flow related problems, although elusive in the past several
years, will be re-established in fiscal year 1997 provided that modest increases
in instrument sales, and maintenance and repair work continue and that ongoing
demonstrations and trial applications of the Crystallographic Scanner result in
sales of this product. Strengthening of revenues and stringent controls of costs
are necessary to enable profits from operations to remedy cash flow problems.
The capital expenditures, earnings and competitive position have not
been affected by compliance with Federal, State or local regulations enacted to
control the discharge of materials into the environment or otherwise relating to
the protection of the environment.
The Company and its subsidiary employ five persons; two are classified
as professional and three as semi-professional. The Company did not conduct
operations in foreign countries.
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ITEM 6. SELECTED FINANCIAL DATA
Selected Income Statement Data:
<TABLE>
<CAPTION>
---------------------------------- FISCAL YEAR ---------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C>
Net Sales $367,259 $370,102 $437,330 $435,813 $432,139
Income before Taxes
& Extraordinary
Credit (152,584) (68,130) (35,448) (23,854) (73,801)
Net Income (Loss) (152,584) (68,130) (35,448) (23,854) (73,801)
Per Share:
Net Income (Loss) (.16) (.07) (.04) (.03) (.08)
</TABLE>
Selected Balance Sheet Data:
<TABLE>
<CAPTION>
---------------------------------- FISCAL YEAR ---------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C>
Current Assets $563,209 $587,808 $643,836 $597,081 $497,326
Current Liabilities 825,952 699,068 688,834 611,775 491,034
Working Capital (262,743) (111,261) (44,998) (14,694) 6,292
Total Assets 570,541 596,241 654,136 612,525 515,638
Stockholders' Equity
and Accumulated
Deficit $(255,411) $(102,827) $(34,698) 750 24,604
</TABLE>
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<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULT OF OPERATIONS.
The Company's revenues of $367,259 were 1.0% lower than in fiscal year
1995, and 16% lower than in fiscal year 1994. The declines over these years
related in part to organizational and personnel disruptions in the Company's
principal customer for biotechnology instruments, Spiral Biotech, Inc., and the
sub-par quality of an imported automated plater instrument, sold as a part of a
system including Exotech products. The Company's new product has replaced this
instrument.
Sales of platers, laser bacterial colony counters and related accessory
equipment increased to $302,700 compared to $89,800 in 1995 and $200,200 in
1994. There were no sales of radiometers nor Crystallographic Scanners, although
radiometer sales were $16,400 and $27,700 respectively in 1995 and 1994. Service
and parts sales for Modulation Transfer Function Testers were $17,350 compared
to $9,000 and $57,000 respectively in 1995 and 1994. Service and maintenance
sales for the broad range of laboratory instruments was down to $47,200 compared
to sales of $146,700 in the prior year and $85,700 in fiscal 1994.
Continued efforts to control the cost of sales resulted in an operating
profit of $1,633 compared to $2,057 in fiscal year 1995 and a loss $8,812 in
1994. However, the impact of interest and research and development costs
resulted in a net loss of $152,584 compared to losses of $68,130 and $35,448 in
1995 and 1994, respectively.
An increase in demand notes needed to sustain development of a new
automated plater instrument caused an increase in interest expense to $29,817
compared to $26,822 in the prior year, and $27,752 in fiscal 1994. A charge of
$129,000 was incurred in the past year for research and development to search
out the combination of electronic and mechanical technology needed to design and
develop a state-of-the-art instrument with strong sales potential in a highly
competitive market. In the opinion of Management, that objective was achieved
through intense effort to deliver two preproduction prototypes and 14 units of
the new instrument in the second quarter of fiscal 1996.
In the third and fourth quarter of the past year, orders for
instruments and services were increased by Spiral Biotech, Inc. bringing sales
to about the level of the prior year and increasing backlog to $279,000 at June
30, 1996, compared to $81,000 one year earlier and $45,300 at the end of fiscal
year 1994. In the opinion of Management, recent improvements in the marketing of
the biotechnology products will rejuvenate sales of the laser scanner
instruments together with increasing sales of the new automated plater.
Despite financial limitations that have impeded marketing of the
Crystallographic Scanner instruments, management believes that the results of
on-going collaborative studies and demonstrations of capabilities will improve
the prospects of sales to the potential customers who continue to show interest
in that instrument system. Furthermore, management is committed to explore the
prospects for collaborative arrangements with several well established suppliers
of manufacturing equipment to the semiconductor producer industry as a means to
generate increased exposure and sales potential for this product.
Over the past three fiscal years, as in prior years, the independent
accountants' report has included an explanatory paragraph, following the opinion
paragraph, describing the existence of a going concern uncertainty. The
accountants have advised Management that the principal cause for the going
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concern uncertainty is cash flow shortages which have caused delays in meeting
current obligations. In the opinion of Management, the past three years of
seriously depressed markets for the Company's products caused substantial
impediments to overcoming the qualification stated by the accountants. Continued
stringent control of costs and cash outlays has enabled the Company to sustain
high quality and timely upgrades of its products while nurturing improved
results from marketing efforts in a very competitive environment. With a new
product now experiencing a good level of acceptance in the market, and growth in
the Company's backlog for its other biotechnology-related products, Management
believes that increasing revenue will provide for progress in generating
sufficient cash to support operations in fiscal year 1997. Additionally, the
opportunity to build on the results of our current activity will be pursued to
reactivate sales of the Crystallographic Scanner instruments and technology.
The Company continues to meet its cash flow obligations, although at
times delayed in some cases of trade payables and payroll, with receipts from
sales and financing activities comprised of loans from the Company's President
and from Spiral Biotech, Inc., its principal customer. The loans from Spiral
Biotech are secured by ordered instruments in progress and range from 30 to 40
percent of the purchase order value for the total order. No loans are in
default. The fluctuations in accounts payable relate to the amount of
work-in-progress for products on order.
It is noted that the Company's property, plant and equipment are nearly
fully depreciated. However, all essential items of these assets are maintained
in good repair and no replacements nor additions are anticipated in the next
year or more.
The Company's management and employees continue to be committed to
reestablishing progress toward our goal of profitability.
A-7
<PAGE>
EXOTECH INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE YEARS ENDED JUNE 30
Reference is made to Note 1 of the Notes to the Consolidated Financial
Statements for a description of operations of the Company and to Note 2 for a
description of the principal accounting policies followed by the Company.
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C>
REVENUES
Contract Sales $367,259 $370,102 $437,330
COST OF SALES
Direct Cost and Overhead 364,448 363,721 441,390
General and Administrative 1,178 4,324 4,752
----- ----- -----
TOTAL COST OF SALES 365,626 368,045 446,142
------- ------- -------
OPERATING PROFIT (LOSS) 1,633 2,057 (8,812)
OTHER REVENUES
(EXPENSES)
Miscellaneous 4,600 (43,365) 1,116
R&D Costs (129,000) -- --
Interest (29,817) (26,822) (27,752)
-------- -------- --------
NET LOSS BEFORE TAXES (152,584) (68,130) (35,448)
INCOME TAXES -- -- --
-------- -------- --------
NET LOSS $(152,584) $(68,130) $(35,448)
========== ========= =========
Loss per
Common Share (.16) (.07) (.04)
Weighted average number
of common shares
outstanding 942,387 942,387 942,387
</TABLE>
The accompanying notes are an integral part of these statements.
A-8
<PAGE>
EXOTECH INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) DISCUSSION OF OPERATIONS AND REALIZATION OF ASSETS
For the fiscal year ended June 30, 1996, the Company had an operating profit of
$1,633. The Company had an operating profit of $2,057 in the prior fiscal year.
At June 30, 1996, approximately $75,000 of accounts payable were more than 30
days old.
The accompanying financial statements have been prepared on the "going concern"
basis of generally accepted accounting principles. The ability of the Company to
continue normal operations is dependent upon its ability to obtain the required
amounts of working capital to finance the existing contracts, to continue the
acquisition of additional contracts, and to pursue instrument sales at prices
sufficient to recover costs and some profits.
Inventory of Crystallographic Scanners have experienced no sales activity since
their development approximately four years ago. Efforts have recently been
intensified to develop a marketing agreement with an established marketer of
capital equipment to the crystal growers and processors, or alternatively to
sell the products, design package, software, patents and licenses to larger
manufacturers of instruments with a significant presence in the semiconductor
processing equipment market. Should those efforts fail, the company may be
forced to charge off the carrying value of approximately $243,000 against
income.
At June 30, 1996, the remaining value (backlog) of existing sales contracts were
approximately $279,000.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company is a manufacturer of Electro-optical instruments. It performs the
research and development required for those products.
Principle of Consolidation
The accompanying consolidated financial statements include the accounts of the
Company and its subsidiary, after elimination of all significant intercompany
transactions.
Revenue Accounting
The Company records revenue earned based on shipments of units of its products.
Inventory
Finished goods inventory is stated on the basis of the lower of costs (average)
or market value.
Depreciation and Amortization
The Company uses a straight-line method of depreciation and amortization for
both tax and financial reporting purposes. The following time periods are used:
DEPRECIATION:
Laboratory equipment 5 or 8 years
Office furniture and equipment 5 years
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<PAGE>
AMORTIZATION:
Leasehold improvements Life of lease
Patents 12 years
Depreciation expenses recorded in the consolidated statement of operations
are as follows: 1994 - $3,809, 1995 - $2,454, and 1996 - $1,101, including
amortization of patents at the rate of $928 in each year. The Company's
limit for capitalization of property and equipment is $500 or more.
Income Taxes
Provisions for income taxes are based on pre-tax income reported in the
financial statements, using the guidance of Financial Accounting Standards Board
Statement No. 109 (FAS #109) "Accounting for Income Taxes." Differences between
income (loss) for financial reporting purposes and tax reporting arise from (a)
the capitalization and amortization of research and development costs for income
tax reporting purposes, but deducting these costs as expenses in the period
incurred for financial statement purposes; and (b) timing differences in
deducting net losses on contracts. There were no provisions for income taxes
required in the three year period ended June 30, 1996 due to the operating
losses for each of those years.
At June 30, 1996, the Company had net operating loss carryforwards of $371,357
which begin to expire in 1997. The Company also has incurred research and
experimental expenses of $129,000 in 1996, and $54,368 in prior years that have
been capitalized to be amortized over a sixty month period for income tax
purposes, but have been expensed in the period incurred for financial statement
reporting. While the accounting standard allows companies to recognize a
deferred tax asset on the tax effect of these timing differences, the Company
has provided a valuation allowance for the full amount since it is more likely
than not the deferred tax asset will not be realized.
The approximate tax effect of the carryforward and temporary difference for the
three years ended June 30 consist of:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- ------
<S> <C>
Net operating loss carryforward $148,543 $150,545 $119,923
Deferred research and
experimental expenses 48,174 5,204 8,673
Less: Valuation allowance (196,717) (155,749) (128,596)
--------- --------- ---------
Deferred Tax Asset - net - 0 - - 0 - - 0 -
========= ========= =========
Net increase in valuation allowance $(40,968) $(27,153)
========= =========
</TABLE>
Following is a table reconciling the Company's accounting net loss for each of
the last three years ended June 30.
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
<S> <C>
Accounting Net Loss $152,584 $68,130 $35,448
Nondeductible expense (250)
Research and experimental costs:
Capitalized on tax return (129,000) - -
Tax amortization 21,574 8,674 9,874
-------- -------- --------
Taxable Net Loss $ 45,158 $ 76,554 $ 45,322
======== ======== ========
</TABLE>
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<PAGE>
Repairs and Betterments
Repairs are expensed as incurred. Betterments are capitalized and amortized over
the remaining useful life of the assets.
Accounts Receivable
Accounts receivable consist of amounts billed from sales as of June 30, 1996. In
the prior fiscal year an allowance for doubtful accounts was set up for $43,368.
This amount represents a claim for product development costs from fiscal year
ended June 30, 1994. This amount has since been written off, and there is no
allowance for doubtful accounts as of June 30, 1996, as the Company considers
accounts receivable to be fully collectible.
Cash And Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
Use of Estimates
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
(3) INVENTORY
Inventories are summarized as follows:
1996 1995
---- ----
Raw Materials $32,625 $ 32,625
Goods in Process 505,062 528,825
Finished Goods 14,000 14,000
--------- ---------
$551,687 $575,450
(4) RESEARCH AND DEVELOPMENT COSTS
The Company's accounting policy is to write off research and development costs
as incurred. In the fiscal year 1996, $129,000 of R&D costs related to the new
Autoplate 4000 product were incurred and written off. There were no R&D costs in
the prior two years.
(10) TRANSACTIONS WITH SHAREHOLDERS
Sales to a company owned by a shareholder aggregated $340,841, $335,736 and
$340,397, (about 93, 91 and 78 percent, respectively, of total sales) for the
fiscal years ended June 30, 1996, 1995 and 1994, respectively. Amounts due from
such sales at June 30, 1996 and 1995 were $11,073 and $10,932, respectively.
Sales were consummated on terms similar to those prevailing with unaffiliated
customers.
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(12) VALUATION AND QUALIFYING ACCOUNTS
The following is a schedule of Valuation and Qualifying Accounts:
<TABLE>
<CAPTION>
Additions:
Balance Charged to Balance
Beginning Costs and End of
Description of Period Expenses Deductions Period
----------- --------- -------- ---------- ------
<S> <C>
Allowance deducted from asset
to which it applies:
Allowance for Doubtful Accounts:
Year Ended June 30, 1995 $ -- 0 -- $43,368 $43,368(A) $ -- 0 --
Allowance for Depreciation:
Year Ended June 30, 1996 230,946 174 231,119
Year Ended June 30, 1995 229,420 1,526 230,946
Year Ended June 30, 1994 226,539 2,881 229,420
Allowance for Amortization
of Patents:
Year Ended June 30, 1996 6,959 928 7,887
Year Ended June 30, 1995 6,031 928 6,959
Year Ended June 30, 1994 5,103 928 6,031
</TABLE>
Note (A): Uncollected receivables written off.
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<PAGE>
Linton, Shafer & Company, P.A.
Certified Public Accountants
6 West Second Street
Frederick, MD 21701
301-663-5122
Principals: Edmond B. Gregory III, CPA, CBA
Kevin R. Hessler, CPA
Donald C. Linton, CPA, CFP
Joseph M. McCathran, CPA
Ronald W. Shafer, CPA
Consent of Certified Public Accountants
We have issued our report dated September 20, 1996, accompanying the financial
statements and schedules of Exotech, Incorporated and Subsidiary contained in
the annual report on Form 10-K of Exotech, Incorporated and Subsidiary as of
June 30, 1996 and 1995, and for the years ended June 30, 1996, 1995 and 1994. We
consent to the use of the aforementioned report in the amendments to Form 10-K,
as amended January 6, 1997.
/s/ Linton, Shafer & Company, P.A.
__________________________________
January 6, 1997
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<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
(a), (b), (e)
NAME: ROBERT G. LYLE (67)
President, CEO of the Company and
subsidiary; Director
Business experience
during past 5 years Same as above, since 1977
Other Positions: None
Other Directorships: None
NAME: JAMES G. PAULI (41)
Treasurer (2) and Director (4);
Member of Audit Committee (4)
Business experience - Managing Consultant, Leader of
during past 5 years Management Study Teams at Electronic
Data Systems, Inc., Herndon, VA
Data Systems Consultants and
Designers (1)
- Management Analyst, Price
Waterhouse Audit and Management
Consulting Firm (5)
Other Positions: None
Other Directorships: None
NAME: ANDREW WONG (43)
Secretary and Director (1); Member
of Audit Committee (1)
Business experience - Vice President, Marketing, General
during past five years Electric-Spacenet, McLean, VA (1).
Manager of Marketing Function for
Telecommunications Division.
Responsible for selling customized
private networks to businesses in
the United States and international
markets.
- Director, Business Development,
COMSAT Mobile Communications,
Bethesda, MD (4). Responsible for
identification, analysis and
implementation of mobile wireless
communications business
opportunities.
Other Positions: None
Other Directorships: Member, Board of Engineering
Advisors, Univ. of California,
Lawrence Livermore Laboratory (2)
- ----------------------
Note: All terms expire in December, 1997
c. Not applicable.
d. There are no family relationships between any of the
above listed directors and any other director or executive officer of the
Company.
f. None of the directors or executive officers have been subject
to any bankruptcy or insolvency proceedings, criminal proceedings, or
injunctions against dealing in investments during the past three years.
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<PAGE>
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS
A. No individual in management received remuneration of $100,000
or more. Officers as a group of three people received no payments except for
$3,900 in disbursements for the group health and life insurance premiums for the
Chief Executive Officer.
B. No annuity, pension or retirement benefits are proposed to be
paid to any director or officer in the event of his retirement. No remuneration
payments are proposed to be made in the future, directly or indirectly, to any
director or officer by the Company or its subsidiary pursuant to any existing
plan or arrangement.
C. There are no fees paid to directors for services in that
capacity.
D. No officer, or director of the Company: (1) received options
during the reporting period; or (2) exercised options during the reporting
period, or (3) held options as of September 1, 1996. The officers and directors
of the Company as a group did not: (1) receive options during the reporting
period, or (2) exercise options during the reporting period, or (3) hold options
as of September 1, 1996.
E. Termination of employment - the Company has no employment
termination agreements with officers or employees.
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<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 27, 1996, the information with
respect to common stock ownership of each person known by the Company to own
beneficially more than 5% of the shares of the Company's common stock, par value
$0.10 per share, and of all officers and directors as a group:
AMOUNT AND NATURE OF %
NAME AND ADDRESS BENEFICIAL OWNERSHIP CLASS
Carter C. Chinnis Of Record 90,244
303 N. Vine Street Beneficially 1,200
Richmond, VA 23220 Total 91,444 9.70
Robert G. Lyle Of Record 68,242 7.24
41957 Brightwood Lane
Leesburg, VA 22075
William T. Stephens Of Record 96,449 10.23
PO Box 1096
McLean, VA 22075
Denzil C. Pauli Of Record 204,547 21.70
13021 Bluhill Road
Aspen Hill, MD 20906
Calvin S. Koonce Of Record 102,100 10.83
6550 Rock Spring Drive
Bethesda, MD 20817
Samuel Schalkowsky Of Record 92,076 9.77
4003 Woodlawn Road
Chevy Chase, MD 20014
Current officers and directors as a group own a total of 68,242, representing
7.24% of Common Stock.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
A. 1. LIST OF FINANCIAL STATEMENTS IN PART II OF THIS REPORT.
PAGE NO.
--------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS................. 10-11
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THREE YEARS
ENDED JUNE 30, 1996............................................... 12
CONSOLIDATED BALANCE SHEETS - JUNE 30, 1996 AND 1995............... 13-14
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE
YEARS ENDED JUNE 30, 1996......................................... 15
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
INVESTMENT - FOR THE THREE YEARS ENDED JUNE 30, 1996.............. 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS......................... 17-22
Schedules other than those listed above are omitted for the reason that they are
not required or are not applicable, or the required information is shown in the
financial statements or notes thereto.
Columns omitted from schedules filed have been omitted because the information
is not applicable.
Individual financial statements of the Company are omitted because it is
primarily an operating company and the subsidiary included in the consolidated
financial statements being filed in the aggregate does not have minority equity
interests and/or indebtedness to any person other than the parent in the amounts
which together exceed 5% of the total consolidated assets at the date of the
latest balance sheet filed excepting indebtedness incurred in the ordinary
course of business which is not overdue and which matures within one year of its
creation, whether evidenced by securities or not, and indebtedness which is
collateralized by the parent by guarantee, pledge, assignment or otherwise.
A. 2. PARENT AND SUBSIDIARY
The Company has no parent. The subsidiary of the Company is:
NAME: EXOTECH RESEARCH & ANALYSIS, INC.
STATE OF INCORPORATION: DELAWARE
SECURITIES OWNED BY THE COMPANY: COMMON STOCK, 100%
The foregoing is included in the consolidated statements of the Company
and subsidiary.
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<PAGE>
A. 3. EXHIBITS
1. Exhibit No. 1 is the Restated Certificate of Incorporation of the Company
which is hereby identified as a BASIC DOCUMENT. The document was originally
filed pursuant to a Registration Statement (Form S-1) filed on November 8,
1968, and is incorporated herein by reference.
2. Exhibit No. 2 is the By-Laws of the Company as revised amended on April 16,
1971, which is hereby identified as a BASIC DOCUMENT. The document has been
filed pursuant to FORM 10-K for the fiscal year ended June 30, 1971, and is
incorporated herein by reference.
3. Exhibit No. 3 is a specimen copy of a certificate for the Company's
common stock, par value $.10 per share, which is hereby identified as a BASIC
DOCUMENT. The specimen was filed pursuant to a Registration Statement (form
S-1) filed on November 8, 1968, and is incorporated herein by reference.
(a) Exhibit No. 3a is a specimen copy of a certificate for the
Company's common stock, par value $.10 per share, reprinted due to
exhaustion of the initial supply. This specimen copy was identified as
a BASIC DOCUMENT. This exhibit was filed with Form 8 for the fiscal
year ended June 30, 1975, and is incorporated herein by reference.
4. Exhibit No. 4 is a CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
- - EXOTECH SYSTEMS, INC. changing its name to EXOTECH RESEARCH AND ANALYSIS,
INC. certified by the Secretary of the State of Delaware on the 12th day of
August 1975, which is identified as a BASIC DOCUMENT. The document was
originally filed with the Form 10-K for the fiscal year ended June 30, 1976, and
is incorporated herein by reference.
5. Exhibit No. 5 hereto is a CERTIFICATE OF OWNERSHIP AND MERGER merging
EXO-REALTY, INC. into EXOTECH INCORPORATED, certified by the Secretary of
State, State of Delaware on the 28th day of June, 1976, which is identified
as a BASIC DOCUMENT. The document was originally filed with the Form 10-K
for the fiscal year ended June 30, 1976, and is incorporated herein by
reference.
B. No Form 8-K reports were filed in the fiscal year covered in this report.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Act of
1934, the Company has duly caused this amended Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
January 7, 1997 BY: /s/ Robert G. Lyle
_______________ ___________________________________________
DATE ROBERT G. LYLE, CHIEF EXECUTIVE OFFICER,
PRINCIPAL ACCOUNTING OFFICER AND DIRECTOR
January 7, 1997 BY: /s/ James G. Pauli
_______________ ___________________________________________
DATE JAMES G. PAULI, TREASURER AND DIRECTOR
January 7, 1997 BY: /s/ Andrew Wong
_______________ ___________________________________________
DATE ANDREW WONG, SECRETARY & DIRECTOR
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