SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______ to _______
Commission file number 0-10696
LogiMetrics, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 11-2171701
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 Orville Drive, Bohemia, New York 11716
(Address of principal executive offices)
Issuer's telephone number: (516) 784-4110
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 [ ] No [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Common Stock, par value Outstanding at March 24, 1998:
$.01 per share 25,892,414 shares
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
<PAGE>
LOGIMETRICS, INC.
INDEX
PAGE
Part I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited)
Balance Sheet - December 31, 1997................................... 3
Statements of Operations -
Six months ended December 31, 1997 and 1996 ........................ 4
Statements of Operations -
Three months ended December 31, 1997 and 1996....................... 5
Statements of Cash Flows -
Six months ended December 31, 1997 and 1996......................... 6
Notes to Consolidated Financial Statements...........................7-9
Item 2. Management's Discussion and Analysis or Plan of Operation..... 10-14
PART II - OTHER INFORMATION
Item 3. Defaults Upon Senior Securities................................ 15
Item 6. Exhibits and Reports on Form 8-K............................... 15
SIGNATURES.............................................................. 16
<PAGE>
LOGIMETRICS, INC.
CONSOLIDATED BALANCE SHEET
December 31, 1997
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 2,829,069
Accounts receivable, less allowance
for doubtful accounts of $505,875 1,618,335
Inventories (Note 2) 3,235,315
Prepaid expenses and other current
assets 48,207
---------
Total current assets 7,730,926
Equipment and fixtures (net) 616,858
Deferred financing costs 128,156
Other assets 37,012
-----------
TOTAL ASSETS $ 8,512,952
===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Accounts payable and other accrued expenses $ 3,613,321
Advance payments 900,815
Income taxes payable 491,278
Current portion of long-term debt (Note 3) 2,548,291
----------
Total current liabilities 7,553,705
Long-term debt (Note 3) 4,445,863
----------
TOTAL LIABILITIES $ 11,999,568
------------
COMMITMENTS
STOCKHOLDERS' DEFICIENCY (Note 3 and 4)
Preferred Stock:
Series A, stated value $50,000 per share;
authorized, 200 shares; issued and
outstanding, 28 shares 924,526
Common Stock:
Par value $.01; authorized,
100,000,000 shares; issued and
outstanding, 25,648,984 shares 256,490
Additional paid-in capital 4,306,468
Deficit (8,109,650)
Stock subscriptions receivable (Note 4) (864,450)
-----------
TOTAL STOCKHOLDERS' DEFICIENCY $(3,486,616
----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 8,512,952
==========
See Notes to Consolidated Financial Statements
<PAGE>
LOGIMETRICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended December 31,
1997 1996
Restated (Note 1)
Net revenues (Note 5) $ 5,312,344 $ 4,591,332
Costs and expenses:
Cost of revenues 2,844,438 4,044,004
Selling, general and
administrative expenses 2,294,488 1,704,384
Research and development 228,780 396,986
----------- ------------
Loss from operations (55,362) (1,554,042)
Interest expense 477,570 361,073
----------- ------------
Loss before income taxes (532,932) (1,915,115)
Provision for income taxes 74,714 27,091
----------- -----------
Net loss (607,646) (1,942,206)
Preferred stock dividends 100,553 110,422
----------- -----------
Net loss attributable
to common stockholders $ (708,199) $ (2,052,628)
=========== ============
Loss per common share (Note 6) $ (0.03) $ (0.09)
Weighted average number of
common shares outstanding 25,112,026 22,208,394
========== ==========
See Notes to Consolidated Financial Statements
<PAGE>
LOGIMETRICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December 31,
1997 1996
Restated (Note 1)
Net revenues (Note 5) $ 4,300,646 $ 1,774,180
Costs and expenses:
Cost of revenues 1,708,290 1,942,249
Selling, general and
administrative expenses 1,476,268 798,201
Research and development 109,321 235,646
--------- ---------
Income (loss) from operations 1,006,767 (1,201,916)
Interest expense 239,610 182,446
--------- ---------
Income (loss) before income taxes 767,157 (1,384,362)
Provision (benefit) for
income taxes 302,169 (41,780)
--------- ----------
Net income (loss) 464,988 (1,342,582)
Preferred stock dividends 59,989 55,961
--------- ----------
Net income (loss) attributable
to common stockholders $ 404,999 $ (1,398,543)
========= =============
Earnings (loss) per common
share: (Note 6)
Basic $ 0.02 $ (0.06)
Diluted $ 0.01 $ (0.06)
========= =============
Weighted average number of
common shares outstanding:
Basic 25,617,708 22,214,034
Diluted 36,922,868 22,214,034
========== ==========
See Notes to Consolidated Financial Statements
<PAGE>
LOGIMETRICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended December 31,
1997 1996
(Restated Note 1)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (607,646) $ (1,942,206)
--------- -----------
Adjustments to reconcile net loss to net
cash (used for) provided by operating activities:
Depreciation and amortization 259,152 221,182
Allowance for doubtful accounts 355,875 -
Accrued interest expense paid by
issuance of debentures 240,394 -
Increase (decrease) in cash from:
Accounts receivable 189,555 1,345,976
Costs and estimated earnings
in excess of billings on
uncompleted contracts 785,013 (33,859)
Inventories 113,721 (189,922)
Prepaid expenses and other
current assets 41,305 111,468
Accounts payable and accrued expenses (1,701,827) 791,041
Other assets/liabilities 76,145 3,489
--------- ---------
Total adjustments 359,733 2,249,375
--------- ---------
Net cash (used for) provided by
operating activities (247,913) 307,169
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and fixtures (75,654) (99,677)
---------- ---------
Net cash used for investing activities (75,654) (99,677)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt issuance - net 2,750,000 -
Proceeds from warrant issuance 567,500 943
Proceeds from sale of stock 12,500 -
Repayment of loan from stockholder - net (182,755) (185,282)
Proceeds from exercise of warrants 15,188 -
Stock subscriptions received 8,500 1,250
Repayment of debt - net (386,624) (38,512)
---------- ---------
Net cash (used for) provided by financing
activities 2,784,309 (221,601)
--------- ---------
NET INCREASE (DECREASE) IN CASH 2,460,742 (14,109)
CASH AND CASH EQUIVALENTS, beginning
of period 368,327 269,248
--------- -------
CASH AND CASH EQUIVALENTS, end of period $ 2,829,069 $ 255,139
========= =======
See Notes to Consolidated Financial Statements
<PAGE>
LLOGIMETRICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Financial Statements
The accompanying consolidated financial statements include the accounts of
LogiMetrics, Inc. ("LogiMetrics") and its wholly owned subsidiaries, mmTech,
Inc. ("mmTech") and LogiMetrics FSC, Inc. (collectively, the "Company"). All
intercompany balances and transactions have been eliminated. The consolidated
financial statements have been prepared to give retroactive effect to the
business combination with mmTech which occurred on April 25, 1997 and which has
been accounted for as a pooling of interests.
The Company's financial statements have been prepared assuming that the Company
will continue as a going concern. The independent auditors' report on the
Company's financial statements for the fiscal year ended June 30, 1997 included
an emphasis paragraph concerning the Company's ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
The balance sheet as of December 31, 1997, the statements of operations for the
six-month and three-month periods ended December 31, 1997 and 1996, and the
statements of cash flows for the six-month periods ended December 31, 1997 and
1996, are unaudited. Such unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and with the instructions to Form 10-QSB. Accordingly, they
do not include all of the information and disclosures required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments, consisting of normal recurring accruals
considered necessary for a fair presentation, have been included. Results for
the six and three months ended December 31, 1997 are not necessarily indicative
of the results that may be achieved for any other interim period or for the
fiscal year ending June 30, 1998. These statements should be read in conjunction
with the financial statements and related notes included in the Company's Annual
Report on Form 10-KSB for the year ended June 30, 1997.
2. Inventories
Inventory consists of the following at December 31, 1997:
Raw material and components $ 1,367,555
Work-in-progress 1,867,760
---------
$ 3,235,315
===========
<PAGE>
LOGIMETRICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
3. Long-Term Debt
Long-term debt consists of the following at December 31, 1997:
Notes payable to Bank $ 2,008,810
Class A Debentures 2,906,436
Class B Debentures 1,583,958
Less: Discount at issuance (457,628)
Plus: Amortization of discount 300,321
Notes payable - stockholder 440,332
Notes payable - other 45,000
Capital lease obligations 166,925
---------
Sub-total 6,994,154
Less: current portion 2,548,291
---------
Total long term debt $ 4,445,863
=========
Principal payments due on all long-term debt consist of the following:
Fiscal year ending June 30, 1998 $ 2,319,827
Fiscal year ending June 30, 1999 255,235
Fiscal year ending June 30, 2000 4,407,554
Thereafter 11,538
---------
$ 6,994,154
=========
4. Stockholders' Deficiency
Stock subscriptions receivable consists of the following at December 31, 1997:
Notes from former officers $ 154,450
Notes from two employees 675,000
Note from a director 35,000
-------
$ 864,450
=======
5. Revenue Recognition
In December 1997, CellularVision of New York, L.P. ("CVNY") entered into a
letter agreement with the Company pursuant to which CVNY agreed to pay on behalf
of CellularVision Technology & Telecommunications L.P. ("CT&T") approximately
$3.0 million of the amounts owed by CT&T . Under the terms of the letter
agreement, CVNY paid $350,000 to the Company, and delivered to the Company a
secured promissory note in the principal amount of approximately $2.6 million
(the "CVNY Note"). The debt assumed by CVNY related to equipment, substantially
all of which had been ordered by CT&T and CVNY in prior periods, and which was
being held at the Company's premises at CVNY's request. In addition, CVNY has
assumed ownership rights and risk of loss. CVNY has committed to accept delivery
of all such equipment by June 30, 1998. As of December 28, 1997, CVNY had paid
$49,500 pursuant to the CVNY Note. On December 31, 1997, the Company sold the
CVNY Note without recourse for approximately $2.4 million. The Company has
recorded approximately $3 million of sales during the second quarter related to
these transactions.
<PAGE>
LOGIMETRICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
6. Income (Loss) Per Share
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share". SFAS No.
128 specifies the computation, presentation and disclosure requirements for
earnings per share ("EPS") and became effective for both interim and annual
periods ending after December 15, 1997. In accordance with SFAS No. 128, basic
earnings per common share are computed based on the weighted-average number of
common shares outstanding during each period. The loss per share calculations
for the six month periods ended December 31, 1997 and December 31, 1996, and the
three-month period ended December 31, 1996, do not give effect to common stock
equivalents because they would have an antidilutive effect. The following table
provides a reconciliation between basic and diluted earnings per share for the
three-month period ended December 31, 1997.
Three-months ended December 31, 1997
Basic EPS Income Shares Per Share
Income available to common stockholders $ 404,999 25,617,708 0.02
Effect of Dilutive Securities
Options/Warrants $ - 11,305,160 $ (0.01)
Diluted EPS
Income available to common stockholders
plus assumed exercises $ 404,999 36,922,868 $ 0.01
The Company's (i) Series A 12% Cumulative Convertible Redeemable Preferred
Stock, stated value $50,000 per share; (ii) Class A 13% Senior Subordinated
Convertible Pay-in-Kind Debentures due July 29, 1999; and (iii) Amended and
Restated Class B 13% Senior Subordinated Convertible Pay-in-Kind Debentures due
July 29, 1999 are not included in the above table, as their inclusion would be
antidilutive.
<PAGE>
LOGIMETRICS, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Three Months Ended December 31, 1997 Compared to Three Months Ended December 31,
1996
Net revenues for the three months ended December 31, 1997 increased $2.5
million, or 142%, to $4.3 million from $1.8 million for the comparable period of
1996. The increase in revenues resulted from increased sales of Local Multipoint
Distribution Service ("LMDS") equipment. As described in Note 5 to the
accompanying consolidated financial statements, during the quarter ended
December 31, 1997, the Company recognized approximately $3.0 million in revenues
from the sale of LMDS equipment to CT&T and certain of its affiliates. Sales of
LMDS equipment to CT&T are expected to be substantially lower for the remainder
of fiscal 1998.
Cost of revenues for the three months ended December 31, 1997 decreased
$234,000, or 12%, to $1.7 million from $1.9 million for the comparable period of
1996. As a percentage of net revenues, cost of revenues was 40% for the quarter
ended December 31, 1997, compared to 109% for the quarter ended December 31,
1996. The decline in cost of revenues primarily resulted from certain production
inefficiencies during the 1996 period, as well as the completion of several
large projects during the quarter ended December 31, 1996 which had
significantly higher associated costs.
SG&A expenses for the three months ended December 31, 1997 increased $678,000,
or 85%, to $1.5 million, from $798,000 for the comparable period of 1996,
primarily as a result of increased commission expense relating to the sale of
certain LMDS equipment and the recording of a $356,000 allowance for doubtful
accounts relating to amounts owed to the Company by CT&T. As a percentage of net
revenues, SG&A expenses decreased to 34% for the quarter ended December 31, 1997
from 45% for the comparable period of 1996, primarily as a result of a higher
revenue base.
Research and development expenses for the three months ended December 31, 1997
decreased $126,000, or 54%, to $109,000 from $236,000 for the comparable period
of 1996, as a result of the Company's efforts to streamline its operations and
deploy its resources more efficiently.
For the reasons discussed above, the Company recorded operating income for the
three months ended December 31, 1997 of $1.0 million compared to a $1.2 million
operating loss for the comparable period in 1996.
Interest expense for the three months ended December 31, 1997 increased $57,000,
or 31%, to $240,000 from $183,000 for the comparable period of 1996, primarily
as a result of a higher level of average outstanding indebtedness.
During the quarter ended December 31, 1997, the Company had an income tax
expense of $302,000, compared to an income tax benefit of $42,000 for the
quarter ended December 31, 1996. The Company and mmTech currently file separate
federal and state tax returns. The tax expense recorded in the quarter ended
December 31, 1997 relates to pre-tax income generated by mmTech in that period.
During the quarters ended December 31, 1997 and 1996, the Company accrued
dividends on its outstanding preferred stock of $60,000, and $56,000,
respectively.
For the reasons discussed above, the Company recorded net income attributable to
common stockholders of $405,000 for the quarter ended December 31, 1997 compared
to a net loss attributable to common stockholders of $1.4 million for the
comparable period in 1996.
<PAGE>
LOGIMETRICS, INC.
Six Months Ended December 31, 1997 Compared to Six Months Ended December 31,
1996
Net revenues for the six months ended December 31, 1997 increased $721,000, or
16%, to $5.3 million from $4.6 million for the comparable period of 1996. The
increase in revenues for the six months ended December 31, 1997 resulted
primarily from increased sales of LMDS equipment. As described in Note 5 to the
accompanying consolidated financial statements, during the quarter ended
December 31, 1997, the Company recognized approximately $3.0 million in revenues
from the sale of LMDS equipment to CT&T and certain of its affiliates. The
increase in LMDS sales was offset in part by a decline in sales of the Company's
other products, primarily as a result of delays in shipment of certain orders,
which had the effect of delaying the recognition of revenues into later periods.
Sales of LMDS equipment to CT&T are expected to be substantially lower for the
remainder of fiscal 1998.
Cost of revenues for the six months ended December 31, 1997 decreased $1.2
million, or 30%, to $2.8 million from $4.0 million for the comparable period of
1996. As a percentage of net revenues, cost of revenues was 54% for the six
months ended December 31, 1997, compared to 88% for the six months ended
December 31, 1996. The decline in cost of revenues primarily resulted from
certain production inefficiencies during the 1996 period, as well as the
completion of several large projects during the six months ended December 31,
1996 which had significantly higher associated costs.
SG&A expenses for the six months ended December 31, 1997 increased $590,000, or
35%, to $2.3 million from $1.7 million for the comparable period of 1996,
primarily as a result of increased commission expense relating to the sale of
certain LMDS equipment and the recording of a $356,000 allowance for doubtful
accounts relating to amounts owed to the Company by CT&T. As a percentage of net
revenues, SG&A expenses increased to 43% of net revenues for the six months
ended December 31, 1997 from 37% for the comparable period of 1996 primarily as
a result of the reasons stated above.
Research and development expenses for the six months ended December 31, 1997
decreased $168,000, or 42%, to $229,000 from $397,000 for the comparable period
of 1996 as a result of the Company's efforts to streamline its operations and
deploy its resources more efficiently.
For the reasons discussed above, the Company recorded an operating loss of
$55,000 for the six months ended December 31, 1997, compared to an operating
loss of $1.6 million for the comparable period in 1996.
Interest expense for the six months ended December 31, 1997 increased $117,000,
or 32%, to $478,000 from $361,000 for the comparable period of 1996, primarily
as a result of a higher level of average outstanding indebtedness.
During the six months ended December 31, 1997, the Company had an income tax
expense of $75,000, compared to an income tax expense of $27,000 for the six
months ended December 31, 1996. The Company and mmTech currently file separate
federal and state tax returns. The tax expense recorded in the six months ended
December 31, 1997 relates to pre-tax income generated by mmTech in that period.
During the six months ended December 31, 1997 and 1996, the Company accrued
dividends on its outstanding preferred stock of $101,000, and $110,000,
respectively.
For the reasons discussed above, the Company recorded a net loss attributable to
common stockholders for the six months ended December 31, 1997 of $708,000,
compared to a net loss attributable to common stockholders of $2.1 million for
the comparable period in 1996.
<PAGE>
LOGIMETRICS, INC.
Liquidity and Capital Resources
At December 31, 1997, the Company had cash and cash equivalents of $2.8 million.
At such date, the Company had total current assets of $7.7 million and total
current liabilities of $7.6 million.
Net cash used for operating activities was $248,000 for the six months ended
December 31, 1997, compared to net cash provided by operating activities of
$307,000 for the comparable period in 1996. Net cash used for operating
activities during the six months ended December 31, 1997 resulted primarily from
a net loss of $608,000 and the repayment of $1.7 million in accounts payable,
offset in part by a $785,000 decrease in costs and estimated earnings in excess
of billings or uncompleted contracts, as well as decreases in inventory and
accounts receivable. Net cash provided by operating activities during the six
months ended December 31, 1996 resulted primarily from a $1.3 million decrease
in accounts receivable and a $791,000 increase in accounts payable, offset in
part by a net loss of $1.9 million.
Net cash used for investing activities was $76,000 for the six months ended
December 31, 1997, and $100,000 for the comparable period in 1996. Net cash used
for investing activities in each period resulted from the purchase of equipment
to support the Company's operations.
Net cash provided by financing activities was $2.8 million for the six months
ended December 31, 1997, while net cash used for financing activities was
$222,000 for the six months ended December 31, 1996. Net cash provided by
financing activities during the 1997 period resulted primarily from the proceeds
of certain debt and warrant issuances by the Company, offset in part by the
repayment of certain outstanding indebtedness as well as the repayment of loans
from a stockholder of the Company. Net cash used for financing activities during
the 1996 period resulted primarily from the repayment of certain outstanding
indebtedness.
Since January 1, 1996, the Company has raised approximately $6.1 million from
private sales of convertible debentures, convertible preferred stock and
warrants to fund a portion of its cash flow needs. To the extent that the
Company is unable to meet its working capital requirements by generating
positive cash flow from operations, the Company intends to continue to fund a
portion of its working capital requirements through the sale of its securities.
There can be no assurance that the Company can continue to finance its
operations through the sale of securities or as to the terms of any such sales
that may occur in the future. If the Company is unable to generate sufficient
cash flows from operations or other sources, the Company may not be able to
achieve its growth objectives, may have to curtail further its marketing,
development or operations, and may be unable to continue as a going concern.
The Company is a party to a Restated and Amended Term Loan Note, dated as of
April 25, 1997, and a Sixth Restated and Amended Revolving Credit Note, dated as
of April 25, 1997, pursuant to which North Fork Bank (the "Bank") has provided
the Company with a $640,000 term loan (the "Term Loan") which matures December
31, 1998 and a revolving credit facility (the "Revolver") which matures April
30, 1998, pursuant to which the Company is entitled to draw up to $2.2 million
assuming sufficient eligible inventory and accounts receivable (the Term Loan
and the Revolver are referred to herein collectively as the "Facility").
Outstanding amounts under the Facility bear interest at the rate of 2% per annum
in excess of the Bank's prime rate. At December 31, 1997, the Bank's prime rate
was 8.5%. As of February 16, 1998, the Company was in violation of a covenant
contained in the Facility requiring the Company to deliver to the Bank financial
statements for the fiscal quarter ended December 31, 1997 (the "Reporting
Requirement Covenant"). The Bank has waived the Reporting Requirement Covenant
default until April 30, 1998.
In addition to the Facility, at December 31, 1997 the Company had issued and
outstanding $2.8 million of its Class A 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due July 29, 1999 (the "Class A Debentures"), $1.5
million of its Amended and Restated Class B 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due July 29, 1999 (the "Class B Debentures") and $45,000
of its Senior Subordinated Notes (together with the Class A Debentures and the
Class B Debentures, the "Senior
<PAGE>
LOGIMETRICS, INC.
Subordinated Indebtedness"), which contain financial covenants identical to
those contained in the Facility. Accordingly, as of February 16, 1998, the
Company was in default of the Reporting Requirement Covenant to the same extent
as under the Facility. The holders of the Senior Subordinated Indebtedness have
waived the Reporting Requirement Covenant default until April 30, 1998. Pursuant
to the terms of the Class A Debentures and the Class B Debentures, the Company
is required to file a registration statement covering, among other things, the
resale of the shares of Common Stock issuable upon the conversion of the Class A
Debentures and the Class B Debentures on or prior to October 27, 1997 and to
have the registration statement declared effective by the Securities and
Exchange Commission (the "SEC") on or prior to January 25, 1998. The Company has
not yet filed the registration statement. Unless the Company complies with its
registration obligations, the interest rate on the Class A Debentures and the
Class B Debentures will increase (subject to a maximum interest rate of 17% per
annum). The holders of the Class A Debentures and the Class B Debentures have
the right to declare all amounts thereunder due and payable if the registration
statement is not declared effective by the SEC on or prior to April 25, 1998.
The holders of the Class A Debentures and the Class B Debentures have waived
until April 30, 1998 any default arising as a result of the Company's failure to
file the required registration statement, and have waived until June 30, 1998
any default arising as a result of the Company's failure to have the required
registration statement declared effective by the SEC.
At December 12, 1997, CT&T was indebted to the Company in the amount of
approximately $3.4 million, representing amounts due and owing as a result of
equipment purchased by CT&T and certain of its affiliates. In December 1997,
CVNY, an affiliate of CT&T, entered into a letter agreement with the Company
pursuant to which CVNY agreed to pay on behalf of CT&T approximately $3.0
million of the amounts owed by CT&T. Under the terms of the letter agreement,
CVNY paid $350,000 to the Company, and delivered to the Company the CVNY Note in
the principal amount of approximately $2.6 million. In December 1997, CVNY paid
the Company $50,000 pursuant to the terms of the CVNY Note. On December 31,
1997, the Company sold the CVNY Note without recourse for approximately $2.4
million. There can be no assurance that the Company will receive payment of the
remaining amounts owed to it by CT&T or as to the timing of any such payments
that are ultimately made.
The Company and mmTech currently file separate federal and state income tax
returns. As of June 30, 1997, the Company had an approximate $6.1 million net
operating loss carry forward available to be used to offset future income.
Disclosure Regarding Forward Looking Statements
Certain information contained in this Form 10-QSB contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Although the Company believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions, there can be no
assurance that its expectations will be realized. Forward-looking statements
involve known and unknown risks that may cause the Company's actual results for
future periods to differ materially from management's expectations. Future
events and actual results, financial and otherwise, could differ materially from
those set forth in or contemplated by the forward-looking statements contained
herein. Factors that could cause results to differ materially from the Company's
expectations include, but are not limited to, the following: general economic
and political conditions, as well as conditions in the markets for the Company's
products; the Company's history of losses, cash constraints and ability to
continue as a going concern; the recent shift in the Company's business focus;
the Company's dependence on and the effects of government regulation; the
Company's dependence on the LMDS market and uncertainties relating to the size
and timing of any such market that ultimately develops; the Company's dependence
on large orders and the effects of customer concentrations; the Company's
relationship with CT&T and the resulting limitations on the Company's ability to
sell certain of its products to third parties; the Company's dependence on the
sale of securities to meet its working capital needs; the Company's dependence
on future product development and market
<PAGE>
LOGIMETRICS, INC.
acceptance of the Company's products, particularly in the LMDS market; the
Company's limited proprietary technology; possible fluctuations in quarterly
results; the effects of competition; risks related to international business
operations; the Company's dependence on independent sales representatives; and
the Company's dependence on a limited number of suppliers. Other factors may be
described from time to time in the Company,s other filings with the SEC, news
releases and other communications.
Year 2000 Issue
The year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Certain computer programs
may recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activity.
Based on a recent internal assessment, the Company has determined that the cost
to modify its existing software and/or to convert to new software will not be
significant. However, if customers, suppliers or others with whom the Company
does business experience problems relating to the year 2000 issue, the Company's
business, financial condition or results of operation could be materially
adversely affected.
<PAGE>
PART II - OTHER INFORMATION
Item 3. Defaults Upon Senior Securities
For a description of certain defaults under the Company's debt securities, see
Item 2. Management's Discussion and Analysis or Plan of Operation - Liquidity
and Capital Resources.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Number Description
3.1 Certificate of Incorporation of LogiMetrics, Inc. (the "Company"), as
amended (previously filed as Exhibit 3.1 to the Company's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1997 (file no. 0-10696) and
incorporated herein by reference).
3.2 By-laws, as amended, of the Company (previously filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1997 (file no. 0-10696) and incorporated herein by reference).
4.1 Form of the Company's Class A 13% Senior Subordinated Convertible
Pay-in-Kind Debentures due July 29, 1999 (previously filed as Exhibit 4.1
to the Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1997 (file no. 0-10696) and incorporated herein by reference).
4.2 Form of the Company's Amended and Restated Class B 13% Senior Subordinated
Convertible Pay-in-Kind Debentures due July 29, 19999 (previously filed as
Exhibit 4.2 to the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1997 (file no. 0-10696) and incorporated herein by
reference).
27 Financial Data Schedule.
(b) Reports on Form 8-K:
Not applicable.
<PAGE>
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.
LOGIMETRICS, INC.
Dated: April 14, 1998 By: /s/ Erik S. Kruger
______________________________
Erik S. Kruger
Vice President
Finance and Administration and
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE REGISTRANT'S FORM 10-QSB FOR THE SIX MONTHS ENDED DECEMBER 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
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<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> JUN-30-1998
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924,526
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