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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 of 15(d) of the Securities
Exchange Act of 1934
For quarter ended June 30, 1996 Commission File Number 0-16397
Applied Spectrum Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Minnesota 41-1419457
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
P.O. Box 26707, St. Louis Park, Minnesota 55426
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code________________612/947-0714
Not Applicable
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(Former name, former address and former fiscal year,
if changed from last report)
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 such filing
requirements for the past 90 days.
Yes X No
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The number of shares of registrant's Common Stock, par value $.01 per share,
outstanding as of July 31, 1996, was 2,953,941.
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APPLIED SPECTRUM TECHNOLOGIES, INC.
INDEX
PAGE
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Part I. Financial Information
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
Condensed Statements of Operations for the three 3
and nine months ended June 30, 1996 and 1995
Condensed Balance Sheets of June 30, 1996 4
and September 30, 1995
Condensed Statements of Cash Flows for the 5
nine months ended June 30, 1996 and 1995
Notes to Condensed Financial Statements - 6
June 30, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 7
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Part II. Other Information 8
Signature 9
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Part 1. Financial Information
APPLIED SPECTRUM TECHNOLOGIES,INC
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
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1996 1995 1996 1995
------- ------- ------- -------
REVENUES
Net sales $ 1,000 $ 1,000 $ 3,000 $ 3,000
Sublicensing revenues 10,000 11,000 43,000 39,000
-------- -------- -------- --------
Total revenues 11,000 12,000 46,000 42,000
Cost of product sold - - - -
-------- -------- -------- --------
Gross profit 11,000 12,000 46,000 42,000
General and administrative expense 9,000 19,000 35,000 55,000
-------- -------- -------- --------
Operating profit (loss) 2,000 (7,000) 11,000 (13,000)
Interest expense - - - (2,000)
Interest income 2,000 4,000 5,000 14,000
Other income (expense) - (5,000) - (17,000)
-------- -------- -------- --------
Net profit (loss) $ 4,000 ($8,000) $ 16,000 ($18,000)
======== ======== ======== ========
Net profit (loss) per share $ 0.00 ($0.00) $0.01 ($0.01)
======== ======== ======== ========
Weighted average number of
shares outstanding 2,953,941 2,953,941 2,953,941 2,731,096
See notes to condensed financial statements
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APPLIED SPECTRUM TECHNOLOGIES,INC
CONDENSED BALANCE SHEETS
(UNAUDITED)
JUNE 30, SEPTEMBER 30,
1996 1995
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ASSETS
CURRENT ASSETS
Cash $302,000 $293,000
Other - -
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Total current assets 302,000 293,000
PROPERTY AND EQUIPMENT
Equipment at fair market value 1,000 1,000
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$303,000 $294,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $14,000 $15,000
Employee compensation and taxes withheld 2,000 5,000
Reserve for warranty costs 75,000 75,000
Accrued severance costs 62,000 62,000
Other accrued expenses - 3,000
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Total current liabilities 153,000 160,000
SHAREHOLDERS' EQUITY
Common Stock,par value $.01 per share
authorized 10,000,000 shares, issued
and outstanding - 2,953,941 30,000 30,000
Additional paid-in-capital 16,274,000 16,274,000
Accumulated deficit (16,154,000) (16,170,000)
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150,000 134,000
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$303,000 $294,000
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See notes to condensed financial statements
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APPLIED SPECTRUM TECHNOLOGIES,INC
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
JUNE 30,
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1996 1995
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OPERATING ACTIVITIES
Cash flow from (used in) operations $16,000 ($18,000)
Net cash flow from (used for)
working capital (7,000) 93,000
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Net cash from operating activities 9,000 75,000
INVESTING ACTIVITIES - -
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Net cash from investing activities - -
FINANCING ACTIVITIES
Proceeds from issuance of stock - 10,000
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Net cash from financing activities - 10,000
INCREASE (DECREASE) IN CASH 9,000 85,000
Cash beginning of period 293,000 149,000
-------- --------
CASH END OF PERIOD $302,000 $234,000
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See notes to condensed financial statements
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APPLIED SPECTRUM TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
All dollar amounts, except net loss per share, in the attached financial
statements have been rounded to the nearest $1,000.
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
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. Based on the Company's adopted "Plan of Dissolution" the condensed
financial statements which are unaudited have been prepared on a dissolution
basis. Assets have been recorded at estimated fair market value. Liabilities
have been recorded in the normal course of business. Operating results for the
nine months ended June 30, 1996 are not necessarily indicative of the results
that may be expected for the year ending September 30, 1996. For further
information, refer to the financial statements and footnotes thereto included in
the Company's annual report on Form 10-K for the year ended September 30, 1995.
NOTE B - WEIGHTED AVERAGE SHARES
Weighted average number of shares includes shares of common stock outstanding
during the period. Outstanding stock options and warrants are not included in
the loss per share calculations as they are considered anti-dilutive.
NOTE C - SIGNIFICANT EVENTS
At a Special Shareholders' Meeting on November 30, 1993, the Shareholders
approved the Plan of Dissolution. Following the Shareholder approval the
Company finalized its Agreement with HT Communications, Inc. for the sale of
assets. Payments on the asset sales have been made over a period from December
1993 to August 1995. The Company continues to collect royalties from two
technology licensing agreements which expire in December, 1996 and January,
1997.
NOTE D - OWNERSHIP
On January 20, 1995, Norwood Venture Corp. (Norwood) the Company's major
shareholder exercised warrants to 957,877 shares of common stock at a price of
$.01 per share. Following the exercise, Norwood owns 2,282,564 shares or 77.27%
of the Company.
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APPLIED SPECTRUM TECHNOLOGIES, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
All amounts in the following discussion have been rounded to the nearest $1,000.
GENERAL
The Company is operating under a Plan of Dissolution as approved by its Board of
Directors and its Shareholders.
OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 1996
REVENUES
Under the Company's Plan of Dissolution the sale of assets have not been
recognized as revenue. Revenues for fiscal 1996 consisted of $1,000 and $3,000
respectively of equipment leases and $10,000 and $43,000 respectively of
sublicensing fees. Revenues from sublicensing fees during the first nine months,
increased $4,000 from fiscal 1995 primarily because of the Company's Agreement
with HT Communications, Inc.
EXPENSES
The Company has ceased selling and research activities and all engineering,
administration and operating expenses have been charged to General and
Administrative Expense. General and Administrative expenses of $35,000 in fiscal
1996 were $20,000 less than comparable 1995 as a result of the implementation of
the dissolution plan.
INTEREST INCOME
Interest income of $5,000 in 1996 is earned on cash investments. Interest income
of $14,000 in 1995 relates primarily to interest received on the deferred
payments from the sale of assets.
OTHER EXPENSE
Other Expense of $17,000 in 1995 relates to the settlement of certain
liabilities.
CAPITAL RESOURCES AND LIQUIDITY
The implementation of the Dissolution Plan has resulted in a reduction of
liabilities of $357,000 in fiscal 1994 and an additional $43,000 in fiscal 1995.
As of June 30, 1996, the Company had cash of $302,000 and booked liabilities of
$153,000.
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Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
None
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Quarterly Report on Form 10-Q for the period
ended June 30, 1996, to be signed on its behalf by the undersigned thereunto
duly authorized.
APPLIED SPECTRUM TECHNOLOGIES, INC.
Date: August 13, 1996 Edward F. Mackay
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Chief Financial Officer and
Chief Executive Officer
/S/Edward F. Mackay
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Signature
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