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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 March 31, 1997 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 April 30, 1997, 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 3
three and six months ended March 31, 1997 and 1996
Condensed Balance Sheets of March 31, 1997 4
and September 30, 1996
Condensed Statements of Cash Flows for the 5
six months ended March 31, 1997 and 1996
Notes to Condensed Financial Statements - 6
March 31, 1997
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)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
------------------------ ------------------------
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
REVENUES
Net sales $2,000 $1,000 $4,000 $2,000
Sublicensing revenues 3,000 17,000 8,000 33,000
---------- ---------- ---------- ----------
Total revenues 5,000 18,000 12,000 35,000
Cost of product sold - - - -
---------- ---------- ---------- ----------
Gross profit 5,000 18,000 12,000 35,000
General and administrative expense 4,000 9,000 12,000 26,000
---------- ---------- ---------- ----------
Operating loss 1,000 9,000 - 9,000
Interest expense - - - -
Interest income 1,000 1,000 2,000 3,000
Other income (expense) 75,000 - 75,000 -
---------- ---------- ---------- ----------
Net profit (loss) $77,000 $10,000 $77,000 $12,000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net profit (loss) per share $0.03 $0.00 $0.03 $0.00
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average number of
shares outstanding 2,953,941 2,953,941 2,953,941 2,953,941
</TABLE>
See notes to condensed financial statements
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APPLIED SPECTRUM TECHNOLOGIES,INC
CONDENSED BALANCE SHEETS
(UNAUDITED)
MARCH 31, SEPTEMBER 30,
1997 1996
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ASSETS
CURRENT ASSETS
Cash $ 312,000 $ 308,000
Other 1,000 -
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Total current assets 313,000 308,000
PROPERTY AND EQUIPMENT
Equipment at fair market value 1,000 1,000
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$ 314,000 $ 309,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 14,000 $ 14,000
Employee compensation and taxes withheld - -
Reserve for warranty costs - 75,000
Accrued severance costs 62,000 62,000
Other accrued expenses 5,000 2,000
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Total current liabilities 81,000 153,000
SHAREHOLDERS' EQUITY
Common Stock,par value $.01 per share
authorized 10,000,000 shares, issued
and outstanding 2,953,941 30,000 30,000
Additional paid-in-capital 16,274,000 16,274,000
Accumulated deficit (16,071,000) (16,148,000)
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233,000 156,000
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$ 314,000 $ 309,000
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See notes to condensed financial statements
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APPLIED SPECTRUM TECHNOLOGIES,INC
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
MARCH 31,
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1997 1996
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OPERATING ACTIVITIES
Cash flow from (used in) operations $77,000 $12,000
Net cash flow from (used for)
working capital (73,000) -
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Net cash from (used for) operating activities 4,000 12,000
INVESTING ACTIVITIES - -
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Net cash from investing activities - -
FINANCING ACTIVITIES - -
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Net cash from financing activities - -
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INCREASE (DECREASE) IN CASH 4,000 12,000
Cash beginning of period 308,000 293,000
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CASH END OF PERIOD $312,000 $305,000
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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
six months ended March 31, 1997 are not necessarily indicative of the results
that may be expected for the year ending September 30, 1997. 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, 1996.
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 continued to collect royalties from one
technology licensing agreement through 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 SIX MONTHS ENDED MARCH 31, 1997
Revenues
Under the Company's Plan of Dissolution the sale of assets have not been
recognized as revenue. Revenues for fiscal 1997 consisted of $2,000 and $4,000
respectively of equipment leases and $3,000 and $8,000 respectively of
sublicensing fees. Revenues from sublicensing fees during the first six months,
decreased $25,000 from fiscal 1996 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 $12,000 in fiscal
1997 were $14,000 less than 1996 as a result of the continuing implementation of
the dissolution plan.
INTEREST INCOME
Interest income of $2,000 in fiscal 1997 and $3,000 in fiscal 1996 is earned on
cash investments.
Other Income
Other Income of $75,000 in 1997 results from an unneeded reserve for warranty
costs being reversed when the HT Communications, Inc licensing agreement expired
in January 1997.
CAPITAL RESOURCES AND LIQUIDITY
The implementation of the Dissolution Plan has resulted in a reduction of
liabilities of $474,000 since the implementation in fiscal 1994. As of March 31,
1997, the Company had cash of $312,000 and booked liabilities of $81,000.
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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 March 31, 1997, to be signed on its behalf by the undersigned thereunto
duly authorized.
APPLIED SPECTRUM TECHNOLOGIES, INC.
Date: August 27, 1997 Edward F. Mackay
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Chief Financial Officer and
Chief Executive Officer
/S/Edward F. Mackay
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Signature
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 March 31, 1997, to be signed on its behalf by the undersigned thereunto
duly authorized.
APPLIED SPECTRUM TECHNOLOGIES, INC.
Date: August 27, 1997
Edward F. Mackay
----------------
Chief Financial Officer and
Chief Executive Officer
Signature
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