<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the quarterly period ended December 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________________ to __________________
Commission file number 0-12382
Perceptronics, Inc.
----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 95-2577731
- -------------------------------------------- --------------------------------
(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
21010 Erwin Street, Woodland Hills, CA 91367
---------------------------------------------
(Address of principal executive offices)
(818)884-7470
--------------------------
(Issuer's telephone number)
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: $.001 par value, outstanding at December 31, 1997:
4,469,287
Transitional Small Business Disclosure Format (Check one):
Yes No X
----- -----
1
<PAGE>
INDEX
PERCEPTRONICS, INC. AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
(a) Consolidated condensed balance sheets, Perceptronics, Inc. and
subsidiary, December 31, 1997 and March 31, 1997.
(b) Consolidated condensed statements of income, Perceptronics, Inc.
and subsidiary, three and nine months ended December 31, 1997 and
1996.
(c) Consolidated condensed statements of cash flows, Perceptronics, Inc.
and subsidiary, nine months ended December 31, 1997 and 1996.
(d) Notes to consolidated condensed financial statements.
Item 2. Management's discussion and analysis of financial condition and
results of operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
PERCEPTRONICS, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
Dec. 31, 1997 March 31, 1997
------------- --------------
<S> <C> <C>
CURRENT ASSETS
Cash and short-term investments........... $ 134,186 $ 135,318
Restricted cash .......................... - 35,742
Receivables
Billed - Note C........................ 258,297 326,636
Unbilled - Note C ..................... 1,318,863 1,647,894
Other receivables ..................... 18,252 40,454
Inventory - Note D........................ 186,355 186,355
Prepaid expenses ......................... 126,178 221,919
----------- -----------
TOTAL CURRENT ASSETS .................. 2,042,131 2,594,318
EQUIPMENT & LEASEHOLD IMPROVEMENTS, at cost . 754,760 706,746
Less accumulated depreciation and
amortization .......................... 704,356 695,134
----------- -----------
50,404 11,612
DEFERRED SOFTWARE DEVELOPMENT
Net of Amortization of $278,097 December 31, 1997,
$271,442 March 31, 1997...................... 2,219 8,874
DEFERRED TAXES............................... 932,566 932,566
OTHER ASSETS................................. 23,715 39,045
----------- -----------
TOTAL ASSETS .......................... $ 3,051,035 $ 3,586,415
----------- -----------
----------- -----------
</TABLE>
See notes to consolidated condensed financial statements
3
<PAGE>
PERCEPTRONICS, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(continued)
<TABLE>
<CAPTION>
Dec. 31, 1997 March 31, 1997
------------- --------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion of long term debt .......... $ 39,559 $ 124,307
Short term loans payable ................... 1,144,064 1,587,569
Accounts payable ........................... 748,372 834,491
Accrued compensation ....................... 220,528 150,341
Notes to officers and directors ............ 4,000 4,000
Advance from customers...................... - 35,742
Other accrued liabilities .................. 215,165 236,730
------------ -----------
TOTAL CURRENT LIABILITIES ............... 2,371,688 2,973,180
LONG TERM DEBT
Long term debt, net of current portion...... 409,079 438,306
COMMITMENTS & CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock - par value $.001 .............. 4,469 4,469
Additional paid-in capital .................. 12,231,218 12,231,218
Retained deficit ............................ (11,965,419) (12,060,758)
------------ -----------
TOTAL SHAREHOLDERS' EQUITY................ 270,268 174,929
------------ -----------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY............................... $ 3,051,035 $ 3,586,415
------------ -----------
------------ -----------
</TABLE>
See notes to consolidated condensed financial statements
4
<PAGE>
PERCEPTRONICS, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended December 31, Ended December 31,
-------------------- --------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
TOTAL REVENUES ............................ $ 1,031,115 $ 835,884 $ 2,578,524 $ 2,057,364
COST AND EXPENSES
Cost of sales .......................... 706,653 573,504 1,752,395 1,660,704
General and administrative ............. 211,356 173,788 586,169 597,072
Research and development ............... - - - 8,402
------------ ---------- ----------- -----------
TOTAL COST AND EXPENSES ................... 918,009 747,292 2,338,565 2,266,178
INCOME (LOSS) FROM OPERATIONS............... 113,105 88,592 239,959 (208,814)
Interest expense....................... 59,075 60,742 143,470 120,389
------------ ---------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES........... 54,030 27,850 96,489 (329,203)
Income taxes........................... (449) - 1,151 -
------------ ---------- ----------- -----------
NET INCOME (LOSS)........................... $ 54,479 $ 27,850 $ 95,338 $ (329,203)
------------ ---------- ----------- -----------
------------ ---------- ----------- -----------
Basic earnings (loss) per common
share - Note F.............................. $ .01 $ .01 $ .02 $ (.08)
------------ ---------- ----------- -----------
------------ ---------- ----------- -----------
Diluted earnings (loss) per common
share - Note F.............................. $ .01 $ .01 $ .02 $ (.08)
------------ ---------- ----------- -----------
------------ ---------- ----------- -----------
Basic shares outstanding - Note F........... 4,469,287 3,863,732 4,469,287 3,863,732
------------ ---------- ----------- -----------
------------ ---------- ----------- -----------
Diluted shares outstanding - Note F......... 4,520,177 3,863,732 4,482,313 3,967,601
------------ ---------- ----------- -----------
------------ ---------- ----------- -----------
</TABLE>
See notes to consolidated condensed financial statements
5
<PAGE>
PERCEPTRONICS, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months
Ended December 31
-----------------------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)..........................., $ 95,339 $(329,203)
Non-cash items included in income:
Depreciation and amortization ............ 15,877 111,920
(Increase) decrease in:
Receivables .............................. 419,572 16,571
Inventory ................................ - 54,900
Prepaid expenses ......................... 95,741 (342,964)
Other assets ............................. 15,330 (300)
Increase (decrease) in:
Accounts payable ......................... (86,119) (141,931)
Accrued compensation ..................... 70,187 (18,677)
Other accrued liabilities ................ (21,565) 69,371
Advance from customer..................... (35,742) (268,300)
---------- ---------
NET CASH FLOWS PROVIDED (USED) BY
OPERATING ACTIVITIES .............. 568,620 (848,613)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital additions......................... (48,014) -
---------- ---------
NET CASH FLOWS (USED) BY INVESTING
ACTIVITIES......................... (48,014) -
CASH FLOWS FROM FINANCING ACTIVITIES
Net of proceeds and (payments) of export
financing ................................ (443,505) 853,012
Settlement of note payable .................. (500,000) -
Proceeds from new long term debt ............ 400,000 -
Principal payments on debt .................. (13,975) (44,621)
---------- ---------
NET CASH FLOWS (USED) BY FINANCING
ACTIVITIES................................ (557,480) 808,391
DECREASE IN CASH AND CASH EQUIVALENTS . (36,874) (40,222)
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF THE PERIOD ...... 171,060 317,778
---------- ---------
CASH AND CASH EQUIVALENTS
AT THE END OF THE PERIOD ............ $ 134,186 $ 277,556
---------- ---------
---------- ---------
CASH PAID DURING THE PERIOD
Interest .................................... $ 232,927 $ 38,580
Income taxes ................................ $ 1,151 $ -
</TABLE>
See notes to consolidated condensed financial statements
6
<PAGE>
PERCEPTRONICS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE A. UNAUDITED, CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS
The unaudited, condensed, consolidated financial statements have been prepared
in conformity with generally accepted accounting principles and include all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented. All such
adjustments are, in the opinion of management, of a normal recurring nature.
Results for the nine and three month periods ended December 31, 1997 are not
necessarily indicative of the operating results to be expected for the full
year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with general accepted accounting principles
have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-KSB for the year ended March 31, 1997.
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However, the Company has sustained substantial
operating losses in past years. In addition, the Company continues to require
substantial amounts of working capital in its operations. Further at December
31, 1997, current liabilities exceed current assets by $330,000. The Company is
continuing to have difficulty in meeting its obligations as they become due.
Payments to vendors, totaling approximately $600,000 at December 31, 1997 were
past due and a number of vendors are requiring cash in advance or on delivery
terms for goods and services. The Company's average monthly cash receipts have
been sufficient to meet current operating requirements but not sufficient to
allow the company to make satisfactory progress towards liquidating its past due
obligations. In order to conserve cash, management has reduced staff, employee
benefits, and other operating expenditures. Even if the Company overcomes its
short-term liquidity problems, the ability of the Company to successfully cut
costs and generate sufficient revenues to produce adequate positive cash flows
cannot be predicted. The Company's consolidated financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the Company to
continue as a going concern.
NOTE B. SIGNIFICANT ACCOUNTING POLICIES
Perceptronics, Inc., (the "Company") designs, develops and manufactures
computer-based simulation systems for training and decision support.
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of Perceptronics, Inc., (the "Company") and its wholly owned
subsidiary. All significant intercompany transactions and balances have been
eliminated.
CASH EQUIVALENTS: All highly liquid investments maturing in three months or
less when purchased are considered as cash equivalents.
INVENTORY: Inventory is stated at cost, which is not in excess of market. Cost
is determined principally by the first-in, first-out method.
7
<PAGE>
EQUIPMENT AND LEASEHOLD IMPROVEMENTS: Equipment and leasehold improvements are
stated at cost. Depreciation of equipment is provided for by the straight-line
method over their estimated useful lives, which range from 3 to 5 years.
Amortization of leasehold improvements is provided for by the straight-line
method over the shorter of the useful lives or the terms of the leases.
SOFTWARE DEVELOPMENT COSTS: Software development costs are stated at the
lower of cost or net realizable value. Such costs are amortized on a
product-by-product basis, commencing when a product is available for general
release to customers. The annual amortization expense is the greater of the
amount computed using the straight-line method over the remaining estimated
economic life of the product.
REVENUE RECOGNITION: All sales were recorded using the
percentage-of-completion (cost to cost) method of accounting. Under this
method, sales are recorded as costs (including general and administrative
expenses) are incurred, plus a portion of the profit expected to be realized
on each contract in the ratio that costs incurred to date bear to total
estimated cost at completion. General and administrative expenses in excess
of rates billed on contracts are recorded in the period incurred. Costs
related to anticipated future losses on contracts are accrued and charged to
expense in the period when the losses are identified.
INCOME TAXES: Provisions for federal and state income taxes are calculated
on reported financial statement income based on the current tax law. Such
provisions differ from the amounts currently payable because certain items of
income and expense, known as temporary differences, are recognized in
different tax periods for financial reporting purposes than for income tax
purposes. Deferred income taxes are the result of the recognition of tax
benefits that management expects to realize from the utilization of net
operating loss carryforwards. The amounts recorded are net of a valuation
allowance and represent management's estimate of the amount that is more
likely than not to be realized.
PER SHARE DATA: Per share data is based upon the weighted average number of
shares of common stock and dilutive common stock equivalents outstanding
using the treasury stock method.
NOTE C. RECEIVABLES
Billed receivables at March 31, 1997 and December 31, 1997 are $326,636 and
$258,297 respectively. These balances represent amounts that have been
invoiced on commercial and United States Government contracts that remain
unpaid at the end of the respective periods.
Unbilled receivables at March 31, 1997 and December 31, 1997 are $1,647,894
and $1,318,863 respectively. These balances represent amounts recognized
under the percentage-of-completion method of accounting that have not been
billed because of the billing terms of the contracts.
The amount of contract retention included in unbilled receivables was
$96,000 at March 31, 1997 and $147,424 at December 31, 1997.
NOTE D. INVENTORY
A summary of the components of inventory follows:
<TABLE>
<CAPTION> December 31, 1997 March 31, 1997
----------------- ---------------
<S> <C> <C>
Raw materials and component parts $186,355 $186,355
-------- --------
$186,355 $186,355
-------- --------
-------- --------
</TABLE>
8
<PAGE>
NOTE E - LONG TERM DEBT
Long-term debt included the following at December 31 and March 31, 1997:
<TABLE>
<CAPTION>
DEC. 31, 1997 MARCH 31, 1997
------------- --------------
<S> <C> <C>
Note Payable - Small Business Administration, secured by
Company assets, payable in monthly installments of $782
including interest at 4% per annum, due November 2004. $ 56,135 $ 60,739
Note Payable - Small Business Administration, secured by
company assets, payable in monthly installments of $278
including interest at 8% per annum, due December 1997. - 1,874
Unsecured Note Payable - Lockheed Martin Fairchild (LMF)
resulting from PGTS contract settlement. - 500,000
Note Payable - Bank guaranteed by Small Business
Administration, secured by company assets, payable
in monthly installments of $4,374 including interest
at prime rate plus 2.75 percentage points, due
November 2002. 192,503 -
Note Payable - Export customer bearing interest
at 12% annually payable monthly $2,000, principal
to be repaid by September 1999. 200,000 -
---------- ---------
448,638 562,613
Current portion of long-term notes payable 39,559 124,307
---------- ---------
$ 409,079 $ 438,306
---------- ---------
---------- ---------
</TABLE>
On September 30, 1997 the Company reached a settlement with Lockheed Martin
Fairchild to pay $500,000 to discharge an unsecured note in full including
accrued interest. The funds required to discharge the Lockheed Martin
Fairchild unsecured promissory note were obtained from other lenders. The
Company entered into a $200,000 note with a bank which is guaranteed by SBA
which bears interest at prime interest rate plus 2.75 percentage points with
principal and interest payable monthly amortizing over five years. The
Company also entered into a $200,000 note with an export customer that bears
interest at 12 percent and is to be repaid in September 1999 or possibly
earlier with proceeds from the final payment on the $1.5 million TOW PGTS
contract expected to occur by June 1998. The Company funded $100,000 of the
settlement from operating cash flow.
9
<PAGE>
Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
December 31,
<S> <C>
1998 $ 39,559
1999 240,756
2000 45,013
2001 49,751
2002 55,025
Thereafter 18,535
-----------
$ 448,638
-----------
-----------
</TABLE>
NOTE F. NET INCOME PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share"
which replaces the current methodology for calculating and presenting
earnings per share. Under SFAS No. 128, primary earnings per share will be
replaced with a presentation of basic earnings per share and fully diluted
earnings per share will be replaced with diluted earnings per share. Basic
earnings per share excludes dilution and is computed by dividing income
available to common stockholders by the weighted average number of common
shares outstanding for the period. Diluted earnings per share is computed
similarly to fully diluted earnings per share. The statement is effective
beginning in the Company's third quarter ended December 31, 1997, and
accordingly, the financial statements for the third quarter include a
restatement of historical earnings per share to conform to the requirements
of SFAS No. 128. A reconciliation of shares used to compute earnings per
share is as follows:
<TABLE>
<CAPTION>
Quarter ended Nine Months ended
December 31, December 31,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Weighted average common shares
outstanding 4,469,287 3,863,732 4,469,287 3,863,732
Dilutive stock options and warrants
based on the treasury stock method 50,890 -- 13,026 103,869
--------- --------- --------- ---------
Diluted shares 4,520,177 3,863,732 4,482,313 3,967,601
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
10
<PAGE>
Item 2. Management's discussion and analysis of financial condition and results
of operations.
GENERAL
Perceptronics , Inc., (the "Company") designs, develops and manufactures
computer-based simulation systems for training and decision support. These
systems include both hardware and software. The Company's simulators are used to
train personnel in the use of various military and commercial equipment,
including weapons, vehicles and aircraft. In the decision support area, the
Company's computer software systems are used to enhance command and control
operations, for process modeling and simulation, and for management of
concurrent engineering activities in product development and manufacturing. Much
of the Company's business is in the foreign defense industry where the Company
has built an international reputation.
RESULTS OF OPERATIONS
NET SALES. Net sales for the nine months ended December 31, 1997 increased by
$517,000 or 25% compared to the comparable nine month period in the prior
fiscal year. Sales of training simulator systems increased $649,000 or 54% as a
result of increased export sales of TOW PGTS simulator systems. Simulation
network technology sales decreased $202,000 or 26% as a result of reduced
activity on U. S. Government cost reimbursable contracts. Science technology and
software product sales increased $70,000 primarily due to a contract for design
of a medication dispenser monitoring device. Net sales for the three months
ended December 31, 1997 increased by $191,000 or 23% compared to the comparable
three month period in the prior fiscal year. Sales of training simulator systems
increased by $245,000 or 48% in the current three month period primarily the
result of an export contract for TOW PGTS simulator systems. Simulation network
technology sales decreased by $73,000 or 25% as a result of reduced activity on
U.S. Government cost reimbursable contracts. Science technology and software
product sales increased $19,000 primarily due to a contract for design of a
medication dispenser monitoring device.
COST OF SALES. Cost of sales for the nine months ended December 31, 1997
increased 6%. Cost of sales as a percentage of sales decreased to 68% for the
nine month period from 81% in the comparable nine month period in the prior
fiscal year. The decrease in cost of sales as a percentage of sales in the nine
month period resulted from the increased sales of higher margin foreign
contracts and the reduced sales of lower margin U.S. government contracts. Cost
of sales for the three months ended December 31, 1997 increased 23% consistent
with the increase in sales for the three month period discussed above. Cost of
sales as a percentage of sales during the three month period remained constant
at 69% compared to the comparable three month period in the prior fiscal year.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
decreased 2% in the nine month period and increased 22% in the three month
period compared to comparable periods in the prior fiscal year. The Company
continues to pursue cost reduction measures consistent with the level of
business as is evident by the 2% reduction for the nine month period in light of
a 25% increase in sales.
INTEREST EXPENSE. Interest expense increased 19% or $23,000 in the nine month
period ended December 31, 1997. Interest applicable to export financing
increased $90,000 as a result of higher borrowing levels during the period,
however this was substantially offset by reduced interest expense resulting from
the settlement of the unsecured note payable with Lockheed Martin Fairchild.
During the three month period ended December 31, 1997, interest expense
decreased $2,000 or 3%. Interest related to export financing increased $14,000
as a result of higher borrowing levels during the period, however this was
offset by reduced interest expense resulting from the settlement of the
unsecured note payable with Lockheed Martin Fairchild.
BACKLOG. The Company's firm contract backlog was $3.8 million at December 31,
1997, compared to $2.1 million at December 31, 1996. The term "firm contract
backlog" refers to the aggregate
11
<PAGE>
revenue remaining under contracts held by the Company and includes both
funded and unfunded amounts. Included in the December 31, 1997 backlog is a
contract with the Egyptian government for TOW PGTS training systems, $3.0
million, which was signed in July 1997. The Egyptian contract has been
audited and approved by the U. S. Government who is involved in funding the
contract. The Company is currently arranging the necessary export financing
required to perform on the contract and believes the financing will be in
place in February 1998. Because of delays in starting the contract, a
substantial portion of the Egyptian contract revenues will not be realized
during this fiscal year. All other contracts in the December 31, 1997 backlog
are funded and all contracts in the December 31, 1996 backlog were funded.
LIQUIDITY AND CAPITAL RESOURCES.
Cash balances were $134,000 at December 31, 1997, and the Company's principal
source of liquidity is cash flow generated by operations combined with the
export facilities discussed below. The Company had negative working capital of
$330,000 at December 31, 1997, compared to negative working capital of $379,000
at March 31, 1997. The Company has experienced severe liquidity problems and
continues to have difficulty in meeting its obligations as they come due. At
December 31, 1997, payments to vendors totaling $600,000 are past due and are
being liquidated as positive cash flow permits. The Company is making good
progress in reducing this balance (ie. it was $750,000 at October 31, 1997),
however the lack of sufficient working capital continues to restrict the
Company's ability to expand its revenue base. See Note A of the Notes to
Consolidated Financial Statements which is hereby incorporated herein by
reference.
The Company's short-term strategy is to increase its domestic and foreign
defense contract revenue base in order to generate sufficient cash flow from
operations and to reduce current liabilities and improve financial ratios. The
Company's long-term strategy will be to continue to focus on the development of
commercial products derived from the Company's defense related technology and
expertise in order to reduce the Company's dependence on defense contracts. The
Company's ability to pursue its long-term strategy will depend on generating
sufficient cash flow from operations to finance new product development. There
can be no assurance that this strategy will be successful. The Company is
exploring alternative sources for financing as well as potential business
combinations in order to meet the short and long-term objectives.
With respect to the current export contracts for TOW PGTS training systems, the
Company plans to utilize an export credit facility similar to export financing
used on previous export contracts. In October 1997, an export credit facility
was obtained from a commercial lender in the amount of $833,000 which is
guaranteed by the U.S. Small Business Administration (SBA). In December 1997, an
export credit facility was obtained from the same commercial lender in the
amount of $400,000 which is guaranteed by the California Export Finance Office
(CEFO). Borrowings occur on the credit facilities as work progresses on the
contract. The borrowings on these facilities bear interest at 3.0 points above
prime rate and are secured by a lien placed on the Company's general assets. The
Company presently has applied for, and expects to receive, a similar export
credit facility from the same commercial lender which would be guaranteed by SBA
and CEFO to fund the production of TOW PGTS training systems under the contract
with the government of Egypt. These borrowings are reported as short term loans
payable since repayment generally occures within twelve months.
The Company currently has a note payable with a bank which is guaranteed by SBA.
The face amount of the note is $200,000 and at December 31, 1997 the principal
balance outstanding was $193,000. The note bears interest at prime rate plus
2.75 percentage points with principal and interest payable monthly amortizing
over five years. The Company also has a note payable with an export customer
that bears interest at 12 percent annually and is to be repaid in September 1999
or possibly earlier with proceeds from the final payment of a $1.5 million TOW
PGTS contract expected to occur by June 1998. Both notes were entered into in
conjunction with the settlement of an unsecured note payable with Lockheed
Martin Fairchild, which occurred on September 30, 1997.
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
(a) The following exhibits are filed herewith:
27 Financial Data Schedules.
(b) The Registrant filed no report on Form 8-K during the
quarter ended December 31, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PERCEPTRONICS, INC.
----------------------------
Registrant
Date: February 12, 1998 /s/ ROBERT E. ANDERSON
----------------------------- ----------------------------
Robert E. Anderson
Senior Vice President Finance
(Principal Financial & Accounting
Officer)
13
<PAGE>
INDEX TO EXHIBITS
27 Financial Data Schedules - on Edgar filing only.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> DEC-31-1997
<CASH> 134,186
<SECURITIES> 0
<RECEIVABLES> 1,595,412
<ALLOWANCES> 0
<INVENTORY> 186,355
<CURRENT-ASSETS> 2,042,131
<PP&E> 754,760
<DEPRECIATION> 704,356
<TOTAL-ASSETS> 3,051,035
<CURRENT-LIABILITIES> 2,371,688
<BONDS> 409,079
0
0
<COMMON> 4,469
<OTHER-SE> 265,799
<TOTAL-LIABILITY-AND-EQUITY> 3,051,035
<SALES> 2,578,524
<TOTAL-REVENUES> 2,578,524
<CGS> 1,752,395
<TOTAL-COSTS> 2,338,565
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 143,470
<INCOME-PRETAX> 96,489
<INCOME-TAX> 1,151
<INCOME-CONTINUING> 95,338
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 95,338
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
