<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
OR
[ ] 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 0-11365
LASER PHOTONICS, INC.
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN IT'S CHARTER)
DELAWARE 59-2058100
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
12351 RESEARCH PARKWAY, ORLANDO, FLORIDA 32826
- ---------------------------------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (407) 281-4103
N/A
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(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL DOCUMENTS AND
REPORTS REQUIRED TO BE FILED BY SECTION 12, 13, OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT.
YES X NO
--- ---
AS OF MARCH 31, 1997, 6,191,592 SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, WERE OUTSTANDING.
<PAGE> 2
INDEX
Page
Number
------
PART I FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets 3
as of March 31, 1997 and December 31, 1996
Condensed Consolidated Statements of Operations for the 4
Three Months ended March 31, 1997 and 1996
Condensed Consolidated Statements of Cash Flow for the 5
Three Months ended March 31, 1997 and 1996
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis 7
of Financial Condition and Results of Operations
PART II OTHER INFORMATION
Exhibits and Reports of Form 8-K 8
Signatures 9
2
<PAGE> 3
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
Laser Photonics, Inc. and Subsidiaries
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS MARCH 31, 1997 December 31, 1996*
- ------ -------------- ------------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS
Accounts receivable, net $ 381,551 $ 383,435
Inventory 881,649 891,011
Prepaid expenses and other assets 0 7,722
----------- -----------
TOTAL CURRENT ASSETS 1,263,200 1,282,168
PROPERTY, PLANT AND EQUIPMENT 706,450 684,224
Less accumulated depreciation and amortization (430,611) (389,382)
----------- -----------
NET PROPERTY, PLANT AND EQUIPMENT 275,839 294,842
OTHER ASSETS
Other 99,728 102,333
Goodwill, net 1,385,718 1,515,739
----------- -----------
TOTAL OTHER ASSETS 1,485,446 1,618,072
----------- -----------
TOTAL ASSETS $ 3,024,485 $ 3,195,082
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes Payable - Current portion $ 722,073 $ 696,453
Accounts Payable 889,133 698,286
Accrued payroll and related expenses 818,875 670,481
Other Accrued liabilities 681,130 945,791
----------- -----------
TOTAL CURRENT LIABILITIES 3,111,211 3,011,011
DUE TO RELATED PARTY 2,056,708 1,991,440
NOTES PAYABLE, LESS CURRENT PORTION 282,559 282,559
SHAREHOLDERS' EQUITY (DEFICIT)
Common stock 61,926 61,626
Additional paid-in-capital 5,369,303 5,330,228
Accumulated Deficit (7,857,222) (7,481,782)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (2,425,993) (2,089,928)
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,024,485 $ 3,195,082
=========== ===========
</TABLE>
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* Condensed from audited financial statements.
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
<PAGE> 4
Condensed Consolidated Statements of Operations
Laser Photonics, Inc. and Subsidiaries
<TABLE>
<CAPTION>
Three months ended
-----------------------------------
MARCH 31, 1997 March 31, 1996
-------------- --------------
(UNAUDITED) (unaudited)
<S> <C> <C>
SALES $ 937,368 $ 607,380
COSTS AND EXPENSES
Cost of Sales 649,313 429,572
Selling, General & Administrative 226,445 705,751
Research & Development 132,541 66,586
Depreciation and Amortization 173,854 236,760
----------- -----------
LOSS FROM OPERATIONS (244,785) (831,289)
Interest Expense 93,294 15,506
Other expenses (income), net 37,359 58,942
----------- -----------
NET LOSS $ (375,438) $ (905,737)
=========== ===========
LOSS PER SHARE $ (0.06) $ (0.16)
=========== ===========
Weighted Average Shares 6,172,591 5,434,342
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
<PAGE> 5
Condensed Consolidated Statements of Cash Flows
Laser Photonics, Inc.
<TABLE>
<CAPTION>
Three months ended
-------------------------------
March 31, 1997 March 31, 1996
-------------- --------------
(Unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(375,439) $(905,737)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and Amortization 173,854 343,577
Stock issued to pay legal fees 39,375
Changes in operating assets and liabilities:
Current assets 18,968 (97,756)
Current liabilities 100,200 (186,642)
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (43,042) (846,558)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (22,226) (10,000)
Advances from related parties 65,268 395,850
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NET CASH PROVIDED BY INVESTING ACTIVITIES 43,042 385,850
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 0 421,039
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NET CASH PROVIDED BY FINANCING ACTIVITIES 0 421,039
--------- ---------
NET INCREASE (DECREASE) IN CASH 0 (39,669)
CASH AND CASH EQUIVALENTS, beginning of period 0 61,087
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 0 $ 21,418
========= =========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
<PAGE> 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
LASER PHOTONICS, INC. AND SUBSIDIARIES
March 31, 1997
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheets as of March 31, 1997 and December 31,
1996, and the related condensed consolidated statements of operations and cash
flow for the three months ended March 31, 1997 and 1996 have been prepared by
the Company, without audit. In the opinion of management, the condensed
consolidated financial statements contain all adjustments, consisting of normal
recurring accruals, necessary to present fairly the financial position of Laser
Photonics, Inc. and subsidiaries as of March 31, 1997 and the results of their
operations and cash flows for the three months ended March 31, 1997 and 1996.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally 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 report on Form
10-K for the year ended December 31, 1996.
Certain reclassifications have been made to the prior year's condensed
consolidated financial statements to conform with the current presentation. Such
reclassifications had no effect on net loss.
2. INVENTORIES
Inventories consist of the following:
March 31, December 31,
1997 1996
--------- ------------
Raw Materials $461,984 $310,121
Work in Process $326,210 $456,330
Finished Goods $ 93,455 $124,560
-------- --------
TOTAL INVENTORY $881,649 $891,011
======== ========
6
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Sales for the three months ended March 31, 1997 increased 54% to $937,368 over
the $607,380 reported for the three months ended March 31, 1996. The primary
reason for the increase was improvement in sales of the Laser Analytics
subsidiary.
Gross margin increased by $110,247 for the three months ended March 31, 1997
primarily due to the increase in sales.
The Company's net loss improved by $530,298 to $375,438 for the three months
ended March 31, 1997 compared to $905,737 for the three months ended March 31,
1996. In addition to the increase in gross margin, improvement in the net loss
was due to a $357,811 reduction in expenditures in the Acculase subsidiary. The
reduction in expenditures was due to a lack of needed capital to fund research
and development. (Acculase is a development stage enterprise developing
applications for excimer lasers.)
Liquidity and Capital Resources
For the period ending March 31, 1997 the Company had cash and cash equivalents
of zero dollars representing a continuation from December 31, 1996. This was the
result of the continued paydown of debt, and cash used in excess of cash
provided by operating activities.
Capital expenditures in the first quarter of 1997 of $22,226 were due to the
relocation of the Massachusetts facility to a new location as of January 1,
1997. The expenditures consisted of leasehold improvements and new machinery and
equipment.
Funding from intercompany balances was due to AccuLase's debt to Helionetics.
$50,000 of the increased intercompany balance was due to interest accrued at a
10% annual rate on the Helionetics note.
The Company failed to make timely payments of certain federal and state payroll
and withholding taxes during the periods of 1996 and 1997. During September
1997, all federal taxes except those for the quarters ended June 30, 1996 and
September 30, 1996, were paid in full.
The Company will continue to have difficulty funding its current debt amounts
from its current cash flow, due to the minimum cash required to purchase the
inventory needed to reduce the sales backlog.
Subsequent Events
On August 19, 1997, the Company's AccuLase subsidiary executed a series of
agreements with Baxter Healthcare Corporation. See the Company's report on Form
10-K for the year ended December 31, 1996 for a complete discussion of the these
agreements.
In September, 1997, the Company privately sold a total of 579,500 shares of its
common stock in a private placement to 20 accredited investors at a price of
$1.25 per share. These funds were used in part to pay outside auditors in order
to complete the Company's audit, to make partial payments on delinquent Federal
and State taxes outstanding, and to make payments on other outstanding bills.
Additionally, 170,500 shares have been subscribed to, payment to be made upon
the Company's request.
During September 1997, the Company entered into agreements with Pennsylvania
Merchant Group Ltd., an investment banking and venture capital firm, to provide
investment banking advice and to be the Company's exclusive placement agent in
connection with raising $6.0 million to $8.0 million, with closing anticipated
to occur in November 1997.
7
<PAGE> 8
PART II. OTHER INFORMATION
Item 1 Legal Proceedings: See December 31, 1996 10-K
Item 2 Changes in Securities None
Item 3 Defaults Upon Senior Securities None
Item 4 Submission of Matters to Vote of
Security Holders None
Item 5 Other Information None
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K None
8
<PAGE> 9
SIGNATURES TO FORM 10-Q
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
LASER PHOTONICS, INC.
(Registrant)
Date: October 16, 1997 By: /s/ Steve Qualls
-----------------------
Steve Qualls
Chief Executive Officer
Date: October 16, 1997 By: /s/ Robert Gibson
-----------------------
Robert Gibson
Controller
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 381,551
<ALLOWANCES> 0
<INVENTORY> 881,649
<CURRENT-ASSETS> 1,263,200
<PP&E> 706,450
<DEPRECIATION> 430,611
<TOTAL-ASSETS> 3,024,485
<CURRENT-LIABILITIES> 3,111,211
<BONDS> 0
0
0
<COMMON> 61,926
<OTHER-SE> (2,487,919)
<TOTAL-LIABILITY-AND-EQUITY> 3,024,485
<SALES> 937,368
<TOTAL-REVENUES> 937,368
<CGS> 649,313
<TOTAL-COSTS> 649,313
<OTHER-EXPENSES> 532,840
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 93,294
<INCOME-PRETAX> (375,438)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (375,438)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> 0
</TABLE>
