<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 JUNE 30, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 0-11365
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LASER PHOTONICS, INC.
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(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
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (407) 281-4103
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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
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AS OF JUNE 30, 1997, 6,266,595 SHARES OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, WERE OUTSTANDING.
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INDEX
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<TABLE>
<CAPTION>
Page
Number
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<S> <C>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets 3
as of June 30, 1997 and December 31, 1996
Condensed Consolidated Statements of Operations for the 4
Six Months and Three Months ended June 30, 1997 and 1996
Condensed Consolidated Statements of Cash Flow for the
Six Months ended June 30, 1997 and 1996
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
PART II OTHER INFORMATION
Exhibits and Reports of Form 8-K 8
Signatures 9
</TABLE>
2
<PAGE> 3
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
Laser Photonics, Inc. and Subsidiaries
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<TABLE>
<CAPTION>
ASSETS JUNE 30, 1997 December 31, 1996*
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(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS
Accounts receivable, net $ 392,875 $ 383,435
Inventory 895,369 891,011
Prepaid expenses and other assets 33,334 7,722
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TOTAL CURRENT ASSETS 1,321,578 1,282,168
PROPERTY, PLANT AND EQUIPMENT 706,450 684,224
Less accumulated depreciation and amortization (468,424) (389,382)
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NET FIXED ASSETS 238,026 294,842
OTHER ASSETS
Other 97,640 102,333
Goodwill, net 1,255,797 1,515,739
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TOTAL OTHER ASSETS 1,353,437 1,618,072
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TOTAL ASSETS $ 2,913,041 $ 3,195,082
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LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes Payable - current portion $ 688,125 $ 696,453
Accounts Payable 1,032,074 698,286
Accrued payroll and related expenses 938,652 670,481
Other accrued liabilities 554,372 945,791
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TOTAL CURRENT LIABILITIES 3,213,223 3,011,011
DUE TO RELATED PARTY 2,136,708 1,991,440
NOTES PAYABLE, LESS CURRENT PORTION 282,559 282,559
SHAREHOLDERS' EQUITY (DEBT)
Common stock 62,676 61,626
Additional paid-in-capital 5,627,751 5,330,228
Accumulated Deficit (8,409,876) (7,481,782)
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TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (2,719,449) (2,089,928)
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,913,041 $ 3,195,082
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</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>
Six months ended Three months ended
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JUNE 30, 1997 June 30, 1996 JUNE 30, 1997 June 30, 1996
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(UNAUDITED) (Unaudited) (UNAUDITED) (Unaudited)
<S> <C> <C> <C> <C>
SALES $ 1,673,577 $ 1,382,314 $ 736,209 $ 774,934
COSTS AND EXPENSES
Cost of Sales 1,094,451 1,014,858 445,138 585,286
Selling, General & Administrative 682,170 1,073,927 455,725 368,176
Research & Development 221,849 148,349 89,308 81,763
Depreciation and Amortization 343,677 473,548 169,823 236,788
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LOSS FROM OPERATIONS (668,570) (1,328,368) (423,785) (497,079)
Interest Expense 182,922 63,921 89,628 48,415
Other expenses (income), net 76,600 20,241 39,241 (38,701)
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NET LOSS $ (928,092) $(1,412,530) $ (552,654) $ (506,793)
=========== =========== =========== ===========
LOSS PER SHARE $ (0.15) $ (0.26) $ (0.09) $ (0.09)
=========== =========== =========== ===========
Weighted Average Shares 6,195,405 5,341,682 6,217,968 5,538,583
=========== =========== =========== ===========
</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. and Subsidiaries
<TABLE>
<CAPTION>
Six months ended
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JUNE 30, 1997 June 30, 1996
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(UNAUDITED) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (928,092) $(1,412,530)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and Amortization 343,677 601,032
Stock issued to pay legal fees 39,375 --
Bad debt expense related to Related Party 259,196 --
receivable
Changes in operating assets and liabilities:
Current assets (39,410) 110,170
Current liabilities 202,212 (305,252)
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NET CASH USED IN OPERATING ACTIVITIES (123,042) (1,006,580)
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CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (22,226) (5,725)
Advances from related parties 145,268 511,935
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NET CASH PROVIDED BY INVESTING ACTIVITIES 123,042 506,210
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options 0 525,282
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NET CASH PROVIDED BY FINANCING ACTIVITIES 0 525,282
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NET INCREASE (DECREASE) IN CASH 0 24,912
CASH AND CASH EQUIVALENTS, beginning of period 0 61,087
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CASH AND CASH EQUIVALENTS, end of period $ 0 $ 85,999
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</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
June 30, 1997
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheets as of June 30, 1997 and December 31,
1996, and the related condensed consolidated statements of operations and cash
flows for the three months and six months ended June 30, 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 June 30, 1997 and the results of
their operations and cash flows for the three months and six months ended June
30, 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:
June 30, December 31,
1997 1996
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Raw Materials $479,022 $310,121
Work in Process $309,978 $456,330
Finished Goods $106,369 $124,560
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$895,369 $891,011
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6
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Sales for the six months ended June 30 ,1997 increased by 21% to $1,673,577 over
the $1,382,314 reported for the six months ended June 30, 1996. The increase in
sales was due to increases from the first quarter of 1997. Sales for the three
months ended June 30, 1997 decreased by 5% to $736,209 compared to $774,934
reported for the three months ended June 30, 1996.
Gross profit for the six months ended June 30, 1997 increased by $211,670 to
$579,126 from $367,456 reported for the six months ended June 30, 1996. Gross
profit for the three months ended June 30, 1997 increased by $101,423 to
$291,071 over the $189,648 reported for the three months ended June 30, 1996.
The increase in gross profit was due to the increase in sales as well as a
reduction in labor and other direct costs to better fit the Company's
availability of working capital.
Net loss was reduced to $928,092 for the six months ended June 30, 1997 from
$1,412,430 reported for the six months ended June 30, 1996. In addition to the
improvements in gross profit, the reduction in the net loss was also due to
reduced expenditures in Acculase from a lack of capital and a reduction in
amortization expense from the write-off of the reorganization goodwill during
1996.
Liquidity and Capital Resources
For the period ending June 30, 1997 the Company had cash and cash equivalents of
zero representing an continuation from December 31, 1996. This is the result of
the continued paydown of debt, and cash used in excess of cash provided by
operating activities and AccuLase being funded by Helionetics.
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 1996, were paid in full.
Funding from intercompany balances was primarily due to AccuLase's intercompany
debt to Helionetics. $100,000 of the increased intercompany balance was due to
interest accrued at a 10% annual rate on the Helionetics note. An aditional
$27,000 was from related entities.
Bad debt expense of $259,196 represents write-offs of the Company's intercompany
balance with Helionetics. The write-off was due to Helionetics bankruptcy filing
as Helionetics was responsible for funding AccuLase through May 22, 1997.
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
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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
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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
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Steve Qualls
Chief Executive Officer
Date: October 16, 1997 By: /s/ Robert Gibson
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Robert Gibson
Controller
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 392,875
<ALLOWANCES> 0
<INVENTORY> 895,369
<CURRENT-ASSETS> 1,321,578
<PP&E> 706,450
<DEPRECIATION> 468,424
<TOTAL-ASSETS> 2,913,041
<CURRENT-LIABILITIES> 3,213,223
<BONDS> 0
0
0
<COMMON> 62,676
<OTHER-SE> (2,656,773)
<TOTAL-LIABILITY-AND-EQUITY> 2,913,041
<SALES> 1,673,577
<TOTAL-REVENUES> 1,673,577
<CGS> 1,094,451
<TOTAL-COSTS> 1,094,451
<OTHER-EXPENSES> 1,247,696
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182,922
<INCOME-PRETAX> (928,092)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (928,092)
<EPS-PRIMARY> (0.15)
<EPS-DILUTED> 0
</TABLE>
