<PAGE>
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended: September 30, 1998
Commission File Number: 1-8662
PROACTIVE TECHNOLOGIES, INC.
(formerly KEYSTONE MEDICAL CORPORATION)
(Exact name of registrant as specified in its charter)
Delaware 23-2265039
(State of Incorporation) (I.R.S. Employer ID No.)
7118 Beech Ridge Trail,
Tallahassee, Florida 32312
(Address of principal executive offices) (Zip Code)
(850) 668-8500
(Registrant's telephone number, including area code)
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 such shorter
period that registrant was to require such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes ____X______ No ________
Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
Yes ___X_____ No _________
The number of shares outstanding of registrant's common stock, par
value $.04 per share, as of November 9, 1998 was 15,499,253.
Transitional Small Business Disclosure Format (Check
one):Yes______No ___X____
</PAGE>
<PAGE>
PROACTIVE TECHNOLOGIES, INC.
Table of Contents
Page No.
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet 3
September 30, 1998 and June 30, 1998
Condensed Consolidated Statements of
Income for the Three Months
Ended September 30, 1998 and 1997 4
Condensed Consolidated Statements of
Cash Flows for the Three Months Ended
September 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial
Statements 6-8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 9-11
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE 11
EXHIBIT INDEX 12
</PAGE>
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<TABLE>
PROACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES (NOTE 1)
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(000's except for outstanding shares)
<CAPTION>
September 30 June 30,
1998 1998
<S> <C> <C>
ASSETS:
Real estate inventories $ 33,449 $ 32,960
Cash and equivalents 98 100
Property and equipment, net 393 410
Investment in Killearn Properties, Inc. 1,188 1,188
Other Investments 197 261
Other assets 274 175
Notes Receivable 1,055 3,366
_________ _________
TOTAL ASSETS $ 36,654 $ 38,460
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Notes payable $ 21,095 $ 21,849
Accounts payable and accrued expenses 1,096 1,608
Income taxes payable 1,237 1,237
Deferred income tax liability 112 298
Deferred revenue 109 109
Deferred compensation payable 0 0
Customer deposits 190 125
_________ _________
Total Liabilities $ 23,839 $ 25,226
Minority Interest 0 0
Stockholders' Equity:
Common stock - par value $.04 per
share; authorized 60,000,000 shares;
issued 18,445,648 684 684
Paid-in capital 12,328 12,180
Retained earnings 1,753 2,320
Treasury Stock (1,950) (1,950)
_________ _________
Total Stockholders' Equity $ 12,815 $ 13,234
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 36,654 $ 38,460
========= =========
See Accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
</PAGE>
<PAGE>
<TABLE>
PROACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In 000's, except for earnings per share and outstanding shares)
<CAPTION>
Three Months Ended
September 30,
1998 1997
<S> <C> <C>
Net sales $ 1,327 $ 2,543
Cost of sales 1,389 1,544
Selling, general and
administrative expenses 454 301
_______ ________
(Loss) income from operations (516) 698
Other Income (deductions):
Interest (expense) (138) (181)
Other income (expense),
net 120 ( 26)
Minority Interest 0 ( 1)
________ ________
(Loss) income from
continuing operations
before income taxes (534) 490
Income tax benefit
(expense) 186 (180)
________ ________
Net (loss) income before
discontinued operations ($ 348) 310
Discontinued operations:
Loss from operations
of Decocrete Worldwide,
less applicable tax
benefit of $0 and
$5,000,respectively 0 ( 7)
________ _________
Net (loss) income ($ 348) $ 303
======== ========
(Loss) earnings per share before
Discontinued operations ($ .02) $ .02
Discontinued operations $ .00 $ .00
________ ________
Earnings per share ($ .02) $ .02
======== ========
Adjusted shares
outstanding primary and
fully diluted 16,499,253 18,234,929
Dividends Paid NONE NONE
See Accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
</PAGE>
<PAGE>
<TABLE>
PROACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (In 000's)
<CAPTION>
Three Months Ended
September 30
1998 1997
<S> <C> <C>
Net Cash provided by operating activities $ 766 $ 164
_________ ________
Cash Flows from Investing Activities:
Distribution from real estate ventures 0 0
Investment in real estate ventures ( 14) 5
Purchase of investments in equity securities 0 ( 1,020)
Purchase of property and equipment 0 0
_________ _________
Net Cash used in investing activities ( 14) ( 1,015)
Cash Flows from Financing Activities:
Proceeds from exercise of stock warrants 0 0
Proceeds from issuance of notes payable 3,458 2,623
Repayments of amounts borrowed (4,212) (1,799)
_________ ________
Net Cash provided by financing activities ( 754) 824
_________ ________
Net (Decrease) Increase in Cash
and Cash Equivalents ( 2) ( 27)
_________ ________
Cash and Cash Equivalents, Beginning of Period 100 182
_________ ________
Cash and Cash Equivalents, End of Period $ 98 $ 155
========= ========
See Accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
</PAGE>
<PAGE>
PROACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Form 10-QSB for the Three Months Ended September 30, 1998
(1) Basis of Financial Presentation
On February 12, 1996, Proactive Technologies, Inc. ("PTE" or the
"Company") acquired 100% of the outstanding common stock of Capital
First Holdings, Inc. ("Capital First") in a reverse acquisition in
which Capital First's sole shareholder acquired voting control of the
Company. The acquisition was accomplished through the issuance of
approximately 8,559,000 shares of PTE stock which represented
approximately 80% of the voting stock of PTE immediately after the
transaction. For accounting purposes, the acquisition has been treated
as a recapitalization of Capital First with Capital First as the
acquirer. The historical financial statements prior to February 12,
1996 are those of Capital First. As a result of the acquisition,
Capital First effectively changed its accounting year end to June 30
from December 31. Capital First is a developer of residential
subdivisions with its principal operations in Tallahassee, Florida.
The accompanying unaudited consolidated financial statements and
related notes have been prepared pursuant to the rules and regulations
of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for a
fair presentation of the results of the interim period presented. The
accompanying consolidated financial statements and related notes should
be read in conjunction with the audited financial statements of Capital
First Holdings, Inc., and notes thereto, as found in the Company's
Form 10-KSB for the year ended June 30, 1998, (filed by EDGAR on October
14, 1998), and the Company's Form 10-QSB for the three months
September 30, 1997 (filed by EDGAR on November 14, 1997). A copy
of such consolidated financial statements and notes thereto may be
obtained by writing to the Company.
(2) Acquisitions and Dispositions
Effective August 12, 1996, the Company acquired all of the voting
common stock of Flowers Properties, Inc., Highland Properties
Construction Company, Inc., and Barrier Dunes Development Corporation in
exchange for approximately 2,565,000 shares of PTE common stock with a
stated value of $3.50 per share. Under the agreement, the number of
shares was to be adjusted in the event the quoted market price of the
shares at December 31, 1996 was less than $3.50 per share.
Subsequently, the Company has amended this Agreement with the final
resolution as to the number of shares issued. On April 3, 1997 the
Company and the Flowers group agreed upon the final number of shares to
be issued for the three corporations known as the Flowers entities. By
mutual agreement between the parties, it was decided that the number of
shares to be paid for the entities would be 4.5 million shares as
follows: Highlands Properties Construction Company, Inc. - 3,200,000
shares; Flowers Properties, Inc. - 800,000 shares; and Barrier Dunes
Development Corporation - 500,000 shares. Then, in 1998, the Company and
the directors completed their reevaluation of the assets acquired. The
renegotiated purchase price was valued at $5,128,629 after the purchase
price adjustment. As a result the director returned 1,102,456 shares of
Company stock originally issued for the acquisition. The purchased
corporations operations principally consist of land development in Middle
and South Georgia, and Cape San Blas, Florida. The land owned by these
</PAGE>
<PAGE>
corporations has been added to the land inventory of the Company.
Subsequent to the acquisition, the Company has sold several of the assets
to a director of the Company in exchange for cash or stock, all of
which has been accounted for under the purchase method of accounting.
During April, 1996, the Company acquired for investment purposes
approximately 8.1% of the issued and outstanding shares of Killearn
Properties, Inc.(AMEX "KPI"). KPI is in the business of real estate
development in the Stockbridge, Georgia area. The Company filed its
Schedule 13D regarding this event on April 25, 1996. In May 1996, PTE
proposed a transaction with KPI whereby KPI would exchange certain
assets (consisting of the golf course and country club, a newly
constructed inn and certain joint venture interests) to KPI's then
Chairman of the Board and Chief Executive Officer, for his approximate
42% ownership interest in KPI, or 551,321 shares of KPI voting common
stock.
During August 1996, PTE acquired approximately 85,950 additional
shares of KPI stock, increasing its ownership interest in KPI to
approximately 22%. On July 29, 1996, PTE proposed to KPI's Board of
Directors that PTE be retained to provide sales personnel and sales
training techniques in order to improve the sales of residential lots.
In addition, PTE proposed that KPI's board include two additional
representatives of PTE. On July 31, 1996, KPI's Board of Directors
approved the transaction and the PTE proposals, and an agreement was
entered into on August 2, 1996 between KPI and KPI's Chairman.
The split-off transaction was voted upon and approved at KPI's
shareholders' meeting held on September 30, 1996. At the Board meeting
following the shareholders' meeting, Mark A. Conner was named Chairman
of the Board of KPI. Additionally, Langdon S. Flowers, Jr., and Robert
Maloney, Jr. were named as Directors of KPI. On November 1, 1996,
J.T. Williams, Jr., President, resigned his position and the Board of
Killearn Properties, Inc. (AMEX:KPI) named Mark A. Conner as Chief
Executive Officer. The transaction was completed on November 16, 1996,
at which time, PTE's holdings in KPI were increased to approximately
25.6%.
The Company continued to make investments in Killearn
Properties, Inc., including acquisitions during the three months ended
September 30, 1997, of an additional 155,426 shares of KPI, in exchange
for approximately $323,000 in cash, $198,000 in promissory notes, and
294,000 shares of Company voting stock, bringing its holdings in KPI to
approximately 45.77%.
In January, 1998, the Company learned that J.T. Williams, whom the
Company had entered into a prior agreement (see Form 13D/A filed October
11, 1997) had refused to tender his shares in accordance with a stock
exchange agreement between Mr. Williams and the Company. The result
was that in the event the non-performance by Mr. Williams was valid
the Company's position was reduced to 315,430 shares, or 35.5% of the
887,412 issued and outstanding shares of KPI.
Additionally, as filed in Form 13-D/A with EDGAR on January 8,
1998, the Company exercised its call rights with three other major
KPI shareholders under certain Put and Call Agreements for a total of
132,000 additional KPI shares at a total price of $1,254,000, or $9.50
per share, giving the Company a total of 447,430 shares,
representing 50.4% of the total issued and outstanding shares of KPI.
Further, on January 27, 1998, the Company entered into an Agreement
to sell 315,430 shares of KPI stock to the Wimberly Investment Fund,
L.P. for a total of $2,286,867.50, or $7.25 per share. Consequently,
as of February 11, 1998, the Company currently owns of record, 132,000
shares, or 14.87% of the total issued and outstanding shares of KPI.
As part and parcel of the aforementioned January 27, 1998 agreement
the Company created a new Georgia corporation called Capital First
Holdings, Inc. of Georgia which received at cost from Killearn
Properties, Inc. title to three separate subdivisions -- The Summit,
The Glen, and Simpson Mill Development, as well as Killearn's 50%
interest in Henry County Land Partners, a Georgia General Partnership,
and other contract assignments, the result of which will bring
approximately 650 acres or 1,200 lots, in various stages of
development and bring land with an estimated basis of $9 million to
the Company.
Effective February 10, 1996 Decocrete Worldwide, Inc.
("Decocrete"), a newly-formed subsidiary of PTE, operating under the
direction of Capital First, acquired the net assets of Decocrete
International, Inc., a manufacturer of decorative concrete with a plant
located in Tampa, Florida, for an aggregate purchase price of $72,000 in
cash and 20% of the outstanding shares of Decocrete. The acquisition
had been accounted for under the purchase method of accounting.
Identifiable assets acquired approximated the liabilities assumed;
accordingly, the entire purchase price had been attributed to goodwill.
During fiscal 1997 the Company decided to cease operating Decocrete.
The Company wrote off all existing amounts still outstanding in their
June 30, 1998 Form 10-KSB (filed by EDGAR on October 14, 1998), thus no
financial information regarding Decocrete is included in the Company's
quarterly financial statements.
</PAGE>
<PAGE>
(3) Debt
The Company refinanced approximately $438,000 worth of debt in Albany,
Georgia at comparable rates and having due dates of January, 1999.
The Company paid off its Tallahassee debt to Killearn Properties, Inc.
which amounted to a total of approximately $2,000,000, through a refinance
of its first mortgage to its primary lender, and incurring new debt
of approximately $367,000, collateralized solely by property located in
Stockbridge, Georgia. The new loan was for approximately $2,400,000, and
included refinance of an existing $250,000 loan with the same lender.
The new loan bears interest at the rate of 9.5%, with interest due monthly
and with a due date of July, 1999.
The Company paid off approximately $633,000 worth of debt on some of
its Tallahassee property through sales and some refinancing.
In Stockbridge, the Company drew approximately $165,000 to begin
development on The Highland subdivision. Further, the Company drew
approximately $800,0000 of an exisitng line to begin development on The
Summit at Eagle's Landing, also located in Stockbridge, Georgia.
(4) Earnings Per Share
Primary and fully diluted earnings per share are calculated based on
the following number of weighted average shares of stock outstanding
including stock options as common stock equivalent: The weighted number
of shares outstanding was 16,499,253 for the three month period presented.
There were no changes to the outstanding number at June 30, 1998
during the three months ended September 30, 1998.
(5) Subsequent Events
Subsequent to the end of the quarter, the Company sold approxiumately
100 acres to a director for $610,000.00, which purchase price was the
highest bona fide price offered for such property.
Also, subsequent to the end of the year, the Company sold approximately
230 acres in Albany, Georgia to a director and a shareholder of the Company
in exchange for 1,000,000 shares of the Company's stock.
Lastly, the Company paid off its remaining exisitng debt of about
$367,000 to Killearn proeprties, Inc. through the sale of bulk assets
in October 1998.
</PAGE>
<PAGE>
PROACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
On February 12, 1996, Proactive Technologies, Inc. ("PTE")acquired
100% of the outstanding common stock of Capital First Holdings, Inc.
("Capital First") in a reverse acquisition in which Capital First's sole
shareholder acquired voting control of the Company. For financial
reporting purposes the transaction is treated as the acquisition of PTE
by Capital First. Accordingly, the historical results of operations and
financial position are those of Capital First and include the accounts
of PTE from February 12, 1996. As a result of the acquisition, Capital
First effectively changed its accounting year end to June 30 from
December 31.
Worldwide, a manufacturer of decorative concrete, became an 80%
owned subsidiary of the Company on February 10, 1996. On September 30,
1996, the Company purchased 15% of the remaining Worldwide stock from
Garat Oates, bringing its ownership percentage to 95%. On January 1,
1997, the Company discontinued the working operations of Decocrete
Worldwide, Inc. In the financial statements for the year ended June 30,
1998, the Company wrote off all exisitng amount outstanding from
Decocrete, and thus no financial informationregarding Decocrete are
presented in these financial statements.
On December 31, 1995, Mark A. Conner contributed to Capital First
his 33 1/3% limited partnership interest in Piney-Z Ltd. and Apalachee
Partners, Ltd. (the "Piney-Z Partnerships"). The Piney-Z Partnerships
were formed in October 1995, by Conner, J. T. Williams and Grace Dansby
to develop the "Piney-Z" development, an approximately 400 acre mixed-
use development north of Tallahassee. On May 17, 1996, the Company
purchased Williams' 33 1/3% general partnership. In the acquisition,
</PAGE>
<PAGE>
the Company issued to Williams 200,000 shares of its common stock
(valued at $675,000) and repaid Williams a $25,000 advance he had made
to the Piney-Z Partnerships. As a result of these acquisitions, as of
December 31, 1997, the Company and Capital First had a collective
ownership interest of 66 2/3% of the Piney-Z Partnerships, which
interest was sold on January 28, 1998. Thus, there are no financial
statements regarding the Piney-Z Partnerships presented in the three
months ended September 30, 1998. Because of the ownership
percentage in the partnership (and the fact that the Company became
the sole general partner), the results of the Piney-Z Partnerships
have been consolidated in the Company's financial statements for the
three month period ended September 30, 1997.
Results of Operations
Net sales decreased approximately $1,216,000 during the
current three month period ended September 30, 1998, compared to that
same period a year ago. Real estate market conditions which have been
down in the southeastern United States, and specifically in the northern
Florida, for the past several months, continued its trend downward.
Cost of sales, as a percentage of sales, was 104.67% for the current
three month period compared to 60.7% a year ago. The gross
profit margin for the current three month period decreased greatly
as compared to the same period a year ago. This decrease in profit
margin on net sales was primarily due to the increased basis in the
property sold during the current three months. Much of the land sold
in Albany contained a high basis which could not be achieved through
current market sales in the area. Further, during this same peirod a year
ago, a bulk sale of an asset with an extremely low basis contributed greatly
to the disparity in profit margins. Profit margins on ordinary lot sales
of between 18% and 21% are expected assuming no great fluctuations in the
current interest rates.
Selling, general, and administrative ("SG&A") expenses increased
approximately $153,000 during the three months ended September 30, 1998
as compared to the three months ended September 30, 1998. This increase
was due primarily to increased accounting and auditing fees from the
company's independent auditors, as well as increased legal fees due to the
implementation of the Community development District the Company
has in its Magnolia Bluff project. Management believes that SG&A expense
to decline slightly over the next few quarters, as it continues to
streamline salaried employees and the need for a new audit should not
occur until next fiscal year.
Interest expense decreased $43,000 for the three months ended
September 30, 1998 as compared to the three months ended September
30, 1997, This decrease was due primarily to the general reduction in
Company debt derived from the sales of its assets over the past
two quarters.
Other income was $120,000 for the three months ended September
30, 1998 compared to an expense of $26,000 for that same period in 1997.
This increase was primarily due to the following: a gain through the
write-off of a debt owed to a former employee which the employee agreed
he was no longer owed through written agreement; and adjustment to cash
in the amount of approximately $70,000 through the recognition of voided
checks which were listed as outstanding during the year ended June 30, 1998.
Liquidity
Management believes that the Company, through the generation of
cash flow from operations and the utilization of unused borrowing
capacity, has sufficient financial resources available to maintain its
</PAGE>
<PAGE>
current operations and provide for its current capital expenditure
requirements.
The Company intends to concentrate its future efforts on increasing
the volume of it's real estate business in Tallahassee and implementing
its sales and marketing techniques with its other properties. The
Company's investment in Killearn Properties, Inc. did not result in
the returns originally anticipated by the Company's management.
However, the agreement reached with Killearn Properties, Inc. in
January of 1998 resulted in the acquisition of substantial land
holdings and a presence in the Stockbridge, Georgia area.
Additionally, the Company has created, in Walton County, Florida
the Magnolia Bluff Community Development District, the purpose of which
will allow bonds to fund the development of a project with over 600
homesites in Freeport, Florida. Such a development bond, which is
anticipated to close around December of 1998, will allow the
Company to obtain the necessary funding while allowing interest to
accrue and defer payment of all interest and principal until the lots
are sold to third party purchasers.
The Company is continuing to explore other possible acquisitions
which will complement its existing businesses, as well as to search out
other areas for residential and commercial development in other
geographic areas.
Financial Condition
Total assets decreased a net total of $1,806,000 from June 30, 1998
to September 30, 1998; Real estate inventories increased $489,000
due to the capitalization of development costs for the projects in progress
for the Stockbridge properties and Golden Eagle 8. Further, the notes
receivable decreased about $2,311,000. This was mainly due to the
elimination of several wrap positions the Company held on some
properties. This elimination caused both a reduction in receivables
and the corresponding notes payable.
Total liabilities decreased $1,387,000 from June 30, 1998 to
September 30, 1998, primarily due to a reduction in over $750,000 in
notes payable during the current threemonth poeriod. Account payables
dropped approximately $512,000 as a result of payment of existing payables
Additionally, the Company decreased its deferred income tax liabiity by
approximately $186,000 through payment of outstanding taxes.
Total Shareholders' equity decreased $419,000 during the current
three month period, as a result of the above adjustments.
Management plans to continue its residential development business
in Florida and Georgia, and intends to focus on the marketing and sale
of its existing inventory, and will continue to look explore other
possible acquisitions to complement its existing businesses.
</PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings The Company and its subsidiaries are
involved from time to time in various claims and legal actions in the
ordinary course of business. In the opinion of management, the Company
and its subsidiaries are not party to any other legal proceedings, the
adverse outcome of which, would have any material adverse effect on its
business, its assets, or results of operations.
ITEM 4. Submission of Matters to a Vote of Security Holders
During the three months ended September 30, 1998, there were no
matters submitted to a vote of security matters of the Company.
ITEM 5. Other Information
On January 27, 1998, the Company entered into an
Agreement to sell 315,430 shares of KPI stock to the Wimberly
Investment Fund, L.P. for a total of $2,286,867.50, or $7.25 per
share. Consequently, as of February 11, 1998, the Company currently
owns of record, 132,000 shares, or 14.87% of the total issued and
outstanding shares of KPI, and the outstanding debt of the Company
to KPI has been reduced by approximately $892,000 to $2.9 million.
As part and parcel of the aforementioned January 27, 1998 agreement
the Company created a new Georgia corporation called Capital First
Holdings, Inc. of Georgia which received at cost from Killearn
Properties, Inc. title to three separate subdivisions -- The Summit,
The Glen, and Simpson Mill Development, as well as Killearn's 50%
interest in Henry County Land Partners, a Georgia General Partnership,
and other contract assignments, the result of which will bring
approximately 650 acres or 1,200 lots, in various stages of development
and bring land with an estimated basis of $9 million to the Company.
On or about February 11, 1998, Marshall R. Cassedy, Jr. resigned
as director for the Company citing business reasons for his departure.
Furtehr, On March 6, 1998. James A. Preiss retired as Chief Operating
Officer for the Company, deciding to devote more attenton to his
retirement and other business interests. Mr. Preiss remains as a member
of the Board of Directors.
On or about May 18,1998, the Company hired David W. Wahl as its
new Controller and Vice-President of Operations in order to better
position itself to financially manage the operations of both current
and future development projects. Mr. Wahl is a recent graduate of the
master's program at the Goizueta Business School of Emory University.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
SIGNATURE
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PROACTIVE TECHNOLOGIES, INC.
(Registrant)
Date: November 13, 1998 By: /s/ Mark A. Conner
Mark A. Conner, President
</PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
27 Financial Data Schedule 15
12
</PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1998
<CASH> 98,000
<SECURITIES> 1,385,000
<RECEIVABLES> 1,055,000
<ALLOWANCES> 0
<INVENTORY> 33,449,000
<CURRENT-ASSETS> 35,986,000
<PP&E> 624,000
<DEPRECIATION> 231,000
<TOTAL-ASSETS> 36,654,000
<CURRENT-LIABILITIES> 23,618,000
<BONDS> 0
0
0
<COMMON> 684,000
<OTHER-SE> 12,131,000
<TOTAL-LIABILITY-AND-EQUITY> 36,654,000
<SALES> 1,327,000
<TOTAL-REVENUES> 1,447,000
<CGS> 1,389,000
<TOTAL-COSTS> 454,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 138,000
<INCOME-PRETAX> ( 534,000)
<INCOME-TAX> ( 186,000)
<INCOME-CONTINUING> ( 348,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> ( 348,000)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
