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UNITED STATES
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 period ended June 30, 1996.
Commission file number 0-11284
Z-AXIS CORPORATION
(Exact name of registrant as specified in its charter)
COLORADO 84-0910490
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
116 INVERNESS DRIVE EAST, SUITE 110
ENGLEWOOD, COLORADO 80112
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (303) 792-2400
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 common shares outstanding as of June 30, 1996: 3,765,000.
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CONTENTS
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PART I FINANCIAL INFORMATION
Item 1. Condensed Balance Sheets, March 31 and June 30, 1996. 3
Condensed Statements of Operations, Three month periods
ended June 30, 1996 and 1995. 4
Condensed Statements of Cash Flows, Three month periods
ended June 30, 1996 and 1995. 4
Notes to Condensed Financial Statements. 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 5
PART II OTHER INFORMATION 6
Item 1. Legal proceedings 6
Item 2. Changes in securities 6
Item 3 Defaults upon senior securities 6
Item 4 Submission of matters to a vote of security holders 6
Item 5. Other information 6
Item 6. Exhibits and reports on Form 8-K 6
SIGNATURES 6
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED BALANCE SHEETS
June 30, 1996 March 31,1996
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(Unaudited)
ASSETS
Current assets:
Cash (1) $ 232,377 $ 118,823
Trade accounts receivable 320,675 706,597
Other current assets 71,301 51,857
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Total current assets 624,353 877,277
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Property and equipment, at cost 2,160,819 2,157,602
Accumulated depreciation (1,743,643) (1,701,014)
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Net property and equipment 417,176 456,588
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Deferred income taxes 238,700 171,000
Capitalized software costs 134,339 134,339
Other assets 20,565 11,941
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TOTAL ASSETS $ 1,435,133 $ 1,651,145
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 125,530 $ 183,662
Accrued expenses 189,275 221,921
Deferred revenue 42,768 29,553
Current portion of long-term obligations 43,079 48,994
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Total current liabilities 400,652 484,130
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Long-term obligations 115,953 110,129
Stockholders' equity:
Common stock 3,759 3,759
Additional paid in capital 1,438,487 1,438,487
Retained earnings (deficit) (523,718) (385,360)
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Total stockholders' equity 918,528 1,056,886
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,435,133 $ 1,651,145
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See notes to condensed financial statements.
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CONDENSED STATEMENTS OF OPERATIONS
Three months ended June 30,
----------------------------
1996 1995
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(Unaudited)
Net sales $ 388,458 $ 598,565
Operating expenses:
Production 245,263 300,746
General and administrative 166,191 189,256
Marketing 157,701 163,727
Depreciation 42,629 45,805
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Total operating expenses 611,784 699,534
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Income (loss) from operations (223,326) (100,969)
Other income (expense) 16,822 (5,194)
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Income (loss) before income taxes (206,504) (106,163)
Income tax benefit (expense) 68,146 31,800
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NET INCOME (LOSS) $(138,358) (74,363)
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INCOME (LOSS) PER COMMON SHARE OF STOCK:
NET INCOME (LOSS) PER COMMON SHARE OF STOCK $ (0.04) $ (0.02)
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING DURING THE PERIOD 3,765,000 3,759,000
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CONDENSED STATEMENTS OF CASH FLOWS
Three months ended June 30,
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1996 1995
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(Unaudited)
CASH FLOWS FROM OPERATIONS:
Net cash (used in) provided by operations $ 131,925 $ (9,775)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,217) (51,792)
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Net cash (used in) investing activities (3,217) (51,792)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Debt and capital lease payments (15,154) (36,482)
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Net cash (used in) financing activities (15,154) (36,482)
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Net (decrease) increase in cash 113,554 (98,049)
Cash, beginning of period 118,823 285,150
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CASH, END OF PERIOD $ 232,377 $ 187,101
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See notes to condensed financial statements.
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NOTE 1.
The accompanying Condensed Balance Sheets at March 31 and June 30, 1996 and
Condensed Statements of Operations and Cash Flows for the three month periods
ended June 30, 1996 and 1995 should be read in conjunction with the Company's
financial statements and notes for the years ended March 31, 1996, 1995 and
1994. These condensed financial statements contain all adjustments that
management considers necessary for fair presentation. Results for interim
periods are not necessarily indicative of results for a full year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Company's
financial statements and notes for the fiscal years ended March 31, 1996, 1995
and 1994. Except where otherwise noted, references to periods are to periods of
fiscal years ended March 31 of the year stated.
FINANCIAL CONDITION
At June 30, 1996, the Company's working capital position was $223,701, a
decrease of $169,446 from the position at March 31, 1996. The year-to-date
decrease is primarily attributed to lower cash flows from operations. Cash flow
from operations was $131,925 during the current quarter. The majority of the
Company's cash flow from operations during the three months ended June 30, 1996
was invested in short term money market funds and the remaining amounts were
used for fixed asset additions and reduction of debt obligations. It is
management's opinion that through cash management and other measures, working
capital for the foreseeable future will be sufficient to meet operating
requirements.
Capital additions during the first quarter of 1996, primarily for production
equipment, were $3,217.
Debt and capital lease payments were $15,154 during the three months ended
June 30, 1996.
RESULTS OF OPERATIONS
A loss from operations in the amount of $223,326 was incurred during the first
quarter of 1997, compared to a loss from operations in the amount of $100,969
during the corresponding period of the preceding year. The loss was primarily
attributable to lower sales volume. Operating expenses decreased by 13% when
compared to the corresponding period of the prior fiscal year. Production
expenses were lower than those of the corresponding quarter of the preceding
year primarily due to staff reduction which occurred during the first quarter of
1997. Included in the production expense for the first quarter of 1997 is
approximately $41,200 of research and development costs as compared to $16,400
during the corresponding quarter of the preceding fiscal year. Management
anticipates that sales volumes and operating results are expected to improve
during the second and third quarters.
The Company had a net deferred tax asset of $238,700 at June 30, 1996 as
compared to $171,000 at March 31, 1996. The increase in the deferred tax asset
was the direct result of the corresponding decrease in the Company's income
before taxes for the first quarter of 1997. The company has established a
valuation allowance of $85,000 at March 31, 1996 and June 30, 1996 against the
deferred tax asset as management believes that it is more likely than not, that
the deferred tax asset related to the tax credits and a portion of the loss
carryforwards may not be realized before all carryforward expiration dates.
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ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits.
(b) No reports on Form 8-K have been filed during the quarter ended
June 30, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934 the registrant has duly caused this report of be signed on its
behalf by the undersigned, thereunto duly authorized.
Z-AXIS CORPORATION
By: /s/ Alan Treibitz
------------------------------
Alan Treibitz
President
Date: August 16, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Steven H. Cohen Director, Chief Executive Officer August 16, 1996
- ------------------------
/s/ Alan Treibitz Director, President, Treasurer,
- ------------------------ Chief Financial Officer, Principal
Alan Treibitz Accounting Officer August 16, 1996
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