SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
(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 No. 0-8489
APOGEE ROBOTICS, INC.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
COLORADO 84-0916585
------------------------------- -----------------
(State of organization or other (IRS Employer
jurisdiction of incorporation) Identification NO.)
1301 Meadowood Lane
Charlotte, NC 28211
-------------------------------------- --------
(Address of Principal Executive Offices) Zip Code
Issuer's telephone number: (704) 366-8999
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 [ ]
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 court. Yes [ ] No [X]
The number of shares of common stock of the issuer outstanding as of April
15, 1997 was 18,195,022.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
APOGEE ROBOTICS, INC
(Debtor-in-Possession)
BALANCE SHEET
March 31, June 30,
1997 1996
-------- -------
ASSETS
<S> <C> <C>
Current Assets
Cash ............................................................. $ 250,347 $ 103,920
Accounts Receivable .............................................. -- --
Inventories ...................................................... 10,491 10,491
Nonmarketable securities (estimated fair value, .................. $ -- $ 168,255
cost of $438,480,675)
Total current assets .................................... 260,838 282,266
------------ ------------
OTHER ASSETS
Deposits and other assets ........................................ 5,672 5,672
------------ ------------
Total other assets ...................................... 5,672 5,672
------------ ------------
TOTAL ASSETS ..................................................... $ 266,510 $ 288,388
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ................................................. 84,058 63,994
Other accrued liabilities ........................................ 64,052 64,052
Total current liabilities ............................... 148,110 128,046
------------ ------------
LIABILITIES SUBJECT TO COMPROMISE ......................................... 3,497,132 3,497,132
STOCKHOLDERS' EQUITY
Common stock, no par value; 50,000,000 shares authorized;
18,195,022 shares issued and outstanding in
1997 and 1996, respectively ................................... 10,683,590 10,683,590
Other capital .................................................... 33,349 33,349
Accumulated Earnings (deficit) ................................... (14,095,671) (14,053,779)
Total stockholders' equity .............................. (3,378,732) (3,336,840)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................................ $ 266,510 $ 288,338
------------ ------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
APOGEE ROBOTICS, INC
(Debtor-in-Possession)
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
March 31, March 31,
------------------ ---------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
CONTRACT REVENUES AND SALES ........... $ -- $ -- $ 8,000 $ --
COST OF REVENUES AND SALES ............ -- -- -- --
------------ ------------ ------------ ------------
GROSS INCOME .......................... $ -- -- $ 8,000 --
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Selling, general ............. 21,672 55,793 112,041 181,825
and administrative expenses
Total Operating expenses ..... 21,672 55,793 112,041 181,825
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS .................. (21,672) (55,793 (104,041) (181,825)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest income .............. 1,812 -- 2,378 77
Income from sale of assets ... 79,777 79,777
Interest expense ............. -- (163) --
Settlement Expenses .......... (20,000) (20,000)
Net other income (expense) ... 61,589 (163) 62,155 77
------------ ------------ ------------ ------------
REORGANIZATION ITEMS
Gain on debt relief .......... 932,963 898,681
NET INCOME (LOSS) ..................... $ 39,917 $ 877,170 $ (41, $ 716,933
============ ============ ============ ============
LOSS PER COMMON SHARE ................. * * * *
WEIGHTED AVERAGE SHARES
OUTSTANDING ...................... 18,195,022 18,195,022 18,195,022 18,195,022
============ ============ ============ ============
</TABLE>
* Less than $.01 per share
3
<PAGE>
<TABLE>
<CAPTION>
APOGEE ROBOTICS, INC.
(Debtor-in-Possession)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS
ENDED MARCH 31,
-------------------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ...................................................... ($ 41,886) $ 717,193
Loss on sale of assets ........................................ 3,312
Adjustments to reconcile to net cash from operating activities:
Deposits and other ............................................ -- $ 5,176
Increase in accounts payable and accrued liabilities .......... $ 20,064 $ 80,221
Decrease in securities ........................................ 168,255 --
Increase in pre-petition tax liability ........................ -- $ 64,052
Liabilities subject to compromise ............................. (978,436)
Other ......................................................... ($ 6) ($ 24)
--------- ---------
Net cash provide by (used in) operating activities ............ ($ 146,427) ($ 108,458)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from settlement with SI Handling Systems, Inc. ....... $ 150,000
Proceeds from sale of purchased AGVS software ................. 36,687
INCREASE (DECREASE) IN CASH ............................................ $ 146,427 $ 78,229
CASH, at beginning of period .................................. $ 103,920 $ 118,364
--------- ---------
CASH, at end of period ........................................ $ 250,347 $ 196,593
========= =========
</TABLE>
4
<PAGE>
APOGEE ROBOTICS, INC.
Notes to Financial Statements
1. In the opinion of management, the accompanying unaudited financial statements
contain all adjustments (all of which were normal recurring accruals) necessary
to present fairly the Company's financial position as of March 31, 1997 and June
30, 1996, the results of its operations for the nine month periods ended March
31, 1997 and 1997, and the results of its operations and the statements of cash
flows for the nine month periods ended March 31, 1996 and 1997.
The accounting policies followed by the Company are set forth in the 1996 Apogee
Robotics, Inc. 10-KSB Annual Report.
2. Inventories at March 31, 1997 and June 30, 1996 consisted of robotic
components, assembly parts and AGVS vehicles.
3. Earnings (loss) per common share is based on the weighted average number of
common shares outstanding during the period. Outstanding convertible preferred
stock, common stock warrants and options have not been included in the
computation of net (loss) per common share when this effect would have been
antidilutive.
4. Contingencies.
(a) The Company is a defendant in certain legal actions with a creditor.
(b) All pre-petition claims will be subject to settlement in accordance
with a plan of reorganization.
5. Proceedings Under Chapter 11. On December 9, 1994 (petition date), the
Company and it's wholly owned subsidiary, AGV Acquisitions, Inc. ("AGV"), filed
a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the District of Colorado, Denver,
Colorado. The Company continues business operations as a debtor-in-possession,
subject to the approval of the Court for certain of its proposed actions.
As of the petition date, actions to collect pre-petition indebtedness were
stayed and other contractual obligations may not be enforced against the
Company. In addition, the Company may reject executory contracts and lease
obligations during pendency of the Chapter 11 proceedings, and parties affected
by these rejections may file claims with the Bankruptcy Court in accordance with
the reorganization process. Substantially all unsecured liabilities of the
Company as of the petition date are subject to compromise under a plan of
reorganization which was submitted to the court on March 14, 1997; when
finalized, the plan of reorganization must be voted upon by all impaired classes
of creditors and equity security holders and approved by the Bankruptcy Court.
6. Liabilities Subject to Compromise. The Company is in the process of disputing
certain claims filed, including all claims filed by former employees and trade
creditors of AGV. Management of the Company believes that such liabilities
represent a liability of SI Handling Systems, Inc. The Company is unable to
predict whether or not it will be successful in disputing claims filed.
No provision has been made for the effect of preference or other actions as they
cannot be determined at this time.
5
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
General
Plan of Operation
On April 29 1997, Company management entered into a Letter of Intent with a
corporate entity interested in merging their operations into Apogee for purposes
of access to the public financial markets. No assurances can be made that this
Letter of Intent will become a formal agreement or that the proposed business
combination will be consummated, but during the forthcoming six (6) month
period, the Company will diligently pursue a merger agreement, consummation of
an agreement, and the emergence from bankruptcy as an operating entity. A
Reorganization Plan and Disclosure Statement was submitted to the Bankruptcy
Court on January 15, 1997 and amended March 14, 1997. An additional amendment is
expected to be filed during the month of May, 1997 to provide additional
information regarding the contemplated business combination, and a description
of the merger candidate, and to address comments of the Securities and Exchange
Commission (the "SEC") upon the Company's Reorganization Plan and Disclosure
Statement.
Current cash usage involves exclusively the maintenance of the bankruptcy
estate. Management expects sufficient cash to be available to maintain this
estate for the immediate future and through a merger process. Thereafter, the
reorganized entity will seek to satisfy its cash requirements through cash flow
from the operations of the merged partner.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The following legal proceeding involving the Company have been successfully
resolved:
1) Case No. CV-ED94-270-RT (GAKX) filed in the US. District Court, Central
District of California, December 2, 1994 and subsequently removed to
the U.S. District Court, District of Colorado on February 16, 1995.
This action was filed by Conagher against Apogee; certain Company
managers and directors; and the Company's outside auditors, Brock &
Co., Inc., alleging various securities violations and
misrepresentations. These proceedings were under automatic stay
provided under bankruptcy statutes. As a result of a Proof of claim
filed by Conagher, these claims, in addition to counterclaims, were
defended in the bankruptcy court under Claims Objection proceedings.
On March 4, 1996 Apogee submitted a Motion to Amend Objection and
Assert Counterclaims against Conagher. This motion was granted by
action of the Bankruptcy Court on April 8, 1996. Furthermore, as a
result of a Release and Settlement Agreement ("Settlement Agreement")
entered into between Conagher; Apogee's Directors and Officers
Liability Insurance carrier; Pattison Hayton III ("Hayton"); and James
W. Jones, Robert Oliphant, and Dennis C. Foss; Conagher withdrew this
action. Conagher's motion to withdraw its Proof of Claim was also
granted, subject to certain conditions. (Please see the Company's Form
8-K filing of February 27, 1996 for a discussion of this matter.
On September 10, 1996 the Bankruptcy Court entered a default against
Conagher for failure to conduct discovery and produce documents, and
on September 30, 1996 entered judgement on the default in the
aggregate sum of $2,590,336.00 in favor of the Company and against
Conagher.
6
<PAGE>
Apogee will seek to enforce this judgement in jurisdictions the Company
believes Conagher domiciles or is conducting business in. Company
Management is not optimistic any collection will be made on the
judgement.
2) Case No. 3:95CV207H filed in the U.S. District Court, Western District
of North Carolina, May 1, 1995 by James R. Currier, Sr. against
Conagher and Hayton. This action was filed by Currier to see a
declaratory judgement relative to claims asserted by Conagher in an
action against Currier filed in the Superior court for the State of
California that was dismissed for the lack of personal jurisdiction.
Currier made additional claims of fraud and misrepresentation against
Conagher and Hayton in this proceeding.
On September 16, 1996 a default judgement was entered against Hayton &
Conagher jointly and severally for $773,025.38 in damages and $2,727.50
in attorneys' fees in favor of Currier. Currier has commenced
collection proceedings.
3) On October 9, 1996 Apogee commenced an action for recovery of a
preference under Section 547 and 550 of the U.S. Bankruptcy Code
against Minarik Electric (Case No. 96- 01691-SBB). Judgement was
rendered in the amount of $13,247.39 in favor of Apogee on December
10, 1996.
4) Case No. 96-1807-RJB filed by Apogee on October 9, 1996 in the U. S.
Bankruptcy Court for the District of Colorado. Apogee sought judgement
against Pattinson Hayton, for imposition of liability for his personal
conduct, and as an alter ego of Conagher and Co., for the damages with
respect to which judgement was entered in favor of the Company against
Conagher, described above.
A judgment in favor of the Company and against Hayton was entered on
April 8, 1997 for $2,670,791.70 plus punitive damages in the amount of
$1,000,000.00. The Company has not yet commenced collection of this
judgment.
The following legal proceedings involving the Company are still pending:
1) Case No. 94-22193-CEM, Chapter 11 and Case No. 94-22194-MSK, Chapter
11, Jointly administered under Case No. 94-22193-CEM filed in the
United States Bankruptcy Court, District of Colorado December 9, 1994.
Apogees and it's wholly owned subsidiariy, AGV sought protection from
its creditors under Chapter 11 of the Federal Bankruptcy Statutes
appertaining thereto. Management believes that the Company is current
in all of its bankruptcy filings.
2) Case No. 95-1653 PAC filed by Apogee on October 20, 1995 in the United
States Bankruptcy Court, District of Colorado. Apogee seeks turnover of
60,000 shares of stock in Loronix Information Systems, Inc.
("Loronix"), from creditor Foss Realty Corporation, ("Foss") which
claims a perfected security interest in the stock to secure a note
payable from the Company, and from Robert Oliphant, who holds the stock
certificate. Oliphant has disclaimed any interest in the 60,000 Loronix
shares and entered an interpleading approved by the Bankruptcy Court on
February 6, 1996. Oliphant was subsequently dismissed from the case.
7
<PAGE>
On July 29, 1996 the Bankruptcy Court granted a motion by the Company
wherein the security interest of Foss in the Loronix stock was voided.
The Company subsequently filed a motion to sell the Loronix stock,
which was granted October 29, 1996.
Foss retained former Company council Hart & Trinen LLP and filed a
motion to set aside the July 29, 1996 ruling. This motion was denied on
October 29, 1996. Foss appealed this ruling with the U.S. District
Court in Denver, CO, which entered a ruling in favor of Apogee and
against Foss on February 14, 1997. Foss subsequently filed an appeal of
this ruling in the U.S. Court of Appeals, 10th Circuit in Denver, CO.
Company management expects that the ruling upon this appeal will also
be in favor of the Company.
3) On October 9, 1996 the following cases were filed seeking recovery
under the bankruptcy avoidance powers provided under Sections 547, 548
and 550 of the U.S. Bankruptcy Code against the entities listed and for
the amounts shown below:
a) Cellular One Case No. 96-1689-DEC $ 4,000.00
b) American Express Case No. 96-1692-RJB $ 5,000.00
c) Barry K. Rothman Case No. 96-1690-MSK $ 25,000.00
Upon investigation and discovery of the facts underlying the payment to
American Express, the Company determined that the payment was not
avoidable, and accordingly, the American Express case has subsequently
been dismissed. However, the other cases remain pending.
Item 3. Defaults Upon Senior Securities.
See notes 5 and 6 to the Financial Statements contained in Item 1 of Part I of
this report, which notes are incorporated herein by reference thereto.
Item 6. Exhibits and Reports on Form 8-K.
a) There are no exhibits required to be filed herewith.
b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
8
<PAGE>
SIGNATURES
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.
APOGEE ROBOTICS, INC.
Date: May 12, 1997 /s/ James R. Currier, Sr.
---------------------------------------------
James R. Currier, Sr.
Chairman, President, C.E.O., & C.F.O.
(Principal Executive, Financial and Accounting
Officer)
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1996
<CASH> 250,347
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 10,491
<CURRENT-ASSETS> 260,838
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 266,510
<CURRENT-LIABILITIES> 148,110
<BONDS> 0
0
0
<COMMON> 10,683,590
<OTHER-SE> (14,095,671)
<TOTAL-LIABILITY-AND-EQUITY> 266,510
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 21,672
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (21,672)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 61,589
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (44,222)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
