<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1996
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: 0-11485
ACCELR8 TECHNOLOGY CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1072256
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
303 East 17th Avenue, Suite 108, Denver, Colorado 80203
-------------------------------------------------------
(Address of principal executive offices)
(303) 863-8088
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 at least the past 90 days. Yes __x__ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Shares Outstanding
Class of Securities (as of May 31, 1996)
------------------- --------------------
Common Stock, no par value 21,970,000
<PAGE> 2
INDEX
ACCELR8 TECHNOLOGY CORPORATION
PART I. FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements
--------------------
Balance Sheets:
As of April 30, 1996 (unaudited) and July 31, 1995 3
Statements of Operations (unaudited):
For the nine and three months ended April 30, 1996
and 1995 4
Statements of Cash Flows (unaudited):
For the nine months ended April 30, 1996 and 1995 5
Note to Financial Statements
For the nine and three months ended April 30, 1996
and 1995 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
--------------------------------
Signatures 9
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
ACCELR8 TECHNOLOGY CORPORATION
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
April 30, 1996
(Unaudited) July 31, 1995
-------------- ---------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,100,404 $ 437,425
Accounts receivable 238,029 292,536
Prepaid expenses 0 1,170
---------- -----------
Total current assets 1,338,433 731,131
---------- -----------
Property and Equipment:
Computer equipment 256,400 248,620
Furniture and fixtures 11,231 11,231
---------- -----------
Total property and equipment 267,631 259,851
Less accumulated depreciation 206,571 189,346
---------- -----------
Net property and equipment 61,060 70,505
---------- -----------
Software Development Costs:
Software development costs 889,688 826,038
Less accumulated amortization 716,023 650,023
---------- -----------
Net software development costs 173,665 176,015
---------- -----------
TOTAL ASSETS $ 1,573,158 $ 977,651
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 20,985 $ 60,141
Accrued liabilities 31,692 30,773
Product development advance 50,000 50,000
Deferred revenue 9,000 0
Deferred maintenance 70,879 89,801
---------- -----------
Total current liabilities 182,556 230,715
---------- -----------
Shareholders' Equity:
Common stock, no par value:
55,000,000 shares authorized;
21,970,000 shares issued and
outstanding 1,970,970 1,970,970
Contributed capital 41,449 41,449
Accumulated deficit (621,817) (1,265,483)
---------- ---------
Total shareholders' equity 1,390,602 746,936
---------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 1,573,158 $ 977,651
========== =========
</TABLE>
<PAGE> 4
ACCELR8 TECHNOLOGY CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
4/30/96 4/30/95 4/30/96 4/30/95
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Product license and
customer support
fees $ 454,606 $ 499,589 $ 261,449 $ 132,327
Resale of purchased
software 181,265 210,227 62,405 114,761
Consulting fees 667,968 234,880 268,511 82,130
--------- --------- ----------- -----------
Total revenues 1,303,839 944,696 592,365 329,218
--------- --------- ----------- -----------
Expenses:
General and
administrative 149,128 183,238 44,527 49,782
Marketing and
advertising 233,758 257,274 78,160 85,349
Research and
development 227,464 218,304 68,872 82,896
Software purchased
for resale 73,108 80,713 30,653 34,090
--------- --------- ----------- -----------
Total expenses 683,458 739,529 222,212 252,117
--------- --------- ----------- -----------
Income from operations 620,381 205,167 370,153 77,101
Interest income 28,285 5,944 11,907 3,331
--------- --------- ----------- -----------
Net income before taxes $ 648,666 $ 211,111 382,060 80,432
--------- --------- ----------- -----------
Current income tax
provision 5,000 0 5,000 0
--------- --------- ----------- -----------
Net Income $ 643,666 $ 211,111 $ 377,060 $ 80,432
========== ========== =========== ===========
Weighted average shares
outstanding 23,597,826 21,970,000 23,597,826 21,970,000
========== ========== =========== ===========
Net income per share $ .03 $ .01 $ .02 $ *
========== ========== =========== ===========
* Less than $.01 per share
</TABLE>
<PAGE> 5
ACCELR8 TECHNOLOGY CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
April 30, 1996 April 30, 1995
----------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Cash received from product license
and customer support fees $ 576,992 $ 619,194
Cash received from resale of
purchased software 252,136 103,021
Cash received from consulting fees 529,218 160,912
Cash paid to suppliers and employees (652,222) (582,035)
Interest received 28,285 5,945
-------------- --------------
Net cash provided by operating activities 734,409 307,037
-------------- --------------
Cash flows from investing activities:
Software development costs (63,650) (79,685)
Purchase of computer equipment (7,780) 0
-------------- --------------
Net cash used in investing activities (71,430) (79,685)
-------------- --------------
Net increase in cash and cash equivalents 662,979 227,352
Cash and cash equivalents at beginning
of period 437,425 85,325
-------------- --------------
Cash and cash equivalents at end of
period $ 1,100,404 $ 312,677
============== ==============
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 643,666 $ 211,111
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 83,225 123,840
Net change in assets and liabilities:
Accounts receivable 54,507 (61,569)
Prepaid expenses 1,170 0
Accounts payable and accrued
liabilities (38,237) 27,719
Deferred revenue 9,000 (24,000)
Deferred maintenance (18,922) 29,935
-------------- -------------
Net cash provided by operating activities $ 734,409 $ 307,036
============== =============
</TABLE>
<PAGE> 6
ACCELR8 TECHNOLOGY CORPORATION
NOTE TO FINANCIAL STATEMENTS
FOR THE NINE AND THREE MONTHS ENDED APRIL 30, 1996 AND 1995
Note 1. Accounting Policies
The financial information provided herein was prepared from the books and
records of the Company without audit. The information furnished reflects all
normal recurring adjustments which, in the opinion of the Company, are
necessary to present fairly the Company's financial position, results of its
operations, and cash flows, as of the dates and for the periods presented. The
Notes to Financial Statements included in the Company's 1995 Annual Report on
Form 10-K should be read in conjunction with these financial statements.
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations.
---------------------
Changes in Result of Operations: 1996 Compared to 1995
Revenues for the nine and three months ended April 30, 1996 were
$1,303,839 and $592,365, respectively, while revenues during the corresponding
periods of the previous fiscal year were $944,696 and $329,218, respectively.
For the nine months ended April 30, 1996 compared to the same period in 1995,
revenue from product licenses and customer support fees decreased 9% to
$454,606 from $499,589 and revenues from resale of purchased software decreased
14% to $181,265 from $210,227 while revenues from consulting fees increased
184% from $234,880 to $667,968. The increase in consulting fees and decrease
in product licenses and resale of software purchased are consistent with
management's continuing emphasis on marketing its services, rather than on
marketing its products on a stand-alone basis as has historically been the
Company's emphasis. The cost of purchased software as a percentage of those
sales increased for the nine months ended April 30, 1996 to 40% from 38%
reflecting a difference in the product mix.
Those sales which represented in excess of 10 percent of the total
revenues generated during the nine months ended April 30, 1996 included
$278,075 (21% of total revenues) and $208,759 (16% of total revenues),
respectively, to Electronic Data Systems, headquartered in Plano, Texas ("EDS")
and Telos Federal Systems ("Telos"). The Company completed its work under the
Telos agreement in February 1996. The only sale which represented in excess of
10 percent of total revenues generated during the quarter ended April 30, 1996
was $150,000 (25% of total revenues) to EDS. The Company's agreement with EDS,
which involves the migration of the application of the Workforce Management
product sold by EDS to regional telephone companies, should result in total
revenue of approximately $407,000, $208,759 of which, as disclosed above, was
recognized in the nine month period ended April 30, 1996 and the remainder of
which is expected to be recognized in the fourth quarter of fiscal 1996.
Additionally, the Company signed services contracts with Kellogg's (Cereal),
Proctor & Gamble Co. and DEBIS (the software development subsidiary of Daimler
Benz, Germany). The minimum revenues anticipated from these contracts are
approximately $282,000,
<PAGE> 7
$202,000 and $20,000, respectively. These revenues
should be recognized during the fourth quarter of this fiscal year and the
first quarter of the new fiscal year.
General and administrative expenses for the nine and three months ended
April 30, 1996 were $149,128 and $44,527, respectively, while those same
expenses were $183,238 and $49,782 during the corresponding periods of the
previous fiscal year. These decreases were largely due to a decrease in salary
expense resulting from the elimination of a salaried position.
During the nine and three months ended April 30, 1996, marketing and
advertising expenses were $233,758 and $78,160, respectively, compared with
$257,274 and $85,349, respectively, for the corresponding periods of the
previous fiscal year, representing a decrease of 9% for the nine month period
and a decrease of 8% for the three month period. These cost decreases were
primarily the result of decreases in marketing and advertising expense and not
incurring outside services during the 1996 periods offset in part by increases
in salary in lieu of outside consulting services.
The Company continues to devote a substantial portion of its resources to
the development and enhancement of its products. Consequently, research and
development expenses continued to comprise a significant portion of the
Company's overall operating expenses. For the nine and three months ended
April 30, 1996, research and development expenses amounted to $227,464 and
$68,872, compared with expenses of $218,304 and $82,896 for the corresponding
periods of the previous fiscal year. The increase for the nine month period
was largely due to contract labor and personnel costs associated with the Telos
contract.
During the nine months and three months ended April 30, 1996, net income
was $648,666 and $382,060, respectively, compared with net income of $211,111
and $80,432 for the like periods of the previous year. These increased profits
in both the nine month and three month periods were the result of increases in
revenues and decreases in expenses as a percentage of revenues. These
decreases in expenses are attributable to generally larger sales per customer
as increasingly more customers are purchasing the services as well as the
products offered by the Company.
Changes in Capital Resources and Liquidity
During the nine month period ended April 30, 1996, the Company's liquidity
increased in comparison to the Company's liquidity as of its most recent fiscal
year end (July 31, 1995) primarily as a result of the increase in revenues and
a decrease in expenses as a percentage of revenues during that nine month
period. Specifically, current assets increased 83%, from $731,131 to
$1,338,433. Total assets increased 61%, from $977,651 to $1,573,158.
Shareholders' equity increased 87%, from $746,936 to $1,395,603.
Major capital needs in the near future will be for continued development
and enhancements to existing software products as well as development of new
technologies and the staffing and training of additional software development
personnel for the timely delivery of the Company's services to its existing
customers as well as future customers.
<PAGE> 8
General
This report contains forward-looking statements which are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The forward-looking statements, which are based on current expectations,
involve risks and uncertainties that could cause actual results to differ
materially from the forward-looking statements, including, without limitation,
cancellation, rescheduling and performance of contracts. The forward-looking
statements should be considered in light of these risks and uncertainties.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
None
(b) Reports on Form 8-K
None.
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has caused this Report to be signed on its behalf by
the undersigned duly authorized person.
ACCELR8 TECHNOLOGY CORPORATION
Date: June 6, 1996 By: /s/ Thomas V. Geimer
---------------------------------------------
Thomas V. Geimer, Principal Financial Officer
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
<S> <C> <C>
EX-27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ACCELR8
TECHNOLOGY CORPORATION APRIL 30, 1996 10-Q AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000727207
<NAME> ACCELR8 TECHNOLOGY CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> APR-30-1996
<CASH> 1,100,404
<SECURITIES> 0
<RECEIVABLES> 238,029
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,338,433
<PP&E> 267,631
<DEPRECIATION> 206,571
<TOTAL-ASSETS> 1,573,158
<CURRENT-LIABILITIES> 182,556
<BONDS> 0
<COMMON> 1,970,970
0
0
<OTHER-SE> (621,817)
<TOTAL-LIABILITY-AND-EQUITY> 1,573,158
<SALES> 181,265
<TOTAL-REVENUES> 1,303,839
<CGS> 73,108
<TOTAL-COSTS> 683,458
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 648,666
<INCOME-TAX> 5,000
<INCOME-CONTINUING> 643,666
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 643,666
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
