<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 January 31, 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
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(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
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(Address of principal executive offices)
(303) 863-8088
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(Registrant's telephone number, including area code)
Not Applicable
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(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 February 29, 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 January 31, 1996 (unaudited) and July 31, 1995 3
Statements of Operations (unaudited):
For the six and three months ended January 31, 1996
and 1995 5
Statements of Cash Flows (unaudited):
For the six months ended January 31, 1996 and 1995 6
Notes to Financial Statements
For the six and three months ended January 31, 1996
and 1995 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 9
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
ACCELR8 TECHNOLOGY CORPORATION
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
January 31, 1996
(Unaudited) July 31, 1995
---------------- ---------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 881,280 $ 437,425
Accounts receivable 96,908 292,536
Prepaid expenses 0 1,170
---------- -----------
Total current assets 978,188 731,131
---------- -----------
Property and Equipment:
Computer equipment 250,051 248,620
Furniture and fixtures 11,231 11,231
---------- -----------
Total property and equipment 261,282 259,851
Less accumulated depreciation 200,756 189,346
---------- -----------
Net property and equipment 60,526 70,505
---------- -----------
Software Development Costs:
Software development costs 866,641 826,038
Less accumulated amortization 695,023 650,023
---------- -----------
Net software development costs 171,618 176,015
TOTAL ASSETS $ 1,210,332 $ 977,651
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 40,911 $ 60,141
Accrued liabilities 28,954 30,773
Product development advance 50,000 50,000
Deferred maintenance 76,925 89,801
---------- -----------
Total current liabilities 196,790 230,715
---------- -----------
</TABLE>
<PAGE> 4
ACCELR8 TECHNOLOGY CORPORATION
BALANCE SHEETS
(Continued)
<TABLE>
<CAPTION>
January 31, 1996
(Unaudited) July 31, 1995
---------------- ---------------
<S> <C> <C>
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 (998,877) (1,265,483)
---------- ---------
Total shareholders' equity 1,013,542 746,936
---------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 1,210,332 $ 977,651
========== =========
</TABLE>
<PAGE> 5
ACCELR8 TECHNOLOGY CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
1/31/96 1/31/95 1/31/96 1/31/95
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Product license and
customer support
fees $ 193,157 $ 367,262 $ 76,341 $ 148,721
Resale of purchased
software 118,860 95,466 61,707 39,084
Consulting fees 399,458 152,750 232,980 143,500
--------- --------- ----------- -----------
Total revenues 711,475 615,478 371,028 331,305
--------- --------- ----------- -----------
Expenses:
General and
administrative 104,601 133,456 44,243 59,600
Marketing and
advertising 155,598 171,925 76,343 76,934
Research and
development 158,592 135,408 80,861 66,249
Software purchased
for resale 42,456 46,623 19,106 24,100
--------- --------- ----------- -----------
Total expenses 461,247 487,412 220,553 226,883
--------- --------- ----------- -----------
Income from operations 250,228 128,066 150,475 104,422
Interest income 16,378 2,613 9,225 1,583
--------- --------- ----------- -----------
Net Income $ 266,606 $ 130,679 159,700 106,005
========= ========= =========== ===========
Weighted average shares
outstanding 26,364,000 21,970,000 26,364,000 21,970,000
========== ========== =========== ===========
Net income per share $ .01 $ * $ * $ *
========== ========== =========== ===========
* Less than $.01 per share
</TABLE>
<PAGE> 6
ACCELR8 TECHNOLOGY CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
January 31, 1996 January 31, 1995
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Cash received from product license
and customer support fees $ 314,044 $ 426,276
Cash received from resale of
purchased software 173,332 83,937
Cash received from consulting fees 420,897 77,750
Cash paid to suppliers and employees (438,762) (417,578)
Interest received 16,378 2,613
-------------- --------------
Net cash provided by operating activities 485,889 172,998
-------------- --------------
Cash flows from investing activities:
Software development costs (40,603) (56,847)
Purchase of computer equipment (1,431) 0
-------------- --------------
Net cash used in investing activities (42,034) (56,847)
-------------- --------------
Net increase in cash and cash equivalents 443,855 116,151
Cash and cash equivalents at beginning
of period 437,425 85,325
-------------- --------------
Cash and cash equivalents at end of
period $ 881,280 $ 201,476
============== ==============
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 266,606 $ 130,679
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 56,410 79,560
Net change in assets and liabilities:
Accounts receivable 195,628 (27,515)
Prepaid expenses 1,170 0
Accounts payable and accrued
liabilities (21,049) 19,875
Customer deposits 0 (36,000)
Deferred maintenance (12,876) 6,399
-------------- -------------
Net cash provided by operating activities $ 485,889 $ 172,998
============== =============
</TABLE>
<PAGE> 7
ACCELR8 TECHNOLOGY CORPORATION
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX AND THREE MONTHS ENDED JANUARY 31, 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 for a fair statement of the balance sheets, statements of
operations, and statements of 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
consolidated 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 six and three months ended January 31, 1996 were $711,475
and $371,028, respectively, while revenues during the corresponding periods of
the previous fiscal year were $615,478 and $331,305, respectively.
Specifically, revenues related to product license and customer support fees for
the six months ended January 31, 1996 compared to the same period in 1995
decreased by 47%, from $367,262 to $193,157. Revenues generated from the
resale of software for the six months ended January 31, 1996 compared to the
same period in 1995 increased by 25%, from $95,466 to $118,860. Revenues from
consulting fees for the six months ended January 31, 1996 compared to the same
period in 1995 increased 162% from $152,750 to $399,458. These changes in
revenue categories 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.
Those sales which represented in excess of 10 percent of the total
revenues generated during the six months ended January 31, 1996 included
$128,074 (18% of total revenues) and $190,638 (27% of total revenues),
respectively, to Electronic Data Systems, headquartered in Plano, Texas ("EDS")
and Telos Federal Systems ("Telos"). Those sales which represented in excess
of 10 percent of total revenues generated during the quarter ended January 31,
1996, included $101,675 (27% of total revenues) to EDS and $84,950 (23% of
total revenues) in sales to Telos. The Company completed its work under the
Telos agreement in February 1996. 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
$406,750, $128,074 of which, as disclosed above, was recognized in the six
month period ended January 31, 1996 and the remainder of which is expected to
be recognized in the third and fourth quarters of fiscal 1996.
General and administrative expenses for the six and three months ended
January 31, 1996 were $104,601 and $44,243, respectively, while those same
expenses were $133,456 and $59,600, respectively, during the corresponding
periods of the previous fiscal year. These decreases are largely due to a
decrease in salary expense, resulting from the elimination of a salaried
position.
<PAGE> 8
During the six and three months ended January 31, 1996, marketing and
advertising expenses were $155,598 and $76,343, respectively, compared with
$171,925 and $76,934, respectively, for the corresponding periods of the
previous fiscal year. This decrease for the six month period resulted
primarily from a decrease in consulting and marketing expense partially offset
by an increase in travel expense.
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 six and three months ended
January 31, 1996, research and development expenses amounted to $158,592 and
$80,861, respectively, compared with $135,408 and $66,249, respectively, for
the corresponding periods of the previous fiscal year. These increases were
largely due to contract labor and personnel costs associated with the Telos
contract. These increased costs were partially offset by a decrease in the
amortization of software costs capitalized. Amortization costs are decreasing
as less effort is being expended on development of new products.
During the six and three months ended January 31, 1996, software purchased
for resale amounted to $42,456 and $19,106, respectively, compared with $46,623
and $24,100, respectively, for the corresponding periods of the previous fiscal
year. These costs vary with the amount and product mix of software sold.
The Company experienced net income of $266,606 for the six months ended
January 31, 1996 and net income of $159,700 for the three months ended January
31, 1996, compared with net income of $130,679 and net income of $106,005 for
the corresponding periods of the previous fiscal year. These increases in net
profit are the result primarily of an increase in revenue, while total expenses
remained fairly constant over the aforementioned periods.
Capital Resources and Liquidity
During the six month period ended January 31, 1996, the Company's
liquidity increased, in comparison to the same period in fiscal 1995, as a
result of increased revenues and a decrease in expenses relative to the
revenues generated. Current assets increased 34%, from $731,131 to $978,188.
Total assets increased 24%, from $977,651 to $1,210,332. Shareholders' equity
increased 36%, from $746,936 to $1,013,542, as a result of the net income of
$266,606 during the period.
General
As of December 31, 1995, options representing the right to purchase
2,900,000 shares of the Company's common stock at a price of $.07 per share,
held by the Company's former president, expired unexercised and, accordingly,
the number of shares of common stock issuable upon exercise of currently
outstanding options and/or warrants was reduced as of that date from 9,700,000
to 6,800,000.
<PAGE> 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None.
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: March 15, 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 JANUARY 31, 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> 6-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JAN-31-1996
<CASH> 881,280
<SECURITIES> 0
<RECEIVABLES> 96,908
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 978,188
<PP&E> 261,282
<DEPRECIATION> 200,756
<TOTAL-ASSETS> 1,210,332
<CURRENT-LIABILITIES> 196,790
<BONDS> 0
<COMMON> 1,970,970
0
0
<OTHER-SE> (998,877)
<TOTAL-LIABILITY-AND-EQUITY> 1,210,332
<SALES> 118,860
<TOTAL-REVENUES> 711,475
<CGS> 42,456
<TOTAL-COSTS> 461,247
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 266,606
<INCOME-TAX> 0
<INCOME-CONTINUING> 266,606
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 266,606
<EPS-PRIMARY> .012
<EPS-DILUTED> .012
</TABLE>
