THIS DOCUMENT IS THE SUBMISSION OF FORM 10QSB AND CONTAINS THE QUARTERLY
REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000.
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United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark one)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
----- ACT OF 1934
For the quarterly period ended March 31, 2000
or
----- TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
--------------- -------------------
Commission File Number 0-13316
LASER CORPORATION
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(Exact name of small business issuer as specified in its charter)
Utah 87-0395567
----------------------------- --------------------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
2417 South 3850 West
Salt Lake City, UT 84120
----------------------------- --------------------------------
(Address of principal (Zip Code)
executive office)
(801) 972-1311
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(Issuer's telephone number, including area code)
Not Applicable
-------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (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
----- -----
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practical date.
Common Stock, .05 Par Value -- 1,603,988 shares as of March 31, 2000.
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INDEX
LASER CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - March 31, 2000 and December 31, 1999.
Consolidated Statements of Operations - Three months ended March 31,
2000 and 1999.
Consolidated Statements of Cash Flows - Three months ended March 31,
2000 and 1999.
Notes to Consolidated Financial Statements - March 31, 2000.
Item 2. Management's Discussion and Analysis.
PART II. OTHER INFORMATION
- -------- -----------------
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
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PART I. FINANCIAL INFORMATION
Item 1.
LASER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
ASSETS 2000 1999
- ------ Unaudited
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 195,178 $ 113,337
Receivables, net 578,659 635,417
Inventories 705,802 749,411
Other current assets 24,631 16,887
----------- -----------
Total Current Assets 1,504,270 1,515,052
NON-CURRENT ASSETS
Equipment and leasehold improvements, net 264,765 284,771
Other assets 43,775 43,068
----------- -----------
$ 1,812,810 $ 1,842,891
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
Accounts payable $ 905,511 $ 1,058,042
Accrued expenses 291,377 291,689
Accrued warranty expense 140,000 150,000
Current portion capital leases 11,817 11,373
----------- -----------
Total Current Liabilities 1,348,705 1,511,104
LONG-TERM LIABILITIES
Long-Term Capital Lease 29,448 32,050
Convertible Note Payable 250,000 ---
----------- -----------
Total Liabilities $ 1,628,153 $ 1,543,154
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common Stock, $.05 par value, 10,000,000 shares
authorized; 1,603,988 and 1,590,038 shares
issued, respectively 80,200 79,503
Additional paid-in capital 1,690,251 1,617,718
Retained deficit (1,485,794) (1,297,484)
Treasury stock, at cost (100,000) (100,000)
----------- -----------
Total Stockholders' Equity 184,657 299,737
----------- -----------
$ 1,812,810 $ 1,842,891
=========== ===========
See accompanying notes to consolidated financial statements
<PAGE> Page 3 of 9
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LASER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
---------------------------
March 31, March 31,
2000 1999
----------- -----------
REVENUES:
Net sales $ 630,140 $ 930,276
Interest and other income 1,409 4,927
----------- -----------
631,549 935,203
COSTS AND EXPENSES:
Cost of products sold 557,379 831,464
Selling, general and administrative 199,393 247,654
Research and development 53,565 128,293
Royalties 8,250 12,565
Interest 1,272 ---
----------- -----------
819,859 1,219,976
----------- -----------
LOSS FROM OPERATIONS BEFORE INCOME TAXES (188,310) (284,773)
INCOME TAX BENEFIT (EXPENSE) - CURRENT --- ---
----------- -----------
NET LOSS $ (188,310) $ (284,773)
=========== ===========
NET LOSS PER SHARE $ ( .12) $ ( .21)
=========== ===========
Average number of shares of
Common Stock outstanding 1,596,000 1,388,000
=========== ===========
See accompanying notes to consolidated financial statements
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LASER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
2000 1999
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (188,310) $ (284,773)
Adjustments to reconcile net income (loss)
to net cash provided from (used in)
operating activities:
Depreciation and amortization 20,006 35,728
(Increase) decrease in assets:
Receivables 56,758 (109,356)
Inventories 43,609 (54,261)
Other assets (8,451) (29,137)
Increase (decrease) in liabilities:
Trade accounts payable and
accrued expenses (165,001) 140,874
----------- -----------
Net Cash Used in Operating Activities (241,389) (300,925)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment --- (14,145)
CASH FLOWS FROM FINANCING ACTIVITIES -
Proceeds from Notes Payable 250,000 ---
Proceeds from Sale of Stock 73,230 ---
----------- -----------
Net Cash Provided from Financing Activities 323,230 ---
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 81,841 (315,070)
CASH AND CASH EQUIVALENTS, BEG. OF PERIOD 113,337 531,734
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 195,178 $ 216,664
=========== ===========
See accompanying notes to consolidated financial statements
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LASER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
March 31, 2000
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 2000
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2000. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended December 31, 1999
included in the Company's Annual Report on Form 10-KSB (file number 0-13316).
NOTE B - RECLASSIFICATIONS
Certain 1999 financial statement amounts have been reclassified to conform
to 2000 presentations.
NOTE C - WEIGHTED AVERAGE SHARES
Loss per common share is computed using the weighted average number of
common shares outstanding. Common equivalent shares consist of the Company's
stock options and are considered to be antidilutive common stock equivalents,
determined using the treasury stock method.
<PAGE> Page 6 of 9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This report contains certain forward-looking statements and information
relating to the Company that are based on the beliefs of management as well as
assumptions made by, and information currently available to management. Such
statements reflect the current view of the Company respecting future events and
are subject to certain risks, uncertainties, and assumptions, including the
risks and uncertainties noted in the Company's filings with the Securities and
Exchange Commission. Although the Company has attempted to identify important
factors that could cause the actual results to differ materially, there may be
other factors that cause the forward-looking statements not to come true as
anticipated, believed, projected, expected, or intended. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may differ materially from those described herein as
anticipated, believed, projected, estimated, expected, or intended.
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto appearing in the Company's
Annual Report on Form 10-KSB (file number 0-13316).
RESULTS OF OPERATIONS
- ---------------------
Three months ended March 31, 2000.
Net sales for the three months ended March 31, 2000 were $630,140 as
compared to $930,276 for the same period in 1999, a decrease of $300,136 or 32%.
This decrease was primarily the result of a decreased demand for new laser
products and to a lesser extent, a decrease in medical sales. Laser product and
service sales accounted for $264,386 of that decrease while medical product
sales decreased by $35,750.
Cost of products sold for the three months ended March 31, 2000 were
$557,379 as compared to $831,464 for the same period in 1999, a decrease of
$274,085 or 33%, which was primarily due to the decrease in sales. As a
percentage of net sales, cost of products sold was 88% for the three months
ended March 31, 2000 as compared to 89% for the same period in 1999. This
percentage decrease in the cost of products sold was primarily the result of
decreased labor costs.
Selling, general, and administrative expenses for the three months ended
March 31, 2000 were $199,393 as compared to $247,654 for the same period in
1999, a decrease of $48,261 or 19%. This decrease in sales, general, and
administrative expenses was primarily a result of decreases in marketing and
advertising expenses and to a lesser extent decreases in other administrative
costs and expenses. An increased accrual for bad debts in the amount of $20,000
during the period ended March 31, 2000 offset additional cost reductions.
Research and development expenditures for the three months ended March 31,
2000 were $53,565 as compared to $128,293 for the same period in 1999, a
decrease of $74,728 or 58%. This decrease was primarily a result of the Company
narrowing its product development focus to that of medical laser systems and to
the product needs of certain of its OEM laser product customers.
<PAGE> Page 7 of 9
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Royalty expenses for the three months ended March 31, 2000 were $8,250 as
compared to $12,565 for the same period in 1999, a decrease of $4,315 or 34%.
Interest income and other revenue for the three months ended March 31, 2000
was $1,409 as compared to $4,927 for the same period in 1999, a decrease of
$3,518 or 71%. Interest expenses for the three month period ended March 31, 2000
were $1,272 as compared to no interest expense during the same period of 1999.
The Company recognized a net loss for the three months ended March 31, 2000
of $188,310 or $.12 per share compared to a net loss of $284,773 or $.21 per
share for the same period in 1999, an improvement of $96,463 or 34%. This
improvement was primarily a result of decreases in selling, general and
administrative expenses and research and development expenditures.
LIQUIDITY AND CAPITAL RESOURCES
On March 31, 2000, the Company had working capital of $155,565 as compared
to $3,948 at December 31, 1999, an increase of $151,617. This increase in
working capital was primarily a result of the cash proceeds received from a
convertible note payable in the amount of $250,000 and by the sale of the
Company's stock in the amount of $73,230 which was partially offset by the
Company's net loss for the three month period ended March 31, 2000.
Cash equivalents at March 31, 2000 were $195,178 compared to $113,337 on
December 31, 1999, an increase of $81,841 or 72%. This increase in cash
equivalents was primarily a result of the cash proceeds received from a
convertible note payable in the amount of $250,000 and by the sale of the
Company's stock in the amount of $73,230 which was partially offset by the
Company's cash loss from operations for the three month period ended March 31,
2000. The Company is continuing to explore other sources for additional capital
but has not entered into any agreements for additional sources of borrowing or
capital other than that which has already been received through the sale of
common stock.
YEAR 2000 ISSUE
The Company experienced no problems with programming codes in existing
computer systems during the year 2000 change over. The Company will, however,
continue to monitor its systems for any unexpected problems that may arise.
PART II. OTHER INFORMATION
- -------- -----------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.1 - Convertible Promissory Note, payable to
Reinhardt Thyzel, by the Company.
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SIGNATURES
In accordence with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
LASER CORPORATION
Date: May 12, 2000 /s/ B. Joyce Wickham
-------------------------- ---------------------------------
B. Joyce Wickham
President, Chief Executive Officer
Treasurer and Director
Date: May 12, 2000 /s/ Reo K Larsen
-------------------------- ----------------------------------
Reo K Larsen
General Accounting Manager
<PAGE> Page 9 of 9
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.1 - Convertible Promissory Note, payable to
Reinhardt Thyzel, by the Company
CONVERTIBLE NOTE
----------------
$250,000 March 27, 2000
Laser Corporation, a Utah corporation ("Laser"), for value received, hereby
promises to pay to the order of Reinhardt Thyzel or his successors and assigns
(collectively "Payee"), in lawful money of the United States at the address of
Payee set forth below, the principal sum of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000), together with interest on the unpaid principal at the
simple rate of 7% per annum. The principal balance of $250,000 shall be paid in
full on March 27, 2002.
Interest shall be computed on the basis of a 360-day year and actual days
elapsed.
Subject to the provisions of this Note, Payee has the right at his option
to convert, from time to time prior to maturity all or part of the principal
amount and any amounts of accrued but unpaid interest hereof into the $0.05 par
value common stock (the "Common Stock") of Laser at the conversion price of
$5.00 for one share of Common Stock. Conversion hereunder by Payee shall take
place at the offices of Laser in Salt Lake City, Utah, 1:00 p.m., on the second
day following actual receipt of notice by Laser of Payee's intent to convert.
Upon such conversion and as a condition thereto, Payee shall surrender this Note
evidencing the remaining obligation of Laser, if any, and Payee shall deliver
an executed letter of investment interest as prepared by Laser's counsel. Upon
conversion of any portion constituting less than all of the principal amount
hereof and any amounts of accrued but unpaid interest, Laser shall issue a new
Note, with identical terms and conditions as this Note except the date of issue,
for the original principal amount hereof not converted.
It is understood and agreed that the shares of Common Stock issued upon
conversion as described above, shall be restricted securities as defined by the
Securities Act of 1933.
In the event any changes are made to the Common Stock (whether by reason of
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, combination of shares, exchange of shares or change in corporate
structure), this Note shall, after such change, be convertible into the kind and
number of shares of stock or other securities or property of the corporation or
otherwise to which Payee would have been entitled immediately prior to such
change had he converted this Note into Laser Common Stock. If any of the
foregoing adjustments shall result in a fractional share, the fraction shall be
rounded to the nearest share.
In the event of a change in the Laser Common Stock as currently
constituted, the shares resulting from any such change shall be deemed to be
the Common Stock within the meaning of this Option. To the extent that the
foregoing adjustments relate to stock or securities of the Company, such
adjustments shall be made by and in the sole discretion of the Company's Board
of Directors, whose determination in that respect shall be final, binding and
conclusive.
<PAGE> 1
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In case of any capital reclassification or reorganization, any
consolidation or merger of Laser with or into another corporation (other than
a merger with a subsidiary after which Laser is the continuing corporation and
which does not result in any reclassification, capital reorganization or other
change of outstanding stock) or any sale or conveyance to another corporation
of the assets of Laser as an entirety or substantially as an entirety, Laser,
as a condition precedent to such transaction, shall cause effective provision
to be made so that the Payee shall have the right thereafter, by exercising the
conversion rights hereunder to purchase the kind and amount of securities and/or
other property receivable upon such reclassification, reorganization,
consolidation, merger, sale, lease or conveyance as if the Payee had exercised
the conversion rights in full immediately prior to such reclassification,
reorganization, consolidation, merger, sale or conveyance. Any such provision
shall include provision for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Note, including
this paragraph. If, as a result of an adjustment made pursuant to this
paragraph, the Payee shall become entitled to receive shares of two or more
classes of capital stock of the Company or any other corporation or entity,
the board of directors or other governing body if there be no board of directors
therefore (whose determination shall be conclusive) shall determine the
allocation of the adjusted conversion price between or among shares of such
classes of capital stock. In the event of any subsequent adjustments to the
conversion price, such adjustments shall be made separately to the portion of
the price so allocated to each of such classes of capital stock. The foregoing
provisions of this paragraph, similarly apply to successive reclassifications,
capital reorganizations, consolidations and mergers.
No provision of this Note shall alter or impair the obligation of the Laser
to pay the principal of and interest on this Note at the place, at the time, and
the rate herein prescribed, provided, however, that the conversion into Common
Stock of the principal amount shall discharge all obligations to pay the
principal amount so converted.
If payment on this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State of Utah, such payment shall be made on the
next succeeding business day and such extension of time shall be included in
computing interest in connection with such payment.
Immediately upon the occurrence of an "Event of Default" (as defined
below), Payee may, at its option, declare immediately due and payable the entire
unpaid principal amount of this Note, together with all interest thereon, plus
any other amounts payable at the time of such declaration pursuant to this Note.
An Event of Default shall be defined as each of the following:
(i) failure of Laser to make any payment of interest and/or principal
within 30 days after a notice of default is received by Laser;
(ii) Laser shall admit in writing its inability to pay its debts as they
become due, shall make a general assignment for the benefit of
creditors or shall file any petition for action for relief under any
bankruptcy, reorganization, insolvency or moratorium law, or any other
law or laws for the relief of, or relating to, debtors; or
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(iii) an involuntary petition shall be filed against Laser under any
bankruptcy, reorganization, insolvency or moratorium law, or any other
law or laws of for the relief of, or relating to, debtors unless such
petition shall be dismissed or vacated within 30 days of the date
hereof.
If Payee should institute collection efforts, of any nature whatsoever, to
attempt to collect any and all amounts due hereunder upon the default of Laser,
Laser shall be liable to pay to Payee all reasonable costs and expenses of
collection incurred by Payee, including, without limitation, reasonable
attorneys' fees, whether or not suit or other action or proceeding be instituted
and specifically including but not limited to collection efforts that may be
made through a bankruptcy court.
If, for any reason, performance of any provisions of the Note, at the time
performance of such provision shall be due, shall involve exceeding the highest
lawful rate of interest prescribed by the law controlling the Note, then, ipso
facto, the obligations to be performed shall be reduced to the highest lawful
rate. If, for any reason, Payee shall receive as interest an amount which would
exceed the highest lawful rate, such amount which would be excessive interest
shall be applied immediately and automatically to the reduction of the unpaid
balance of the principal amount and not to payment of interest. The provisions
of this paragraph shall control every other provision of this Note.
This Note shall be governed by and construed and interpreted in accordance
with the laws of the State of Utah.
Any notice or other communication, except for payment hereunder, required
or permitted hereunder shall be in writing and shall be deemed to have been
given upon delivery if personally delivered or one day after deposit if
deposited in the United States mail for mailing by overnight mail, postage
prepaid, and addressed as follows:
If to Laser: Laser Corporation
2417 South 3850 West
Salt Lake City, UT 84120
If to Payee: Rehweidstrasse 15
8738 Uetliburg
Switzerland
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IN WITNESS WHEREOF, the parties hereto have executed this Note as of the
day and year first above written and agree to the terms and conditions herein.
Any payment shall be deemed made upon receipt by Payee.
OBLIGOR: LASER CORPORATION
-----------------
By:
-------------------------------
PAYEE: ----------------------------------
By:
-------------------------------
523727
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM LASER
CORPORATION AND SUBSIDIARIES MARCH 31, 2000 FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000740726
<NAME> LASER CORPORATION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 195,178
<SECURITIES> 0
<RECEIVABLES> 628,306
<ALLOWANCES> 49,647
<INVENTORY> 705,802
<CURRENT-ASSETS> 1,504,270
<PP&E> 1,788,361
<DEPRECIATION> 1,523,596
<TOTAL-ASSETS> 1,812,810
<CURRENT-LIABILITIES> 1,348,705
<BONDS> 0
0
0
<COMMON> 80,200
<OTHER-SE> 104,457
<TOTAL-LIABILITY-AND-EQUITY> 1,812,810
<SALES> 630,140
<TOTAL-REVENUES> 631,549
<CGS> 557,379
<TOTAL-COSTS> 818,587
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,272
<INCOME-PRETAX> (188,310)
<INCOME-TAX> 0
<INCOME-CONTINUING> (188,310)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (188,310)
<EPS-BASIC> (.12)
<EPS-DILUTED> (.12)
</TABLE>
