SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20949
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For the Quarter Ended May 31, 1998
Commission File Number 0-22382
SECTOR COMMUNICATION, INC.
----------------------------------------------
(Name of small business issuer in its charter)
Nevada 56-1051491
- ------------------------------- -------------
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
7601 Lewinsville Road, Suite 250, McLean, VA 22102
--------------------------------------------------
Address of principal executive offices
(703) 761-1500
-------------------------
Issuer's Telephone Number
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 [ ]
As of May 31, 1998, there were 1,211,998 shares of the Registrant's Common Stock
outstanding.
<PAGE>
SECTOR COMMUNICATIONS, INC.
REPORT ON FORM 10-QSB
TABLE OF CONTENTS
PART I ----- FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheet -
May 31, 1998 (unaudited) and February 28, 1998.................1
Consolidated statement of operations -
three month periods (unaudited) ended
May 31, 1998 and 1997..........................................2
Consolidated statement of cash flows -
three month periods (unaudited) ended
May 31, 1998 and 1997..........................................3
Notes to consolidated financial statements (unaudited).....................5
Item 2. Management's Discussion and Analysis........................10
PART II ----- OTHER INFORMATION
Item 1. Legal Proceedings...........................................13
Item 6. Exhibits and Reports on Form 8-K............................13
<PAGE>
SECTOR COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
May 31, February 28,
1998 1998
------------ ------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 228,582 $ 128,911
Accounts Receivable, net of provision for
doubtful accounts of $11,326 and $38,097 343,801 501,010
Notes Receivable 43,333 125,000
Prepaid Expenses 56,237 45,646
------------ ------------
Total Current Assets 671,953 800,567
------------ ------------
PROPERTY AND EQUIPMENT 2,220,093 2,211,317
Accumulated Depreciation (1,559,672) (1,476,444)
------------ ------------
Net Book Value 660,421 734,873
------------ ------------
OTHER ASSETS
Intangible Assets, net 4,870,648 4,974,345
Deposits 42,482 42,482
Other Assets 70,000 --
------------ ------------
Total Other Assets 4,983,130 5,016,827
------------ ------------
TOTAL OTHER ASSETS $ 6,315,504 $ 6,552,267
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 1,387,077 $ 1,689,711
Debentures Payable, net of discount of $230,300 269,700 --
Deferred Revenue 276,258 298,419
Due to Related Parties 369,239 235,785
------------ ------------
Total Current Liabilities 2,302,274 2,223,915
Rent Deposit 12,248 12,248
------------ ------------
TOTAL LIABILITIES 2,314,522 2,236,163
------------ ------------
Commitments and Contingencies -- --
STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par value; 5,000,000 shares
authorized, no shares issued and outstanding --
Preferred Stock, Series A $.001 per share, no shares
issued and outstanding -- --
Common Stock, $.001 par value; 40,000,000 shares
authorized, 1,211,645 and 917,962 shares
issued and outstanding (See Note 10) 1,211 918
Additional Paid-in Capital 14,023,429 13,729,709
Retained Deficit (9,860,070) (9,244,613)
Cumulative Foreign Currency Translation Adjustment (163,588) (169,910)
------------ ------------
Total Stockholders' Equity 4,000,982 4,316,104
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,315,504 $ 6,552,267
============ ============
</TABLE>
The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements.
- 1 -
<PAGE>
SECTOR COMMUNICATIONS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 31,
1998 1997
----------- -----------
REVENUE
Telecommunication Revenue $ 203,976 $ 250,684
Software Sales & Maintenance 106,408 372,711
----------- -----------
310,384 623,395
COST OF SALES 138,839 371,388
----------- -----------
GROSS PROFIT 171,545 252,007
----------- -----------
OPERATING EXPENSES
Gold Exploration Costs 2,662 29,864
Software Development Costs 128,396 237,919
Sales, General & Administrative 633,782 766,786
----------- -----------
Total Operating Expenses 764,840 1,034,569
----------- -----------
(Loss) Income From Operations (593,295) (782,562)
OTHER INCOME (EXPENSE)
Interest (Expense) (25,825) (612)
Other Income 3,663 25,235
Foreign Exchange Gain -- 10,274
----------- -----------
Loss Before Provision for Income Taxes (615,457) (747,665)
Provision for Income Taxes -- --
----------- -----------
Net Loss $ (615,457) $ (747,665)
=========== ===========
Net Loss Per Share $ (0.57) $ (0.83)
=========== ===========
Weighted Average Common Shares Outstanding 1,074,371 897,961
The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements
- 2 -
<PAGE>
SECTOR COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 31,
1998 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $(615,457) $(747,665)
Adjustments to Reconcile Net Loss to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 181,747 204,760
Amortization of Discount 24,700 --
Change in Assets and Liabilities, Net of
Effect of Acquisition:
(Increase) Decrease in Assets
Accounts Receivable 157,209 17,017
Repayment of Related Party Receivable -- 32,198
Prepaid Expenses and Deposits (10,591) 4,617
Receivable on Sale of Securities -- 571,000
(Decrease) Increase in Liabilities
Accounts Payable (302,634) 60,613
Related Party Payable 171,954 6,771
Deferred Revenue (22,161) (24,652)
--------- ---------
Net Cash Provided (Used) by Operating Activities (415,233) 124,659
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets (8,776) (31,675)
Decrease in Marketable Securities -- 21,762
Notes and Loans Receivable 81,667 13,403
--------- ---------
Net Cash Provided by Investing Activities 72,891 3,490
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of Debentures 430,000 --
--------- ---------
Effect of Exchange Rate Changes on Cash 12,013 (51,229)
--------- ---------
Net Increase in Cash 99,671 76,920
Cash - March 1, 128,911 80,096
--------- ---------
Cash - May 31, $ 228,582 $ 157,016
========= =========
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash Paid For:
Interest $ -- $ --
========= =========
Taxes $ -- $ --
========= =========
The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements.
- 3 -
<PAGE>
SECTOR COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MAY 31, 1998 AND 1997
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCIAL ACTIVITIES:
Period ended May 31, 1998:
Common stock totalling 25,306 shares was issued to retire a debt of
$39,013.
Common stock totalling 75,000 shares was issued in connection with the
preferred stock conversion described in Note 7.
Common stock totalling 60,000 shares was issued in connection with the
placement of the convertible debentures described in Note 8. A discount of
$255,000 has been ascribed to these shares.
Period ended May 31, 1997:
Common stock totalling 1,000,000 shares was issued in connection with a
February 28, 1999 debt reduction agreement.
The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements.
- 4 -
<PAGE>
SECTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MAY 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presentation
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB.
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
adjustments)considered necessary for a fair presentation have been
included.Certain reclassifications have been made to the prior
period to conform to the current period's presentation.
For further information refer to the financial statements and
footnotes included in the Registrant's Annual Report on form 10-KSB
for the period ended February 28, 1998.
The results of operations for any interim period are not necessarily
indicative of the results to be expected for the full fiscal year
ending February 28, 1999.
The unaudited consolidated balance sheet as of May 31, 1998 and the
consolidated statements of operations and cash flows for the three
month periods ended May 31, 1998 and 1997 are those of Sector and
its subsidiaries (collectively the "Company"). All significant
intercompany accounts and transactions have been eliminated.
The accompanying consolidated financial statements as of May 31,
1998 and for the three months then ended include the accounts of
Sector and its subsidiaries. Such subsidiaries are as follows:
Global Communications, Inc. 100% owned
HIS Technologies AG 60% owned
Mountain Software AG 100% owned
b) Loss Per Share
Loss per share is based on the weighted average number of shares of
common stock outstanding during the period.
c) Foreign Currency Translation
In accordance with the provisions of Statement of Accounting
Standard No. 52, "Foreign Currency Translations" ("SFAS No. 52") the
assets and liabilities of the Company's subsidiaries located outside
the United States are generally translated at the rates of exchange
in effect at the balance sheet date. Gains and losses resulting from
foreign currency transactions are recognized currently in income and
those resulting from translation of financial statements, with the
exception of entities operating in highly inflationary economies, as
Global does in Bulgaria, are accumulated in a separate component of
stockholders' equity. In highly inflationary economies, SFAS No. 52
requires that the use of historical exchange rates to translate
nonmonetary items and current exchange rates to translate monetary
items. The effect of exchange rate changes is reflected in net loss.
- 5 -
<PAGE>
SECTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MAY 31, 1998
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
May 31, February 28,
1998 1998
----------- -----------
Fiber Network $ 157,837 $ 157,837
Equipment 1,916,192 1,916,192
Furniture and Fixtures 55,996 47,220
Vehicles and Other 90,068 90,068
----------- -----------
2,220,093 2,211,317
Less: Accumulated Depreciation (1,559,672) (1,476,444)
----------- -----------
$ 660,421 $ 734,873
=========== ===========
Depreciation expense for the three month periods ended May 31, 1998 and
1997 was $83,228 and $106,287, respectively.
NOTE 3 - INTANGIBLE ASSETS
Intangible assets at May 31, 1998 are as follows:
Intangible assets related to the acquisition
of Histech $ 4,286,922
Intangible assets related to the acquisition
of Mountain 595,959
Intellectual property and distribution rights
acquired by Histech prior to its acquisition
by the Company, net of foreign currency
exchange fluctuations. 755,398
-----------
5,638,279
Amortization of intangible assets and
intellectual property and distribution rights 767,631
-----------
Total $ 4,870,648
===========
The intangible asset recorded for intellectual property and distribution
rights was acquired by Histech based on an agreement, as amended, dated
May 1, 1996, between Histech and HIS Software AG.
The excess purchase price over the fair value of the net assets acquired
of Histech and Mountain will be amortized on a straight-line basis over
twenty years. Costs related to the acquisition of the intellectual
property and distribution rights purchase by Histech are amortized over
the estimated useful life of five years.
- 6 -
<PAGE>
SECTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MAY 31, 1998
NOTE 4 - WARRANTS
At May 31, 1998, the Company has reserved 36,000 shares of common stock
for issuance upon the exercise of the currently outstanding warrants. The
exercise prices and expiration dates of the warrants are as follows:
Number Exercise Date Date of
of Shares Price Exercisable Expiration
----------- -------- ----------- ----------
2,000 $112.50 2/28/97 6/30/00
2,000 150.00 7/20/97 6/30/00
2,000 200.00 7/20/98 6/30/00
5,000 39.50 2/28/97 7/18/99
25,000 39.50 2/28/97 7/18/99
-----------
36,000
===========
NOTE 5 - STOCK OPTION PLANS
At May 31, 1998, the Company has options outstanding for the purchase of
26,200 shares under the 1994 Stock Plan, at exercise prices ranging from
$18.75 to $81.25 per share. 21,200 options are exercisable as of May 31,
1998. There were no option transactions during the period March 1 through
May 31, 1998.
NOTE 6 - SECTOR COMMUNICATIONS AG
Sector Communications AG was dissolved in July of 1997. At the time of its
dissolution it had no operating budget, revenues nor employees. The
Company acquired 100% of the outstanding capital stock of Sector
Communications AG ("Sector AG") on July 31, 1996, from Murray Services,
Ltd. ("Murray") for the purpose of holding the equity interests acquired
by the Company in Switzerland, namely HIS Technologies AG and Mountain
Software AG. At the time that Sector AG was acquired it had neither assets
nor liabilities. Equity interests in HIS Technologies AG and Mountain
Software AG are now held directly by Sector Communications, Inc.
NOTE 7 - STOCKHOLDERS' EQUITY
Preferred Stock
The Company has authorized an issue of Series A 8% Cumulative Convertible
Preferred Stock. The preferred stock may be converted into common stock at
the lesser of (i) 75% of the five day average closing bid price
immediately preceding the conversion date or (ii) the closing bid price on
the date of purchase of the preferred stock (the "Closing Date"). Up to
and including the 100th day following the Closing Date, the Company shall
have the right to redeem any or all of the shares for 125% of the purchase
price, plus accrued dividends.
- 7 -
<PAGE>
SECTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MAY 31, 1998
NOTE 7 - STOCKHOLDERS' EQUITY (continued)
Common Stock
Fiscal Year 1998 Reverse Stock Split
On July 22, 1997, the Board of the Company authorized an amendment to the
Company's Amended and Restated Articles of Incorporation approving a
reverse stock split of the outstanding shares of the Common Stock on the
basis of one new share of the Common Stock for each 40 shares of
outstanding Common Stock. The Amendment was approved at the Annual Meeting
of Stockholders held on October 21, 1997. Such action did not change the
par value of the Common Stock of $.001 per share of the number of
authorized shares of the Common Stock from 50,000.
On November 18, 1997, the Board authorized a reverse stock split of the
Common Stock of one share for every 1.25 outstanding shares. The par value
of the Common Stock did not change, but the number of authorized shares
was reduced from 50,000,000 to 40,000,000. The two reverse stock splits,
which had the combined effect of 1 for 50 reverse stock split, as well as
the reduction of the authorized shares, became effective with the filing
of an amendment in Nevada on December 2, 1997.
Recent Issuance of Common Stock
On January 5, 1998, ET Trading, based in London, England, purchased 250
shares of the Company's Series A 8% Convertible Preferred Stock, $.001 par
value (the "Series A Preferred"), for $250,000 in a private placement
pursuant to Regulation S under the Securities Act of 1933, as amended (the
"Securities Act"). Concerned that the holder of the shares of the Series A
Preferred may have been selling shares of the Common Stock, thereby
lowering the market price of the Common Stock, on March 18, 1998, the
Company gave the holder notice of its intention to redeem on April 2, 1998
all 250 shares of the Series A Preferred for $312,500, which action
terminated the holder's right to convert. In Lieu of the redemption,
Firstimpex, based in Geneva, Switzerland, purchased the 250 shares of the
Series A Preferred from FT Trading for the redemption price on the
condition that the Company restore the conversion right and issue to
Firstimpex 75,000 shares of the Common Stock, which issuance was effected
on April 5, 1998 simultaneously with the restoration of the conversion
right. On the same day, Firstimpex converted 165 shares of the Series A
Preferred into 73,333 shares of the Common Stock based on a conversion
price of $2.25 per share. On May 13, 1998, Firstimpex converted the
remaining 85 shares of the Series A Preferred into 60,044 shares of Common
Stock based on the alternative conversion price of $1.415625 per share
which represented the average of the closing bid prices during the five
trading days preceding the conversion date.
In connection with the sale of its 6% Convertible Debentures, the Company
issued 30,000 shares of its Common Stock to each of the two purchasers.
The Company issued 25,306 shares of common stock to retire debt owed to a
related party in the amount of $39,013.
- 8 -
<PAGE>
SECTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
MAY 31, 1998
NOTE 8 - DEBENTURES PAYABLE
On April 15, 1998, the Company sold $500,000 in principal amount of its 6%
Convertible Promissory Note due July 30, 1998 (the "Notes") pursuant to
Regulation S under the Securities Act for net proceeds of $430,000. In
addition, the two purchasers, Amex Corp. Limited and Danvers Investment
Corp., each a British Virgin Island corporation, with an address in
Zurich, Switzerland, each received 30,000 shares of the Common Stock.
Effective May 26, 1998, each holder has the full right to convert its Note
in the principal amount of $250,000, plus accrued interest (at the rate of
6% per annum), in whole or in part, into shares of the Common Stock at a
conversion price equal to the lesser of (1) $2.98 (which was 80% of the
closing bid prices of the Common Stock on April 15, 1998) or (2) 80% of
the average closing bid prices of the Common Stock for the five trading
days immediately preceding the conversion date.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Currently the Company does not meet certain of the Nasdaq maintenance
requirements. If the Common Stock is delisted from the Nasdaq Smallcap
Market because of the Company's inability to meet the Nasdaq maintenance
requirements, its price quotations would either be reported in the OTC
Bulletin Board or in the pink sheets. In addition, if the bid price
continues to be below $5.00 per share, the security would then become
subject to Rule 15g-9 promulgated under the exchange Act, which Rule
imposes additional sales practices requirements on a broker-dealer which
sells Rule 15g-9 securities to persons other than the broker-dealer's
established customers and institutional accredited investors (as such term
is defined in Rule 501(a) under the Securities Act).
- 9 -
<PAGE>
Item 2. Management's Discussion and Analysis
Results of Operations
The following is management's discussion and analysis of certain
significant factors which have affected the financial position and operating
results of Sector Communications, Inc. (the "Company") and its subsidiaries
during the three months ended May 31, 1998 as compared with the three months
ended May 31, 1997.
Telecommunication Revenues
Global Communications Group, Inc. ("Global"), the Company's subsidiary,
derives all of its telecommunications revenue from Global's Bulgarian subsidiary
(1) providing direct-dial services for international long distance calls to a
select group of hotels in the cities of Sofia and Plovdiv in Bulgaria; (2) from
the integration, installation and maintenance of customer-owned digital phone
systems; and (3) from usage-based percentages of company-owed digital phone
systems through shared revenue agreements with some of its customers.
Telecommunication revenue decreased by $46,708 or 18.6% from $250,684 in
the three months ended May 31, 1997 to $203,976 in the three months ended May
31, 1998. This decrease was due to a cross-the-board decrease in the use of
hotel phones in Bulgaria by international travelers for purposes other than
faxing. Management believes that such travelers are increasingly using cellular
or mobile telephones instead to make their calls. In the event that this is a
trend, management is looking to offset this loss of revenue by the Bulgarian
subsidiary exploring Internet and Intranet usage of its installed system.
Assuming that this is a trend, there can be no assurance that these offsetting
efforts will be successful.
Software Sales and Maintenance Revenues
Effective August 31, 1996, the Company began recording the software sales
and maintenance revenues from its 60%-owned subsidiary HIS Technologies AG
("Histech"). No revenue related to Histech's operations was recorded prior to
that time because the acquisition of Histech was accounted for as a purchase
effective August 31, 1996.
Software sales and maintenance revenues from Histech decreased by $266,303
or 71.5% from $372,711 in the three months ended May 31, 1997 to $106,408 in the
three months ended May 31, 1998. Management believes that this decrease is a
temporary glitch due to a major customer not paying invoices aggregating
$175,000 and that the trend of increasing software revenues will be resumed in
later quarters, as to which there can be no assurance.
10
<PAGE>
Cost of Sales
Costs of sales decreased by $232,549 or 62.6% from $371,388 in the three
months ended May 31, 1997 to $138,839 in the three months ended May 31, 1998.
The decrease was due to the decrease in the revenues of the Company and its
subsidiaries.
Software Development Costs
Histech's software development costs decreased by $219,523 or 92.3% from
$237,919 for the three months ended May 31, 1997 to $128,396 for the three
months ended May 31, 1998. The decrease was due to the unavailability of funds
to finance the Company's research and development operations.
Management believes that a significant level of software development costs
will be require by Histech to remain competitive and expects such costs will
increase in the future if the funding for such increased costs is available to
the Company, as to which funding there can be no assurance.
Selling, General and Administrative Expense
This expense decreased by $133,004 or 17.3% from the $766,786 in the three
months ended May 1997 to the $633,782 in the three months ended May 31, 1998.
The decrease was due to the lower revenues.
Net Loss
The net loss decreased by $132,208 or 17.7% from $747,665 in the three
months ended May 31, 1997 to $615,457 in the three months ended May 31, 1998 as
a result of the reasons described above.
Liquidity and Capital Resources
During the three month period ended May 31, 1998, the Company financed its
operations primarily through the funds it received from the sale of $500,000 in
principal amount of the Company's 6% Convertible Promissory Notes due July 30,
1999.
The Company is experiencing negative cash flow from operations. The
funding of future operations will require further infusions of capital.
If additional funds are raised by the Company through the issuance of
equity securities, or securities convertible into or exercisable for equity
securities, the
11
<PAGE>
percentage ownership of the then current stockholders of the Company will be
reduced. The Company may issue preferred stock with rights, preferences or
privileges senior to those of the Common Stock. Although discussions are
on-going with various potential sources of additional capital, there can be no
assurance that the Company will be successful in its efforts to obtain adequate
capital nor if any such additional capital is made available to the Company that
it will be on terms and conditions that are not extremely dilutive to the
present holders of the Common Stock. Discontinuance of the listing of the Common
Stock on the Nasdaq Smallcap Market because of the Company's failure to meet the
Nasdaq maintenance requirements may adversely impact the Company's ability to
obtain future financing.
Forward Looking Statements
This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements which involve risk and
uncertainties. Such forward-looking statements reflect the Company's current
views with respect to future events and financial performance. Actual results
could differ materially from those projected in the forward-looking statements
as a result of the Company's ability to obtain adequate additional financing as
needed, the uncertainties of new product development and introduction, sales,
growth, competitive pressures, uncertainties connected to the Bulgarian economy,
and other risks listed from time to time in the Company's periodic reports filed
with the Securities and Exchange Commission, including, but not limited to, its
Annual Report on Form 10-KSB for the fiscal year ended February 28,1998
(Forward-Looking Statements section).
12
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Item 3 of the Company's Annual Report on Form 10-KSB
for the fiscal year ended February 28, 1998 (the "Annual Report"). There were no
material developments during the quarter ended May 31, 1998 relating to the
litigation reported in the Annual Report.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed on April 24, 1998, reporting Item 5
(Other Information) and Item 6 (Financial Statements and Exhibits). There were
no financial statements filed.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this Report to be signed on its behalf by the undersigned, thereinto duly
authorized.
SECTOR COMMUNICATIONS, INC.
---------------------------------
(Registrant)
Date: July 21, 1998 By: Geoffrey A. Button
-----------------------------
President and Chief Executive Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Sector
Communications, Inc. and is qualified in it's entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1998
<PERIOD-END> MAY-31-1998
<CASH> 228,582
<SECURITIES> 0
<RECEIVABLES> 355,127
<ALLOWANCES> 11,326
<INVENTORY> 0
<CURRENT-ASSETS> 671,953
<PP&E> 2,220,093
<DEPRECIATION> 1,559,672
<TOTAL-ASSETS> 6,315,504
<CURRENT-LIABILITIES> 2,302,274
<BONDS> 269,700
0
0
<COMMON> 1,211
<OTHER-SE> 3,999,771
<TOTAL-LIABILITY-AND-EQUITY> 6,315,504
<SALES> 310,384
<TOTAL-REVENUES> 310,384
<CGS> 138,839
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 764,840
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,825
<INCOME-PRETAX> (615,457)
<INCOME-TAX> 0
<INCOME-CONTINUING> (615,457)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (615,457)
<EPS-PRIMARY> (.57)
<EPS-DILUTED> (.57)
</TABLE>
