UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(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
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-17020
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Larson Davis Incorporated
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(Exact name of registrant as specified in its charter)
Nevada 87-0429944
- ---------------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1681 West 820 North
Provo, Utah 84601
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(Address of principal executive offices) (Zip Code)
(801) 375-0177
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(Registrant's telephone number, including area code)
N/A
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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 the past 90 days.
Yes X No
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by court.
Yes No
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APPLICABLE ONLY TO CORPORATE ISSUERS
As of May 12, 1997, the Issuer had 11,439,964 shares of its common stock,
par value $0.001 per share, issued and outstanding.
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Larson Davis Incorporated (the "Company") has included the consolidated
balance sheets of the Company and its subsidiaries as of March 31, 1997
(unaudited), and December 31, 1996 (the end of the Company's transition period),
and unaudited consolidated statements of operations and cash flows for the three
months ended March 31, 1997 and 1996, together with unaudited condensed notes
thereto. In the opinion of management of the Company, the financial statements
reflect all adjustments, all of which are normal recurring adjustments,
necessary to fairly present the financial condition, results of operations, and
cash flows of the Company for the interim periods presented. The financial
statements included in this report on Form 10-Q should be read in conjunction
with the audited financial statements of the Company and the notes thereto
included in the annual report of the Company on Form 10-KSB for the year ended
June 30, 1996, and the report of the Company on Form 10-K for the transition
period ended December 31, 1996.
<TABLE>
<CAPTION>
LARSON DAVIS INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
March31, December 31,
1997 1996
ASSETS ------------ ------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,728,172 $ 2,696,542
Trade accounts receivable, net of
allowance for doubtful accounts 2,273,012 2,598,582
Inventories 4,127,492 4,096,445
Other current assets 189,291 130,096
------------ ------------
Total current assets 11,317,967 9,521,665
Property and equipment, net of accumulated
amortization 2,180,586 1,815,455
Assets under capital lease obligations,
net of accumulated amortization 793,796 613,675
Long-term contractual arrangement, net of
accumulated cost recoveries 2,794,284 2,872,014
Intangible assets, net of accumulated
amortization 4,991,432 5,083,712
------------ ------------
$ 22,078,065 $ 19,906,521
============ ============
</TABLE>
The accompanying notes are an integral part of these financial
statements
<TABLE>
<CAPTION>
LARSON DAVIS INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
March31, December 31,
1997 1996
LIABILITIES AND STOCKHOLDERS' EQUITY ------------ ------------
(unaudited)
<S> <C> <C>
Current liabilities:
Line of credit $ 663,715 $ 1,033,018
Accounts payable 666,481 902,926
Accrued liabilities 720,733 764,393
Current maturities of long-term debt 42,846 91,902
Current maturities of capital lease
obligations 185,183 159,515
------------ ------------
Total current liabilities 2,278,958 2,951,754
Long-term debt, less current maturities 759,573 759,709
Capital lease obligations, less current
maturities 671,683 523,185
------------ ------------
Total liabilities 3,710,214 4,234,648
------------ ------------
Commitments and contingencies - -
Stockholders' equity:
Preferred stock, $.001 par value; authorized
10,000,000 shares; issued and outstanding
200,000 shares 200 200
Common stock, $.001 par value; authorized
290,000,000 shares; issued and outstanding
11,374,191 shares at March 31, 1997 and
10,717,790 shares at December 31, 1996 11,374 10,718
Additional paid-in capital 24,101,810 19,999,375
Accumulated deficit (5,773,111) (4,418,780)
Cumulative foreign currency translation
adjustment 27,578 80,360
------------ ------------
Total stockholders' equity 18,367,851 15,671,873
------------ ------------
$ 22,078,065 $ 19,906,521
============ ============
</TABLE>
The accompanying notes are an integral part of these financial
statements
<TABLE>
<CAPTION>
LARSON DAVIS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
Three months ended March 31,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Net sales $ 2,204,697 $ 2,317,430
------------ ------------
Costs and operating expenses:
Cost of sales 1,208,367 1,105,591
Research and development 947,211 581,607
Selling, general, and administrative 1,362,026 907,172
------------ ------------
3,517,604 2,594,370
------------ ------------
Operating loss (1,312,907) (276,940)
------------ ------------
Other income (expense):
Interest income 43,999 -
Interest expense (74,732) (101,766)
Other, net 559 (12,142)
------------ ------------
(30,174) (113,908)
------------ ------------
Loss before income taxes (1,343,081) (390,848)
Income tax expense - -
------------ ------------
Net loss $ (1,343,081) $ (390,848)
============ ============
Loss per common shares:
Primary $ (0.12) $ (0.05)
Fully diluted $ (0.12) $ (0.05)
Weighted average common and common
equivalent shares:
Primary 11,114,125 7,576,427
Fully diluted 11,114,125 7,576,427
</TABLE>
The accompanying notes are an integral part of these financial
statements
<TABLE>
<CAPTION>
LARSON DAVIS INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
Three months ended March 31,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Increase (decrease) in cash and cash
equivalents:
Cash flows from operating activities
Net loss $ (1,343,081) $ (390,848)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation 81,835 118,694
Amortization 159,208 184,106
Stock issued in payment of compensation 43,698 -
Gain on sale of property and equipment (559) -
Changes in assets and liabilities:
Trade accounts receivable 325,570 (376,863)
Inventories (31,047) (187,128)
Other current assets (59,195) (54,221)
Accounts payable (236,445) 291,721
Accrued liabilities (43,660) 217,620
------------ ------------
Net cash used in operating activities (1,103,676) (196,919)
------------ ------------
Cash flows from investing activities
Purchase of property and equipment (481,481) (171,286)
Proceeds from sale of assets 35,074 -
Payments for intangible assets - (519,229)
Proceeds from long-term contractual
arrangement 77,730 56,664
------------ ------------
Net cash used in investing activities (368,677) (633,851)
------------ ------------
Cash flows from financing activities
Net change in lines of credit (369,303) 89,280
Proceeds from long-term obligations 25,486 229,851
Principal payments of long-term debt (74,678) (31,246)
Net proceeds from issuance of common
stock and exercise of options and
warrants 4,059,393 330,782
Principal payments on capital lease
obligations (72,883) (37,379)
Preferred dividends (11,250) (11,250)
------------ ------------
Net cash provided by financing activities 3,556,765 570,038
------------ ------------
Effect of exchange rates on cash (52,782) 3,477
------------ ------------
Net increase (decrease) in cash and cash
equivalents 2,031,630 (257,255)
Cash and cash equivalents at beginning of
period 2,696,542 329,244
------------ ------------
Cash and cash equivalents at end of
period $ 4,728,172 $ 71,989
============ ============
</TABLE>
The accompanying notes are an integral part of these financial
statements
LARSON DAVIS INCORPORATED AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(A) Basis of Presentation
- -------------------------
The accompanying unaudited consolidated financial statements of Larson Davis
Incorporated and Subsidiaries (the Company) have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, these financial statements do not include all
of the information and footnote disclosures required by generally accepted
accounting principles for complete financial statements. These financial
statements and footnote disclosures should be read in conjunction with the
audited consolidated financial statements and the notes thereto included
in the Company's annual report on Form 10-KSB for the year ended June 30,
1996, and report on Form 10-K for the six month transition period ended
December 31, 1996. In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to fairly present the Company's
consolidated financial position as of March 31, 1997, and its consolidated
results of operations and cash flows for the three months ended March 31, 1997
and 1996. The results of operations for the three months ended March 31, 1997,
may not be indicative of the results that may be expected for the year ending
December 31, 1997.
(B) Reclassifications - Not Material
- ------------------------------------
Certain nonmaterial reclassifications have been made to the consolidated
financial statements for the three months ended March 31, 1996, to conform to
the March 31, 1997, presentation.
(C) Earnings (Loss) Per Common Share
- ------------------------------------
Earnings (loss) per common share is computed by dividing net income (loss) by
the weighted average common shares outstanding during the period, including
common equivalent shares (if dilutive). Common equivalent shares include stock
options and warrants. Net income used in this calculation is decreased (net
loss is increased) by the dividends paid to preferred stockholders.
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 "Earnings per Share" (SFAS No. 128).
SFAS No. 128 establishes new standards for computing and presenting earnings per
share (EPS). SFAS No. 128 is effective for financial statements issued for
periods ending after December 15, 1997, including interim periods; earlier
application is not permitted. Upon adoption of SFAS No. 128, restatement of all
prior period EPS data will be required. SFAS No. 128 replaces the presentation
of primary and fully diluted EPS with a presentation of basic and diluted EPS,
respectively. Basic EPS excludes dilution and is computed by dividing earnings
available to common shareholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects potential dilution and is
calculated similarly to fully diluted EPS under current accounting standards.
Under SFAS No. 128, basic and diluted loss per share for the Company for the
three months ended March 31, 1997, and 1996, would have been the same as
primary and fully diluted loss per share presented in the accompanying
financial statements.
(D) Inventories
- ---------------
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Raw materials $1,226,418 $1,276,413
Work in process 1,339,758 1,398,229
Finished goods 1,561,316 1,421,803
---------- ----------
$4,127,492 $4,096,445
========== ==========
</TABLE>
(E) Stock Warrants
- ------------------
In conjunction with a private placement in May 1995, the Company issued warrants
to acquire additional common stock of the Company to a group of investors.
Since that time, the Company has issued additional warrants to this group as the
previously outstanding warrants were exercised. As of December 31, 1996,
warrants to purchase 2,100,167 shares of common stock at $6.25 per share were
outstanding.
In January 1997, the board of directors approved a reduction in the exercise
price, from $6.25 to $5.30 per share, of certain of these warrants related to
1,715,832 shares of common stock. In consideration of this reduction, the
holders of the warrants agreed to the early exercise of the warrants which were
otherwise permitted to be exercised until November 1, 1998. The holders agreed
to exercise a portion of the warrants on or before January 31, 1997, which
exercise occurred and resulted in the issuance of 651,103 shares and gross
proceeds to the Company of approximately $4,069,000. This initial issuance was
priced at $6.25 per share because the reduced price is contingent on the timely
exercise of the warrants related to all 1,715,832 shares.
Initially, the remaining portion of the warrants were to be exercised by April
16, 1997, but the agreement has been amended to allow the exercise of the
remaining warrants by June 6, 1997. If the remaining exercise occurs, it will
result in the issuance of an additional 1,064,729 shares of common stock and
additional gross proceeds to the Company of approximately $5,025,000. If these
remaining warrants are exercised, an aggregate of 1,715,832 shares will be
issued for aggregate gross proceeds of approximately $9,094,000, resulting in an
average exercise price of $5.30 per share.
(F) Employee Stock Purchase Plan
- --------------------------------
The board of directors of the Company adopted the 1997 Employee Stock Purchase
Plan (the "Plan") effective as of February 1, 1997. The Plan is subject to the
approval of stockholders and will be voted upon at the next shareholders'
meeting. The maximum number of shares of common stock which are available under
the Plan is 100,000 shares. The Plan will terminate on December 31, 1998, but
may be terminated earlier by the board of directors.
The Plan provides an opportunity to the employees of the Company to purchase
shares of common stock in the Company at 85% of fair market value on each
offering date. An offering date is defined in the Plan as the date that is ten
business days subsequent to the filing of the Company's quarterly reports on
Form 10-Q and annual report on Form 10-K. Employees of the Company, except
employees owning (or having a right to acquire) more that 5% of the Company's
stock, who have been employed for more than six months by the Company are
eligible to participate in the Plan. Participation in the Plan is limited to
20% of the employee's compensation, with a maximum of $25,000 during any
calendar year.
(G) Subsequent Events
- ---------------------
1. Building Lease
- ------------------
In April 1997, the Company entered into a new lease agreement covering existing
and additional office and manufacturing space. The lease covers approximately
18,300 square feet of space, has an initial term through March 31, 1999, and
contains options to extend the lease for five additional one-year periods
thereafter. The rental payment under the lease is $13,730 per month and
increases by 2% on April 1, 1998, and, if extended, by 4% on April 1, 1999, and
each year thereafter.
2. Preferred Stock
- -------------------
At March 31, 1997 and December 31, 1996, the Company had 200,000 shares of
preferred stock outstanding. This preferred stock was converted, in accordance
with the governing provisions of the designation, into 58,842 shares of common
stock effective April 30, 1997.
3. Stock Options
- -----------------
On May 13, 1997, the board of directors approved the 1997 Stock Option and Award
Plan (the "1997 Plan"). Under the 1997 Plan, the Company may grant options to
acquire or award up to 750,000 shares of common stock. The exercise prices
and vesting periods of options granted under the 1997 Plan are determined by
the board of directors.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with the
consolidated financial statements and related notes contained herein and in
conjunction with "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" and the audited consolidated financial statements
included in the Company's report on Form 10-KSB for the year ended June 30,
1996, and on Form 10-K for the six-month transition period ended December 31,
1996.
This report and other information made publicly available by the Company
from time to time may contain certain forward looking statements and other
information relating to the Company and its business that are based on the
beliefs of management of the Company and assumptions made concerning
information then currently available to management. Such statements reflect
the views of management of the Company at the time they are made and are not
intended to be accurate descriptions of the future. The discussion of the
future business prospects of the Company is subject to a number of risks and
assumptions, including the completion of commercial products within projected
time frames, the market acceptance of products to be developed, the ability
of the Company to successfully address technical and manufacturing problems
in producing new products, the ability of the Company to enter into strategic
alliances, joint ventures, or other collaborative arrangements with
established industry partners, the success of the marketing efforts of the
Company and the entities with which it has agreements, and the ability of
the Company to obtain the necessary financing to successfully complete its
goals. Should one or more of these or other risks materialize or if the
underlying assumptions of management prove incorrect, actual results of the
Company may vary materially from those described in the forward looking
statements. The Company does not intend to update these forward looking
statements, except as may occur in the regular course of its periodic
reporting obligations.
Over the course of the last three years, the Company has acquired the
rights to a number of technologies from Brigham Young University ("BYU"), either
directly from BYU or indirectly through its acquisition of Sensar Corporation.
These technologies have placed the Company in a position to develop a number of
sophisticated analytical instruments in addition to its historical acoustical
and vibration based business. The Company believes that the patented technology
it has acquired will permit it to develop instruments that are technically
superior to those currently being offered, that will be on the cutting edge of
certain emerging markets, that will address needs in certain industries in a
more cost efficient manner, and that can be sold at prices less than alternative
solutions currently being offered.
In order to accomplish its goals, the Company initiated a research and
development plan designed to convert the underlying technologies into commercial
products. These efforts are just beginning to lead to products and have not had
a significant impact on the revenues of the Company to date. The Company does
not anticipate that there will be a significant impact until at least the third
or fourth quarter of the calendar year ending December 31, 1997. The products
currently being worked on by the Company are designed for extremely
sophisticated applications, and there can be no assurance that the Company will
be successful in its development efforts or that alternative technologies may
not be developed by some other entity that provide a more advantageous solution
to the needs of the various industries targeted by the Company.
In order to obtain the necessary funding to implement its research and
development plan, the Company has sought and obtained equity financing,
primarily from private placements to a small number of investors. This capital
has been and is currently being used for various purposes, including increased
research and development activities, the reduction of the Company's operating
line of credit, and general operations. New product development, prototype
manufacture, and first production costs adversely affected the results of
operations of the Company in the three months ended March 31, 1997. These
activities generated expenses without corresponding revenues. It is anticipated
the Company will continue to experience operating losses until new products are
brought to market and begin to generate significant sales. The Company has
experienced delays in the finalization of proposed products and there can be no
assurance as to the timing of significant sales or as to the ultimate success of
the products. If the products prove unsuccessful, the Company may not be able
to recover its associated research and development costs, which could have a
significant material, adverse impact on the business and activities of the
Company.
RECENT DEVELOPMENTS
The Company has recently developed certain technologies and hired
experienced employees to enter into the supercritical fluid chromatography (SFC)
market. SFC is a chemical separations technique that one of the company's
chief scientists, Dr. Milton E. Lee, was instrumental in developing. Several
major customers, including Procter & Gamble, have found the SFC technique very
useful and have strongly encouraged the Company to introduce a new generation
commercial product.
The Company and Procter & Gamble have entered into an agreement under
which Procter & Gamble will provide the Company with its substantial experience
in SFC and its assistance in designing and testing new products developed by
the Company. The Company anticipates that it will take approximately one year
to introduce its initial product and that the market that potentially can be
developed with respect to the products being considered over the next few years
is in excess of $45 million in annual sales.
RESULTS OF OPERATIONS
Comparison of Three Months ended March 31, 1997 and 1996
Net Sales
Net sales for the three months ended March 31, 1997 and 1996, were
$2,204,697 and $2,317,430, respectively. This represents a decrease of
$112,733, or 4.9%, for 1997 as compared to 1996. The overall decrease is the
net difference between a decrease in sales of approximately $335,000 in the
acoustical and vibration product families and an increase of approximately
$222,000 in revenue from the Sensar products. Acoustical and vibration product
sales decreased from historical levels due to the delayed introduction of
certain recently announced new products. Management expects that market demand
for these new products will cause acoustical and vibration products sales to
return to and exceed historical levels, although no assurance can be made that
this will occur.
Cost of Sales
Cost of sales for the three months ended March 31, 1997, were $1,208,367,
or 54.8% of net sales, compared to $1,105,591, or 47.7% of net sales, for the
three months ended March 31, 1996. The increased level in cost of sales as a
percentage of net sales continues principally due to the high cost of materials,
initial production costs, and development costs associated with production of
the initial Sensar products. Management expects the cost of sales as a
percentage of net sales to decline in the future to a level more consistent with
historical levels prior to the Sensar acquisition. This should occur when the
Sensar products are ready for market, product demand is achieved, and standard
production processes are established; although this result cannot yet be assured
because the Company continues to have limited production experience with these
products to date.
Selling, General, and Administrative
Selling, general, and administrative expenses increased to $1,362,026, or
61.8% of net sales, for the three months ended March 31, 1997, compared to
$907,172, or 39.1% of net sales, for the three months ended March 31, 1996. The
increase was due to several factors, including audit and legal costs associated
with the change in fiscal year end to December 1996, and the related filing of a
report on Form 10-K for the six month transition period then ended; increased
consulting, travel, legal, and administrative costs associated with the pursuit
of strategic alliances; increased costs related to the establishment of the new
European sales manager position; and increased costs associated with other
corporate and marketing activities. Management believes that certain of these
costs during the three months ended March 31, 1997, were incurred in conjunction
with specific strategic initiatives, and that selling, general, and
administrative expenses as a percentage of net sales should decline in the
future to be more consistent with historical levels once such initiatives are
completed, although no assurance can be made that the Company will be successful
in accomplishing such reduction.
Research and Development
For the three months ended March 31, 1997, research and development costs
were $947,211, or 43.0% of net sales, compared to $581,607, or 25.1% of net
sales, for the three months ended March 31, 1996. The increase over the prior
period, as well as over historical levels, is due to the Company's continuing
commitment to research and the development of new products from technologies
acquired in recent years. The increased expenses principally relate to the
employment of additional scientists and engineers with pertinent experience and
education in chemistry, electrical engineering, software development, and
manufacturing production. The increased costs also include higher expenses
associated with materials and supplies used in the development process, and
consultation with outside experts. It is anticipated that research and
development costs will continue to exceed historical levels as a percentage of
net sales at least until the development of new products is completed and
significant sales levels of the new products are achieved.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had total current assets of $11,317,967,
including cash and cash equivalents of $4,728,172. The Company also had total
current liabilities of $2,278,958, resulting in working capital of $9,039,009
and a working capital ratio of 4.97 to 1. At March 31, 1997, the Company had
drawn $663,715 on its line of credit. The maximum limit on this line of credit
is $3,000,000, although the actual amount that the Company can borrow is
adjusted from time to time based on the amounts of inventories and accounts
receivable that secure the line of credit. The line of credit contains certain
covenants including, but not limited to, provisions that the Company maintain
specified levels of net worth, achieve certain results of operations, meet
established financial ratios, and restrict the amount of capital expenditures.
At times, the Company has been in violation of certain of these covenants,
the most significant of which relate to the maintenance of net worth and the
achievement of certain results of operations. The lender monitors the
Company's compliance with these covenants. Under the line of credit
agreement, the lender is required to notify the Company when it considers
an event of default to have occurred. Through March 31, 1997, and subsequent
thereto, the Company has not been notified by the lender of any event of
default, although this line of credit could become unavailable at any time
the Company is out of compliance with the loan covenants or any other
provision of the agreement.
The Company's primary source of cash for the three months ended March 31,
1997, was the issuance of common stock, principally resulting from the exercise
of stock warrants. The Company has relied on the sale of common stock as a
method to fund its increases in working capital, operational losses, and
research and development efforts. During the three months ended March 31, 1997,
net proceeds from the issuance of common stock were $4,059,393. There are
currently issued and outstanding warrants with respect to 1,449,064 shares of
common stock. If all of these warrants were exercised, of which there can be no
assurance, the Company would receive additional gross proceeds of $7,426,610.
On the satisfaction of certain conditions, the Company has agreed to issue
additional warrants to acquire up to an aggregate of 1,715,832 shares of common
stock at an exercise price of $10.75 per share. There is no obligation on the
part of the holders of these rights to exercise them, and the exercise will
largely depend on the future price of the Company's common stock in the public
trading market, as to which no assurance can be given.
The Company's primary uses of cash for the three months ended March 31,
1997, were (1) cash used in operations of $1,103,676; (2) purchase of property
and equipment of $481,481; and (3) reduction in the line of credit of $369,303.
Management expects that in the short-term, the primary uses of cash will be
operations and the purchase of property and equipment due to continued research
and development activities.
In the opinion of management, current cash balances, funds available under
the line of credit, and anticipated proceeds from the exercise of warrants will
provide the Company with sufficient capital to fund its operations and
development plans for the immediate future. The Company intends to fund its
short-term operating and capital requirements through equity financing,
principally through the exercise of stock warrants. As newly developed
products are commercialized and sufficient product demand is achieved,
management believes its long-term operating and capital requirements will be
funded principally through cash generated from operations, supplemented as
necessary by equity on long-term debt financing.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
The following exhibits are included as part of this report:
<TABLE>
<CAPTION>
SEC
Exhibit Reference
Number Number Title of Document Location
- ------ ------ ----------------- --------
<S> <C> <C>
1 (10) Amendment to Agreement to Issue Exhibit to report on
Warrants to Congregation Ahavas Form 10-Q for the
Tzdokah Z'Chesed dated April 16, 1997 quarter ended
March 31, 1997
2 (10) Amendment to Agreement to Issue Exhibit to report on
Warrants to Ezer Mzion Organization Form 10-Q for the
dated April 16, 1997 quarter ended
March 31, 1997
3 (10) Amendment to Agreement to Issue Exhibit to report on
Warrants to Laura Huberfeld and Form 10-Q for the
Naomi Bodner dated April 16, 1997 quarter ended
March 31, 1997
4 (10) Amendment to Agreement to Issue Exhibit to report on
Warrants to Connie Lerner Form 10-Q for the
dated April 16, 1997 quarter ended
March 31, 1997
5 (10) Amended and Restated 1996 Director Exhibit to report on
Stock Option Plan Form 10-Q for the
quarter ended
March 31, 1997
6 (10) 1997 Stock Option and Award Plan Exhibit to report on
Form 10-Q for the
quarter ended
March 31, 1997
7 (27) Financial Data Schedule Exhibit to report on
Form 10-Q for the
quarter ended
March 31, 1997
</TABLE>
[FN]
*Incorporated by reference
REPORTS ON FORM 8-K
During the quarter ended March 31, 1997, the Company filed a report on Form
8-K dated January 23, 1997, reporting the change in its fiscal year end from
June 30 to December 31.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Larson Davis Incorporated
Dated: September 30, 1997 By /s/ Brian G. Larson
----------------------------
Brian G. Larson, President
(Duly Authorized Officer)
Dated: September 30, 1997 By /s/ Craig E. Allen
----------------------------
Craig E. Allen
(Principal Financial and
Accounting Officer)
