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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1995 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 0-16106
APA OPTICS, INC.
(exact name of small business issuer as specified in its charter)
Minnesota 41-1347235
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2950 N.E. 84th Lane, Blaine, Minnesota 55449
(Address of principal executive offices and zip code)
Issuer's telephone number, including area code: (612) 784-4995
Indicate 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 issuer was required
to file such reports), and (2) has been subject to the filing requirement for
the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Class: Outstanding at June 30, 1995
Common stock, par value $.01 7,385,007
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PART 1, FINANCIAL INFORMATION
ITEM 1, FINANCIAL STATEMENTS
APA OPTICS, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS June 30 March 31
1995 1995
<S> <C> <C>
CURRENT ASSETS: (Unaudited) (Audited)*
Cash and short-term investments $ 313,152 $ 401,034
Accounts receivable 460,896 421,943
Inventories:
Raw Materials 61,128 61,791
Work-in-process & finished goods 153,839 146,414
Prepaid expenses 19,137 31,225
Bond reserve funds 87,083 63,333
TOTAL CURRENT ASSETS 1,095,235 1,125,740
PROPERTY AND EQUIPMENT, NET 1,424,465 1,492,282
OTHER ASSETS 471,078 445,075
$ 2,990,778 $ 3,063,097
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current Portion of Long-Term Debt $ 95,000 $ 95,000
Accounts payable 75,894 97,584
Accrued expenses 1,842 40,476
TOTAL CURRENT LIABILITIES 172,736 233,060
LONG TERM DEBT 445,000 445,000
SHAREHOLDERS' EQUITY
Undesignated shares; 5,000,000 shares
authorized; none issued --- ---
Common stock, $.01 par value; 15,000,000
shares authorized; 7,385,007 & 7,376,923
issued 73,850 73,769
Paid-in-capital 5,126,703 5,122,292
Retained earnings (deficit) (2,827,511) (2,811,024)
2,373,042 2,385,037
$ 2,990,778 $ 3,063,097
</TABLE>
* Derived from audited financial statements
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APA OPTICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
June 30,
1995 1994
<S> <C> <C>
REVENUES $ 592,017 $ 450,222
COSTS AND EXPENSES:
Cost of sales and
services 445,326 321,345
Selling, general &
administrative 152,627 129,288
Research & development 2,467 97,675
600,420 548,308
Gain/Loss from Operations (8,403) (98,086)
INTEREST INCOME & EXPENSE:
Interest Income 2,445 1,527
Interest Expense (10,279) (11,819)
(7,834) (10,292)
INCOME (LOSS)
BEFORE INCOME TAXES (16,237) (108,378)
INCOME TAX EXPENSE
(BENEFIT) 250 250
NET INCOME (LOSS) $ (16,487) $(108,628)
EARNINGS (LOSS) PER
COMMON & COMMON EQUIVALENT
SHARE (EXHIBIT 11) $(.00) $(.01)
WEIGHTED AVERAGE SHARES
OUTSTANDING 7,381,792 7,274,923
</TABLE>
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APA OPTICS, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (loss) $ (16,487) $ (108,628)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 103,193 108,865
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (38,953) (22,720)
(Increase) decrease in inventories and
prepaid expenses (18,424) (65,206)
Increase (decrease) in accounts payable and
accrued expenses (60,324) (38,964)
Other (38,003) (11,588)
Net cash provided by (used in) operating
activities (68,998) (138,241)
INVESTING ACTIVITIES
(Purchases) Sales of property and equipment (23,376) 108,979 *
Net cash used in investing activities (23,376) 108,979
FINANCING ACTIVITIES
Proceeds from the sale of common stock 4,492 ---
Repayment of long-term debt --- ---
Net cash provided by financing activities 4,492 ---
Increase (decrease) in cash (87,882) (29,262)
Cash at Beginning of Period 401,034 274,204
Cash at End of Period $ 313,152 $ 244,942
</TABLE>
NOTE TO CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the information furnished reflects all
adjustments which are necessary to a fair statement of the results of the
interim periods presented. All adjustments were of a normal recurring nature.
The result of any interim period are not necessarily indicative of results
for the full year.
* Includes $125,000 from the sale of used equipment.
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PART II. OTHER INFORMATION
ITEMS 1 - 5. Not Applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11: Statement RE: Computation of per share earnings.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three months ended
June 30, 1995.
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934,
the issuer caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
APA OPTICS, INC.
Date Anil K. Jain
President
Principal Executive Officer
Treasurer & Principal Financial
Officer
Date Randal J. Becker
Principal Accounting Officer
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EXHIBIT 11
APA OPTICS, INC.
<TABLE>
<CAPTION>
Statement RE: Computation
of Per Share Earnings
Three months ended
June 30,
1995 1994
<S> <C> <C>
Average common
shares outstanding 7,381,792 7,274,923
Dilutive stock options
and warrants (A) --- ---
Total 7,381,792 7,274,923
Net income (loss) $ (16,487) $(108,628)
Per share amount $(.00) $(.01)
</TABLE>
(A) Calculated using the "treasury stock" method.
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ITEM 2. MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations:
Revenues for the first quarter of fiscal 1996 ending June 30,
1995 were $592,017, an increase of 31% from the first quarter of
fiscal 1995 ending June 30, 1994. The first quarter revenues of
fiscal 1996 are also up 6% as compared to the previous quarter.
(4th quarter FY 1995). While the production revenues decreased by
$89,538 during the first quarter of fiscal year 1996 as compared
to the first quarter of fiscal year 1995, the contract revenues
increased by $231,333 resulting in an overall increase of $141,795
for the period. This shift is consistent with the Company's overall
plans to focus upon production and marketing of products based upon
its research and development activities. The Company believes that
its contract research and development activities along with
additional company paid research and development activities are
vital to the development of these future products. The increased
contract revenues also resulted in reducing the Company's paid
internal reseach and development expenses to $2,467 during the
first quarter of fiscal year 1996 from $97,675 for the first
quarter of fiscal year 1995.
The substantial increase in government contract revenues for
the first quarter of fiscal 1996 as compared to the first quarter
of fiscal 1995 is a result of the Company's efforts in winning new
government contracts in fiscal 1995. The Company's backlog of
unfinished government contracts is still around 4 million as
previously mentioned in our 1995 annual report.
For the first quarter of fiscal 1996, the Company is reporting
a net loss of ($16,487) as compared to a net loss of ($108,628) for
the first quarter of fiscal 1995. This significant decrease in
losses of $92,141 is mainly due to significant reduction in company
paid research and development expenses and increased contract
revenues. While the cumulative research and development activites
(contract and internal), an indicator of the overall product
development activities, increased in the first quarter of fiscal
year 1996 ($545,077) as compared to the first quarter of fiscal
year 1995 ($408,952), the expenses for internal research decreased
by $95,208 over the same period. The Company anticipates that the
cumulative research and development activities will increase during
the next few quarters of fiscal 1996.
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Liquidity and Capital Resources:
The Company's cash balance at June 30, 1995 is $313,152. The
Company's current ratio is over six to one. The Company believes
that it has sufficient cash to maintain its normal operation
through the balance of fiscal 1996 and beyond. Additionally, the
Company is in the process of expanding its opto-electronic product
manufacturing facilities in Aberdeen, South Dakota based on
economic assistance from the State of South Dakota and the City of
Aberdeen. In particular, South Dakota will provide assistance in
excess of $6.5 million. The Company will need to supplement this
package with $2.0 million over the next two years, which it plans
to raise through equity financing. The Company believes that these
funds will be sufficient for the Aberdeen operation over the next
two years and beyond. <PAGE>
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PART II. OTHER INFORMATION
ITEMS 1 - 5. Not Applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11: Statement RE: Computation of per share earnings.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three months ended
June 30, 1995.
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934,
the issuer has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
APA OPTICS, INC.
07/31/95 s/s Anil K. Jain
Date Anil K. Jain
President
Principal Executive Officer
Treasurer & Principal Financial
Officer
07/31/95 s/s Randal J. Becker
Date Randal J. Becker
Principal Accounting Officer
