FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_____________________________________
For the Quarter Ended September 30, 1998
Commission File # 0-15303
UNICO, Inc.
(Exact name of Registrant as specified in its Charter)
Delaware
(State or other jurisdiction of incorporation or organization)
73-1215433
(IRS Employer Identification Number)
8380 Alban Road, Springfield, VA 22150
(Address of principal executive offices) (Zip Code)
(703) 644-0200
(Registrant's telephone number, including area code)
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 __
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class: Common Stock, $.01 Par Value
Number of shares outstanding as of November 9, 1998
3,831,817
UNICO, Inc.
INDEX
Page No.
PART 1 - FINANCIAL INFORMATION
Item 1 Consolidated Balance Sheets
September 30, 1998 and December 31, 1997 3 & 4
Consolidated Statements of Operations
For the Quarter Ended September 30, 1998
and the Quarter Ended September 30, 1997 5
For the Nine Months Ended September 30, 1998
And the Nine Months ended September 30, 1997 6
Consolidated Statements of Cash Flow
For the Nine Months Ended September 30, 1998
and the Nine Months ended September 30, 1997 7
Notes to Interim Consolidated Financial Statements 8
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART 11 - OTHER INFORMATION 13
SIGNATURE PAGE 15
PART 1. FINANCIAL INFORMATION
UNICO, Inc.
CONSOLIDATED BALANCE SHEETS 1 of 2
ASSETS
September 30, December 31,
1998 1997
------------- ------------
CURRENT:
Cash and Cash Equivalents $ 228,131 $ 129,860
Accounts Receivable:
Trade(net of allowance
for uncollectible accounts
of $140,000 and $60,000) 370,008 292,003
Inventory 129,837 119,203
Other Receivables 3,043 2,877
Prepaid Expenses 0 9,140
------- -------
Total current assets 731,019 553,083
PROPERTY:
Printing and office equipment 3,513,286 3,428,274
Computer equipment and software 672,617 604,591
Transportation equipment 138,693 138,693
Leasehold improvements 63,063 63,063
--------- ---------
Total 4,387,659 4,234,621
Less accumulated depreciation (2,597,412) (2,166,065)
Net property and equipment 1,790,247 2,068,556
DEPOSITS AND OTHER ASSETS 8,105 18,302
----------- -----------
TOTAL $2,529,371 $2,639,941
=========== ===========
The accompanying Notes To Financial Statements are an integral
part of these financial statements.
UNICO, Inc.
CONSOLIDATED BALANCE 2 of 2
September 30, December 31,
LIABILITIES & STOCKHOLDERS' EQUITY 1998 1997
------------- ------------
CURRENT LIABILITIES:
Accounts payable $ 612,729 $1,307,198
Accrued liabilities 238,273 485,433
Notes payable, current portion 357,026 1,449,384
Deferred revenue 11,290 120,509
---------- ----------
Total current liabilities 1,219,318 3,362,524
LONG TERM LIABILITIES:
Notes payable 652,898 360,622
Deferred rent 354,544 320,874
---------- ----------
Total long term liabilities 1,007,442 681,496
Total liabilities 2,226,760 4,044,020
COMMITMENTS AND CONTINGENCIES (Note 2)
DEFICIENCY IN STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value:
5,000,000 shares authorized;
designated as: Redeemable Preferred;
70 shares issued and outstanding 1 1
Series A Convertible Preferred - -
Series B Preferred - -
Series C Preferred stock, $.01 par
value; voting on the basis of 4 votes
to 1 vote for the common stock,
preferred in liquidation at $1 per
share over common shareholders,
convertible into common stock
on the basis of 4 common shares
for each preferred share, with
automatic conversion on August 1,
1998; authorized, 2,000,000 shares,
issued and outstanding, 428,185
shares at December 31, 1997 and zero
at September 30, 1998 - 4,282
Common stock - $.01 par value;
20,000,000 shares authorized;
3,831,817 shares issued and
outstanding 25,473 21,191
Additional paid-in capital 6,801,008 6,801,008
Deferred Compensation (4,557) (4,557)
Accumulated deficit (6,519,314) (8,226,004)
----------- -----------
Total stockholders' 302,611 (1,404,079)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,529,371 $2,639,941
The accompanying Notes To Financial Statements are an integral part
of these financial statements.
UNICO, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED SEPTEMBER 30, 1998 AND 1997
1998 1997
REVENUES:
Coupon and advertising sales,
net of discounts and $ 0 $1,185,345
Franchise 0 4,847
Other 0 118,768
---------- ----------
TOTAL REVENUES 0 1,308,960
EXPENSES:
Production 0 1,258,648
General and administrative 110,717 354,679
Franchise development 0 24,082
Interest expense - affiliate 0 22,800
Interest expense - other 11,183 30,366
---------- ---------
TOTAL EXPENSES 121,900 1,690,575
NET INCOME (LOSS) BEFORE
INCOME TAXES (121,900) (381,615)
DEFERRED INCOME TAX EXPENSE 0 9,000
---------- ----------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM (121,900) (390,615)
EXTRAORDINARY GAIN FROM
FORGIVENESS OF DEBT 0 0
EXTRAORDINARY GAIN FROM BUSINESS
DISSOLUTION 335,167 64,001
---------- ----------
NET INCOME (LOSS) $ 213,267 $(326,614)
========== ==========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 2,677,579 2,119,077
---------- -----------
NET INCOME (LOSS) PER COMMON SHARE $ .08 $ (.15)
========== ===========
The accompanying Notes To Financial Statements are an integral
part of these financial statements.
UNICO, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
1998 1997
REVENUES:
Coupon and advertising sales,
net of discounts and allowances $ 0 $ 4,218,532
Franchise fees 0 82,965
Other 7,973 344,714
---------- ------------
TOTAL REVENUES 7,973 4,646,211
EXPENSES:
Production 0 3,309,720
General and administrative 155,446 1,509,625
Franchise development 0 165,587
Interest expense - affiliate 0 69,222
Interest expense - other 23,912 85,240
---------- -----------
TOTAL EXPENSES 179,358 5,139,394
---------- -----------
NET (LOSS) BEFORE INCOME TAXES (171,385) (493,183)
DEFERRED INCOME TAX EXPENSE 0 27,000
---------- -----------
NET (LOSS) BEFORE
EXTRAORDINARY ITEM (171,385) (520,183)
EXTRAORDINARY GAIN FROM
FORGIVENESS OF DEBT 1,314,248 0
EXTRAORDINARY GAIN FROM
BUSINESS DISOLUTION 563,827 493,386
------------ ------------
NET INCOME $ 1,706,690 $ (26,797)
============ ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 2,307,290 2,119,077
------------ ------------
NET INCOME PER COMMON SHARE $ .74 $ (.01)
============ ============
The accompanying Notes To Financial Statements are an integral
part of these financial statements.
UNICO, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
1998 1997
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,706,690 $ (26,797)
Adjustments to reconcile
net income to net cash
provided by operating activities:
Depreciation and amortization 431,347 344,124
Provision for bad debts 80,000 83,114
Deferred income taxes 54,000 27,000
Changes in operating assets
and liabilities:
Accounts and notes receivable (78,171) (118,138)
Prepaid expenses and inventory (1,494) (6,856)
Deposits and other 10,197 (30,682)
Accounts payable and accrued
Liabilities (941,629) 147,838
Deferred revenue and rent (75,549) (124,788)
Net Cash Provided by (Used in) ----------- ----------
Operating Activities $1,185,391 294,815
CASH FLOWS FROM
INVESTING ACTIVITIES:
Territory Buy Back Allowance
credits granted 0 (59,250)
Purchase of property (153.038) (118,271)
Net Cash Provided by (Used in)
Investing Activities (153,038) (177,521)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from notes payable 420,500 31,894
Payment of notes payable (174,582) (259,897)
Debt forgiveness regarding
notes payable (1,180,000) 0
Net Cash Provided (Used In) ----------- ---------
Financing Activities (934,082) (228,003)
----------- ---------
CHANGE IN CASH AND CASH
EQUIVALENTS: 98,271 (110,709)
Cash and Cash Equivalents -
Beginning of Period 129,860 233,971
Cash and Cash Equivalents - ---------- ----------
End of Period $ 228,131 $ 123,263
========== ==========
SUPPLEMENTAL CASH FLOW
DISCLOSURES:
Cash paid for income taxes $ 0 $ 0
Cash paid for interest $ 19,689 $ 85,240
The accompanying Notes To Financial Statements are an integral
part of these financial statements.
UNICO, Inc.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 1998 and 1997
1. BASIS OF PRESENTATION
The interim consolidated financial statements
at September 30, 1998 and for the three month
and six month periods ended September 30, 1998
and 1997 are unaudited, but include all
adjustments which the Company considers necessary
for a fair presentation. The December 31, 1997
balance sheet was derived from the Company's
audited financial statements.
The accompanying unaudited financial statements
are for the interim periods and do not include
all disclosures normally provided in annual
financial statements, and should be read in
conjunction with the Company's audited financial
statements included in the Company's Form 10-KSB
for the year ended December 31, 1997. The
accompanying unaudited interim financial
statements for the three month and six month
periods ended September 30, 1998 are not necessarily
indicative of the results which can be expected for
the entire year.
The preparation of financial statements, in conformity
with generally accepted accounting principles, requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
2. COMMITMENTS & CONTINGENCIES
The Company is exposed to various legal matters encountered
in the normal course of business. In the opinion of
management, the resolution of these matters will not have a
material adverse effect on the Company's consolidated
financial position or results of operations.
3. INCOME TAXES
The Company accounts for income taxes in accordance with
the provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"), which requires an asset and liability approach to
accounting for income taxes. Under SFAS 109, deferred tax
assets or liabilities are computed on the difference
between the financial statement and income tax bases of
assets and liabilities ("temporary differences") using the
enacted marginal tax rate. Deferred income tax expenses or
benefits are based on the changes in the deferred tax
asset or liability from period to period.
Management has determined that it is not more likely than
not that the Company will be able to realize all the tax
benefits from available net operating loss carryforwards
and has, therefore, provided a valuation allowance of an
equal amount. The deferred income tax expense of $36,000
and $54,000, reflected in the Statements of Operations for
the quarter and nine month periods ended September 30,
1998, represent state income taxes payable by United
Marketing Solutions, Inc. on operating profits that are not
impacted by available net operating loss carryforwards.
4. SUBSIDIARY RESTRUCTURING
Certain amounts in the 1997 financial statements as
reported herein have been reclassified to conform to the
1998 presentation. These reclassifications relate
primarily to reporting discontinued operations. These
reclassifications had no effect on the net income or loss,
total current assets or total current liabilities as
previously reported.
During the fourth quarter of 1997, the Company decided to
dispose of its principal operating subsidiary United
Marketing Solutions, Inc. (formerly United Coupon
Corporation), by sale if a suitable purchaser could be
obtained. Accordingly, the results of operations
subsequent to that date have been presented showing the
results of continuing operations and discontinued
operations, net of applicable income taxes. A summary of
the subsidiary's operations for the three-month and nine-
month periods ended September 30, 1998 are as follows:
3 Months Ended 9 Months Ended
September 30, 1998 September 30, 1998
REVENUE ------------------ ------------------
Printing, design and
advertising sales, net $ 854,752 $ 3,286,108
Franchise fees 59,200 197,985
Other 168,792 588,723
------------ -------------
Total revenue 1,082,744 4,072,816
EXPENSES
Cost of sales 437,036 2,205,714
Franchise development 60,360 190,404
General and administrative 214,181 1,058,871
------------ ------------
Total expenses 711,577 3,454,989
------------ ------------
NET INCOME BEFORE INCOME TAX
(PROVISION) 371,167 617,827
INCOME TAX PROVISION 36,000 54,000
------------ -----------
NET INCOME $ 335,167 $ 563,827
5. CORPORATE RESTRUCTURING
On May 12, 1998, $1,314,248 of subordinated notes
previously owed to various third parties,were acquired,
along with all issued and outstanding shares of
the Company's Series C Preferred Stock, in connection with
a series of agreements among Renaissance Capital Partners
I, a Texas limited partnership ("Renaissance"), Duncan-
Smith Company, a Texas corporation ("Duncan-Smith"), and
Next Generation Media Corporation, a Nevada corporation
("NexGen"), between the Company and NexGen and between
NexGen and T.C. Equities.. As a component of these
agreements, the subordinated notes were forgiven, resulting
in an extraordinary gain of $1,314,248 for the Company.
This gain is reflected in the accompanying financial
statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Certain matters discussed herein (including the documents
incorporated herein by reference) are forward-looking
statements intended to qualify for the safe harbors from
liabilities established by the Private Litigation Reform
Act of 1995. These forward-looking statements can
generally be identified as such because the context of the
statement will include words such as the Company
"believes," "plans," "intends," "anticipates," "expects,"
or words of similar import. Similarly, statements that
describe the Company's future plans, objectives, estimates,
or goals, are also forward-looking statements. Such
statements address future events and conditions concerning
capital expenditures, earnings, litigation, liquidity,
capital resources and accounting matters. Actual
results in each case could differ materially from those
currently anticipated in such statements by reason of
factors such as future economic conditions, including
changes in customer demands; future legislative, regulatory
and competitive developments in markets in which the
Company operates; and other circumstances affecting
anticipated revenues and costs.
Liquidity and Capital Resources
The Company's principal measures of liquidity are cash,
certificates of deposit, accounts receivable and salable
inventory. Also, management deems appropriately managed
and collateralized bank lines of credit as a proper
supplement to its liquidity.
The Company's working capital was a deficit $488,299 at
September 30, 1998, an 82% improvement from December 31,
1997. This change reflects: an increase in Cash and
Equivalents of $98,271 resulting primarily from operating
profits and supplemental borrowings for the period; a net
increase of $78,171 in Trade and Other Accounts Receivable;
an increase of $10,634 in paper and work in process
Inventory at United Marketing Solutions, Inc. ("United
Marketing"); a decrease of $9,140 in Prepaid Expenses
related to utilization of annual insurance renewals and
similar contracts; These changes were impacted by a
decrease of $694,469 in Accounts Payable and a $247,160
decrease in Accrued Liabilities related to utilization of
seasonally accrued operating costs at United Marketing.
Working capital was also aided by a $1,092,358 reduction in
the current portion of Notes Payable related to principal
payments made on bank debt and write-off of $1,314,248 of
debenture debt that was forgiven during the period. These
amounts were partially offset by $175,000 of additional
borrowings during the period. Deferred Revenue also
decreased by $109,219 during the period.
Long term liabilities increased by $325,946 during the
period.
Management adopted a restructuring plan for its subsidiary
Cal-Central Marketing Corporation during 1995. Management
abandoned its restructuring plan for Cal-Central during the
fourth quarter of 1996 and wrote off remaining accounts
receivable and goodwill associated with this operation.
Results of Operations - Quarter Ended September 30, 1998
as Compared to the Quarter Ended September 30, 1997
Total revenues for the Company decreased by 17% during the
three month period ended September 30, 1998, compared to
the same period in 1997, after restatement of both periods
to reflect the plan to discontinue, through potential sale,
the operations of the Company's remaining operating
subsidiary, United Marketing. This decline reflects a
reduction of $330,593 in printing, advertising and design
sales to third parties and a $54,353 increase in franchise
fees. These items were coupled with a $50,024 increase in
other revenue during the 1998 period. Overall, the decline
in total revenue reflects the dilution of management's
efforts related to negotiations to sell United Marketing
and to restructure UNICO.
Production Expenses, which include art development,
printing, bindery, delivery, product development,
distributor support and selling expenses, decreased by
$821,612, during the 1998 quarter in contrast to
the same period in 1997. This decrease is directly related
to the decline in printing advertising and design
sales as well as elimination of marginally profitable
business activities encountered during the 1997
period.
General and Administrative Expense decreased by $29,781
from the same period last year primarily as a result of
lower overall level of business and required administrative
functions.
Franchise Development Cost, which includes the cost of
developing, advertising, selling, training and supporting
United Marketing franchises, was $36,278 higher than
the prior year, reflecting higher levels of activity in
franchise sales and support.
Interest Expense decreased $41,983 over the same period
last year as a result of conversion of convertible
debenture debt to equity during the past year.
An extraordinary gain of $1,314,248 was recorded during May
1998, as a result of forgiveness of an equal amount of
subordinated debenture debt by the holder. No income tax
provision was deemed necessary for this gain due to
available net operating loss carryforward amounts.
Extraordinary gain related to Business Dissolution of
United Marketing was $335,167 for the current period
compared to $64,001 for the same period in 1997. The gain
in 1997 was related to discontinuation of Cal-Central
Marketing business activities. The gain for 1998 includes
gain from the discontinued operations of United Marketing.
There was no Cal-Central Marketing activity during the
1998 period.
Consolidated Net Income for the current quarterly period
was $213,267 compared to a net loss of $326,614 for the
prior year.
Results of Operations - Nine Months Ended September 30,
1998 as Compared to the Nine Months Ended September 30,
1997
Total revenues for the Company decreased by 9% during the
nine month period ended September 30, 1998, compared to the
same period in 1997, after restatement of both periods to
reflect the plan to discontinue, through potential sale,
the operations of the Company's remaining operating
subsidiary, United Marketing. This decline reflects a
reduction of $932,424 in printing, advertising and design
sales to third parties and a $115,020 increase in franchise
fees. These changes were impacted by a $251,982 increase
in other revenue during the 1998 period. Overall, the
decline in total revenue reflects the dilution of
management's efforts related to negotiations to sell
United Marketing and to restructure UNICO.
Production Expenses, which include art development,
printing, bindery, delivery, product development,
distributor support and selling expenses, decreased by
$1,104,006, during the 1998 period in contrast to
the same period in 1997. This decrease is directly related
to the decline in printing advertising and design
sales, as well as elimination of marginally profitable
business addressed during the 1997 period.
General and Administrative Expense decreased by $234,948
over the same period last year primarily as a result of
lower overall level of business and required administrative
functions.
Franchise Development Cost, which includes the cost of
developing, advertising, selling, training and supporting
United Marketing franchises, was $35,543 lower than
the prior year, reflecting attention directed to
restructuring activities, as opposed to new franchise
sales during the early portion of 1998. Such activities
have increased during the third quarter of 1998.
Interest Expense decreased $130,550 from the same period
last year as a result of conversion of convertible
debenture debt to equity during the past year.
An extraordinary gain of $1,314,248 was recorded during May
1998, as a result of forgiveness of an equal amount of
subordinated note debt by the holders. No income
tax provision was deemed necessary for this gain due to
available net operating loss carryforward amounts.
Extraordinary gain related to Business Dissolution was
$563,827 for the current period compared to $493,386 for
the same period in 1997. The 1997 period was aided
by approximately $403,000 of non-recurring income related
to the write-off of Cal-Central obligations that were
deemed extinguished during the period. The gain during
1998 is related to the operations of United Marketing
Solutions which was designated to be sold during the fourth
quarter of 1997.
Consolidated Net Income for the current nine-month period
was $1,706,690 compared to a net loss of $26,797 for the
prior year.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Omitted from this report as inapplicable.
Item 2. Changes in Securities
Omitted from this report as inapplicable.
Item 3. Default Upon Senior Securities
Omitted from this report as inapplicable.
Item 4. Submission of Matters to Vote of Securities
Holders
Omitted from this report as inapplicable.
Item 5. Other Information
On May 12, 1998, 428,185 shares of the Company's Series C
Preferred Stock (the "Preferred Shares") were delivered to
Shane Sutton, Esquire, 689 Fifth Avenue, Sixth Floor, New
York, New York 10022, as Escrow Agent (the "Escrow Agent"),
for the account of T.C. Equities, Ltd., a Bahamas
corporation ("T.C. Equities"), pursuant to a series of
agreements between Renaissance Capital Partners I, a Texas
limited partnership, ("Renaissance"), Duncan-Smith Company,
a Texas corporation ("Duncan-Smith") and Next Generation
Media Corporation, a Nevada corporation ("NexGen"), between
the Company and NexGen and between NexGen and T. C.
Equities. Pursuant to these agreements, T. C. Equities
acquired effective control of the Company through its
ownership of the preferred shares, which represent 44.7% of
the total votes entitled to be cast by the holders of all
classes of the Company's capital stock, and the agreement
of the Company's current Board of Directors to resign
from office, appointing T. C. Equities' nominees to fill
the vacancies thereby created, upon the consummation of the
sale of the Company's sole operating subsidiary, United
Marketing Solutions, Inc., formerly United Coupon
Corporation, ("United") to NexGen (the "United
Acquisition"). The Preferred Shares were acquired from
Renaissance and Duncan-Smith by NexGen, simultaneously with
its acquisition of all of the Company's subordinated debt,
in exchange for an aggregate consideration to the holders
of the Preferred Shares and Subordinated Debt consisting
of: (i) cash in the amount of $100,000; (ii) 250,000
shares of NexGen Series A Callable, Convertible Cumulative
Preferred Stock; and (iii) ten year warrants to purchase
166,667 shares of NexGen's' common stock (subject to
adjustment) at an exercise price of $.16 per share. As
part of that transaction, all of the Company's subordinated
debt obligations were forgiven and the dividend preference
of the Preferred Shares upon liquidation was canceled. The
source of the cash portion of the consideration paid by
NexGen for the Preferred Shares, was T. C. Equities, which
invested $350,000 in NexGen in exchange for: (x) 70,000
shares of NexGen Series B Callable Convertible Cumulative
Preferred Stock; (y) five year warrants to purchase
250,000 shares of NexGen's Common Stock (subject to
adjustment) at an exercise price of $.16 per share; and (z)
an agreement to transfer and deliver the Preferred Shares
and certain shares of the Company's Common Stock (and the
cancellation of any options to purchase shares of the
Company's common stock) currently held by certain
members of the Company's Board of Directors (the "Director
Shares") to T.C. Equities. Pursuant to agreements between
NexGen and directors, Leon Zadel, Gerard R. Bernier and
Gerald Bomstad, Jr., these individuals agreed to surrender
the Director Shares to be conveyed to T.C. Equities (and in
the case of director, Bomstad, a promissory note from UNICO
having a principal balance of $12,000, and accrued interest
of $1,400, to be forgiven by NexGen) to NexGen in exchange
for 8,747, 329 and 37,600 shares of NexGen common stock,
respectively (and in the case of director, Bomstad, five
year options to purchase 1,787 shares of NexGen common
stock at an exercise price of $.16 per share). The
Director Shares represent 10.3% of the total votes
entitled to be cast by the holders of all classes of the
Company's capital stock. Accordingly, upon the
consummation of the sale of United to NexGen, T.C.
Equities will control 55% of the total votes entitled to be
cast by the holders of all classes of the Company's capital
stock. Until the United Acquisition is completed, after
submission to and approval by the UNICO stockholders at a
special meeting to be called for such purpose, the
Preferred Shares and the Director Shares are held in escrow
by the Escrow Agent who is required to vote affirmatively
therefor, but to otherwise refrain from any other voting of
such shares.
Effective September 1, 1998, the 428,185 shares
of Series C Preferred Stock automatically
converted to 1,712,740 shares of Common Stock of
the Company pursuant to its terms.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
27 Financial Data Schedule - Pursuant to EDGAR filing
requirements for the period ended September 30, 1998, filed
herewith this form 10-QSB dated November 18, 1998.
B. Reports on Form 8-K
Form 8-K was filed June 19, 1998 to reflect the resignation
of the Registrant's Certifying Accountants.
Form 8-KA was filed June 29, 1998 to reflect the
acknowledgment and approval of the Registrant's Certifying
Accountants to the content of Form 8-K filed on June 19,
1998.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the Undersigned.
UNICO, INC.
November 18, 1998 By: /s/ Gerard R. Bernier
Chief Executive Officer
and President
November 18, 1998 By: /s/ Gerard R. Bernier
Acting Chief Financial Officer
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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