*---------------------------------------------------------------*
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
SEPTEMBER 30, 1995
Commission File Number
0-17187
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LOGIC DEVICES INCORPORATED
(Exact name of registrant as specified in its charter)
*---------------------------------------------------------------*
CALIFORNIA 94-2893789
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
628 EAST EVELYN AVENUE, SUNNYVALE, CALIFORNIA 94086
(Address of principal executive offices) (Zip Code)
(408) 737-3300
(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
Indicate the number of shares outstanding of the issuer's classes of
common stock, as of the latest practicable date. On November 3, 1994,
5,909,205 shares of Common Stock, without par value, were outstanding.
*---------------------------------------------------------------*
<PAGE>
LOGIC DEVICES INCORPORATED
INDEX
PAGE NUMBER
Part I. Financial Information
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of September 30, 1995 3
and December 31, 1994
Consolidated Statements of Income for the three 4
months ended September 30, 1995 and 1994
Consolidated Statements of Income for the nine 5
months ended September 30, 1995 and 1994
Consolidated Statements of Cash Flows for the 6
nine months ended September 30, 1995 and 1994
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 11
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Part II. Other Information
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 16
Signatures 17
Exhibit 11 25
<PAGE>
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements.
LOGIC DEVICES INCORPORATED
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<C> <C>
September 30, December 31,
1995 1994
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 5,976,900 $ 222,300
Accounts receivable, net of allowance 5,113,500 4,057,600
Inventories 7,257,200 7,081,600
Prepaid expenses 480,600 405,800
Deferred income taxes 336,100 336,100
Total current assets 19,164,300 12,103,400
Equipment and leasehold improvements, net 1,983,200 2,162,700
Other assets 801,300 658,500
$21,948,800 $14,924,600
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings $ - $ 2,846,400
Current portion of long-term obligations 100,200 325,400
Accounts payable 511,800 1,270,300
Accrued expenses 217,600 292,500
Income taxes payable 303,000 151,400
Total current liabilities 1,132,600 4,886,000
Obligations to shareholders - 663,900
Long-term obligations 87,000 155,100
Deferred income taxes 409,400 409,400
Total liabilities 1,629,000 6,114,400
Shareholders' equity:
Preferred stock - 154,000
Common stock 16,615,200 6,071,200
Retained earnings 3,704,600 2,585,000
Total shareholders' equity 20,319,800 8,810,200
$21,948,800 $14,924,600
</TABLE>
<PAGE>
LOGIC DEVICES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
Three months ended September 30, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
<C> <C>
1995 1994
Net revenues $ 4,517,400 $ 3,462,300
Cost of sales 2,684,700 1,888,400
Gross margin 1,832,700 1,573,900
Operating expenses:
Research and development 382,500 342,400
Selling, general and administrative 761,700 842,800
Operating expenses 1,144,200 1,185,200
Income from operations 688,500 388,700
Other expense, net 40,700 81,900
Income before taxes 647,800 306,800
Income taxes 207,000 92,000
Net income $ 440,800 $ 214,800
Net income per common share $ 0.08 $ 0.04
Weighted average common shares equivalents 5,667,306 4,788,250
outstanding
</TABLE>
<PAGE>
LOGIC DEVICES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
Nine Months ended September 30, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
<C> <C>
1995 1994
Net revenues $12,475,400 $ 9,915,700
Cost of sales 7,149,400 5,420,300
Gross margin 5,326,000 4,495,400
Operating expenses:
Research and development 1,098,000 1,024,800
Selling, general and administrative 2,344,500 2,520,700
Operating expenses 3,442,500 3,545,500
Income from operations 1,883,500 949,900
Other expense, net 234,200 222,300
Income before taxes 1,649,300 727,600
Income taxes 529,700 229,000
Net income $ 1,119,600 $ 498,600
Net income per common share $ 0.21 $ 0.10
Weighted average common shares equivalents 5,324,185 4,782,316
outstanding
</TABLE>
<PAGE>
LOGIC DEVICES INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, 1995 and 1994
(unaudited)
<TABLE>
<CAPTION>
<C> <C>
1995 1994
Cash flows from operating activities:
Net income $ 1,119,600 $ 498,600
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 931,000 917,300
ESOP compensation expense - 83,800
Change in operating assets and liabilities:
Accounts receivable, net (1,103,000) (331,300)
Inventories (175,600) (678,900)
Prepaid expenses (74,700) (124,900)
Accounts payable (758,400) 18,300
Accrued expenses (74,900) 19,300
Income taxes payable 151,600 159,100
Net cash provided by operating 15,600 561,300
activities
Cash flows from investing activities:
Capital expenditures (495,600) (401,600)
Net decrease in other assets (351,700) (199,500)
Net cash (used in) investing activities (847,300) (601,100)
Cash flows from financing activities:
Bank borrowings, net (2,846,400) 647,500
Repayment of notes payable and long-term debt (93,300) (117,700)
Repayment of obligations to shareholders (863,900) (150,000)
Proceeds from long-term debt - (418,700)
Proceeds from exercise of warrants 258,500 -
Proceeds from exercise of employee stock options 190,500 48,800
Proceeds from private placements 9,940,900 -
Net cash provided by (used in) 6,586,300 9,900
financing activities
Net increase (decrease) in cash and cash equivalents 5,754,600 (29,900)
Cash and cash equivalents at beginning of
period $ 222,300 $ 194,400
Cash and cash equivalents at end of period $ 5,976,900 $ 164,500
</TABLE>
<PAGE>
LOGIC DEVICES INCORPORATED
Notes to Consolidated Financial Statements
September 30, 1995 and December 31, 1994
(unaudited)
(A) BASIS OF PRESENTATION
The accompanying unaudited interim financial statements reflect all
adjustments which are, in the opinion of management, necessary to present
fairly the financial position, results of operations and cash flows for the
periods indicated.
The accompanying unaudited interim financial statements have been prepared
in accordance with the instructions for Form 10-Q and therefore do not
include all information and footnotes necessary for a complete presentation
of the financial position, results of operations, and cash flows, in
conformity with generally accepted accounting principles. The Company filed
audited financial statements which include all information and footnotes
necessary for such a presentation of the financial position, results of
operations and cash flows for the years ended December 31, 1994 and 1993,
with the Securities and Exchange Commission. It is suggested that the
accompanying unaudited interim financial statements be read in conjunction
with the aforementioned audited financial statements. The unaudited interim
financial statements contain all normal and recurring entries. The results
of operations for the interim period ended September 30, 1995 are not
necessarily indicative of the results to be expected for the full year.
(B) INVENTORIES
A summary of inventories follows:
September 30, December 31,
1995 1994
Raw materials $ 873,100 $ 835,500
Work-in-process 5,278,200 4,418,300
Finished goods 1,105,900 1,827,800
$ 7,257,200 $ 7,081,600
Based on forecasted 1995 sales levels, the Company has on hand inventories
aggregating approximately ten months of sales.
<PAGE>
LOGIC DEVICES INCORPORATED
Notes to Consolidated Financial Statements
September 30, 1995 and December 31, 1994
(unaudited)
(C) DEBT
On June 1, 1995, the Company renewed its $3,000,000 revolving line of
credit with Sanwa Bank extending the maturity to May 31, 1996. The line of
credit bears interest at the bank's prime rate plus 1.500%. The Company
also entered into an $800,000 Term Loan with Sanwa Bank to refinance the
Company's existing obligation to shareholders. On August 28, 1995, the
Company used proceeds from private placements (see footnote I "Placement of
Securities") to repay the bank the outstanding balances under both the line
of credit and term loan. As of September 30, 1995, the Company had
$3,000,000 available under the revolving line of credit and had zero
outstanding under the Term Loan. The Term Loan had a maturity date of May
1, 1998, had monthly principal amortization payments, and bore interest at
the bank's prime rate plus 1.75%. The line of credit is secured by the
assets of the Company and requires the Company to maintain a minimum
tangible net worth, a maximum ratio of debt to tangible net worth, a minimum
current ratio, a minimum quick ratio, and profitability over a specified
interval of time.
(D) OBLIGATION TO SHAREHOLDERS
The obligation due to shareholders was scheduled to mature on March 31,
1995. On February 15, 1995, the shareholder lenders agreed to extend the
maturity date to March 31, 1996. On June 1, 1995 the Company obtained
financing from Sanwa Bank for repayment of the outstanding shareholder
obligation (see footnote C "Debt Financing").
(E) Employee Stock Ownership Plan
The Company's Employee Stock Ownership Plan ("ESOP") has been
terminated. At the termination date, 226,770 shares of Common Stock were
vested, and the Company is in the process of distributing the shares to
eligible participants. The Company filed a registration statement under the
Securities Act to register the shares being distributed. Following the
distribution of the shares held by the ESOP, most distributees will be free
to sell such shares without restriction.
<PAGE>
LOGIC DEVICES INCORPORATED
Notes to Consolidated Financial Statements
September 30, 1995 and December 31, 1994
(unaudited)
(F) Star Acquisition
On April 14, 1995, the Company acquired certain assets from Star,
including patents, processes and technology regarding a proprietary stream
processor ("SPROC") which is a programmable DSP architecture that offers a
significant performance advantage in data flow signal processing
applications. Such assets were acquired in return for 75,000 shares of the
Company's Common Stock. These shares were registered under the Securities
Act in October 1995.
(G) Exercise of Warrants
Warrants to purchase an aggregate of 150,000 shares of Common Stock had
been issued in connection with an extension of the Shareholder Loan under a
Loan Extension and Warrant Purchase Agreement entered into in March 1991.
Warrants to purchase 74,955 shares have been exercised and warrants to
purchase 75,045 remain outstanding. Such warrants contain provisions which
adjust the exercise price in certain circumstances, such as the issuance of
additional Common Stock or other securities at less than the exercise price
and stock splits. In addition, they contain provisions which adjust the
number of warrant shares in the event of certain mergers, reorganizations
and reclassifications. The exercise price is $3.45 per share, and the
warrants expire March 1, 1996. The warrants are transferable by the holders
thereof in accordance with applicable securities laws.
(H) Conversion of Preferred Shares
The holders of the Company's 154 shares of previously issued and
outstanding Series A Preferred Stock have converted all of such shares into
25,666 shares of Common Stock pursuant to the terms of the Series A
Preferred Stock.
(I) Placement of Securities
In August of 1995, the Company issued a total of 855,000 shares of
Common Stock in two separate private placement transactions exempt from
registration under the Securities Act, for an aggregate
<PAGE>
LOGIC DEVICES INCORPORATED
Notes to Consolidated Financial Statements
September 30, 1995 and December 31, 1994
(unaudited)
consideration of approximately $9,850,000. In September of 1995, the Company
issued a total of 50,000 shares of Common Stock in a separate private
placement transaction exempt from registration under the Securities Act, for
an aggregate consideration of approximately $520,000. The shares sold in
all three of these transactions were not registered under the Securities Act
and cannot be sold or transferred without registration or an exemption from
such registration requirements.
(J) GRANT OF WARRANTS
On February 15, 1995, the non-employee directors of the Company were
granted warrants to purchase an aggregate of 220,000 shares of Common Stock.
The grants were ratified by shareholders of the Company at the Company's
1995 annual meeting of shareholders held June 13, 1995. The warrants have
an exercise price of $2.5625 per share, which was the last reported
transaction price of the Common Stock on February 15, 1995, and expire on
February 15, 2000. Certain other warrants to purchase an aggregate of
34,350 shares of Common Stock were issued by the Company in connection with
two of the private placements described above. Under one transaction, the
Warrant giving the holders the right to purchase from the Company up to
31,850 shares of Common Stock at an exercise price equal to $12.625 per
share (the last reported transaction price on August 21, 1995) was issued.
The Warrant was exercisable immediately upon its issuance and expires on
August 21, 1998. The shares underlying this Warrant were registered in
October 1995. Under the other transaction, warrants giving the holders the
right to purchase from the Company up to 2,500 shares of Common Stock at an
exercise price equal to $11.875 per share (the closing bid price on
September 14, 1995) were issued. These warrants were exercisable
immediately upon their issuance and expire on September 19, 1998. All of
the warrants granted in these transactions are transferable by the holders
thereof in accordance with applicable securities laws.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LOGIC DEVICES INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
REVENUES
Net revenues increased by 30%, from $3,462,300 for the three months
ended September 30, 1994 to $4,517,400 for the three months ended September
30, 1995. The increase was due to a substantial growth in revenues derived
from the Company's SRAM ("Static Random Access Memory") products which
accounted for 16% of revenues for the September 30, 1994 period, increasing
to 49% of revenues for the September 30, 1995 period. Net revenues from
DSP ("Digital Signal Processing") products accounted for 64% of revenues in
1994, whereas DSP products comprised 49% in 1995. Net revenues from the
Company's SCSI ("Small Computer System Interface") products remained
essentially the same while custom product revenues were substantially lower,
decreasing from 18% of revenues in 1994 to 1% in 1995.
Net revenues increased by 26%, from $9,915,700 for the nine month period
ended September 30, 1994 to $12,475,400 for the nine months ended September
30, 1995. This increase was due to increased net revenues derived from the
Company's SRAM products which accounted for 15% of revenues for the 1994
period, increasing to 46% of revenues for the 1995 period. Net revenues
from DSP products accounted for 68% of revenues in 1994, whereas such net
revenues comprised 50% in 1995. Net revenues from the Company's SCSI
products remained essentially the same while custom product revenues were
substantially lower, decreasing from 15% of revenues in 1994 to 2% in 1995.
EXPENSES
Cost of sales increased 42% from $1,888,400 or 55% of net revenues for
the three months ended September 30, 1994 to $2,684,700 or 59% of net
revenues for the same period in 1995. Gross profit increased 16%, from
$1,573,900 in the former period to $1,832,700 in the latter period. The
increase in gross profit is the result of higher revenues for the period.
As a percentage of net revenues, gross profit decreased from 45% for the
three months ended September 30, 1994 to 41% for the three months ended
September 30, 1995. The decrease in gross profit margin is the result of
the higher revenue mix from SRAM products which generally average a lower
gross margin than the Company's DSP, custom, and SCSI products.
<PAGE>
Cost of sales increased 32% from $5,420,300 or 55% of net revenues for
the nine months ended September 30, 1994 to $7,149,400 or 57% of net
revenues for the same period in 1995. Gross profit increased 18% from
$4,495,400 in the former period to $5,326,000 in the latter period. The
increase in gross profit is the result of higher revenues for the period.
As a percentage of net revenues, gross profit decreased from 45% in the nine
months ended September 30, 1994 to 43% in the nine months ended September
30, 1995. The decrease in gross profit margin is the result of a higher
revenue mix from SRAM products which usually average a lower gross margin
than the Company's DSP, custom, and SCSI products.
Research and development ("R & D") expenses for the three months ended
September 30, 1994, which were $342,400 increased to $382,500 for the same
period in 1995. For the nine month period, research and development
expenses were $1,024,800 for 1994 and $1,098,000 for 1995. As a percentage
of net revenues, R & D expenses were 10% for the three months ended
September 30, 1994, compared to 8% for 1995. For the nine months ended
September 30, 1994, R & D expenses as a percentage of net sales were 10%
compared to 9% for 1995. The Company intends to continue to make
substantial investments in its product R & D.
Selling, general and administrative ("S,G & A") expenses were $842,800
for the three months ended September 30, 1994 but decreased to $761,700 for
the same period in 1995. For the nine months ended September 30, 1994, S, G
& A expenses were $2,520,700 decreasing to $2,344,500 for the same period in
1995. In 1994, S,G & A expenses included non-recurring legal and accounting
costs associated with a proposed secondary equity financing and legal costs
associated with the defense of a long standing wrongful termination suit.
As a percentage of net sales, selling, general and administrative expenses
were 24% for the three months ended September 30, 1994 compared to 17% in
1995. As a percentage of net sales, selling, general and administrative
expenses were 25% for the nine months 1994 compared to 19% in 1995.
Net operating income increased 77% to $688,500 for the three months
ended September 30, 1995 versus $388,700 for the same period in 1994. For
the nine month period ended September 30, 1995 net operating income
increased 98% to $1,883,500 from $949,900 for the same period in 1994.
Net interest expense reflects interest expense incurred by the Company
during the periods with respect to loans from shareholders and bank debt,
offset by interest income earned during the periods.
Net income increased 105% for the three months ended September 30, 1995
to $440,800 compared to $214,800 for the same period in 1994. For the nine
months ended September 30, 1995, net income increased 125% to $1,119,600
compared to $498,600 for the same period in 1994.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
For the nine months ended September 30, 1995 the Company's after-tax
cash earnings (net income plus non-cash charges) exceeded its net income,
due to accruals for depreciation and amortization. Such after-tax cash
earnings ($2,050,600 in nine months ended September 30, 1995 and $1,499,700
in nine months ended September 30, 1994) have served as the Company's
primary source of financing for working capital needs, capital expenditures
and the retirement of long term debt.
In the first nine months of 1995, the Company generated $15,600 in cash
flow from operating activities (after-tax cash earnings less net increases
and decreases, respectively, in current assets and liabilities). Capital
equipment expenditures and increases to other assets used $847,300 net in
cash. The Company completed three private placements of securities during
the period which provided $9,763,200 in net cash. Repayment of bank notes
including a term loan in the principal amount of $800,000 which had been
used previously to repay certain debt to shareholders used $3,803,600 net in
cash. Due to an increase in the price of the Company's common stock
throughout the first nine months of 1995, the Company was provided with cash
flow from the exercise of certain warrants and employee stock options which
provided $420,500 in cash flow for the period.
WORKING CAPITAL
The Company's investment in inventories and accounts receivables has
been significant and will continue to be significant in the future. The
Company over prior periods, as a nature of its business, has maintained
these levels of inventories and accounts receivables.
The Company relies on third party suppliers for raw materials and as a
result maintains high inventory levels to protect against disruption in
supplies. The Company has historically maintained inventory levels from
approximately 225 days to 360 days since 1990 as calculated to cost of goods
sold. The low point in inventory levels came in 1992 and 1993 when the
Company was having supply disruptions from one of its major suppliers.
The Company, however, tends to look at its inventories in relationship
to its sales which have ranged from 155 days to 185 days within the periods
between 1995 and 1990. Inventory to sales is a stable measure because at
the times when the Company is experiencing supply disruption, and therefore
lower inventory levels, the Company is also experiencing increased costs of
goods due to inefficiencies in its operations stemming from the sporadic
deliveries, and therefore skewing both the numerator and denominator in
different directions for inventory turns calculation. Again the lower days
on hand of inventory calculated to sales has been lower when the Company
experienced supply disruptions as in 1992 and 1993.
<PAGE>
The Company provides reserves for any product material that is over one
year old with no back-log or sales activity and reserves for future
obsolescence. The Company also takes physical inventory write-downs for
obsolescence. For the nine months ended September 30, 1995, the Company has
taken physical inventory write-downs of approximately $350,000.
The Company's account receivable level has been consistently correlated
to the Company's last quarter revenue level. Because of the Company's
schedule of backlog and customer requirements, up to 80% of the quarterly
revenues are shipped in the last month of the quarter. This has the effect
of placing a large portion of the quarterly shipments reflected in accounts
receivables still not yet due per the Company's net 30 day terms. This,
combined with the fact that the Company's distributor customers (which make
up 45% of the Company revenues) generally pay 60 days and beyond, results in
the account receivables balance at the end of the quarterly period being at
its highest point for the period. As with the Company's inventory levels,
this has been consistent over prior periods.
Although current levels of inventory and accounts receivables impact the
Company's liquidity, the Company believes that it is a cost of doing
business given the Company's current situation. The Company is in the
process of trying to diversify its supplier base to reduce the risk of
supply disruption. However, this will require a significant investment in
product development to tool with new suppliers. As to accounts receivable,
the Company believes that as it expands its revenue and customer base it
will be able to even out the flow of its shipments within its quarterly
reporting periods.
FINANCING
In August of 1995, the Company issued a total of 855,000 shares of
Common Stock in two separate private placement transactions exempt from
registration under the Securities Act, for an aggregate consideration of
approximately $9,850,000. In September of 1995, the Company issued a total
of 50,000 shares of Common Stock in a separate private placement transaction
exempt from registration under the Securities Act, for an aggregate
consideration of approximately $520,000. The shares sold in all three of
these transactions were not registered under the Securities Act and cannot
be sold or transferred without registration or an exemption from such
registration requirements.
On June 1, 1995, the Company renewed its $3,000,000 revolving line of
credit with Sanwa Bank extending the maturity to May 31, 1996. The line of
credit bears interest at the bank's prime rate plus 1.500%. Currently, all
$3,000,000 is available under the line of credit facility. The Company also
entered into an $800,000 Term Loan with Sanwa Bank to refinance the
Company's existing obligation to shareholders. The Term Loan as well as the
then existing balance under the Company's line of credit facility were
repaid on August 28, 1995 from the proceeds of the placements of shares
discussed in the preceding paragraph. The Term Loan had a maturity date of
May 1, 1998, had monthly principal amortization payments, and bore interest
at the bank's prime rate plus 1.75%. The line of credit is secured by the
<PAGE>
assets of the Company. The line of credit requires the Company to maintain
a minimum tangible net worth of $6,000,000, a maximum ratio of debt to
tangible net worth of not more than 1.00 to 1.00, a minimum current ratio of
not less than 2.00 to 1.00, a minimum quick ratio of not less than 1.00 to
1.00, and profitability on a year to date basis. As of September 30, 1995
the Company was in compliance with these covenants even though there was no
outstanding balance under these agreements.
Under the terms of its bank agreements, the Company is precluded from
paying any cash dividends without the consent of the lender even if the
Company is in compliance with all of the financial covenants but is allowed
to pay stock dividends whether or not there was any other covenant
violation. Regardless of any such restrictions in its bank loan agreements,
the Company does not intend to pay cash dividends in the near future and
anticipates reinvesting its cash flow back into operations.
The obligation due to shareholders was scheduled to mature on March 31,
1995. On February 15, 1995, the shareholder lenders agreed to extend the
maturity date to March 31, 1996. On June 1, 1995 the Company obtained a
term loan from Sanwa Bank for repayment of the outstanding shareholder
obligation. As discussed above, such term loan has been repaid.
The holders of the Company's 154 shares of previously issued and
outstanding Series A Preferred Stock have converted all of such shares into
25,666 shares of Common Stock pursuant to the terms of the Series A
Preferred Stock.
<PAGE>
PART II - OTHER INFORMATION
LOGIC DEVICES INCORPORATED
Item 6. Exhibits and Reports on Form 8-K.
4.1 Form of Warrant to Purchase 2,500 Shares plus schedule
4.2 Form of Warrant to Purchase 31,850 shares -- Filed as Exhibit 10.2 to
the Company's Registration Statement on Form S-3 (Registration No.
33-623299) and incorporated herein by reference
(a) 11.1 Exhibit 11 - Computation of Earnings Per Common Share.
27.1 Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter for which this
report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Logic Devices Incorporated
(Registrant)
Date: NOVEMBER 13, 1995 By /S/ WILLIAM J. VOLZ
William J. Volz
President and Principal
Executive Officer
Date: NOVEMBER 13, 1995 By /S/ TODD J. ASHFORD
Todd J. Ashford
Chief Financial Officer
Principal Financial and
Accounting Officer
<PAGE>
[EXHIBIT 4.1]
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THIS WARRANT MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON (AS DEFINED IN REGULATION S OF
THE SECURITIES AND EXCHANGE COMMISSION PROMULGATED UNDER THE ACT), AND THIS
WARRANT AND THE UNDERLYING SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
REGISTRATION UNDER SAID ACT AND ALL OTHER APPLICABLE SECURITIES LAWS, UNLESS
AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SAID ACT AND ALL OTHER
APPLICABLE SECURITIES LAWS IS AVAILABLE AND LOGIC DEVICES INCORPORATED
RECEIVES A SATISFACTORY OPINION OF COUNSEL AS TO SUCH EXEMPTION THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF LOGIC DEVICES INCORPORATED
Date of Issuance: As of September 19, 1995
THIS CERTIFIES that, for value received, ________________, or registered
assigns (the "Holder") is entitled to purchase, subject to the provisions of
this Warrant, from LOGIC DEVICES INCORPORATED, a California corporation (the
"Company"), at the price hereinafter set forth in Section 7, the number of
shares hereinafter set forth in Section 8, of the Company's no par value
common stock (all of the Company's shares of Common Stock being hereafter
referred to as "Common Stock"). This Warrant is hereinafter referred to as
the "Warrant" and the shares of Common Stock issued or then issuable
pursuant to the terms hereof are hereinafter sometimes referred to as
"Warrant Shares".
SECTION 1. EXERCISE OF WARRANT. This Warrant may be exercised in whole
or in part at any time and from time to time on or after its date of
issuance but prior to the Expiration Date defined in Section 11 by
presentation of the Purchase Form annexed hereto duly executed and
accompanied by payment of the Exercise Price set forth in Section 7 hereof
for the number of shares specified in such form. Upon receipt by the
Company of the said Purchase Form executed as aforesaid, at the office of
the Company, accompanied by payment of the Exercise Price, the Company shall
issue and deliver to the Holder within a reasonable period of time not to
exceed 10 days a certificate or certificates of the shares of Common Stock
then being issued upon such exercise. If deemed necessary by the Company,
such certificates shall bear restricted legends substantially similar to the
<PAGE>
legends appearing on the face of this Warrant. If this Warrant shall be
exercised with respect to only a part of the shares of Common Stock covered
hereby, the Holder shall be entitled to receive a similar warrant of like
tenor and date covering the number of shares in respect of which this
Warrant shall not have been exercised.
SECTION 2. RESERVATION OF SHARES. The Company hereby covenants that at
all times during the term of this Warrant there shall be reserved for
issuance such number of shares of its Common Stock as shall be required to
be issued upon exercise of this Warrant.
SECTION 3. SHARES TO BE FULLY PAID AND NONASSESSABLE. All shares of
Common Stock issued upon the exercise of this Warrant shall be validly
issued, fully paid and nonassessable.
SECTION 4. ASSIGNMENT OF WARRANT. This Warrant is not transferable
except pursuant to an effective registration statement under the Securities
Act of 1933, as amended, and other applicable securities laws, or unless an
exemption from the registration provisions of such Act and other applicable
securities laws is available and the Company receives an opinion of counsel
satisfactory to the Company as to such exemption that such registration is
not required. In the event of such transfer or assignment, the Holder shall
surrender this Warrant to the Company with the Assignment Form in the form
annexed hereto duly executed and with funds sufficient to pay any transfer
taxes, and the Company shall cancel this Warrant and, without charge, shall
execute and deliver a new Warrant of like tenor in the name of the assignee
which enables the assignee to succeed to all rights and interest of its
assignor at the time of assignment of this Warrant.
SECTION 5. LOSS OF WARRANT. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft or destruction of this Warrant, and of
indemnification satisfactory to it, or upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new
Warrant of like tenor and date.
SECTION 6. RIGHTS OF THE HOLDER. No provision of this Warrant shall be
construed as conferring upon the Holder hereof the right to vote, consent,
receive dividends or receive notice other than as herein expressly provided.
No provision hereof, in the absence of affirmative action by the Holder
hereof to purchase Warrant Shares, and no enumeration herein of the rights
or privileges of the Holder hereof, shall give rise to any liability of such
Holder for the purchase price of any Warrant Shares or as a stockholder of
the Company, whether such liability is asserted by the Company or by
creditors of the Company.
This Warrant and the shares issuable hereunder shall not be sold,
offered for sale, pledged, hypothecated, or otherwise transferred in the
absence of registration under the Securities Act of 1933, as amended, and
other applicable securities laws or an exemption from the registration
<PAGE>
provisions of such Act and other applicable securities laws is available and
the Company receives an opinion of counsel satisfactory to the Company as to
such exemption that such registration is not required.
SECTION 7. EXERCISE PRICE. The purchase price for each share of Common
Stock purchased under this Warrant (the "Exercise Price") shall initially be
$11.875 and may be adjusted as provided in Section 10 hereof.
SECTION 8. NUMBER OF WARRANT SHARES. This Warrant shall upon its
issuance be exercisable in accordance with the terms hereof for ______
shares of Common Stock (the "Initial Number") subject to adjustment pursuant
to Section 10 hereof.
SECTION 9. NOTICES TO WARRANT HOLDER. So long as this Warrant shall be
outstanding, the Company shall cause to be delivered to the Holder at least
15 days prior written notice of the time, place and agenda of any meeting of
its stockholders or the Board of Directors at which it is proposed to
authorize the issuance of any shares of Common Stock or any securities,
options, warrants or rights of conversion the exercise of which would
entitle the holder thereof to receive shares of Common Stock. In addition,
(i) if the Company shall pay any dividend or make any distribution upon the
shares of its Common Stock, or (ii) if the Company shall offer to all of the
holders of Common Stock for subscription or purchase by them any shares of
stock of any classes or any other rights, or (iii) if any capital
reorganization of the Company, reclassification of the Common Stock of the
Company, consolidation or merger of the Company with or into another
corporation, or voluntary or involuntary dissolution, liquidation or winding
up of the Company shall be effected, then, in any such case, the Company
shall cause to be delivered to the Holder, at least 30 days prior to the
date specified in (a) or (b) below, as the case may be, a notice containing
a brief description of the proposed action and stating the date on which (a)
a record is to be taken or the stock transfer books of the Company are to be
closed for the purpose of determining the stockholders entitled to receive
such dividend, distribution or rights, or (b) a record is to be taken or the
stock transfer books of the Company are to be closed for the purpose of
determining the stockholders entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, dissolution,
liquidation or winding up.
SECTION 10. ADJUSTMENTS IN EXERCISE PRICE AND WARRANT SHARES. If the
Company is recapitalized through the subdivision or combination of its
outstanding shares of Common Stock into a larger or smaller number of
shares, the number of shares of Common Stock for which this Warrant may be
exercised shall be increased or reduced, as of the record date for such
recapitalization, in the same proportion as the increase or decrease in the
outstanding shares of Common Stock, and the Exercise Price shall be adjusted
so that the aggregate amount payable for the purchase of all Warrant Shares
issuable hereunder immediately after the record date for such
recapitalization shall equal the aggregate amount so payable immediately
before such record date.
<PAGE>
SECTION 11. EXPIRATION DATE. The Warrant shall terminate on the
Expiration Date and may not be exercised on or after such date. The
Expiration Date shall be September 19, 1998.
SECTION 12. APPLICABLE LAW. This Warrant shall be deemed to be a
contract governed by and interpreted in accordance with the laws of the
State of California. Further, the place where this Warrant is entered into,
and the place of performance and transaction of business shall be deemed to
be the State of California, and in the event of litigation, the exclusive
forum, venue and place of jurisdiction shall be the State of California.
This Warrant has been executed by the Company as of the ____ day of
________, 1995.
LOGIC DEVICES INCORPORATED
By:
Signature
Title:
<PAGE>
ASSIGNMENT FORM
Dated:_________________
For value received, _______________________________________ hereby
sells, assigns and transfers a Warrant dated ____________ unto:
Name ___________________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________________
and appoints ___________________________________________________
________________________________________________________________
Attorney to transfer the said Warrant on the books of the within named
Company with full power of substitution in the premises.
The undersigned hereby certifies, as a condition to Logic Devices
Incorporated honoring the assignment of the Warrant, that unless the Warrant
and the securities delivered upon exercise thereof have been registered
under the Securities Act of 1933, as amended, and other applicable
securities laws, a written opinion of counsel satisfactory to Logic Devices
Incorporated will be delivered to Logic Devices Incorporated to the effect
that an exemption from the registration provisions of such Act and other
applicable securities laws is available with respect to such assignment.
Signature_________________________
<PAGE>
PURCHASE FORM
Dated:____________
The undersigned hereby irrevocably elects to exercise his or its
right to purchase __________ shares of the no par value Common Stock of
Logic Devices Incorporated, such right being pursuant to a Warrant dated
__________________, and as issued to the undersigned by Logic Devices
Incorporated, and hereby remits herewith the sum of $__________ in payment
for same in accordance with the Exercise Price specified in Section 7 of
said Warrant.
The undersigned hereby certifies, as a condition to Logic Devices
Incorporated honoring the exercise of the Warrant, that: (a) it is not a
U.S. person (within the meaning of Securities and Exchange Commission
Regulation S) and the Warrant is not being exercised on behalf of a U.S.
person; or (b) a written opinion of counsel satisfactory to Logic Devices
Incorporated will be delivered to Logic Devices Incorporated to the effect
that the Warrant and the securities delivered upon exercise thereof have
been registered under the Securities Act of 1933, as amended, or are exempt
from registration thereunder.
INSTRUCTIONS FOR REGISTRATION OF STOCK
NAME_________________________________________________________
(Please typewrite or print in block letters)
ADDRESS______________________________________________________
SIGNATURE:_______________________________________
SHARES HERETOFORE PURCHASED ( ).
<PAGE>
SCHEDULE TO EXHIBIT 4.1
The following parties received a Warrant in the form of Exhibit 4.1 for the
number of Warrants shares opposite their respective names:
Name Number of Shares
Aries Peak, Inc. 1,250
Pacific Miners Ltd. 1,250
<PAGE>
EXHIBIT 11
LOGIC DEVICES INCORPORATED
Computation of Earnings per Common Share
(unaudited)
Three months ended September 30, 1995 and 1994
1995 1994
Weighted average shares outstanding 5,349,183 4,762,584
common stock
Common stock equivalent convertible - 25,666
preferred stock
Dilutive effect of warrants and 318,123 -
common stock options
Weighted average common and 5,667,306 4,788,250
common shares equivalents
Net income $ 440,800 $ 214,800
Net income per common share equivalent $ .08 $ .04
<PAGE>
EXHIBIT 11
LOGIC DEVICES INCORPORATED
Computation of Earnings per Common Share
(unaudited)
Nine months ended September 30, 1995 and 1994
1995 1994
Weighted average shares outstanding 5,005,011 4,756,650
common stock
Common stock equivalent convertible - 25,666
preferred stock
Dilutive effect of warrants 319,174 -
common stock options
Weighted average common and 5,324,185 4,782,316
common shares equivalents
Net income $1,119,600 $ 498,600
Net income per common share equivalent $ .21 $ .10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 5,976,900
<SECURITIES> 0
<RECEIVABLES> 5,113,500
<ALLOWANCES> 0
<INVENTORY> 7,257,200
<CURRENT-ASSETS> 19,164,300
<PP&E> 9,445,000
<DEPRECIATION> 7,461,800
<TOTAL-ASSETS> 21,948,800
<CURRENT-LIABILITIES> 1,132,600
<BONDS> 0
<COMMON> 16,615,200
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 21,948,800
<SALES> 12,475,400
<TOTAL-REVENUES> 12,475,400
<CGS> 7,149,400
<TOTAL-COSTS> 10,591,900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 234,200
<INCOME-PRETAX> 1,649,300
<INCOME-TAX> 529,700
<INCOME-CONTINUING> 1,119,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,119,600
<EPS-PRIMARY> .22
<EPS-DILUTED> .21
</TABLE>
