<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
/x/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1995
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ______________
Commission file number 0-16919
WAVEMAT INC.
- - --------------------------------------------------------------------------------
(Name of small business issuer in its charter)
DELAWARE 38-2512387
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
44191 PLYMOUTH OAKS BLVD., SUITE 100, PLYMOUTH, MICHIGAN 48170
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (313) 454-0020
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on
which registered
NONE
------------------------- ------------------------
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
- - --------------------------------------------------------------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
--- ---
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is met contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements or any amendment to this Form 10-KSB. /x/
Issuer's revenues for its most recent fiscal year - $471,557.
The aggregate market value of the Registrant's voting stock held by
non-affiliates of the Registrant as of March 10, 1996, computed by reference to
the average closing bid and asked prices of the Company's common stock on the
OTC Bulletin Board ("Pink Sheets") on that date was $151,945.
At March 10, 1996, there were 10,182,125 shares of the Registrant's Common
Stock, $.01 par value issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The following document (or portions thereof) has been incorporated by reference
in this Annual Report on Form 10-KSB: (1) Proxy Statement for 1996 Annual
Meeting of Shareholders (Part III) and (2) Current Report on Form 8-K, dated
November 9, 1992, as amended, (Part II, Item 8).
<PAGE> 2
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
1995 COMPARED TO 1994
Operating loss increased significantly primarily as a result of significant
decline in operating revenue.
The decline in operating revenue was attributable to the decrease in sales
volume of the Company's microwave process systems.
Operating expenses decreased primarily as a result of lower cost of sales and
non-sponsored research activities performed by the Company which more than
offset a significant increase in selling, general and administration expenses,
and royalty expenses. Cost of sales decline was attributable to lower
microwave processing system sales referenced above. Selling, general and
administration expenses increased primarily due to higher sales and marketing
activities. The Company's operating results continue to be adversely affected
by under-utilization of capacity.
Net loss increased significantly as a consequence of the increase in operating
loss mentioned above and other expenses, net amounting to $161,749 in 1995
compared to $52,743 in 1994. The other expense, net recognized during 1995,
was attributable to higher interest expenses. The increase in interest expense
is due to higher balances of interest-bearing debt and borrowing costs.
7
<PAGE> 3
LIQUIDITY AND CAPITAL RESOURCES
The Company experienced extreme difficulty meeting its cash requirements during
1995. During 1995, the Company continued to defer payment of all or a portion
of the compensation of certain management personnel to conserve cash for
operating purposes. Deferred compensation costs of the Company amounted to
$85,383 as of December 31, 1995. The Company was in arrears pertaining to
other obligations in the amount of $181,616 as of December 31, 1995.
Obligations which the Company met were satisfied through sales of the Company's
microwave processing systems, customer deposits and short term borrowings
relating to lines of credit. (See Note 3 to the Financial Statements.)
The Company's operating activities utilized $510,710 during 1995 compared to
providing cash of $44,681 during 1994. The net cash utilized during 1995 was
primarily attributable to a decrease in short-term borrowings, accrued interest
and other obligations to an affiliate. (See Notes 3 and 4 to the Financial
Statements.)
Investing activities utilized $86,067 during 1995 compared to $29,830 during
1994. Cash utilized during 1995 pertained to capital expenditures and
increased deferred patent costs. The Company presently has no commitments
relating to capital expenditures for 1996.
Financing activities provided $596,777 during 1995 compared to the $15,909
provided by financing activities during 1994. This change reflects the
reduction of debt obligations associated with the issuance of stock to an
affiliate. (See Note 3 and 4 to the Financial Statements.)
As indicated in Note 3 to the Financial Statements, the Company has incurred
operating losses and generated cash flow deficits from operating activities
since its inception, therefore, the Company's ability to continue as a going
concern is contingent upon its ability to raise additional funds to support its
activities. On December 31, 1995, the Company had a negative working capital
position of $2,112,864 compared to a negative working capital position of
$2,020,116 at December 31, 1994.
The Company is attempting to generate working capital through the sale of its
microwave processing systems and through its contract research and development
activities. As of December 31, 1995, the Company had a backlog of open sales
orders, net of customer deposits, amounting to $27,082. Subject to various
qualifications and assuming no change in delivery dates or in the shipment of
orders in the normal course of business, management expects to ship all of the
above mentioned backlog and collect the applicable cash proceeds during 1996.
8
<PAGE> 4
The Company must increase its backlog of open sales orders substantially and
obtain additional product development assistance to adequately support its
activities. The Company is continuously evaluating acquisitions of technologies
and/or entities owning such technologies which are compatible to the Company's
business strategies with the intention of increasing the Company's revenue
generating capabilities. In addition, the Company is continuing to seek funding
from various other sources such as additional term loans, lines of credit,
corporate partners and equity financing. However, there is no assurance that
the required amount of additional funds can be raised.
9
<PAGE> 5
WAVEMAT INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Years Ended
December 31,
----------------------------
1995 1994
(Unaudited) (Unaudited)
----------- ------------
<S> <C> <C>
CASH, BEGINNING OF PERIOD $ --- $1,058
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (882,542) (744,484)
Adjustments to reconcile net loss
to net cash provided by (used in) operating
activities:
Depreciation and amortization 75,861 85,823
Changes in current assets and liabilities:
Accounts receivable (53,045) 110,178
Inventory (69,033) 208,770
Prepaid expenses (1,680) 10,743
Bank overdraft (13,225) 29,555
Short-term borrowings - affiliate 86,775 1,040,090
Accounts payable (16,227) (9,955)
Accounts payable - affiliate (24,041) (13,265)
Accrued liabilities 200,478 (382,161)
Customer deposits (14,031) 19,873
Customer deposits - affiliate --- (310,486)
Noncash expenses relating to capital contribution 200,000 ---
----------- ----------
Net cash (used in) provided by operating activities (510,710) 44,681
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment and leasehold
improvements (11,110) (6,232)
Increase in deferred patent costs (74,957) (23,598)
----------- ----------
Net cash used in investing activities (86,067) (29,830)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock - affiliate 600,000 ---
Reduction of debt (3,223) (15,909)
----------- ----------
Net cash provided by (used in) financing activities 596,777 (15,909)
----------- ----------
DECREASE IN CASH --- (1,058)
----------- ----------
CASH, END OF PERIOD $ --- $ ---
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE> 6
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
WAVEMAT INC.
---------------------------------------
Registrant
Date: April 19, 1996 /s/Monis Schuster
---------------------------------------
Monis Schuster, Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated
on April 19, 1996.
/s/Monis Schuster
---------------------------------------
Monis Schuster, Chairman of the
Board and Chief Executive Officer
(Principal Executive Officer)
and Director
/s/Eugene I. Schuster
---------------------------------------
Eugene I. Schuster, Acting
President and Director
/s/Sharon K. Zitnik
---------------------------------------
Sharon K. Zitnik, Vice President,
Secretary, Treasurer and Chief
Financial Officer (Principal
Financial and Accounting Officer)
/s/Raymond F. Decker
---------------------------------------
Raymond F. Decker, Director
/s/Frederick H. Erbisch
---------------------------------------
Dr. Frederick H. Erbisch (Michigan
State University), Director
