UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1995
Commission file Number 33-9868-A
IMProCOM, INC.
(Exact name of registrant as specified in its charter.)
Nevada, U.S.A. 88-0212471
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Aviator Way, Ormond Beach, FL 32174
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code:
(904) 676-7081
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 each of the
issuer's classes of common stock, as of the latest practical
date:
Common Stock, $.001 Par Value - 5,753,012 shares as of
June 30, 1995.
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<TABLE>
PART I. - FINANCIAL INFORMATION
IMProCOM, INC.
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
FOR THE THREE MONTHS AND NINE MONTHS
ENDED JUNE 30, 1994 AND 1995
(Unaudited)
<CAPTION>
Three months ended Nine months ended
JUNE 30 JUNE 30
______________________ _____________________
1995 1994 1995 1994
___________ _________ _________ _________
<S> <C> <C> <C> <C>
Net sales $13,244 $87,266 $131,228 $245,763
Cost of goods sold 2,382 44,529 72,719 158,485
__________ _________ __________ _________
Gross profit (loss) 10,862 42,737 58,509 87,278
Selling, general and
administrative expenses 319,325 217,907 899,498 655,609
Reasearch and development 21,489 20,200 70,698 61,876
Depreciation
and amortization 16,760 24,763 57,026 71,549
__________ _________ __________ _________
Operating loss (346,712) (220,133) (968,713) (701,756)
Other income 0 0 5,000 0
Interest income 6 279 815 1,422
Interest expense (7,260) (30,957) (70,586) (77,210)
Loss on sale of asset 0 0 (933) 0
__________ _________ __________ __________
Net loss (353,966) (250,811) (1,034,417) (777,544)
Accumulated deficit -
beginning of period (5,847,359) (4,497,699) (5,166,908) (3,970,966)
__________ _________ __________ __________
Accumulated deficit -
end of period (6,201,325) (4,748,510) (6,201,325) (4,748,510)
Loss per share $( .06) $( .08) $( .18) $( .26)
<FN>
See accompanying notes to financial statements
</TABLE>
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<TABLE>
IMProCOM, INC.
BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, 1995 June 30, 1994
______________ ______________
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 34,821 $ 44,316
Accounts receivable 113 39,167
Advance to shareholder <note 3> 80,000 0
Inventories, net <note 2> 510,816 312,945
Prepaid expenses and
other current assets 14,835 19,788
_______ _______
Total current assets 640,585 416,216
Property, plant and equipment
less accumulated depreciation of
$518,906 and $448,997 840,946 808,629
Deferred costs and other assets 10,054 9,802
_______ _______
Total assets 972,679 785,650
</TABLE>
<TABLE>
<CAPTION>
Liabilities and stockholders' deficit
<S> <C> <C>
Current liabilities
Accounts payable $ 50,311 $ 33,846
Accrued interest payable to
shareholder 7,260 0
Accounts payable to officers 0 1,267
Deferred revenue 188,932 194,136
Accrued officers' salaries 536,384 551,662
Loan from shareholder 600,000 0
Other accrued liabilities 16,493 26,623
_________ _________
Total current liabilities 1,399,380 807,534
Long term debt 0 2,075,000
Stockholder's deficit
Common stock par value $.001 per share
Authorized 50,000,000 shares
Issued and outstanding -
3,048,412 and 5,753,012 shares 5,753 3,049
Capital in excess of par value 5,768,871 3,066,975
Accumulated deficit (6,201,325) (5,166,908)
_________ _________
Total stockholders' deficit $( 426,701) $(2,096,884)
Total liabilities and
stockholders' deficit $ 972,679 $ 785,650
<FN>
See accompanying notes to financial statements
</TABLE>
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<TABLE>
IMProCOM INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1994 AND 1995
(Unaudited)
<CAPTION>
1995 1994
<S> <C> <C>
Cash flow from operating activities:
Net cash used by
operating activities $ (1,151,352) $ ( 517,862)
___________ __________
Cash flow from investing activities:
Capital expenditures <net> $ ( 33,250) $ ( 29,500)
Net cash used in
investing activities $ ( 33,250) $ ( 29,500)
Cash flow from financing activities:
Loan from shareholder $ 1,175,000 $ 425,000
Issuance of common stock 107 0
___________ __________
Net cash provided by
financing activities $ 1,175,107 $ 425,000
____________ __________
Decrease in cash ( 9,495) ( 122,362)
Cash at beginning of period $ 44,316 $ 157,952
____________ __________
Cash at end of period $ 34,821 $ 35,590
Supplemental cash flow information:
Retirement of debt with exercise
of warrants for common stock $ 2,650,000 $ 0
Interest paid $ 8,833 $ 0
Issuance of common stock in lieu
of cash payment for interest $ 54,493 $ 0
<FN>
See accompanying notes to financial statements
</TABLE>
<PAGE>
IMProCOM, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1995
1. Basis of Presentation
The accompanying condensed financial statements have been prepared in
compliance with Rule 10-01 of Regulation S-X and generally accepted
accounting principles but do not include all of the information and foot
-notes required for complete financial statements. The statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's latest annual report on Form 10-K. In
the opinion of management, the statements include all adjustments
necessary to present fairly the results of the reported interim periods.
All such adjustments are of a normal recurring nature.
2. Inventory
Inventories at June 30, 1995 and September 30, 1994
consisted of the following:
June 30, 1995 September 30, 1994
Component inventory $204,571 $215,212
Work in progress 156,367 0
Finished goods 149,878 97,733
__________ ________
Total $ 510,816 $312,945
3. Advance to shareholder
On January 26, 1995, an advance of $80,000 was made to Frederick
M. Jenner, Sr. Currently there are no stated repayment terms.
<PAGE>
IMProCOM, INC.
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
June 30, 1995
Liquidity and capital resources
Management believes that the working capital ratio and the ratio
of current assets to current liabilities reflects its' lack of liquidity.
In the absence of a marked increase in the volume of the Company's sales
activities, or an infusion of additional funds from outside sources, the
Company will be unable to continue its operations.
Results of Operations
The decrease in contract revenue is attributed to the Company having
fewer sales contracts. Cost of sales decreased as a result of the
decreased sales activity. Operating expenses increased due to the increase
in staffing, and litigation costs associated with the Complaint filed by
Frederick M. Jenner, Sr. and Annette Jenner against the Company.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal proceedings.
On February 8, 1995 the Company was served with a Summons and a copy
of a complaint filed by Frederick M. Jenner, Sr. and Annette Jenner, his
wife. The seven count complaint sues IMProCOM, Inc., Dominion Capital,Inc.,
Sandi Shifflet, Ray [sic] Yerley and William Hopke. Counts One through
Four are derivative actions for either breach of contract or breach of
fudiciary duties and seek damages in excess of one million dollars. Count
Five seeks judicial dissolution of the Company and appointment of a
receiver on the grounds that Company assets are being wasted. Counts Six
and Seven seek damages against Dominion, Hopke, Yerly and Shiflett in
excess of one million dollars for breach of fiduciary duties. All of the
counts are based upon the actions set forth in ITEM 5. OTHER INFORMATION
and the information previously reported on Form 8-K concerning the change
control of the Company.
Item 2. Changes in Securities. N/A
Item 3. Defaults Upon Senior Activities. N/A
Item 4. Submission of Matters to a Vote of Security Holders. N/A
Item 5. Other Information. N/A
As previously reported on Form 8-K:
On August 8, 1994, the Registrant entered into a Credit Agreement with
Dominion Capital, Inc. ("Dominion"), that provided for Dominion to extend
to the Registrant in an aggregate principal amount at any time not to
exceed $2,650,000 shares of common stock at $1.00 per share. The
Registrant's obligations under the Credit Agreement were partially secured
by seperate Amended and Restated Pledge Agreements, each dated August 8,
1994, between Dominion and Frederick M. Jenner,Sr and Dominion and Annette
H. Greene Jenner, the wife of Mr. Jenner. With respect to each Pldge Agree-
ment, the pledgor pledged his or her interest in 876,083 shares of common
stock to the Registrant owned jointly by Frederick M. Jenner,Sr and
Annette H. Greene Jenner.
<PAGE>
On November 7, 1994, Raymond A. Yerly was elected as a director to fill
in the reminder of the unexpired term of Zalkind Hurwitz. Mr. Yerly, an
employee of Dominion, joined Mr. Hopke and Ms. Shiflett, who are also
Dominion employees, on the Registrant's five member board of directors.
On November 30, 1994, the Registrant's board of directors instituted an
executive committee consisting of CEO Frederick M. Jenner,Sr and directors
Yerly and Shiflett to assist the chief executive officer in the performance
of his duties, to provide oversight of the chief executive officer for the
Board of Directors and to have the authority to require prior approval of
all major actions, such as expenditures or commitments for expenditures, of
the Registrant.
On January 13, 1995, Dominion acquired control of the Registrant by
exercising in full the Warrant to purchase 2,650,000 shares of the
Registrant's common stock for $1.00 per share. The exercise price was
provided through the surrender by Dominion of 2,650,000 of indebtedness out-
standing under the Note.
The Registrant instructed its transfer agent to issue, effective as of
January 13, 1995, one stock certificate to Dominion in the amount of
2,650,000 shares of common stock. After the issuance of those shares,
Dominion beneficially owns 3,367,802 shares, or 58.54%, of the Registrant's
common stock. Prior to the issuance of the 2,650,000 shares of the
Registrant's common stock upon the exercise of the Warrant, Dominion
beneficially owned 717,802 shares, or 23.13%, of the Registrant's common
stock.
Prior to the issuance to Dominion of the 2,650,000 shares of the
Registrant's common stock, Mr. Jenner and Mrs. Jenner beneficially owned
in the aggregate 1,459,083 shares of common stock, or 47.02%, of the then
outstanding common stock.
Subsequent to the previously reported events listed above:
On Friday, January 27, 1995 at a special meeting of the Board of Directors
the following persons were elected as officers of the Company
Frederick M. Jenner, Sr. Chairman and Chief Technical Officer
William J. Hopke Vice Chairman and Chief Executive Officer
John G. Perry President and Cheif Operating Officer
Raymond A. Yerly Vice President - Operations, Treasurer
and Chief Financial Officer
<PAGE>
Daniel A. Hillsman, Jr. Vice President, Secretary and
Asst Treasurer
Henry C. Riely Assistant Secretary
Mr. Hillsman and Mr. Riely are employees of Dominion.
The Board at that meeting also adopted resolutions which provided that:
No Officer or employee of the Company other than the Chief Executive Officer,
Treasures or Assistant Treasures shall have any authority to enter into any
contracts or incur any liability on behalf of the Company and that neither
the Chairman nor the President shall have any authority to take any action
or make any commitment on behalf of the Company.
The authorized officers of the Company could take such actions as necessary
and appropriate to modify the terms and conditions of the Credit Agreement
with Dominion to provide for a reduction of the borrowing commitment from
$2,650,000 to an amount not to exceed $100,000 with all interest payments
to be made in cash.
Subsequent to the meeting on January 27, 1995:
The employment of Ms. Annette H. Greene Jenner was terminated.
The Company gave notice to Dominion of the reduction of the commitment, as
defined in the Credit Agreement, to be $100,000 and delivered a new Grid
Promissory note in the amount of $100,000.
The Company entered into an Amendment of Credit Agreement which requires the
Company to make all interest payment in cash and makes Dominion's obligation
to extent funds subject to certain conditions defined in the Credit Agree-
ment.
On August 4, 1995, the Company entered into an Amendment of Credit Agreement
that provided for Dominion Capital to extend credit to the Registrant in an
aggregate principal amount at any one time not to exceed $850,000.
Item 6. Exhibits and reports on Form 8-K.
No reports have been filed on Form 8-K during this quarter.
<PAGE>
IMProCOM, INC.
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of
1934, the registrant has duly cause this report to be signed on its
behalf by the undersigned thereunto duly authorized.
IMProCOM, INC.
Registrant
August 17, 1995 Raymond A. Yerly
Date Raymond A. Yerly
Vice President
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<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Sep-30-1995
<PERIOD-START> Apr-01-1995
<PERIOD-END> Jun-30-1995
<CASH> 34
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 511
<CURRENT-ASSETS> 545
<PP&E> 841
<DEPRECIATION> 519
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<CURRENT-LIABILITIES> 1399
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<COMMON> 6
0
0
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<TOTAL-LIABILITY-AND-EQUITY> 973
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<INCOME-PRETAX> (354)
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<INCOME-CONTINUING> (354)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (354)
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
