U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
______________________________________
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended to
Commission File Number: 0-3344
_____________
ASTROSYSTEMS, INC.
_______________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 13-5691210
________________________________________ ____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1220 Market St., Ste 603, Wilmington, Delaware 19801
______________________________________________ ____________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302) 652-3115
____________________
N/A
_______________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) has 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 require-
ments for the past 90 days. Yes No X
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the issuer has filed all documents and reports
required to be filed by Sections 12, 13 or 15 (d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
September 30, 1996 - 5,235,785
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
INDEX
Page No.
________
Part I - FINANCIAL INFORMATION
Item 1. Statement of Net Assets in Liquidation 4
September 30, 1996
Statement of Changes in Net Assets in Liquidation 5
Three Months Ended September 30, 1996
Item 2. Management's Discussion and Analysis or
Plan of Operation 6
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
<PAGE>
PART I - FINANCIAL INFORMATION
ASTROSYSTEMS, INC. AND SUBSIDIARIES
The financial information herein is unaudited. However, in the
opinion of management, such information reflects all adjustments
(consisting only of normal recurring accruals) necessary to a fair
presentation for the period being reported. Additionally, it should be
noted that the accompanying condensed financial statements do not
purport to be complete disclosures in conformity with generally
accepted accounting principles.
On February 2, 1996, the Stockholders of the Company approved a
Plan of Complete Liquidation and Dissolution (the "Plan"). Therefore,
the financial statements are presented in accordance with the
liquidation basis of accounting. These condensed financial statements
should be read in conjunction with the Registrant's financial
statements for the year ended June 30, 1996.
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
STATEMENT OF NET ASSETS IN LIQUIDATION
(amounts in thousands, except per share amounts)
(Unaudited)
September 30,
1996
______________
Assets
______
Cash and cash equivalents (1) $27,195
U.S. government securities 12,925
Other assets (2) 4,489
_______
$44,609
Liabilities
___________
Accrued expenses/contingency reserve (3) 10,519
_______
Net assets in liquidation $34,090
=======
Number of common shares (4) 5,960
Net assets in liquidation per share (4) $6.19
=====
(1) Includes $1,000,000 held in an escrow account pursuant to an asset
purchase agreement.
(2) Assumes no material value for the Company's holdings in
AstroPower Inc.
(3) The Company believes that the Accrued expenses/contingency reserve
will be adequate for payment of all expenses and other known
liabilities and foreseeable contingent obligations, as well as an
amount estimated to be required to carry out the Plan.
Existing liabilities at September 30, 1996:
Accounts payable, accrued expenses and
miscellaneous $ 1,296
Deferred income taxes 6,258
Minimum payments on nonrecourse obligation 139
Shut down costs and estimated operating
costs (including compensation) to
administer the Plan through dissolution 3,630
Estimated interest income (1,085)
Estimated tax benefit of losses through
dissolution (1,019)
Reserve for other contingencies 1,300
_______
$10,519
In the event that the Accrued expenses/contingency reserve account
is not adequate for payment of the Company's expenses and
liabilities, each stockholder could be held liable for pro rata
payments to creditors in an amount not to exceed the stockholder's
prior distributions from the Company.
(4) Assumes the exercise of all dilutive stock options (712,765
options at an average exercise price of $2.88 per share). Net
assets in liquidation per share includes the effect of these
options as shown below:
Number of common shares 5,960
=======
Net assets in liquidation $34,090
Proceeds from the exercise of dilutive
stock options 2,055
Estimated tax benefit of compensatory
stock options 755
_______
Adjusted net assets in liquidation $36,900
=======
Net assets in liquidation per share $6.19
=====
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(in thousands)
(Unaudited)
Three Month
Period Ended
September 30, 1996
___________________
Net assets in liquidation at June 30, 1996 $33,586
Changes in estimated liquidation values of
assets and liabilities (1) 504
_______
Net assets in liquidation at September 30, 1996 $34,090
=======
Note (1) Includes adjustment in estimated liquidation value of certain
assets and liabilities:
Cash and securities $ 473
Accounts receivable (32)
Other assets (196)
Accounts payable 88
Shut down costs 418
Deferred income tax 359
Estimated tax benefit of loss through
dissolution (521)
Minimum payments on non-recourse
obligation 11
Estimated interest income (96)
_______
Changes in estimated liquidation value $ 504
========
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity, Capital Resources and Impact of Inflation
____________________________________________________
The Board of Directors adopted, and the stockholders approved on
February 2, 1996, a Plan of Complete Liquidation and Dissolution (the
"Plan") of the Company. See "Plan of Complete Liquidation and
Dissolution" below.
The Company announced on March 26, 1996 a Board of Directors
authorization for the repurchase of up to 500,000 shares of Common
Stock to be made from time to time through open market and privately
negotiated transactions (in addition to the 500,000 shares previously
authorized on October 23, 1992). To date, 552,527 shares have been
repurchased.
Statement of Net Assets in Liquidation
______________________________________
Pursuant to the Plan, the Company consummated the sales of the
assets of its three operating units (Military Division, Behlman
Electronics subsidiary and Industrial Automation Division) as of
February 7, 1996. The exact amount of the proceeds to the Company of
such sales is dependent upon a final fixed asset and inventory
valuation. In connection with the sale of the Military and Behlman
operations, $1,000,000 of the purchase price is being held in escrow to
provide for indemnification claims that the buyer may assert against
the Company or Behlman under the sale agreement. The value of certain
inventory items is being disputed; however, the Company does not
believe that the final result will affect materially net assets in
liquidation.
The Company has set aside, as Accrued expenses/contingency reserve,
an amount believed to be adequate for payment of all expenses and other
known liabilities and foreseeable contingent obligations, including
potential tax obligations. Any portion of the contingency reserve
which the Company determines is no longer required will be made
available for distribution to its shareholders. In the event that the
Accrued expenses/contingency reserve account is not adequate for
payment of the Company's expenses and liabilities, each stockholder
could be held liable for pro rata payments to creditors in an amount
not to exceed the stockholder's prior distributions from the Company.
Statement of Changes in Net Assets in Liquidation
_________________________________________________
The total of Net Assets in liquidation on September 30, 1996 did
not change materially from the total on June 30, 1996.
Plan of Complete Liquidation and Dissolution
____________________________________________
On February 2, 1996, the stockholders of the Company approved a
Plan of Complete Liquidation and Dissolution for the Company. Pursuant
to the Plan, the Company has sold its three operating units and intends
to sell such of its remaining assets as are not to be distributed in
kind to its stockholders. The Company intends to provide for payment
of all expenses, liabilities and obligations of the Company and
liquidate via distributions to stockholders.
The Board is currently unable to predict the precise amount of any
distributions pursuant to the Plan. The actual amount and timing of,
and record date for, all such distributions will be determined by the
Board of Directors, in its sole discretion, and will depend in part
upon the Board's determination as to whether particular assets are to
be distributed in kind or otherwise disposed of, and the amounts deemed
necessary by the Board to pay or provide for all the Company's
liabilities and obligations.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
_________________________________
(a) Exhibits.
_________
2. Plan of Complete Liquidation and Dissolution -
incorporated by reference to Exhibit A to Proxy Statement of
the Company dated January 12, 1996 with respect to Annual
Meeting of Stockholders held February 2, 1996 (File No.
0-3344).
3. (a) Certificate of Incorporation - incorporated by
reference to Exhibit 3 (a) to the Company's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1993 (File No.
0-3344).
(b) By-Laws - incorporated by reference to Exhibit
3(b) to the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1993 (File No. 0-3344).
10. Asset Purchase Agreement dated as of January 11,
1996 by and among Astrosystems, Inc., Behlman Electronics,
Inc., Orbit International Corp. and Cabot Court, Inc. -
incorporated by reference to Exhibit B to Proxy Statement of
the Company dated January 12, 1996 with respect to Annual
Meeting of Stockholders held February 2, 1996 (File No.
0-3344).
27. Financial Data Schedule
(b) Reports on Form 8-K.
____________________
None.
No other reportable items
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASTROSYSTEMS, INC.
November 15, 1996 BY: /S/
___________________________ ______________________________
Date Gilbert H. Steinberg,
Vice President
November 15, 1996 /S/
___________________________ ______________________________
Date Gilbert H. Steinberg,
Treasurer and
Chief Financial Officer
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