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 March 31, 1997
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 Street, 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
requirements 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 securites 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: March
31, 1997 - 5,246,785
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I - FINANCIAL INFORMATION
Item 1. Statement of Net Assets in Liquidation 4
March 31, 1997
Statement of Changes in Net Assets in Liquidation 5
Nine Months Ended March 31, 1997
Item 2. Management's Discussion and Analysis or 6
Plan of Operation
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
PAGE 2
<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 3
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
STATEMENT OF NET ASSETS IN LIQUIDATION
(amounts in thousands, except per share amounts)
(Unaudited)
March 31,
1997
________
Assets
______
Cash and cash equivalents (1) $32,245
U.S. government securities 7,925
Other assets (2) 4,984
_______
$45,154
Liabilities
___________
Accrued expenses/contingency reserve (3) 10,828
_______
Net assets in liquidation $34,326
=======
Number of common shares (4) 5,960
Net assets in liquidation per share (4) $ 6.20
=======
(1) Includes $731,556 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 March 31, 1997 (amounts in thousands):
Accounts payable, accrued expenses and miscellaneous $ 1,778
Deferred income taxes 6,321
Minimum payments on nonrecourse obligation 111
Shut down costs and estimated operating costs
(including compensation) to administer the Plan
through dissolution 3,050
Estimated interest income (895)
Estimated tax benefit of losses through dissolution (787)
Reserve for other contingencies 1,250
_______
$10,828
=======
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 (718,765
options at an average exercise price of $3.04 per share). Net
assets in liquidation per share includes the effect of these
options as shown below (amounts in thousands, except per share
amounts):
Number of common shares 5,960
=======
Net assets in liquidation $34,326
Proceeds from the exercise of dilutive stock options 2,056
Estimated tax benefit of compensatory stock options 543
_______
Adjusted net assets in liquidation $36,925
=======
Net assets in liquidation per share $6.20
=======
PAGE 4
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(in thousands)
(Unaudited)
Nine Month
Period Ended
March 31, 1997
______________
Net assets in liquidation at June 30, 1996 $33,586
Changes in estimated liquidation values of
assets and liabilities (1) 740
_______
Net assets in liquidation at March 31, 1997 $34,326
=======
Note (2) Includes adjustment in estimated liquidation value of
certain assets and liabilities (amounts in thousands):
Cash and securities $523
Accounts receivable (81)
Other assets 348
Accounts payable (394)
Shut down costs 998
Deferred income tax 297
Estimated tax benefit of loss through dissolution (753)
Minimum payments on non-recourse obligation 39
Estimated interest income (287)
Reserve for other contingencies 50
____
Changes in estimated liquidation values $740
====
PAGE 5
<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
Feburary 2, 1996, a Plan of Complete Liquidation and Dissolution (the
"Plan") of the Company. See "Plan of Complete Liquidation and
Dissolution" below.
The Board of Directors of the Company has authorized 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. To date, 52,527 shares have been repurchased.
The repurchase authorization remains in force and the Company
will, from time to time, repurchase shares when it is consistent with
maximizing shareholder distributions under the Plan.
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 was deposited into escrow
to provide for indemnification claims that the buyer may assert
against the Company or Behlman under the sale agreement. To date,
the buyer has made claims against the escrow in the approximate
aggregate amount of $732,000. The remainder of the escrow amount has
been released to the Company. The Company is vigorously opposing
the buyer's claim.
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 possible contingent 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.
PAGE 6
<PAGE>
Statement of Changes in Net Assets in Liquidation
_________________________________________________
The total of Net Assets in liquidation as of March 31, 1997 did
not change materially from the total as of 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 of 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.
On February 12, 1997, the Company announced that it intends to
make an initial cash distribution to stockholders of approximately
$5.00 per share from its Net Assets in Liquidation, pursuant to the
Plan, no later than June 30, 1997, or earlier if conditions warrant.
The Board is currently unable to predict the precise amount and date
of any additional distributions pursuant to the Plan. The exact
amount and timing of, and record date for, all 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 7
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
_________________________________
(a) Exhibits.
2. Plan of Complete Liquidation and Dissolution -
incorporated herein 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
herein 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 herein 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).
27. Financial Data Schedule
(b) Reports on Form 8-K.
____________________
None.
No other reportable items
PAGE 8
<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.
May 13, 1997 BY: /S/
______________________ ____________________________
Date Gilbert H. Steinberg,
Vice President
May 13, 1997 /S/
______________________ ____________________________
Date Gilbert H. Steinberg,
Treasurer and
Chief Financial Officer
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<ARTICLE> 5
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<S> <C> <C>
<PERIOD-TYPE> 9-MOS 3-MOS
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1997
<PERIOD-START> JUL-01-1996 JAN-01-1997
<PERIOD-END> MAR-31-1997 MAR-31-1997
<CASH> 32,245 32,245
<SECURITIES> 7,925 7,925
<RECEIVABLES> 0 0
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<INVENTORY> 0 0
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<PP&E> 0 0
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<TOTAL-ASSETS> 45,154 45,154
<CURRENT-LIABILITIES> 10,828 10,828
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0 0
0 0
<COMMON> 0 0
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<TOTAL-LIABILITY-AND-EQUITY> 10,828 10,828
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