Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15d
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 1995
--------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-17366
------------------------------
SHARED TECHNOLOGIES INC.
------------------------
(exact name of registrant as specified in its charter)
Delaware 87-0424558
---------- -------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
100 Great Meadow Road, Suite 104
Wethersfield, CT 06109
----------------------------------
(Address of principal executive offices)
(203) 258-2400
-----------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or 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 close of the latest
practicable date.
Class Outstanding at August 14, 1995
------------- ---------------------------
Common Stock, $.004 par value 8,460,815 shares
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE
-------- ---------------------- -----
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance
Sheets as of June 30,
1995 and December 31, 1994 3-4
Consolidated Statements of
Operations for the six months
ended June 30, 1995 and 1994 5
Consolidated Statements of
Operations for the three
months ended June 30,
1995 and 1994 6
Consolidated Statements of
Cash Flows for the six
months ended June 30,
1995 and 1994 7
Consolidated Statements of
Stockholders' Equity for
the six months ended
June 30, 1995 8
Notes to Consolidated
Financial Statements 9-11
Item 2 Management's Discussion and
Analysis of Results of
Operations and Financial
Condition 12-13
PART II OTHER INFORMATION 14
Signature Page 15
</TABLE>
<TABLE>
<CAPTION>
Item 1. Financial Statements
------------------------------------
Shared Technologies Inc.
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994
(unaudited)
June 30, December 31,
1995 1994
---------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash $1,779,056 $172,262
Accounts receivable, less allowance
for doubtful accounts of $874,550
in 1995 and $584,000 in 1994 10,752,008 8,532,770
Other current assets 1,212,216 727,375
Deferred income taxes 550,000 550,000
-------- -------
Total current assets 14,293,280 9,982,407
------------ ------------
Equipment, at cost:
Telecommunications equipment 28,487,699 26,222,732
Office and data processing
equipment 5,862,616 4,995,191
------------ ------------
34,350,315 31,217,923
Less - Accumulated depreciation 17,152,997 15,473,023
------------ ------------
17,197,318 15,744,900
------------- -------------
Other Assets 14,686,648 12,197,929
----------- ------------
Total Assets $46,177,246 $37,925,236
-------------- -----------------
-------------- -----------------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994
(unaudited)
June 30, December 31,
1995 1994
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable and current portion of
long-term debt and capital lease
obligations $2,201,365 $1,840,401
Accounts payable 9,746,134 8,191,350
Accrued expenses 2,586,859 2,381,736
Advance billings 1,276,109 1,260,158
---------- ------------
Total current liabilities 15,810,467 13,673,645
---------- ------------
Long-Term Debt and Capital Lease 4,168,976 2,886,365
Obligations less current portion ---------- ------------
Minority Interest in Net Assets of
Subsidiaries 2,037,290 101,504
-------- ---------
Redeemable Put Warrant 404,899 383,048
-------- --------
STOCKHOLDERS' EQUITY:
Preferred Stock, $.01 par value:
Series C, authorized 1,500,000 shares,
outstanding 906,930 shares in 1995 and
1994 9,069 9,069
Series D, authorized 1,000,000 shares,
outstanding 456,900 shares in 1995 and
1994 4,569 4,569
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994
(unaudited)
March 31, December 31,
1995 1994
<S> <C> <C>
Series E, authorized 400,000
shares, outstanding, no shares in
1995 and 400,000 shares in 1994 4,000
Series F, authorized 700,000
shares, outstanding,
700,000 shares in 1995 and 1994 7,000 7,000
Common Stock; $.004 par value,
20,000,000 shares authorized;
7,745,815 and 6,628,246 shares
outstanding in 1995 and 1994
respectively 30,983 26,513
Additional paid-in capital 44,507,677 41,488,128
Accumulated deficit (20,803,684) (22,465,105)
Obligations to issue common stock 1,806,500
---------- ------------
Total stockholders' equity 23,755,614 20,880,674
------------ -------------
Total liabilities and stockholders' $46,177,246 $37,925,236
equity -------------- -------------
-------------- -------------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Statements of Operations
For the Six Months Ended
June 30, 1995 and 1994
(unaudited)
June 30, June 30,
1995 1994
<S> <C> <C>
Revenue:
Shared tenant services $17,069,938 $12,348,576
Facility management services 5,349,762 751,496
Cellular services 5,290,069 3,920,910
----------- ----------
Total Revenue 27,709,769 17,020,982
----------- -----------
Cost of Revenue:
Shared tenant services 9,580,135 6,556,558
Facility management services 4,249,913 658,294
Cellular services 3,078,697 2,115,094
---------- -----------
Total Cost of Revenue 16,908,745 9,329,946
---------- -----------
Gross Margin 10,801,024 7,691,036
---------- ----------
Selling, General & Administrative
Expenses:
Field 7,980,538 4,746,620
Corporate 2,143,545 1,852,627
----------- ----------
Operating Income 676,941 1,091,789
Gain on sale of subsidiary stock 1,374,544
Interest Expense (329,613) (126,349)
Interest Income 71,448 37,558
Minority Interest in Net (Income)
Loss of Subsidiaries 88,845 (43,080)
-------- ----------
Net Income 1,882,165 959,918
Preferred Stock Dividends (198,895) (219,202)
--------- ------------
Net Income Applicable to Common Stock $1,683,270 $740,716
---------------- --------------
---------------- --------------
Net Income Per Common Share $0.19 $0.14
-------- ---------
-------- ---------
Weighted Average Shares Outstanding 8,772,147 5,267,344
------------ -----------
------------ -----------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Statements of Operations
For the Three Months Ended
June 30, 1995 and 1994
(unaudited)
June 30, June 30,
1995 1994
<S> <C> <C>
Revenue:
Shared tenant services $8,736,210 $6,256,332
Facility management services 2,866,886 370,500
Cellular services 3,263,413 2,497,790
----------- ----------
Total Revenue 14,866,509 9,124,622
----------- -----------
Cost of Revenue:
Shared tenant services 4,849,926 3,243,771
Facility management services 2,295,392 325,000
Cellular services 2,011,211 1,334,181
---------- -----------
Total Cost of Revenue 9,156,529 4,902,952
---------- -----------
Gross Margin 5,709,980 4,221,670
---------- ----------
Selling, General & Administrative
Expenses:
Field 4,170,143 2,415,877
Corporate 1,281,506 1,022,273
----------- ----------
Operating Income 258,331 783,520
Gain on sale of subsidiary stock 1,374,544
Interest Expense (163,281) (69,676)
Interest Income 49,538 12,616
Minority Interest in Net (Income)
Loss of Subsidiaries 78,302 (23,070)
-------- ----------
Net Income 1,597,434 703,390
------------ ---------
Preferred Stock Dividends (99,680) (109,601)
--------- ----------
Net Income Applicable to Common Stock $1,497,754 $593,789
----------- ----------
----------- ----------
Net Income Per Common Share $0.17 $0.11
------ ----------
---------- --------
Weighted Average Shares Outstanding 8,831,164 5,342,889
---------------- ------------
------------ -----------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Statements of Cash Flows
For the Six Months Ended
June 30, 1995 and 1994
(unaudited)
June 30, June 30,
1995 1994
<S> <C> <C>
Cash Flows Provided by Operating
Activities
Net Income $1,882,165 $959,918
Adjustments:
Gain on sale of subsidiary stock (1,374,544)
Depreciation & amortization 2,071,978 1,209,082
Minority interest in net income of (88,845) 43,080
subsidiaries
Change in Assets and Liabilities:
Accounts receivable (1,665,068) (1,012,804)
Other current assets (370,475) (457,535)
Other assets (129,178) 115,805
Accounts payable 623,246 1,193,937
Accrued expenses (89,032) (259,505)
Advanced billings (24,049) (16,001)
---------- ------------
Net cash provided by operating
activities 836,198 1,775,977
---------- ------------
Cash Flows Used in Investing Activities
Acquisitions (2.591,940) (3,779,725)
Capital expenditures (1,849,923) (1,189,971)
----------- -----------
Net cash used in investing activities (4,441,863) (4,969,696)
------------ -------------
Cash Flows From Financing Activities:
Preferred stock dividends (198,895) (219,202)
Proceeds from sale of subsidiary
stock 3,149,175
Proceeds from borrowings 2,293,907 1,439,838
Repayments of notes payable, long-
term debt and capital lease (1,195,177) (1,036,219)
obligations
Proceeds from sales of common stock 1,163,449 4,645,459
---------- ----------
Net cash provided by financing
activities 5,212,459 (4,829,876)
----------- -----------
Net increase (decrease) in cash 1,606,794 1,636,157
Cash, Beginning of Period 172,262 408,533
--------- ----------
Cash, End of Period $1,779,056 $2,044,690
----------- -----------
----------- -----------
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for -
Interest $279,882 $117,744
Income taxes $56,118 $5,813
Supplemental Disclosures of Noncash
Investing and Financing Activities:
Obligations to issue common stock in
connection with acquisitions $1,806,500
------------ --------------
------------ --------------
Issuance of preferred stock in
connection with acquisition
$5,000,000
------------ --------------
------------ --------------
Dividend accretion on redeemable put
warrant $21,849
--------- ----------
--------- ----------
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Statement of
Stockholders' Equity
For the six months ended
June 30, 1995
(unaudited)
<S> <C> <C> <C> <C>
Series C Series D
Preferred Preferred
Shares Amount Shares Amount
Balance, December 31, 1994 906,930 $9,069 456,900 $4,569
Issuance of Common Stock
per obligation to issue - - - -
Conversion of Series E - - - -
Preferred
Sale of Common Stock - - - -
Common stock issued in
lieu of compensation and
other - - - -
Net income - - - -
Dividend accretion of
redeemable put warrant - - - -
Preferred stock dividends - - - -
-------- ------- --------- ----------
Balance, June 30, 1995 906,930 $9,069 456,900 $4,569
-------- ------- -------- --------
-------- ------- -------- --------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Statement of
Stockholders' Equity
For the six months ended
June 30, 1995
(unaudited)
<S> <C> <C> <C> <C>
Series E Series F
Preferred Preferred
Shares Amount Shares Amount
Balance, December 31, 1994 400,000 $4,000 700,000 $7,000
Issuance of Common Stock
per obligation to issue - - - -
Conversion of Preferred E (400,000) ($4,000) - -
Sale of Common Stock - - - -
Common stock issued in
lieu of compensation and
other - - - -
Net income - - - -
Dividend accretion of
redeemable put warrant - - - -
Preferred stock dividends - - - -
-------- -------- ---------- -----------
Balance, June 30, 1995 0 $0 700,000 $7,000
--- ---- -------- ---------
--- ---- -------- ---------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Statement of
Stockholders' Equity
For the six months ended
June 30, 1995
(unaudited)
<S> <C> <C> <C>
Common Additional
Stock
Paid-in
Shares Amount Capital
Balance, December 31, 1994 6,628,246 $26,513 $41,488,128
Issuance of Common Stock
per obligation to issue 405,395 1,621 1,804,879
Conversion of Preferred E 400,000 1,600 2,400
Sale of Common Stock 300,000 1,200 1,162,249
Common stock issued in
lieu of compensation and 12,174 49 50,021
other
Net income - - -
Dividend accretion of
redeemable put warrant - - -
Preferred stock dividends - - -
----------- ----------- --------------
Balance, June 30, 1995 7,745,815 $30,983 $44,507,677
----------- ----------- --------------
----------- ----------- --------------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
<TABLE>
<CAPTION>
Shared Technologies Inc.
Consolidated Statement of
Stockholders' Equity
For the six months ended
June 30, 1995
(unaudited)
<S> <C> <C> <C>
Obligations Total
Accumulated to Issue
Stockholders'
Deficit Common Stock Equity
Balance, December 31, 1994 ($22,465,105) $1,806,500 $20,880,674
Issuance of Common Stock
per obligation to issue - (1,806,500) (0)
Conversion of Preferred E - - 0
Sale of Common Stock - - 1,163,449
Common stock issued in
lieu of compensation and - - 50,070
other
Net income 1,882,165 - 1,882,165
Dividend accretion of
redeemable put warrant (21,849) - (21,849)
Preferred stock dividends (198,895) - (198,895)
------------- ------------ -------------
Balance, June 30, 1995 ($20,803,684) $0 $23,755,614
------------- ------------- -------------
------------- ------------- ------------
The accompanying notes are an integral part of these consolidated
financial statements.
</TABLE>
Shared Technologies Inc.
Notes to Consolidated Financial Statements
June 30, 1995
(Unaudited)
1. Basis of Presentation: The consolidated financial statements
included herein have been prepared by Shared Technologies Inc.
(the Company) pursuant to the rules and regulations of the
Securities and Exchange Commission and reflect all adjustments,
consisting only of normal recurring adjustments, which are, in
the opinion of management, necessary to present a fair statement
of the results for interim periods. Certain information and
footnote disclosures have been omitted pursuant to such rules and
regulations, although the Company believes that the disclosures
are adequate to make the information presented not misleading.
It is suggested that these consolidated financial statements be
read in conjunction with the consolidated financial statements
and the notes thereto included in the Company's December 31, 1994
report on Form 10-K. Certain reclassifications to prior year
financial statements were made in order to conform to the 1995
presentation.
2. Income Taxes: The Company and its subsidiaries file a
consolidated federal income tax return but generally file
separate state income tax returns. As of December 31, 1994, the
Company has net operating loss carryforwards for federal income
tax purposes of approximately $22.7 million, which expire, if
unused, from 2001 to 2007.
3. Acquisitions: In June 1994, the Company acquired all of the
partnership interests in Access Telecommunication Group, L.P. and
Access Telemanagement, Inc. (collectively Access). The purchase
price was $9,252,000, of which $4,252,000 was paid in cash and
the balance through the issuance of 400,000 shares of Series E
Preferred Stock valued at $3.75 per share and 700,000 shares of
Series F Preferred Stock valued at $5.00 per share.
Unaudited proforma consolidated statements of operations for the
six-month period ended June 30, 1994 as through the acquisition
of Access had been made at the beginning of the period are as
follows:
1994
Revenues $26,303,000
Net Income $1,127,000
Net Income Per Share $0.16
On June 30, 1995 the Company purchased all of the outstanding
capital stock of Office Telephone Management ("OTM"). OTM
provides telecommunication management services primarily to
businesses located in executive office suites. The purchase
price is currently allocated as follows:
<TABLE>
<CAPTION>
<S> <C>
Goodwill $1,945,000
Property, Plant & Equipment 1,291,000
Accounts Receivable, (net) 307,000
Inventory 109,000
Deposits 12,000
Other current assets 1,000
Debt (current and long-term) (545,000)
Accounts Payable (525,000)
Accrued Expense (350,000)
-----------
Net Purchase Price $2,245,000
------------
------------
</TABLE>
In May and June 1995, the Company's cellular subsidiary Shared
Technologies Cellular, Inc. ("STC") commenced management and
subsequently completed its acquisition of the outstanding capital
stock of Cellular Hotline, Inc. ("Hotline") for $617,000. The
$617,000 was comprised of $367,000 in cash, paid at closing, and
the issuance of 50,000 shares of STC common stock. At the
discretion of the former Hotline stockholders, STC is required to
repurchase all or a portion of the shares for $5.00 per share, at
any time during the period commencing three months and ending six
months after June 19, 1995. STC has the right to repurchase all
or a portion of the shares for $6.00 during the same period.
Additionally at closing, STC issued options to purchase 50,000
additional shares of STC common stock, exercisable at $7.50 per
share for three years. The agreement provides for additional
payments based upon attaining certain levels of activation
revenues, as defined, over a one year period.
Pro forma financial information is not yet available.
4. Contingencies: While providing services at the Jacob K.
Javits Convention Center in 1991, the Company licensed the right
to provide certain public pay telephone services at the Center to
Tel-A-Booth Communications, Ltd. In 1992, Tel-A-Booth filed a
claim against the New York Convention Center Operating
Corporation and its facilities manager, Ogden Allied Facility
Management, and against the Company seeking $10,000,000 in
damages for which no amounts have been provided in the
accompanying consolidated financial statements. While any
litigation contains an element of uncertainty, management is of
the opinion based on the current status of the claim that the
ultimate resolution of this matter should not have a material
adverse effect upon either results of operations, cash flows or
financial position of the Company.
On January 17, 1995, the Company's subsidiary Shared Technologies
Cellular, Inc. ("STC") filed a complaint against South (which
includes its affiliates). The complaint alleges that the failure
by South to disclose a certain claim constituted a breach of the
asset purchase agreement. STC seeks damages and a declaratory
judgment that the payment in the Company's common stock to South,
pursuant to the agreement, should be reduced by the amount of any
damages caused to the Company by such breach. In addition, the
Company seeks indemnification from South, including requiring
South to defend the Company from and against such claim.
On January 27, 1995, South commenced an action against STC
alleging, among other things, that STC's failure to deliver to
South the Company's common stock under the asset purchase
agreement constituted a breach of contract and fraud. South is
seeking unspecified actual and punitive damages of not less than
$10,000,000. STC sought a stay of this action and is considering
depositing the Company's common stock with the Court. Although
it has not received an opinion of counsel with regard to this
matter, STC believes it has meritorious defenses to this action.
In the event of an adverse outcome in this action, the Company
does not believe that damages payable would be material unless
the market value of the Company's common stock materially
decreases prior to delivery thereof.
In addition to the above matters, the Company is a party to
various legal actions, the outcome of which, in the opinion of
management, will not have a material adverse effect on the
Company's financial condition and results of operations.
5. Gain on sale of subsidiary stock: In April, 1995, the
Company's cellular subsidiary Shared Technologies Cellular, Inc.
("STC") completed its SB-2 filing with the Securities and
Exchange Commission and became a public company. Prior to this
date STC had been an approximately 86% owned subsidiary of the
Company. STC sold 950,000 shares of common stock at $5.25 which
generated net proceeds of $3,562,000, after underwriters'
commissions and estimated offering expenses. These proceeds are
intended to be used to finance marketing activities relating to
STC's cellular telephone rental service ($1.15 million),
repayment of indebtedness to the Company ($1.25 million),
acquisition of telecommunication equipment, billing technology
management information systems and centralized reservation
systems ($.5 million) and the balance for working capital and
general corporate purposes. The net effect on the consolidated
financial statements for the second quarter was a gain of
approximately $1,375,000.
Item 2.
Management's Discussion and Analysis of Results of Operations and
Financial Condition
Results of Operations
---------------------
The Company's revenues rose to $27,710,000 for the six months
ended June 30, 1995, an increase of $10,689,000 or 63% over the
six months ended June 30, 1994. Revenues rose to $14,867,000 for
the three month period ended June 30, 1995 an increase of
$5,742,000 or 63% over the three month period ended June 30,
1995. Each division continued to contribute significantly to the
increase in revenue. Shared tenant services (STS) increased
$4,721,000 or 27%, facility management services (FMS) grew
$4,598,000 or 86% and Shared technologies cellular services (STC)
rose $1,370,000 or 26% for the six months ended June 30, 1995
over the six months ended June 30, 1994. The majority of the
growth in STS and FMS revenue was attributable to the June 30,
1994 acquisition of Access Telecommunications Group, L.P.
(Access). The growth in STC revenues was due to expanded
operations through the opening of new locations and recent
acquisitions.
Gross margin dropped to 39% of revenue for the six months ended
June 30, 1995 from 45% for the six months ended June 30, 1994.
Gross margin decreased to 38% of revenue for the three months
ended June 30, 1995 compared to 46% for the three months ended
June 30, 1994. For the six months ended June 30, 1995, STS
produced a 44% gross margin and FMS a 21% gross margin compared
to 47% and 12% for the period ended June 30, 1994. For the three
months ended June 30, 1995 STS produced a 45% gross margin and
FMS a 21% gross margin compared to 48% and 12% for the period
ended June 30, 1994. Changes in both of these division's gross
margin is mainly attributable to the acquisition of Access which
significantly changed the Company's revenue mix. STC gross
margin dropped to 42% and 38% for the six and three months ended
June 30, 1995 from 46% and 47% for the six and three months ended
June 30, 1994. This drop is mainly due to the acquisition of
Hotline which has historically produced lower gross margin than
the core business and the 1994 second quarter World Cup cellular
rentals which produced unusually high margins.
The Company's overall gross margin is heavily impacted by swings
in sales mix as each of the Company's three divisions produce
different gross margins. FMS accounted for 19% and 22% of total
sales for the six and three months ended June 30, 1995 compared
to 4% for the same periods ended June 30, 1994. Since FMS
produces significantly lower gross margin than STS and STC, this
increase caused the Company's overall gross margin to decrease.
Selling, general and administrative expenses as a percentage of
revenue decreased to 37% for the six and three months ended June
30, 1995 compared to 39% and 38% for the six and three months
ended June 30, 1994. The Company was able to reduce cost as a
percentage of revenue through synergy's created with the
Company's overall growth. This was partially offset in the last
three months as STC has added overhead costs as it aggressively
grows the cellular business following its April 1995 public
offering.
Interest expense increased by $203,000 for the six months ended
June 30, 1995 over the six months ended June 30, 1994 and $94,000
for the three months ended June 30, 1995 over the three months
ended June 30, 1994. This is attributable to the addition of
interest bearing debt since June 1994.
In late April 1995 the Company successfully completed a public
offering of its cellular subsidiary's stock. Following the sale
the Company's percentage of ownership dropped from 86% to 60%.
The accounting treatment of the sale required the Company to
record a gain of approximately $1,375,000 for six and three
months ended June 30, 1995.
Liquidity and Capital Resources
--------------------------------
The Company's working capital deficit at June 30, 1995 was
$1,517,000 compared to $3,691,00 at June 30, 1994. Stockholders'
equity at June 30, 1995 was $23,756,000 compared to $19,848,000
at June 30, 1994.
Net cash provided by operations decreased to $836,000 for the six
months ended June 30, 1995 versus $1,776,000 for the six months
ended June 30, 1994. The Company continued to utilize cash from
operations to reduce the working capital deficit.
The Company continued to invest in equipment at both new and
existing locations. $1,850,000 was spent on capital expenditures
for the six months ended June 30, 1995 compared to $1,190,000 for
the six months ended June 30, 1994. The Company has also
continued to expand through acquisition, investing $2,592,000 in
1995 to acquire Office Telephone Management, Inc. and Cellular
Hotline, Inc. During 1994 $8,780,000 was invested to acquire
Access Telecommunication Group, L.P. (Access) comprised of
3,780,000 of cash and the remaining portion in preferred stock.
Cash to finance this growth and help reduce the working capital
deficit was provided mainly from financing activities. During
the first six months of 1995 $1,160,000 was raised from sales of
new stock, $3,149,000 from an initial public offering of the
Company's cellular subsidiary, and $2,294,000 from new
borrowings. A portion of these proceeds were used to repay
$1,195,000 in principal debt. During 1994 $4,830,000 was raised
from financing activities, the majority of the proceeds came from
sales of stock and new borrowings. These proceeds were used to
finance the purchase of Access and repay existing debt.
The Company plans to continue to reduce the working capital
deficit and to expand operations throughout 1995. This growth is
expected to be financed with cash from operations and new
borrowings.
<TABLE>
<CAPTION>
PART II. OTHER INFORMATION
<S> <C>
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
None
(b) Reports on Form 8-K
On June 30, 1995 the Company filed a
Form 8-K, date of report June 19, 1995,
in which, the Company reported the
acquisition of Cellular Hotline, Inc.
by its majority owned subsidiary Shared
Technologies Cellular, Inc.
On August 3, 1995 the Company filed a
Form 8-K/A Amendment #3, date of report
June 27, 1994, regarding its
acquisition of Access Telecommunication
Group, L.P.
</TABLE>
SIGNATURE
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 hereunto duly authorized.
SHARED TECHNOLOGIES INC.
By: /s/ Vincent DiVincenzo
----------------------------
Vincent DiVincenzo
Senior Vice President-Finance
and Administration, Treasurer,
Chief Financial Officer
Date: August 14, 1995
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