Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended: December 31, 1996
Commission file number: 33-15682-LA
Exact name of small business issuer as specified in its charter:
Systems West, Inc.
State or other jurisdiction of incorporation or organization:
Colorado
IRS Employer Identification No.: 94-3026545
Address of principal executive offices:
3239 Imjin Road, Marina, CA 93933
Issuer's telephone number: (408) 582-1050
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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
February 1, 1997: 1,066,748
This Form 10-QSB is not covered by an accountant's report
Page 1 of 10
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
December 31, 1996 (unaudited)
and June 30, 1996 Page 3
Statements of Operations
Three months and six months ended
December 31, 1996 and 1995 (unaudited) Page 5
Statements of Cash Flows
Six months ended December 31,
1996 and 1995 (unaudited) Page 6
Notes to Financial Statements
(unaudited) Page 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations Page 9
PART II. OTHER INFORMATION Page 10
SIGNATURES Page 10
EXHIBITS: Exhibit 27 - Financial Data Schedule
Page 2 of 10
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
ASSETS
December 31, June 30,
1996 1996
(unaudited)
______________________________________
<S> <C> <C>
CURRENT ASSETS
Cash 166,234 128,199
Receivables, net of allowance for
doubtful accounts 35,887 134,621
Inventory
Costs & estimated earnings on
long-term contracts -- 54,301
Work-in-process 37,100 14,178
Computer parts 111,860 63,958
Prepaid expenses -- 4,398
_______ _______
Total current assets 351,081 399,655
FURNITURE AND EQUIPMENT, net of
$59,881 and $56,707 of
accumulated depreciation 16,703 20,662
PROTOTYPE EQUIPMENT, net of
$93,576 and $83,946 of
accumulated depreciation 44,206 45,708
Deposits 4,474 4,474
_______ _______
416,464 470,499
Page 3 of 10
<PAGE>
<CAPTION>
BALANCE SHEETS (CONTINUED)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, June 30,
1996 1996
(unaudited)
________________________________
CURRENT LIABILITIES
Deposits 80 --
Note payable -- --
Accounts Payable 58,377 69,252
Accrued Liabilities 57,843 90,530
Payables - officers/directors 140,663 140,663
Current portion of capitalized
lease obligation 9,045 8,701
Deferred Revenue/LT Contracts -- 6,020
_______ _______
Total current liabilities 266,008 315,166
Capitalized lease obligation 3,042 7,567
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
1,000,000 shares authorized,
Series A, 812.5 shares issued
and outstanding (liquidation
preference of $32,500) 8 8
Common stock, no par value;
5,000,000 shares authorized,
1,066,748 shares issued and
outstanding 1,703,746 1,703,746
Additional paid-in capital 160,435 160,435
Accumulated deficit (1,716,775) (1,716,423)
_________ _________
Total stockholders' equity 147,414 147,766
_________ _________
416,464 470,499
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
Page 4 of 10
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Six Months Ended
December 31 December 31
1996 1995 1996 1995
___________________________________________
<C> <C> <C> <C>
Revenues
Sales 124,569 373,642 438,256 763,873
Costs and expenses
Cost of sales 31,078 145,177 156,481 336,596
Marketing 64,426 90,492 126,045 106,571
Research and
development 17,092 8,325 22,209 11,432
General and
administrative 64,891 67,839 133,873 141,893
_______ _______ _______ _______
177,487 311,833 438,608 596,492
Net income (loss) (52,918) 61,809 (352) 167,381
Net income (loss)
per common share (.049) .06 -- .16
Weighted average
common shares 1,081,000 1,066,749 1,081,000 1,066,749
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
Page 5 of 10
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended December 31
1996 1995
____________________________
<S> <C> <C>
Cash flows from operating activities:
Net income <loss> (352) 167,381
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 12,804 9,984
(Increase) decrease in receivables 98,734 229,464
(Increase) decrease in costs and
estimated earnings on long-term
contracts 54,301 (126,288)
(Increase) decrease in inventories (70,824) (21,084)
(Increase) decrease in prepaid
expenses/deposits 4,398 8,023
Increase (decrease) in accounts
payable (10,875) (40,652)
Increase (decrease) in accrued
liabilities and customer deposits (32,607) 58,628
Increase (decrease) in payables--
officers/directors -- 256
Increase (decrease) in deferred
revenue (6,020) (22,560)
________ ________
Net cash provided by (used in)
operating activities 49,559 263,152
Cash flows from investing activities
Acquisition of furniture & equipment 785 4,179
Acquisition of prototype equipment (8,128) (15,641)
________ ________
Net cash used in investing
activities (7,343) (11,462)
________ ________
Cash flows from financing activities
Proceeds from line of credit -- --
Payments on line of credit -- (130,000)
Payments on capital lease (4,181) 11,135
_________ _________
Net cash used in financing
activities: (4,181) (118,865)
Page 6 of 10
<PAGE>
Net increase (decrease) in cash and
cash equivalents 38,035 132,825
Cash and cash equivalents at beginning
of period 128,199 3,215
_______ _______
Cash and cash equivalents at end of
period 166,234 136,040
Supplemental disclosures of cash flow
information
Cash paid during the period for
interest 1,185 5,482
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
Page 7 of 10
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared by
the Company without audit. In the opinion of management, the
accompanying unaudited financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary for a fair presentation of the Company's financial
position as at December 31, 1996 and 1995 and the results of its
operations, changes in its stockholders' equity and cash flows
for the respective periods then ended. Management has elected to
omit certain disclosure required by generally accepted accounting
principles. The Company's Form 10-KSB for fiscal year ended June
30, 1996 includes audited financial statements as of June 30,
1996 and 1995, complete with the auditors' report and footnotes
to the financial statements, and should be read in conjunction
with this Form 10-QSB.
2. STOCKHOLDERS' EQUITY
On May 25, 1993, the Company's shareholders approved a 1 for 400
reverse split of the Company's common stock and preferred stock,
and increased the authorized capital stock of the Company to
5,000,000 shares of no par value common stock and 1,000,000
shares of $.01 par value preferred stock. Retroactive effect has
been given to all share and per share data in the accompanying
financial statements.
The Series A preferred stock has a $40.00 per share liquidation
preference and is convertible to common stock on an eighteen for
one basis at the option of the holders. The preferred stock may
be redeemed at any time at $40.00 per share, at the election of
the Board of Directors of the Company.
The Company has authorized but unissued shares of preferred stock
which may be issued in such series and preferences as determined
by the Board of Directors.
Page 8 of 10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Systems West, Inc. posted a net (loss) of $(52,918) on gross
sales of $124,569 for the second quarter of fiscal year 1997, and
a cumulative net (loss) of $(352) on gross sales of $438,255 for
the year to date.
The weak second quarter has been caused by time delays on two
major contract awards.
Management has continued to maintain a strong marketing effort,
and currently has firm proposals outstanding of over $2,000,000.
FINANCIAL CONDITION
At December 31, 1996, the Company had a working capital surplus
of $85,073 as compared to a working capital surplus of
$27,239 at December 31, 1995.
Systems West, Inc. currently has no outstanding line of credit
financing. The Company's existing working capital is supporting
its short term operating requirements. Current working capital
is supplemented periodically by export loans guaranteed by the
California Export Finance Office on international business.
Page 9 of 10
<PAGE>
PART II. OTHER INFORMATION
No information is included in answer to Items 1, 2, 3, 4, 5, or 6
under Part II as the Items are either not applicable or, if
applicable, the answer is negative.
SIGNATURES
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 thereunto duly authorized.
SYSTEMS WEST, INC.
(Registrant)
2/13/97 Kenneth W. Ruggles
(Date) (Signature)
2/13/97 Douglas S. Timms
(Date) (Signature)
Page 10 of 10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 166,234
<SECURITIES> 0
<RECEIVABLES> 50,622
<ALLOWANCES> 14,735
<INVENTORY> 148,960
<CURRENT-ASSETS> 351,081
<PP&E> 214,366
<DEPRECIATION> 153,457
<TOTAL-ASSETS> 416,464
<CURRENT-LIABILITIES> 266,008
<BONDS> 0
<COMMON> 1,703,746
0
8
<OTHER-SE> 160,435
<TOTAL-LIABILITY-AND-EQUITY> 416,464
<SALES> 124,569
<TOTAL-REVENUES> 124,569
<CGS> 31,078
<TOTAL-COSTS> 177,487
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (52,918)
<INCOME-TAX> 0
<INCOME-CONTINUING> (52,918)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (52,918)
<EPS-PRIMARY> (.049)
<EPS-DILUTED> (.049)
</TABLE>
