<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 FOR THE QUARTER ENDED JUNE 30, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from _______________ to
________________
Commission File number 0-16449
OMNIS TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-3046892
(State of incorporation) (IRS Employer Identification No.)
851 Traeger Avenue
San Bruno, California 94066
(Address of principal executive offices)
(650) 829-6000
(Registrant's telephone number)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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] No [ ]
As of August 3, 1998 there were 2,125,827 shares of registrant's Common Stock,
$.10 par value, outstanding.
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OMNIS TECHNOLOGY CORPORATION AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page No.
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<S> <C>
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets -
June 30, 1998 and March 31, 1998 3
Condensed Consolidated Statements of Operations -
Three months ended June 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows -
Three months ended June 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
OMNIS TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, 1998 March 31, 1998
---------------- ------------------
<S> <C> <C>
(Unaudited)
Current Assets:
Cash and equivalents $132,000 $242,000
Trade accounts receivable, less allowance for
doubtful accounts and returns of $329,643 and
$161,895, respectively 715,000 602,000
Inventory 17,000 74,000
Other current assets 288,000 625,000
---------------- ------------------
Total current assets 1,152,000 1,543,000
---------------- ------------------
Property, furniture and equipment, net 1,252,000 1,472,000
Other assets - 400,000
---------------- ------------------
Total assets $2,404,000 $3,415,000
================ ==================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable and accrued liabilities $2,221,000 $2,387,000
Current portion of long term debt 1,220,000 1,310,000
Deferred revenue 748,000 862,000
---------------- ------------------
Total current liabilities 4,189,000 4,559,000
---------------- ------------------
Long term debt 69,000 111,000
---------------- ------------------
Total liabilities 4,258,000 4,670,000
---------------- ------------------
Stockholders' Deficiency:
Preferred stock 62,000 -
Common stock 212,000 212,000
Paid-in capital 43,300,000 42,881,000
Accumulated deficit (45,580,000) (44,499,000)
Foreign currency translation adjustment 152,000 151,000
---------------- ------------------
Total stockholders' deficiency (1,854,000) (1,255,000)
---------------- ------------------
Total liabilities and stockholders' deficiency $ 2,404,000 $ 3,415,000
================ ==================
</TABLE>
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OMNIS TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30
-----------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Net Revenues:
Products $ 915,000 $ 1,270,000
Services 459,000 1,139,000
------------- -------------
Total net revenues 1,374,000 2,409,000
Costs and Expenses:
Cost of product revenues 121,000 144,000
Cost of service revenues 101,000 1,046,000
Sales and marketing 579,000 2,421,000
Research and development 337,000 899,000
General and administrative 1,201,000 760,000
------------- -------------
Total costs and expenses 2,339,000 5,270,000
------------- -------------
Operating Loss (965,000) (2,861,000)
------------- -------------
Other Income (Expense):
Interest income 2,000 60,000
Interest expense and other, net (114,000) (42,000)
------------- -------------
Total other income (expense) (112,000) 18,000
------------- -------------
Loss before Income Taxes (1,077,000) (2,843,000)
Income Tax Expense 4,000 5,000
------------- -------------
Net loss $ (1,081,000) $ (2,848,000)
============= =============
Net loss per common share: $ (0.51) $ (1.41)
Weighted average number of common
shares outstanding 2,125,827 2,016,038
</TABLE>
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OMNIS TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
June 30
-----------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (1,081,000) $ (2,848,000)
Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation and amortization expense 119,000 199,000
Loss on disposal of property 79,000 --
Loss on write-off of prepaid expense 500,000 --
Provision for inventory evaluation 50,000 --
Change in assets and liabilities:
Trade accounts receivable (113,000) (924,000)
Inventory 7,000 (84,000)
Other current assets 238,000 (310,000)
Accounts payable and accrued liabilities (173,000) 780,000
Deferred revenue (114,000) 257,000
------------- -------------
Net cash used for operating activities (489,000) (2,930,000)
------------- -------------
Cash Flows from Investing Activities:
Purchases of property, furniture and equipment (3,000) (342,000)
Proceeds from sale of fixed assets 16,000 30,000
------------- -------------
Net cash provided by (used for) investing activities 13,000 (312,000)
------------- -------------
Cash Flows from Financing Activities:
Net proceeds from preferred stock issuance 482,000 --
Repayments of debt (127,000) (83,000)
------------- -------------
Net cash used for financing activities 355,000 (83,000)
------------- -------------
Effect of Exchange Rate Changes on Cash 11,000 58,000
Net decrease in cash and equivalents (110,000) (3,267,000)
Cash and equivalents at beginning of period 242,000 6,150,000
------------- -------------
Cash and Equivalents at end of period $ 132,000 $ 2,883,000
============= =============
NON CASH INVESTING AND FINANCING ACTIVITIES
Conversion of convertible subordinated debentures into common stock $ -- $ 1,810,000
============= =============
</TABLE>
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OMNIS TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited financial information furnished herein
reflects all adjustments, consisting only of normal recurring items, which
in the opinion of management are necessary to fairly state the Company's
financial position, the results of its operations and the changes in its
financial position for the periods presented. These financial statements
should be read in conjunction with the Company's audited financial
statements for the year ended March 31, 1998. The results of operations for
the period ended June 30, 1998 are not necessarily indicative of results to
be expected for any other interim period or the fiscal year ending March
31, 1999.
2. The Company has adopted Statement of Financial Accounting
Standards No. 128, "Earnings per Share" (SFAS 128). SFAS 128 requires a
dual presentation of basic and diluted EPS. Basic EPS excludes dilution and
is computed by dividing net income (loss) by the weighted average of common
shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities and other contracts to issue stock
were exercised or converted into common stock. However, the Company's
reported diluted net loss per share for all periods presented is based on
the weighted average number of common shares outstanding during the period
as the effect of such securities would be anti-dilutive.
3. In October 1997, the Company closed an interim debt
financing of $1,000,000 with a significant stockholder. This debt financing
is secured by substantially all the Company's assets and is scheduled to be
repaid by September 30, 1998. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Overview."
4. In April 1998, the Company agreed to sell up to 126,000
shares of Series A Preferred Stock, at a price of $8.00 per share, to a
significant stockholder. Each share of Preferred Stock converts into 10
shares of common stock, has voting and registration rights, is entitled to
cumulative dividends of $0.10 per share in preference to common
stockholders, and has a preference in liquidation over common stockholders
in the amount of $8.00 per share, including all accrued or declared but
unpaid dividends, as defined. Concurrent with the execution of that
agreement, the Company sold the first 49,826 shares of Series A Preferred
Stock, with net proceeds of approximately $400,000. Additionally, the same
stockholder purchased 12,456 shares in May 1998 for net proceeds of
approximately $100,000. The remaining 62,282 shares were purchased by this
stockholder in July, 1998 for net proceeds of approximately $500,000. These
proceeds will be used to fund the Company's operations.
6
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OMNIS TECHNOLOGY CORPORATION AND SUBSIDIARIES
THIS REPORT ON FORM 10-QSB INCLUDES A NUMBER OF FORWARD-LOOKING STATEMENTS THAT
REFLECT THE COMPANY'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL
PERFORMANCE. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES, INCLUDING THOSE DISCUSSED IN "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND THE COMPANY'S
ACTUAL RESULTS MAY DIFFER MATERIALLY FROM HISTORICAL OR ANTICIPATED RESULTS.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
OVERVIEW
OMNIS Technology Corporation develops and markets tools that enable software
application development. The Company markets its products primarily through its
indirect channel consisting of VAR's, Distributors, and OEM relationships.
OMNIS Technology Corporation has experienced significant losses in each of
the past three years, including the quarter ended June 30, 1998. As a result of
this and other factors, the Company has expended a significant amount of cash
resources during that period and the three months ended June 30, 1998. The
Company raised $1 million through a private debt financing in October 1997 and
has recently raised $1 million in Preferred Stock from a significant
stockholder, which is expected to fund the Company's operations going forward.
However, the Company currently has very little available cash and has no
reserves in the event operations do not produce needed resources to fund
operations and repay the debt. While the Company is not currently seeking
additional financing, there can be no assurance that the Company will be able to
raise additional cash at anytime in the future on commercially reasonable terms,
or at all, should the need arise to fund future operations. If the Company is
unsuccessful in raising such cash when needed, the Company may be required to
cease operations and its secured creditors would have a first claim on
substantially all of the Company's assets.
The Company has negotiated a repayment plan with a creditor committee (the
"Creditor Committee") representing the majority of its U.S.-based unsecured
creditors related to past debts owed by the Company ("Workout Plan"). Under the
terms of the Workout Plan, creditors which have agreed to the Workout Plan and
who have begun legal actions must dismiss their lawsuits. Creditors who have not
agreed to the Workout Plan as proposed may at their option continue to seek
payment from the Company individually, or may join the Workout Plan at a later
date. Over 90% of the approximately 110 unsecured creditors of the Company at
February 1998, representing over 90% of the approximately $1.3 million owed by
the Company, have accepted the proposed Workout Plan. Of the participants in the
Workout Plan, approximately 27 creditors, representing approximately $900,000 of
the claims, will be repaid over a period of three years including interest
payments at 10%. The balance of the participants in the Workout Plan will be
paid by August 31, 1998 an aggregate of approximately $70,000 on their
approximately $400,000 in claims. If the Company should not be able to meet
these repayments in future periods, the Company will be in default under the
Workout Plan and the Creditor Committee may terminate the Workout Plan.
Accordingly, in the event of such a breach, there is a significant risk that the
Company's creditors could force the Company to file for bankruptcy protection.
During the past year, the Company has significantly reduced its headcount in
attempts to reduce operating costs. During the quarter ending June 30, 1998, the
Company's worldwide headcount remained relatively constant, and the Company has
no plans to increase headcount in the near term.
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RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998, AND JUNE 30, 1997
REVENUES
Total net revenues for the three months ended June 30, 1998 were $1,374,000,
representing a decrease of 43% as compared to total net revenues of $2,409,000
for the three months ended June 30, 1997. This decrease is due primarily to the
planned reduction in service revenues, particularly as a result of the Company's
decision to reduce conflicts with some its channel partners.
Product revenues decreased during the three months ended June 30, 1998 to
$915,000 from $1,270,000 in the three months ended June 30, 1997. This decrease
is mainly due to the Company's reduction in sales workforce in the past year.
During the three months ending June 30, 1998, product revenues represented 67%
of total net revenues as compared to 53% of total net revenues during the same
period in the prior year. This reflects the Company's shift in focus to its
higher margin product related revenue.
Service revenues for the three months ended June 30, 1998, decreased 60% to
$459,000 from $1,139,000 for the three months ended June 30, 1997. The majority
of this decrease is due to the Company's decision to de-emphasize its consulting
offerings over the past 18 months. Maintenance revenue, which primarily consists
of telephone support to the Company's customers, decreased slightly during the
period ending June 30, 1998 due to the decrease in product revenue. The Company
expects service revenues related to consulting projects to continue to decrease
in future periods as it focuses on higher margin product related revenue and
shifts consulting opportunities to its external partners.
COST OF SALES
Cost of product revenues is comprised of direct costs associated with
software product sales including software packaging, documentation, and physical
media costs. Cost of service revenues is comprised of customer support
(maintenance) expenses, including technical support salaries and related
expenses, and consulting related costs, including consultant salaries and
related costs incurred in delivering customer consulting and training services.
Cost of product revenues as a percentage of product revenues slightly
increased from 11% in the three months ended June 30, 1997 to 13% in the three
months ended June 30, 1998.
Cost of service revenues decreased as a percentage of service revenues from
92% in the three months ended June 30, 1997 to 22% in the three months ended
June 30, 1998. This decrease was primarily due to a significant reduction in
headcount in the consulting division. Currently the Company retains very few
consultants and the Company's remaining consultants are typically fully
utilized. In addition, the Company has very little, if any, management specific
to the consulting division, thereby reducing overhead costs. Additionally, the
Company's technical support group continues to generate favorable gross margins,
and represents the majority of the related revenues and costs within service
revenues.
SALES AND MARKETING EXPENSE
Sales expenses decreased to $434,000 for the three months ended June 30,
1998, as compared to $921,000 for the three months ended June 30, 1997. The
decrease in sales expenses was primarily due to decreases in headcount. In the
third quarter of fiscal 1998, the Company had a reduction-in-force which
included a significant number of sales related employees. The Company has no
plans to replace this headcount in the near term.
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Marketing expenses for the three months ended June 30, 1998, were $145,000,
as compared to $1,500,000 for the three months ended June 30, 1997. This
decrease in marketing expense was primarily due to a reduction of costs
associated with the reduction in Company's lead generation effort, including
trade shows and advertising, in the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997 as well as the absence of start-up costs
associated with the introduction of new products and public relations costs
which the Company incurred during the three months ended June 30, 1997. In the
third quarter of fiscal 1998, the Company had a reduction-in-force which
included a significant number of marketing related employees. The Company
expects slight increases in marketing expenses during future periods as it
rebuilds its marketing efforts towards its existing installed base with partner
focused programs designed to increase its installed base of customers.
RESEARCH AND DEVELOPMENT EXPENSE
Research and development costs decreased to $337,000 for the three months
ended June 30, 1998, as compared to $899,000 for the three months ended June 30,
1997, primarily due to decreased headcount in its U.S. based operations. The
Company has streamlined its development resources, eliminating projects that do
not relate to its core technologies and projects for which the Company can not
forecast revenues in the near future or at all. Additionally the Company
consolidated its development team in its development facility in the U.K. The
Company continues to invest in the development of its newer product line, OMNIS
Studio, aimed at sales opportunities that the Company believes will expand its
installed base of customers.
GENERAL AND ADMINISTRATIVE EXPENSE
General and administrative expenses increased to $1,201,000 for the three
months ended June 30, 1998, as compared to $760,000 for the three ended June 30,
1997. General and administrative expenses increased during the three ended
months June 30, 1998, as a result of the Company's successful negotiation with
its U.S. facility landlord to vacate its current lease space. This resulted in a
write-off of approximately $540,000 of the Company's lease deposit associated
with the Company's headquarters in San Bruno, California. The Company plans to
relocate its headquarters to San Carlos, California, which will reduce
lease-associated usage of cash by $150,000 per quarter. Additionally the Company
recognized a write-off related to the disposal of leased equipment, resulting in
a non-recurring charge of $110,000 during the quarter ended June 30, 1998. The
Company is continuing its efforts to reduce its operating expenses where
possible, including general and administrative expenses.
OTHER INCOME (EXPENSE)
Other income (expense) is comprised primarily of interest income earned on
cash and cash equivalents, interest expense, and any gain or loss on foreign
currency transactions. Interest income decreased to $2,000 for the three months
ended June 30, 1998, from $60,000 for the three months ended June 30, 1998,
primarily due to lower average balances of cash and cash equivalents. Interest
expense decreased to $37,000 for the three months ended June 30, 1998, from
$49,000 for the three months ended June 30, 1997.
RISK FACTORS
The Company has experienced significant losses over the past three fiscal
years including the quarter ended June 30, 1998. As a result, the report of the
Company's independent auditors on the Company's financial statements for the
fiscal year ended March 31, 1998, contains a paragraph stating that there is a
substantial doubt as to the ability of the Company to continue as a going
concern. In November 1997, the Company took several actions expected to reduce
future operating costs and cash flows, including a 15% reduction in headcount, a
significant cut in marketing expenses, and the implementation of stringent
expense monitoring controls. In October, 1997, the Company raised $1 million in
secured debt financing
9
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(the "secured debt") from a significant stockholder, which is secured by
substantially all of the Company's assets. In April, May, and July 1998, the
Company sold convertible Preferred Stock resulting in net proceeds of
approximately $1,000,000. In fiscal year 1997 and 1998, and continuing through
the first three months of fiscal 1999, operations of the Company have generated
negative cash flows. While the Company's management team has taken steps to
improve the Company's cash flow and expects there will be additional significant
expense and cash flow savings during the second and third quarter of fiscal year
1999, the Company continues to generate a negative cash flow and does not expect
to become profitable until the third quarter of fiscal 1999, or later. The
Company is operating with minimal cash resources and, should the Company
continue to experience losses from operations, it will need to seek additional
financing. There can be no assurance that the Company will be able to raise
additional financing in this time frame on commercially reasonable terms, or at
all. If the Company is unsuccessful in raising this capital, the Company may be
required to cease operations and declare bankruptcy. Under such circumstances,
the Company's secured creditors would have a first claim on all, or
substantially all, of the Company's assets. See "Liquidity And Capital
Resources" below.
The Company has experienced significant quarterly fluctuations in operating
results during this and previous quarters and expects that these fluctuations
will continue in future periods. These fluctuations have been a result of
several factors including pricing strategies employed by the Company and its
competitors, the timing of new product releases or enhancements to existing
products, and seasonality. A number of additional factors have, from time to
time, caused and may in the future cause the Company's revenues and operating
results to vary substantially from period-to-period. These factors include:
pricing competition, delays in introduction of new products or product
enhancements, size and timing of demand for existing products and shortening of
product life cycle, inventory obsolescence, changes in the Company's management
and sales and marketing organizations, and general economic conditions.
The Company has recently announced a reduction in certain portions of its
pricing structure for fiscal year 1999 and beyond. There is no guarantee that
this reduction in price will lead to increased unit volume or other additional
revenue streams to replace this lost revenue, which could lead to a significant
cash flow strain on the core operations of the Company. Additionally, the
Company is relying on increased revenues related to its new product line, which
have not generated revenues as originally projected by the Company. There is no
assurance that this product line will generate the revenues needed to sustain
the Company in future periods. The Company has committed to decreasing sales
conflicts with its partners particularly in the service revenue area and has
already taken a number of steps in this regard. This has had and will continue
to have a negative effect on service revenues as compared to previous quarters
and years. There can be no guarantee that the Company will be able to replace
the decreasing service revenues with new product revenues.
The Company's expense levels are based on the Company's expectations as to
future revenues and are therefore relatively fixed in the short term. If revenue
levels fall below expectations, net income is likely to be disproportionately
adversely affected because a proportionately smaller amount of the Company's
expenses vary with its revenues. There can be no assurance that the Company will
be able to achieve profitability on a quarterly or annual basis in the future.
Due to all the foregoing factors, it is likely that in some future quarter the
Company's operating results will be below the expectations of public market
analysts and investors. In such event, the price of the Company's Common Stock
would likely be materially adversely affected.
The Company's operating results will also be affected by the volume, mix,
and timing of orders received during a period and by conditions in the
industries that it serves as well as the general economy. Additionally, the
Company operates on a global basis with offices or distributors in Europe, Asia,
and Latin America as well as North America. Changes in the economies, trade
policies, and fluctuations in interest or exchange rates may have an impact on
its future financial results. Also, as the Company continues to operate more
globally, seasonality may become an increasing factor in its financial
performance.
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The Company's future operating results will depend, to a considerable
extent, on its ability to rapidly and continuously develop new products that
offer its customers enhanced performance at competitive prices. Inherent in this
process are a number of risks. The development of new, enhanced software
products is a complex and uncertain process requiring high levels of innovation
from the Company's management as well as accurate anticipation of customer and
technical trends. Once a product is developed, the Company must rapidly bring it
into production. In addition, there can be no assurance that any new products
will achieve market acceptance at the price the Company sets for the product, if
at all. If the Company is unable to develop and sell new products which are
widely accepted by customers, the Company's business, financial condition, and
results of operations would be unilaterally and adversely affected.
The Company has recently been sued for copyright infringement. While the
Company believes this suit has no merit, there can be no assurance that the
Company will be successful in resolving this or any future lawsuits favorably to
the Company. If the Company loses any of these judgments, it may be forced to
cease operations and declare bankruptcy. Additionally, the Company has recently
negotiated a Workout Plan with its US based unsecured creditors through the
Creditor Committee. Should the Company default under the terms of the Workout
Plan, it may be forced to cease operations and declare bankruptcy.
In February 1998, The Nasdaq Stock Exchange de-listed the Company from the
Nasdaq National Market. The Company is now traded on the Nasdaq bulletin board.
This has had a negative impact on the liquidity of the Company's outstanding
common shares. Additionally, due to the Company's poor financial performance,
among other factors, the per share price of the Company's stock has been and is
expected to continue to be negatively impacted in the near term and beyond.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company's principal sources of liquidity consisted of
cash and equivalents of $132,000.
The Company's working capital position remained relatively constant during
the quarter ended June 30, 1998, with a working capital deficit of $3.0 million
at June 30, 1998, and at March 31, 1998. Although the Company believes that this
working capital deficit will decrease in future quarters as the Company
continues to decrease its operating expenses, such as its recent success in
termination of its US-based office lease and negotiation with its US-based
creditors, there can be no assurance that the Company will be able to
significantly improve its working capital position.
The Company has taken several actions over the past four quarters that it
expects will reduce future operating costs. Management expects that there will
be significant expense and cash flow savings during the second and third quarter
of fiscal 1999 as compared to the third quarter of fiscal 1998 as a result of
these actions.
The Company does not currently have an established line of credit with a
commercial bank. Such a credit facility may be difficult to obtain with the
Company's historical operating results.
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OMNIS TECHNOLOGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, the Company was sued for copyright infringement.
While the Company believes that this suit has no merit, this suit
remains unresolved.
The Company has recently reached an agreement with a group of its
creditors in attempts to resolve its debts with unsecured creditors.
Under the terms of this agreement, any pending litigation must dismiss
their lawsuits upon the agreements effective date, which is expected
to be late August 1998.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In April 1998, the Company agreed to sell up to 126,000 shares of
Series A Preferred Stock, at a price of $8.00 per share, to a
significant stockholder. Each share of Preferred Stock converts into
10 shares of common stock, has voting and registration rights, is
entitled to cumulative dividends of $0.10 per share in preference to
common stockholders, and has a preference in liquidation over common
stockholders in the amount of $8.00 per share, including all accrued
or declared but unpaid dividends, as defined. Concurrent with the
execution of that agreement, the Company sold the first 49,826 shares
of Series A Preferred Stock, with net proceeds of approximately
$400,000. Additionally, same the stockholder purchased 12,456 shares
in May 1998, for net proceeds of approximately $100,000. The remaining
62,282 shares were purchased by this stockholder in July, 1998 for net
proceeds of approximately $500,000. These proceeds will be used to
fund the Company's operations. In connection with the sale of Series A
Preferred Stock, the Company filed a Form D pursuant to the rules
promulgated in the Securities Act of 1993, as amended.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Series A Convertible Preferred Stock Purchase Agreement dated as
of April 1, 1998. (1)
10.2 Employee Agreement between the Company and Kevin Doyle dated as
of April 1, 1998. (1)
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10.3 Employee Agreement between the Company and Larry Barcot dated as
of April 1, 1998. (1)
27.1 Financial Data Schedule
- --------------
(1) Incorporated by reference to the Current Report on Form 8-K filed by the
Company with the Commission on June 16, 1998
(b) Reports on Form 8-K
The Company filed an 8-K report on June 16, 1998, relating to a press
release, dated April 14, 1998, a $1 million loan extended to the
Company in October, 1997, and an October 1997 Amendment to the
Certificate of Incorporation.
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.
Date: August 12, 1998 OMNIS TECHNOLOGY CORPORATION
(Registrant)
/s/ Ken Holmes
--------------------------
Ken Holmes
Chairman, Chief Financial Officer and interim
Chief Executive Officer
13
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EX. NUMBER DESCRIPTION
- ---------- -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1998
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0
500,000
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</TABLE>
