SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED July 31, 1997
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-17500
VERSUS TECHNOLOGY, INC.
(Exact name of Small Business Issuer as specified in its charter)
Delaware 22-2283745
(State or other jurisdiction of (I. R. S. Employer
Incorporation or Organization) Identification Number)
2600 Miller Creek Road
Traverse City, Michigan 49684
(Address of principal executive offices)
616-946-5868
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 Exchange Act during the past twelve 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
Number of shares of Common Stock, par value $.01 per share,
outstanding as of September 12, 1997: 38,157,149.
Transitional small business disclosure format:
Yes_____ No __X__
VERSUS TECHNOLOGY, INC.
Index
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements:
Consolidated Balance Sheets as of
July 31, 1997 (Unaudited) and
October 31, 1996
Consolidated Statements of Operations
for the three and nine months ended
July 31, 1997 and 1996 (Unaudited)
Consolidated Statement of Cash Flows for
the nine months ended
July 31, 1997 and 1996 (Unaudited)
Notes to Consolidated Financial Statements
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
Item 6 - Exhibits and Reports on Form 8-K
Signatures
VERSUS TECHNOLOGY, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS
July 31, October 31,
1997 1996
(Unaudited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 2,884,000 $ 4,931,000
Accounts receivable,
net of allowance for doubtful
accounts of $68,000 at July 31,
1997 and $53,000 October 31, 1996 265,000 154,000
Notes receivable, net 47,000 32,000
Inventories - purchased parts
and assemblies 154,000 145,000
Prepaid expenses and other
current assets 82,000 80,000
Total Current Assets 3,432,000 5,342,000
Notes Receivable, net - 19,000
Property and Equipment, net
of accumulated depreciation
of $178,000 and $155,000 298,000 270,000
Software Development Costs,
net of accumulated amortization
of $69,000 and $12,000 531,000 588,000
Goodwill, net of accumulated
amortization of $143,000 and
$26,000 2,196,000 2,313,000
Patents and Other Intangible Assets,
net of accumulated amortization
of $291,000 and $170,000 1,675,000 255,000
$ 8,132,000 $ 8,787,000
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS'
EQUITY
July 31, October 31,
1997 1996
(Unaudited)
<S> <C> <C>
Current Liabilities
Accounts payable $ 357,000 $ 748,000
Accounts payable, PTFM 250,000 -
Accrued expenses 274,000 135,000
Deferred revenue-customer
advance payments 369,000 16,000
Note payable -- current portion 344,000 367,000
Total Current Liabilities 1,594,000 1,266,000
Total Liabilities 1,594,000 1,266,000
Shareholders' Equity
Common stock, $.01 par value;
50,000,000 shares authorized;
38,157,149 and 36,543,573 shares
issued and outstanding 381,000 366,000
Additional paid-in capital 32,888,000 31,910,000
Accumulated deficit (26,575,000) (24,532,000)
Unearned compensation (156,000) (223,000)
Total Shareholders' Equity 6,538,000 7,521,000
$ 8,132,000 $ 8,787,000
</TABLE>
See accompanying notes to consolidated financial statements.
VERSUS TECHNOLOGY, INC.
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Sales $306,000 $ 67,000 $992,000 $160,000
Cost of sales 146,000 60,000 485,000 124,000
Gross profit 160,000 7,000 507,000 36,000
Operating Expenses
Research & development 43,000 123,000 188,000 415,000
Sales, general and
administrative 926,000 267,000 2,317,000 785,000
Litigation defense
costs, settlements
and judgments 21,000 12,000 144,000 53,000
990,000 402,000 2,649,000 1,253,000
Loss From Operations (830,000) (395,000) (2,142,000) (1,217,000)
Other Income (Expense)
Interest income 34,000 5,000 119,000 41,000
Interest expense (6,000) (16,000) (20,000) (32,000)
Other, net 5,000 - (1,000) ( - )
33,000 (11,000) 98,000 9,000
Net Loss $(797,000) $(406,000) $(2,044,000) $(1,208,000)
Net Loss Per Share $ (.02) $ (.02) $ (.05) $ (.06)
</TABLE>
See accompanying notes to consolidated financial statements.
VERSUS TECHNOLOGY, INC.
Consolidated Statements of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net Loss $(2,044,000) $(1,208,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 344,000 49,000
Change in unearned compensation 35,000 -
Directors' compensation 26,000 -
Loss on sale of equipment 2,000 -
Changes in operating assets and
liabilities:
Accounts receivable (111,000) 56,000
Inventories (9,000) (33,000)
Prepaid expenses and other current
assets (27,000) (70,000)
Accounts payable and other liabilities (391,000) (222,000)
Accrued expenses 139,000 (18,000)
Deferred revenues- customer advance
payments 353,000 (9,000)
Total adjustments 361,000 (247,000)
Net cash used in operating activities (1,683,000) (1,455,000)
Cash flows from investing activities:
Changes in notes receivable 4,000 -
Payment for acquisition of license to
intellectual property and associated
costs (265,000) -
Additions to property and equipment (95,000) (72,000)
Proceeds from sale of equipment 15,000 -
Additions to deferred charges and
other assets - (59,000)
Net cash provided by investing
activities (341,000) (131,000)
Cash flows from financing activities:
Payments on notes payable (23,000) (56,000)
Purchase of treasury stock - (85,000)
Issuance of common stock - 159,000
Net cash provided by (used in)
financing activities (23,000) 18,000
Net decrease in cash and cash
equivalents (2,047,000) (1,568,000)
Cash and cash equivalents,
beginning of period 4,931,000 1,998,000
Cash and cash equivalents,
end of period $2,884,000 $430,000
Supplemental disclosures of cash flow
information
Cash paid during the period for interest $7,000 $32,000
</TABLE>
During the first nine months of fiscal 1997 the Company repurchased non-
vested Employee Incentive Stock from terminated employees at par value,
pursuant to the 1996 Incentive Restricted Stock Bonus Plan, canceling
the unearned compensation of $39,000 related to those shares.
Effective January 31, 1997, the Company acquired a license to
intellectual property from Precision Tracking, FM, Inc. for
consideration of 1,600,000 shares of common stock, valued for accounting
purposes at $1,000,000, and $500,000 of which $250,000 was paid during
the quarter ended April 30, 1997 and $250,000 is recorded as Accounts
Payable, PTFM at July 31,1997. Expenses related to the acquisition
totaling $15,000 were capitalized and $25,000 of prepaid royalties were
re-classified from prepaid expenses to intellectual properties to be
amortized over 10 years.
See accompanying notes to consolidated financial statements.
VERSUS TECHNOLOGY, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
July 31, 1997
(Unaudited)
================================================================
Note 1 Basis of Presentation
The accompanying unaudited consolidated financial statements, which are
for interim periods, do not include all disclosures provided in the
annual consolidated financial statements. They should be read in
conjunction with the consolidated financial
statements and the footnotes thereto contained in the Annual Report on
Form 10-KSB for the year ended October 31, 1996 of Versus Technology,
Inc. and subsidiary (the Company), as filed with the Securities and
Exchange Commission. The October 31, 1996 balance sheet contained
herein was derived from audited consolidated financial statements, but
does not include all disclosures required by generally accepted
accounting principles as filed in the Company's Annual Report on Form
10-KSB referenced above.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements include all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial
position as of July 31, 1997, the results of operations for the three
months and nine months ended July 31, 1997 and 1996 and cash flows for
the nine months ended July 31, 1997 and 1996. The results of operations
for the three months and nine months ended July 31, 1997 are not
necessarily indicative of the results to be expected for the full year.
Note 2 New Accounting Standards Not Yet Adopted
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings
Per Share". SFAS No. 128 simplifies the standards for computing
earnings per share (EPS) and makes them comparable to international EPS
standards. The statement requires the presentation of both basic and
diluted EPS on the face of the statement of operations with a
supplementary reconciliation of the numerators and denominators used in
the calculations. SFAS No. 128 is effective for financial statements
issued for periods ending after December 15, 1997, including interim
periods; earlier application is not permitted. Had SFAS No. 128 been
required to be implemented for the quarter ended July 31, 1997 there
would have been no effect on EPS.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information", which supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise". SFAS No.
131 establishes standards for the way that public companies report
information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in
interim financial statements issued to the public. It also establishes
standards for disclosures regarding products and services, geographic
areas and major customers. SFAS No. 131 defines operating segments as
components of a company about which separate financial information is
available that is evaluated regularly by the chief operating decision
maker in deciding how to allocate resources and in assessing
performance. SFAS No. 131 is effective for financial statements for
periods beginning after December 15, 1997 and requires comparative
information for prior years to be restated. Because of the recent
issuance of this standard, management has been unable to fully evaluate
the impact, if any, it may have on future financial statement
disclosures. Results of operations and financial position, however,
will be unaffected by implementation of this standard.
Note 3 Acquisition
As described more fully in Note 3 to the Consolidated Financial
Statements included in the Form 10-KSB for the year ended October 31,
1996, on August 26, 1996, the Company acquired Olmsted Engineering, Co.
in a transaction accounted for using the purchase method. While the
acquisition occurred on August 26, 1996, the following pro forma
information reflects operations for the three and nine months ended July
31, 1996 as if the acquisition took place on November 1, 1995.
Three Months Nine Months
Net Sales $193,000 $538,000
Net Loss (454,000) (1,354,000)
Net Loss per Common Share (.02) (.06)
Note 4 Notes Payable
Term Note
On August 1, 1995, the Company signed a note payable to one of its
former law firms for $449,000 as partial payment of fees billed. The
note bears interest at a specified bank's prime rate, 8.50% at July 31,
1997, and requires monthly installments of $10,000 each, including
interest, commencing on December 1, 1995, with a balloon payment for the
remaining balance due on January 1, 1997. The note, amounting to
$344,000 and $367,000 at July 31, 1997 and October 31, 1996,
respectively, is secured by a portion of the Company's patents and
intellectual property. Approximately $150,000 of additional fees to the
same law firm are included in accounts payable at July 31, 1997 and
October 31, 1996.
In May 1997, the Company filed a malpractice law suit against the former
law firm, seeking indemnity against any loss the Company might incur in
connection with certain class action law suits, and also seeking
equitable relief against the claim by the law firm that the Company is
indebted to the law firm for prior legal services. Management intends to
dispute the amount and terms of payment of the remaining unpaid
balances. Any adjustment of the unpaid balance will be recognized in
the period in which the Company is released from its obligation.
Note 5 Contingencies
Litigation
In addition to the litigation referenced under note 4, the following is
a summary of other material litigation in which the Company is currently
engaged.
A suit was filed in November 1996, and a nearly identical suit was filed
in January 1997, against the Company alleging that the Company allowed
certain warrants to expire, which the plaintiffs held, and alleging that
the plaintiffs were damaged by the warrants' expiration. The plaintiffs
also allege that the Company breached the warrant agreement pursuant to
which the warrants were issued to the plaintiffs and claim that the sale
by the Company of restricted stock in late 1993 required a downward
adjustment of the exercise price of the warrants under the warrant
agreement. Each sole named plaintiff alleges this action should be
tried as a class action and alleges he is an appropriate representative
of the class. The plaintiffs further allege their claims are
substantially identical to the claims made by the plaintiff in prior
litigation of a similar nature which resulted in a judgment upheld on
appeal during 1996 for $195,000, which involved only 300,000 of the
2,233,800 Class A warrants at issue. Apparently, the plaintiffs believe
the Company has a liability for each of the remaining warrants identical
to the per warrant liability the Company was found to have for the
300,000 warrants in the 1996 judgment. Any loss potential is not
determinable at this time but if plaintiffs' theory were held to be
correct, the loss potential could be approximately $1.2 million. The
Company disputes the material allegations of the complaints and intends
to vigorously defend itself against these matters.
In January 1997, a suit was filed by a former employee of the Company
alleging wrongful discharge. The Company disputes the central
allegations of the Complaint. The Company believes that should any
judgment be rendered against the Company in this matter, it will be less
than $200,000.
Note 6 Related Party Transactions
The President and Chief Executive Officer of the Company was also the
Chief Executive Officer, a member of the Board of Directors and a
stockholder of Olmsted which was acquired by the Company effective August
26, 1996.
Olmsted provided a number of resources to the Company for the period
ended July 31, 1996 including research and development, pass-through
billings, use of office space and development of a business plan.
Related party billings for the three and nine months ended July 31, 1996
totaled $160,000 and $597,000 respectively.
The Company believes that services provided by Olmsted were negotiated at
arm's length at the fair value of goods and services received.
The Company and Olmsted moved their principal operating facilities in
December 1996 to a building that is beneficially owned by the Company's
President. The Company and Olmsted have entered into separate five-year
lease agreements calling for aggregate annual rents of $111,000,
increasing 4% annually on July 1, 1997 and each July 1 thereafter for the
term of the lease. The Company and Olmsted have made combined non-
refundable contributions to leasehold improvements amounting to $104,000,
in accordance with terms of the lease agreements. Rent expense for the
three and nine months ended July 31, 1997 amounted to $28,000 and
$74,000, respectively.
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
Versus Technology, Inc. (Versus) and its wholly-owned subsidiary,
Olmsted Engineering Co. (Olmsted), collectively referred to as "the
Company" operate in two business segments: security; and systems design
and engineering. All Company operations are located in one facility in
Traverse City, Michigan.
Versus develops and markets products using infrared technology for the
health care industry and other markets located throughout North America.
These products permit the instantaneous identification and tracking of
the location of people and equipment and can be used to control access
and permit instantaneous two-way communication via two-way speakers and
telephone lines. Versus also develops, markets and integrates cellular
products for the security industry.
Versus acquired Olmsted in August 1996. Olmsted writes and maintains
complex software programs for the computer-aided design and computer-
aided manufacturing (CAD/CAM) industry. It sells its own software under
the ACU.CARV name, resells third-party software and hardware and
provides systems support services throughout North America. It receives
monthly maintenance and enhancement fees from customers in order to
receive technical support and semi-annual releases. Olmsted also
provides software programming services to support the Versus line of
products.
The Company is continuing its development and marketing of infrared
products and expects this product line to continue to be the Company's
primary focus through the remainder of fiscal 1997 and during fiscal
1998.
The results of the nine months ended July 31, 1997 include non-
repetitive cash expenditures and operating expenses. Gross margins and
selling, general and administrative expenses have improved in relation
to sales levels over the nine months ended July 31, 1996. The sales for
the quarter ended July 31, 1997 do not reflect a trend for increasing
sales, which are expected to occur in ensuing quarters.
Expected sales from Marquette Medical Systems based on the Exclusive
Marketing Agreement entered into in June 1996, with the Company, have
not fully materialized. As a result during the quarter ended July 31,
1997, negotiations were initiated with Marquette to alter their
exclusive status for the remainder of the agreement. It is not possible
to predict the outcome of the current discussions.
The following discussion and analysis focuses on the significant factors
which affected the Company's consolidated financial statements during
the three months and nine months ended July 31, 1997, with comparisons
to similar periods in 1996 where appropriate. It also discusses the
Company's liquidity and capital resources. The discussion should be
read in conjunction with the consolidated financial statements and
related notes included elsewhere in this Form 10-QSB and the
consolidated financial statements and footnotes thereto contained in the
Annual Report on Form 10-KSB for the year ended October 31, 1996.
The following table sets forth selected financial data for the Company:
<TABLE>
<CAPTION>
(in thousands except per share data)
Statement of Operations Data:
Three Months Ended Nine Months Ended
July 31, July 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Sales $306 $ 67 $ 992 $ 160
Net Loss (797) (406) (2,044) (1,208)
Net Loss Per
Common Share (.02) (.02) (.05) (.06)
Weighted average
Number of common
Shares outstanding (000's) 38,132 18,734 37,595 18,710
</TABLE>
<TABLE>
Balance Sheet Data: July 31,1997 October 31,1996
<S> <C> <C>
Working capital $1,838 $4,076
Total assets 8,132 8,787
Total liabilities 1,594 1,266
Shareholders' equity 6,538 7,521
</TABLE>
Results of Operations
Three Months Ended July 31, 1997 and July 31, 1996
Net sales for the third quarter of fiscal 1997 of $306,000 were $239,000
above sales of $67,000 for the corresponding quarter in fiscal 1996.
This increase is primarily due to the addition of Olmsted sales and
growth in sales of the infrared tracking systems with sales generated
from the PTFM license arrangements. Of the total sales in the third
quarter of fiscal 1997, approximately 35% were attributable to infrared
tracking system sales (almost entirely through the PTFM license
arrangements), 55% to Olmsted sales, and 10% to cellular sales.
Cost of sales as a percentage of sales in the third quarter of fiscal
1997 decreased to 48% from 90% for the same quarter in fiscal 1996. This
change was largely attributable to the increase in infrared sales and
the inclusion of Olmsted sales in third quarter fiscal 1997, both of
which have higher gross profit margins.
The Company's selling, general and administrative expenses for the third
quarter of fiscal 1997 increased $659,000, or 247%, over the third
quarter of fiscal 1996. This increase was primarily due to the
additional selling and administrative support costs associated with the
Company's expanded efforts to develop and market its infrared product
line and the Company's acquisition of Olmsted in August 1996 which
resulted in the inclusion of the expenses for Olmsted's operations in
the consolidated financial statements in 1997. Research and development
expenses for the third quarter of fiscal 1997 were $43,000 compared to
$123,000 for the third quarter of fiscal 1996. The Company's acquisition
of Olmsted, the Company's primary source of research and development for
the IR tracking system in the third quarter of fiscal 1996, resulted in
reduced research and development costs in the third quarter of fiscal
1997.
In the third quarter of fiscal 1997, other income, net increased $44,000
over the 1996 level due primarily to the increase in interest earned on
the proceeds from the August 1996 private placement.
Nine Months Ended July 31, 1997 and July 31, 1996
Net sales for the nine months ended July 31, 1997 were $992,000 or 6
times the 1996 level of $106,000. Infrared tracking sales, which
totaled $341,000 are up significantly from the 1996 levels. Sales for
1997 reflect $341,000 of infrared sales, $559,000 in Olmsted sales and
$92,000 in cellular products and services. The sales mix for the first
nine months of 1997 was 34% infrared, 9% cellular and 57% Olmsted
services and products. The Company continued development of its
marketing and distribution channels. The January agreement with
Precision Tracking added significantly to its infrared tracking
distribution network.
Cost of sales as a percentage of sales decreased 29% from the 1996 level
of 78% to 49% in the first nine months of 1997. This decrease was
attributable to the inclusion of sales generated from the PTFM license
arrangements and Olmsted sales in the 1997 results. Sales related to the
PTFM licensing arrangements and Olmsted sales are relatively high margin
sales. Additionally, the Precision Tracking agreements resulted in
Versus not expending royalty payments (previously included in inventory
and cost of sales) to PTFM as was the case in 1996.
The Company's selling, general and administrative expenses increased
from $785,000 in the first nine months of 1996 to $2,317,000 for the
similar period in 1997. The increase was primarily due to the
additional infrared product line selling and administrative support
costs, the inclusion of Olmsted Engineering expenses in 1997 and costs
associated with the Precision Tracking Engineering Agreement. Research
and development costs decreased $227,000 (55%) from the 1996 level. As
mentioned earlier, the Company's acquisition of Olmsted Engineering
reduced research and development costs for the first nine months of
1997.
Other income, net increased $89,000 or 11 times the level of the first
nine months of 1996. Interest earned on funds from the August 1996
private placement was the primary cause of the increase.
Liquidity and Capital Resources
During the nine months ended July 31, 1997, the Company relied on cash
balances from the private placement offering in August 1996, which
generated net proceeds of $5.2 million. The Company believes that
current working capital and cash flow from the Marquette relationship
and other distribution channels should be sufficient to meet projected
cash needs for the next 12 months.
As discussed in prior filings, as of January 31, 1997, the Company and
PTFM signed an Agreement (License Agreement) for the Company to become
the exclusive licensee of PTFM`s patents and other intellectual property
rights related to infrared tracking technology for ten years, and non-
exclusive thereafter. PTFM has previously been a supplier of infrared
components to the Company.
Concurrent with executing the License Agreement, a one-year Engineering
and License Agreement (Engineering Agreement) was entered into by the
parties to assist the Company in the technology transfer and to support
the Company in use and development of the technology.
In consideration of the License Agreement, based on negotiations between
the parties, the Company agreed to pay $500,000 in cash and 1.6 million
restricted shares of the Company's common stock. During the quarter
ended April 30, 1997, $250,000 of the $500,000 obligation was paid. The
remaining $250,000 is required to be paid on the completed transfer
date, defined in the contract as the date all technology has been
transferred. Under the Engineering Agreement, the Company is required
to reimburse PTFM for expenses incurred in providing the services
covered by the agreement. Such expense reimbursement payments are
estimated at $40,000 per month during the one-year term, with additional
reimbursement of authorized expenses as applicable.
Significant liquidity factors are as follows:
<TABLE>
<CAPTION>
July 31, October 31,
1997 1996
<S> <C> <C>
Current ratio 2.2:1 4.2:1
Quick ratio 2.0:1 4.0:1
</TABLE>
Safe Harbor Provisions
This report contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements
are subject to a number of important risks and uncertainties that could
cause actual results to differ materially including, but not limited to,
economic, competitive, governmental and technological factors affecting
the Company's operations, markets, products, services and prices. The
Company undertakes no obligation to update, amend or clarify forward-
looking statements, whether as a result of new information, future
events or otherwise.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The following summarizes changes in material litigation from that
disclosed in the Company's Annual Report on Form 10-KSB for the year
ended October 31, 1996:
Versus Technology, Inc. v. Duane, Morris & Heckscher:
Complaint filed: May 23, 1997
Court: United States District Court for the Southern District
of New York
Civil Action No. 97 Civ. 3798
The Company has filed a malpractice law suit against one of its
former law firms, seeking indemnity against any loss the Company might
incur in connection with the class action law suits (referenced in the
Company's October 31, 1996 Annual Report on Form 10-KSB) and also
seeking equitable relief against the claim that the Company is indebted
to the law firm for prior legal services.
Item 6 (a) Exhibits
Exhibit 11 - Statement re Computation of Per Share Earnings
Exhibit 99 (a) PhoneVision uses IR tracking to provide sight to the
telephone
(b) Versus Technology, Inc. Appoints Samuel Davis as
Director
(c) Los Alamos National Laboratories Purchases
Nightingale Infrared (IR) Tracking System
Exhibit 27 - Financial Data Schedule
Item 6 (b) Reports on Form 8-K
There were no reports on Form 8-K for the quarter ended July 31, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
VERSUS TECHNOLOGY, INC.
(Registrant)
By: GARY T. GAISSER
Gary T. Gaisser
President and Chief
Executive Officer
By: ROBERT BUTLER
Robert Butler
Controller and Chief
Accounting Officer
September 16, 1997
Exhibit 11 - Statement re Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net loss $ (797,000) $ (406,000) $(2,044,000) $(1,208,000)
Calculation of
weighted average
common shares
outstanding:
Outstanding common
shares at beginning
of period 38,113,549 18,485,697 36,543,573 18,910,697
Impact of repurchase
of Former Chairman
of the Board and
CFO's shares (282,299)
Impact of shares
issued 254,076 85,622
Impact of January 31,
1997 Precision
Tracking issue 1,064,706
Other 18,600 (6,159) (12,907) (4,017)
Total weighted average
common shares 38,132,149 18,733,614 37,595,372 18,710,003
Primary and Fully
Diluted Loss
per Share $(.02) $(.02) $(.05) $(.06)
NOTE: The weighted average effect of common stock equivalents was anti-
dilutive for 1996 and 1997 and, therefore, was not considered in the
above
calculation.
</TABLE>
Exhibit 99(a) - PhoneVision uses IR tracking to provide sight to the
telephone
PhoneVision uses IR tracking to provide sight to the telephone
TRAVERSE CITY, Mich., July22/PRNewswire/--Versus Technology, Inc.
(NASDAQ Bulletin Board: VSTI) announced:
Versus Technology, Inc. recently announced the addition of PhoneVision
to their high-tech infrared product line. PhoneVision, using IR
technology as its platform, allows someone to use a telephone to locate
a person or a piece of equipment simply by dialing the appropriate
extension number. The PhoneVision system automatically locates the
person and rings the phone nearest to him so all calls are answered
minimizing phone-tag. PhoneVision provides time saving benefits to a
broad range of professions that operate in a fast-paced environment-
from business offices to healthcare facilities.
PhoneVision provides an IR (infrared) communication solution to the
frustrating problem of locating a person or piece of equipment in
seconds. In the fast-paced, time is money world of today, Phone Vision
offers a viable solution to anyone who knows how to use a telephone.
PhoneVision allows a facility to use its existing phone system as a
means to locate key resources. Notes Vice-President of Versus, Henry
Tenarvitz, "What we have done is to simply merge Versus' infrared
tracking system with our customers' telephone equipment."
People and equipment wear a lightweight infrared badge that identifies
their real-time location to the system. As the system searches for an
extension number programmed to an individual's badge, it is smart enough
to "look" for that person throughout the entire facility. As the system
locates the person associated with that extension number, it will inform
the caller where the person is located (i.e. In the Conference Room).
PhoneVision then allows the caller to select from two options: 1) to
ring the extension number where the person is now located and/or 2)
to identify who or what else is in the room.
In a typical office environment, a receptionist no longer needs to
search office after office trying to locate a person expecting an urgent
phone call; he/she only needs to enter the person's extension number and
PhoneVision will find the employee. "I can be in the Laboratory after
switchboard hours," states Versus' President Gary T. Gaisser, "and if
phone mail is not an acceptable choice for the caller, I have the
comfort of knowing the call can reach me by way of PhoneVision."
Valuable time is easily saved, customer service is enhanced, and
returned phone call costs are nearly eliminated. Management personnel
are excited by the time saving benefits PhoneVision provides to their
organizations.
Equipment can also be easily located via the telephone. By assigning
the equipment an ID number and affixing the equipment with an infrared
tag, the location of the equipment can be determined quickly.
PhoneVision can identify the location of the item and also identify
other tagged items in the room. Knowledge of specific equipment
location can be a critical issue. Real-time location eliminates the
need to guess where an item was last placed and can increase staff
efficiency.
Versus Technology, Inc. (publicly traded on NASDAQ Bulletin Board:
VSTI) manufactures and markets IR (infrared) locating and communication
systems and phone forwarding integration systems. Their headquarters
are located in Traverse City, MI. Additional information is available
at the company's website, http://www.versustech.com or by calling (616)
946-5868 or FAX (616) 946-6775.
- -0- 7/22/97
/CONTACT: Gary T. Wittbrodt, 616-946-5868, of Versus Technology,
Inc./(VSTI)
Exhibit 99(b) Versus Technology, Inc. Appoints Samuel Davis as
Director
NEWS RELEASE
Versus Technology, Inc. Appoints Samuel Davis as Director
TRAVERSE CITY, Mich., August 15/PRNewswire/--Versus Technology, Inc.
(NASDAQ Bulletin Board: VSTI) announced:
Sam Davis, former President and CEO of the Mt. Sinai Hospital, has been
named to the Board of Directors of Versus Technology, Inc., effective
August 14, 1997.
Mr. Davis is a Clinical Professor at the School of Public Health at
Columbia University and a Distinguished Service Professor at the Mount
Sinai School of Medicine. He is a Senior Director of Delta Consulting
Group, Inc. specializing in the management of strategic organizational
change in health care organizations. Mr. Davis has a distinguished
academic and professional background in the health care profession and
has authored numerous published articles.
"We are gratified that Samuel Davis, with his distinguished background,
is joining the Versus Board," noted Gary Gaisser, President and CEO of
Versus Technology. "His expertise in the health care industry will be
of particular assistance to the Company, and he will be a valuable asset
in helping us achieve our strategies. We look forward to his
contributions."
As the former President and CEO of the Mount Sinai Hospital, Mr. Davis
was responsible for the acknowledged financial and managerial turnaround
of one of the largest academic medical centers in New York City. "With
his knowledge of the financial and managerial needs of health care
organizations, Mr. Davis is in a unique position to aid Versus in the
penetration of the health care market," Gaisser commented.
Based in Traverse City, Michigan, Versus Technology manufactures and
markets infrared locating and communication systems and phone forwarding
integration systems. For additional information, please call (616) 946-
5868 or FAX (616) 946-6775 or visit the company's website:
www.versustech.com
- -0- 8/15/97
/CONTACT: Gary T. Gaisser, 616-946-5868, of Versus Technology,
Inc./(VSTI)
Versus Technology, Inc. 2600 Miller Creek Rd., Traverse City, MI 49684
616-946-5868 fax 616-946-6775
Exhibit 99(c) Los Alamos National Laboratories Purchases Nightingale
Infrared (IR) Tracking System
NEWS RELEASE
Los Alamos National Laboratories Purchases Nightingale?
Infrared (IR) Tracking System
TRAVERSE CITY, Mich., September 5/PRNewswire/--Versus Technology, Inc.
(NASDAQ Bulletin Board: VSTI) announced:
Versus Technology Inc. announced today that it has received an order
from Los Alamos National Laboratories to implement a pilot installation
of its Nightingale? Resource Management System at their laboratory in
New Mexico. Los Alamos will be using this pilot as an enhancement to
their security protocol.
The Nightingale system uses small digital infrared (IR) transmitters
that uniquely identify people and equipment moving around in secure
areas. Paul Argo of Los Alamos stated, "We consider this infrared
technology to be a key component in AMISS (Adaptive Multi-Integrated
Security System), a next generation security system we are developing."
The Nightingale tracking system will provide a continuous stream of
information detailing routine movements in a nuclear facility. This
"real-time" collected data allows events to be evaluated as they occur.
Mr. Argo also added, "As its name implies, AMISS will look for
conditions that are out of the norm and call upon multiple security
technologies to verify and respond to any anomalies."
Gary Gaisser, President of Versus Technology, Inc., commented, "We are
continuously pursuing leading edge concepts like AMISS and have
participated in several similar projects. For example, we just
participated in installing a high-tech hospital floor that includes
patient monitoring and two-way communication. We are very excited that
Los Alamos has selected us to be part of an effort towards creating a
high-tech security system.
Based in Traverse City, Michigan, Versus Technology manufactures and
markets infrared locating and communication systems and phone forwarding
integration systems. For additional information, please call 616-946-
5868 or FAX 616-946-6775 or visit the company's website:
www.versustech.com
- -0- 9/05/97
/CONTACT: Gary T. Wittbrodt, 616-946-5868, of Versus Technology,
Inc./(VSTI)
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