SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
(NO FEE REQUIRED)
Commission file Number 000-17288
AMERICAN MEDICAL TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 75-2193593
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5847 San Felipe, Suite 900
Houston, Texas 77057
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713)783-8200
----------------------
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the 8,859,876 shares of Common Stock held by
non-affiliates of the Registrant based on the closing sale price on December 24,
1996 of $2.25 was $19,934,721.
The number of shares of Common Stock outstanding as of the close of business on
December 24, 1996 was 12,517,404.
<PAGE>
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AMERICAN MEDICAL TECHNOLOGIES, INC.
TABLE OF CONTENTS *
ANNUAL REPORT ON FORM 10-K
---------------------------------------------------
PAGE
PART I
Item 1. Business................................................ 1
Item 2. Properties.............................................. 8
Item 3. Legal Proceedings....................................... 9
Item 4. Submission of Matters to
a Vote of Security Holders............................ 9
PART II
Item 5. Market for Registrant's Common
Equity and Related Stockholder Matters................ 10
Item 6. Selected Financial Data................................. 12
Item 7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations............................. 13
Item 8. Financial Statements and Supplementary Data............. 17
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................... 17
PART III
Item 10. Directors and Executive Officers of
the Registrant........................................ 18
Item 11. Executive Compensation................................ 20
Item 12. Security Ownership of Certain Beneficial
Owners and Management................................. 23
Item 13. Certain Relationships and Related
Transactions.......................................... 24
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K............................... 24
Signature Page.................................................. 26
- ------------------
* This Table of Contents is inserted for convenience of reference only and is
not a part of this Report as filed.
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL
American Medical Technologies, Inc. d/b/a AMT Industries, Inc. ("AMT" or the
"Company") is a Delaware corporation engaged in the manufacture of automated
teller machines, cash management security systems and environmental
monitoring systems through its three wholly owned subsidiaries, AnyCard
International, Inc., Tidel Cash Systems, Inc. and Tidel Engineering, Inc.
(collectively "Tidel").
The following is a summary of business activities for the previous five
years:
On September 6, 1991, after an eight month period of inactivity, AMT became
engaged in the business of medical waste management through its acquisition
of substantially all of the assets and certain liabilities of Complete
Compliance Corporation and 3CI Transportation Systems Corporation
(collectively "3CI"). The purchase price was $6,741,884, which included
cash, debentures and common stock.
On April 14, 1992, AMT sold 580,000 shares of its 3CI common stock as a
selling shareholder in an initial public offering by 3CI. The net proceeds
to AMT of $3,064,800 were utilized principally to reduce the notes payable
arising from the initial acquisition of 3CI assets.
On February 7, 1994, AMT sold 1,255,182 shares of its holdings of 3CI common
stock to Waste Systems, Inc. ("WSI") for $5,083,488, resulting in a gain of
$2,229,725. The sale was in connection with the acquisition by 3CI of
substantially all of the assets and liabilities of A/MED, Inc. ("A/MED") and
American Medical Transports Corporation ("AMTC"), both majority owned
subsidiaries of WSI, in exchange for 2,640,350 shares of newly issued 3CI
common stock. The shares sold by AMT, together with the shares issued to the
former shareholders of A/MED and AMTC in the 3CI acquisitions, resulted in a
change of control of 3CI whereby WSI owns a majority of the total
outstanding shares of 3CI. AMT's investment in 3CI now consists of 680,818
shares of the outstanding common stock of 3CI, representing approximately
6.9% of the total outstanding 3CI shares. At September 30, 1996, the
investment is carried at market value of $893,914 which is net of a
provision for unrealized loss of $652,994 in accordance with Statement of
Financial Accounting Standards No. 115.
On September 30, 1992, AMT acquired all of the issued and outstanding
capital stock of Tidel Engineering, Inc., a manufacturer of automated teller
machines, cash management systems and environmental monitoring systems for a
purchase price of $4,746,848. These operations currently represent the sole
business of the Company.
1
<PAGE>
MANUFACTURED PRODUCTS
The following is a description of each product line manufactured by the
Company:
ANYCARD(TM) AUTOMATED TELLER MACHINES ("ANYCARD(TM)")
The Company entered the automated teller machine ("ATM") market in October
1992, with the introduction of its original AnyCard(TM) II model. The
AnyCard(TM) ATM Cash System was an integration of Tidel's cash management
equipment with electronic funds interface processing, utilizing a Personal
Identification Number (PIN) system familiar to ATM users.
The Company generated significant revenues from the sales of the original
AnyCard(TM) product from October 1992 through March 1995 and rapidly
achieved leadership in the low-cost ATM market. During the last half of
fiscal 1995, however, the Company experienced a dramatic reduction in sales
of this product. Management believes that this deterioration in sales
resulted from increased competition from another manufacturer whose product,
although comparably priced, included more features. Accordingly, the Company
developed its newest ATM product, the AnyCard(TM) sc , which offers
substantially more features than the old product and is competitively priced
to assist the Company in regaining its leadership in the low-cost ATM
market. The AnyCard(TM) sc can process larger transaction volumes and
supports either armored car or self-serve cash replenishment. Sales of this
product commenced in November 1995 and comprised the majority of the
Company's revenues for fiscal 1996.
Sales of the AnyCard(TM) II model were insignificant in fiscal 1996, and
management has decided to discontinue the product line and liquidate the
remaining inventory units in bulk. Certain raw materials will be maintained
in stock to support more than 1,000 units which are presently in service.
Management has provided reserves for these inventories. See Note 5 of Notes
to Consolidated Financial Statements.
TIMED ACCESS CASH CONTROLLERS ("TACC")
The Company's original product is its electronic cash management security
system known as TACC, which acts both as a drop safe and as a cash
dispenser. This unit serves as a depository for cash which is stored in
plastic tubes that can be retrieved upon programmed commands at timed
intervals. The TACC has been instrumental in the reduction of incidents of
crime in many segments of the retail industry, including convenience stores,
retail gasoline, specialty retailers, hospitality and entertainment.
Management believes its TACC products are highly regarded in the retail
market and have become standard equipment in virtually all new construction
by major convenience store operators and gasoline retailers. The TACC
systems are in use in all 7-ELEVEN stores in the United States, as well as
in more than 88,000 other locations in the U.S. and 20 other countries.
2
<PAGE>
Current models allow for a computer interface which can be used in
conjunction with offsite systems such as lotteries and point-of-sale
systems.
Management considers the international market for its TACC products to be
potentially significant. Certain of the Company's largest customers during
the fiscal year have been international distributors. Consequently, the
Company has targeted Australia, U.K., Germany, Holland, Sweden, New Zealand,
Korea, Taiwan, Thailand and Hong Kong for continued expansion.
ENVIRONMENTAL MONITORING SYSTEMS ("EMS")
The Company's EMS product lines are designed to provide leak detection and
fuel management of underground petroleum storage tanks and their associated
piping systems. The EMS has the capability to print reports of requested
data, verify fuel inventories and provide instant notification of alarm
conditions such as leaks. The EMS can monitor up to eight storage tanks
simultaneously, providing a cost efficient method of monitoring fuel
inventories. In addition, the EMS console has communication ports for
interface with point-of-sale terminals, modems and computers. The EMS is
designed for use by petroleum retailers and other owners and operators of
underground storage tanks ("UST"), who must comply with government mandated
monitoring regulations for both tanks and piping systems.
The original EMS product developed for domestic use was the 3000 series
which incorporated several different probes purchased from a third party
supplier. The line probes failed to function properly as excessive false
alarms were registered. The supplier retrofitted the line probes in 1992,
but the retrofitted probes also malfunctioned. On January 27, 1994, Tidel
Engineering, Inc. sued the supplier seeking damages for the problems caused
by the defective probes. Further, on December 21, 1994, the principal
customer for the EMS-3000 series filed suit against Tidel Engineering, Inc.
and the supplier seeking damages of $18 million. All matters related to this
litigation have now been settled. See "ITEM 3. LEGAL PROCEEDINGS" and Notes
4 and 13 of Notes to Consolidated Financial Statements.
The litigation relative to the line probes had a significant adverse effect
on this segment of the Company's business. Sales from EMS products were
$6,824,000 in 1993, declining to $1,586,000 and $1,269,000 in 1994 and 1995,
respectively. In an effort to combat the negative impact of this problem,
the Company developed the EMS-3500 series which did not incorporate the
probes used in the EMS-3000 series. Although the Company believes that the
EMS-3500 series is a state of the art system with advanced probe technology,
sales of the product have been minimal due, in the opinion of management, to
industry wide knowledge of the problems associated with the line probes used
in the EMS-3000. As a result, marketing efforts have been discontinued with
respect to the entire EMS product line. Several of the Company's existing
customers are in process of converting all of their store locations to this
product, however, and the Company will continue to sell EMS products to
accommodate their requirements. Total sales of EMS systems in fiscal 1996
were $954,610.
3
<PAGE>
Due to the matters discussed in the preceding paragraphs, management has
written-off all of the intangible assets applicable to the EMS-3000 series
and provided reserves for certain line probe inventories. See Notes 5 and 8
of Notes to Consolidated Financial Statements.
RESEARCH AND DEVELOPMENT
In the effort to protect against product obsolescence by reason of emerging
technologies, as well as to insure development of the most advanced products
possible, the Company has a continuing program of research and development.
Management believes that the Company has established an excellent record of
product conception, design, development, field testing and commercial
production through its eleven-person engineering department. The engineering
staff works with internal sales, marketing and service groups to incorporate
customer driven enhancements into Company products. The research and
development budget for fiscal 1997 provides for approximately $1,300,000 to
be spent in the enhancement of the AnyCard(TM) and TACC product lines. Total
research and development expenditures were $826,251, $862,173 and $940,102
for the years ended September 30, 1996, 1995 and 1994, respectively.
MANUFACTURING
The Company manufactures or assembles its products, produces spare parts,
and renovates or repairs its products at its facility in Carrollton, Texas.
The product assembly operations consist of configuring components received
from various vendors with the Company's proprietary hardware and software.
Upon completion of product assembly, the equipment undergoes functional
testing to the extremes of the product's specifications and final quality
assurance inspection. The Company normally fills and ships customer orders
within 45 days of receipt, and therefore no significant backlog generally
exists.
MARKETING, DISTRIBUTION AND SERVICE
DOMESTIC
The Company markets its cash system products in the United States through
Company controlled national accounts and a network of approximately 152
independent distributors and dealers operating in five marketing regions:
Northeastern, Southeastern, Central, Southwestern and Western. There are
approximately 108 distributors handling only AnyCard(TM), 27 handling only
TACC, and 17 marketing both product lines.
The distributor network facilitates coverage of both large national accounts
and diversified end-user groups. The Company also coordinates a national
service network of service dealers, including 425 for AnyCard(TM) and TACC
and 86 for EMS, to provide electronic and mechanical support for all of its
products in use.
4
<PAGE>
INTERNATIONAL
The Company markets its TACC products overseas through approximately 24
distributors. The international market lags the U.S. by several years with
respect to cash management systems. The international market for petroleum
and convenience stores is heavily influenced by the Company's traditional
domestic customer base, allowing the Company and its international
distributors to leverage and develop markets in many diverse geographical
areas.
At this time, the Company does not have a presence in the international
market for automated teller machines, but the Company plans to expand its
marketing efforts to include certain foreign countries in the future.
INTELLECTUAL PROPERTIES
The Company's success depends, in part, on its ability to obtain patents,
maintain trade secret protection and operate without infringing the
proprietary rights of others. The Company owns United States patents for
certain of its products (see "PATENTS AND TRADEMARKS" hereinbelow) and has
filed United States and foreign patent applications for other proprietary
products and expects to continue to file product, process and use patent
applications with respect to products or improvements developed in the
future. There can be no assurance, however, that such patent applications
will be filed or, if filed, that patents will be issued to the Company or,
if issued, will be adequate to protect its products. In addition, it is not
possible to predict the degree of protection that patents will afford. It is
possible that patents issued to or licensed by the Company will be
successfully challenged, that the Company may unintentionally infringe
patents of third parties or that the Company may have to alter its products
or processes or pay licensing fees or cease certain activities to take into
account patent rights of third parties, thereby causing additional
unexpected costs and delays which may have a material adverse effect on the
Company's business.
In addition, competitors may obtain additional patents and proprietary
rights relating to products or processes used in, necessary to, competitive
with or otherwise related to those availed of by the Company. The scope and
validity of these patents and proprietary rights, the extent to which the
Company may be required to obtain licenses under these patents or under
other proprietary rights and the cost and availability of licenses are
unknown, but these factors may limit the Company's ability to market its
existing or future products. See "LICENSES" hereinbelow.
The Company also relies upon unpatented trade secrets and no assurance can
be given that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to the
Company's trade secrets or disclose such technology or that the Company can
meaningfully protect its rights to its unpatented trade secrets.
5
<PAGE>
PATENTS AND TRADEMARKS
The AnyCard(TM) developed by the Company is protected by two patents and a
trademark granted by the U.S. Patent and Trademark office.
The Company owns two patents relating to its TACC machines and two patents
relating to its EMS systems. The Company also owns registered trademarks
"TACC", "Tidel Systems" and "TS and Design".
LICENSES
The Company grants various distributors a non-exclusive right and license,
with the right to grant sublicenses, to use the names "Tidel" and "Tidel
AnyCard(TM)", together with any associated trademarks, logos or insignias,
for the limited purpose of marketing, selling and distributing the
AnyCard(TM) products.
GOVERNMENTAL REGULATIONS
The Company's EMS unit is produced and sold to provide total compliance and
documentation to the EPA and other regulatory agencies to insure customers'
compliance with all applicable regulations relating to the detection and
prevention of petroleum leaks in tanks and piping systems. The potential
liability from a leaking underground storage tank is the primary motivating
factor influencing the decision to install a leak detection device. The EPA
and other federal agencies are responsible for the regulation and
enforcement of petroleum storage and piping systems and the potential leaks
` therefrom.
6
<PAGE>
The Company's EMS systems are subject to numerous other state and local
regulations relating to the storage and dispensing of petroleum products.
COMPETITION
Competition in the automated teller machine manufacturing business is
substantial. Large manufacturers such as Diebold, NCR and Fujitsu dominate
the marketplace. Direct
7
<PAGE>
competition to the Company in the quickly growing, low cost automated teller
machine and scrip machine market currently consists of other companies such
as Triton and Dessault. Management believes that AnyCard(TM)'s lower initial
cost and ongoing operating expenses allow it to compete effectively in the
low cost market.
Direct competition to the Company in the domestic TACC market comes
principally from Allied Gary International, McGunn, Scitak and AutoVend.
AutoVend is the only manufacturer other than the Company which features cash
controllers as a major product line.
Competition to the Company in its EMS product line is significant. There are
at least six active competitors on a level with the Company, consisting of
EBW, Emco Wheaton, Gilbarco, Petrovend, Red Jacket, and Veeder-Root. These
companies manufacture systems which also provide general leak detection and
fuel management capabilities. Further, all of these companies have
significant name recognition in the industry and have capital resources
which are significantly greater than those presently available to the
Company.
EMPLOYEES
At September 30, 1996, the Company had 84 employees comprised of 41
manufacturing personnel, 11 engineering employees, 13 sales personnel, 12
general office employees, and 7 executive personnel. None of the Company's
employees are subject to collective bargaining agreements. The Company has
not experienced any strikes or work stoppages and considers its
relationships with all its employees to be satisfactory.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES AND REPORTS ON FORM 8-K
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The audited consolidated financial statements of the Company and report of
its independent certified public accountants responsive to the requirements
of Item 8 of Form 10-K are included herein as part of this Report. Such
audited financial statements and reports as set forth in the accompanying
index include, in the opinion of management of the Company, all required
disclosures in the notes thereto.
24
<PAGE>
EXHIBITS
The Exhibits filed as a part of this Report are listed in the attached Index
to Exhibits.
REPORTS ON FORM 8-K
The Company filed no report on Form 8-K during the last quarter of the
fiscal year ended September 30, 1996.
25
<PAGE>
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.
AMERICAN MEDICAL TECHNOLOGIES, INC.
(Company)
June 11, 1997 /s/ JAMES T. RASH
James T. Rash
President and Principal Executive Officer
/s/ JAMES T. RASH
James T. Rash
Principal Financial and Accounting Officer
26
<PAGE>
INDEX TO FINANCIAL STATEMENTS
PAGE
CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN MEDICAL TECHNOLOGIES, INC.
AND SUBSIDIARIES
Independent Auditors' Report ............................................. F-2
Consolidated Balance Sheets -- September 30, 1996 and 1995 ............... F-3
Consolidated Statements of Operations for the years ended
September 30, 1996, 1995 and 1994 ........................................ F-4
Consolidated Statements of Shareholders' Equity for the years
ended September 30, 1996, 1995 and 1994 .................................. F-5
Consolidated Statements of Cash Flows for the years ended
September 30, 1996, 1995 and 1994 ........................................ F-6
Notes to Consolidated Financial Statements ............................... F-7
CONSOLIDATED FINANCIAL STATEMENT SCHEDULES OF AMERICAN MEDICAL
TECHNOLOGIES, INC. AND SUBSIDIARIES
The following schedules are filed as part of this Annual Report on Form 10-K:
Schedule I Condensed Financial Information of Registrant.................. S-1
Schedule II Valuation and Qualifying Accounts............................. S-6
All other schedules are omitted because they are not required, are not
applicable or the required information is presented elsewhere herein.
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
American Medical Technologies, Inc.:
We have audited the consolidated financial statements of American Medical
Technologies, Inc. and subsidiaries as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we also
audited the financial statements schedules as listed in the accompanying index.
These consolidated financial statements and financial statement schedules are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements and financial statement
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of American
Medical Technologies, Inc. and subsidiaries as of September 30, 1996 and 1995,
and the results of their operations and their cash flows for each of the years
in the three-year period ended September 30, 1996 in conformity with generally
accepted accounting principles. Also in our opinion, the related financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material respects,
the information set forth therein.
KPMG PEAT MARWICK LLP
Houston, Texas
December 20, 1996
F-2
<PAGE>
AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30,
ASSETS 1996 1995
------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents ........................... $ 582,108 $ 233,765
Trade accounts receivable, net of allowance of
$184,900 and $161,143, respectively ................. 5,651,980 1,279,271
Note and other receivable (Note 4) .................. -- 2,300,000
Inventories (Note 5) ................................ 3,341,486 2,196,065
Prepaid expenses and other assets ................... 239,621 155,928
------------ ------------
Total current assets ................................ 9,815,195 6,165,029
Investment in 3CI, at market value (Note 3) ......... 893,914 340,409
Property, plant and equipment, at cost (Note 7) ..... 1,601,145 1,249,870
Accumulated depreciation ............................ (928,762) (730,733)
------------ ------------
Net property, plant and equipment ................... 672,383 519,137
Intangible assets, net of accumulated amortization of
$556,546 and $415,282, respectively (Note 8) ........ 937,291 1,078,555
Other assets ........................................ 44,360 89,870
------------ ------------
Total assets ........................................ $ 12,363,143 $ 8,193,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term notes payable (Note 9) ................... $ 4,128,886 $ 2,014,318
Accounts payable .................................... 1,857,601 2,100,619
Accrued liabilities ................................. 1,607,885 1,411,165
------------ ------------
Total current liabilities ........................... 7,594,372 5,526,102
Long-term debt (Note 9) ............................. 640,000 640,000
------------ ------------
Total liabilities ................................... 8,234,372 6,166,102
------------ ------------
Commitments and contingencies (Notes 13 and 14)
Shareholders' Equity (Notes 10 and 11):
Common stock, $.01 par value, authorized 100,000,000
shares; issued and outstanding 12,397,404 and
11,882,404 shares, respectively ..................... 123,974 118,824
Additional paid-in capital .......................... 10,801,273 10,473,173
Accumulated deficit ................................. (6,143,482) (7,358,600)
Unrealized loss on investment in 3CI (Note 3) ....... (652,994) (1,206,499)
------------ ------------
Total shareholders' equity .......................... 4,128,771 2,026,898
------------ ------------
Total liabilities and shareholders' equity .......... $ 12,363,143 $ 8,193,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended September 30,
------------------------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Revenues ............................................................ $ 20,111,249 $ 10,859,815 $ 13,256,341
Cost of sales (Note 5) .............................................. 12,816,453 7,375,074 7,558,895
------------ ------------ ------------
Gross profit ........................................................ 7,294,796 3,484,741 5,697,446
Selling, general and administrative ................................. 5,366,006 5,553,586 5,485,059
Depreciation and amortization ....................................... 341,561 545,181 645,757
Impairment of long-lived assets (Note 8) ............................ -- 1,238,595 --
------------ ------------ ------------
Operating income (loss) ............................................. 1,587,229 (3,852,621) (433,370)
Other income (expense):
Interest expense, net ............................................... (382,691) (317,871) (400,128)
Other income ........................................................ 10,580 37,478 9,389
Income from settlement, net of related costs (Note 13) .............. -- 715,145 --
------------ ------------ ------------
Total other income (expense) ........................................ (372,111) 434,752 (390,739)
------------ ------------ ------------
Income (loss) from continuing operations ............................ 1,215,118 (3,417,869) (824,109)
Discontinued operations (Note 3):
Loss from operations ................................................ -- -- (119,493)
Gain on disposal .................................................... -- -- 2,229,725
------------ ------------ ------------
Net income (loss) ................................................... $ 1,215,118 $ (3,417,869) $ 1,286,123
============ ============ ============
Net income (loss) per common and
common equivalent share:
Primary:
Income (loss) from continuing operations ............................ $ 0.10 $ (0.29) $ (0.08)
Discontinued operations:
Loss from operations ................................................ -- -- (0.01)
Gain on disposal .................................................... -- -- 0.21
------------ ------------ ------------
Net income (loss) ................................................... $ 0.10 $ (0.29) $ 0.12
============ ============ ============
Weighted average shares outstanding ................................. 14,090,464 11,605,689 10,536,589
============ ============ ============
Fully diluted:
Income (loss) from continuing operations ............................ $ 0.09 $ (0.29) $ (0.08)
Discontinued operations:
Loss from operations ................................................ -- -- (0.01)
Gain on disposal .................................................... -- -- 0.21
------------ ------------ ------------
Net income (loss) ................................................... $ 0.09 $ (0.29) $ 0.12
============ ============ ============
Weighted average shares outstanding ................................. 14,188,497 11,605,689 10,536,589
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
UNREALIZED
SHARES ADDITIONAL LOSS ON TOTAL
ISSUED AND COMMON PAID-IN ACCUMULATED INVESTMENT SHAREHOLDERS'
OUTSTANDING STOCK CAPITAL DEFICIT IN 3CI EQUITY
----------- --------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1993 ......... 10,186,573 $ 101,866 $ 9,823,903 $(5,226,854) $ -- $ 4,698,915
Exercise of warrants ................ 1,337,362 13,373 505,603 -- -- 518,976
Repurchase and
cancellation of
common stock ........................ (75,000) (750) (149,250) -- -- (150,000)
Net income .......................... -- -- -- 1,286,123 -- 1,286,123
----------- --------- ------------ ----------- ----------- -----------
Balance, September 30, 1994 ......... 11,448,935 114,489 10,180,256 (3,940,731) -- 6,354,014
Issuance of common stock ............ 49,469 495 33,157 -- -- 33,652
Exercise of warrants ................ 384,000 3,840 259,760 -- -- 263,600
Net loss ............................ -- -- -- (3,417,869) -- (3,417,869)
Unrealized loss on
investment in 3CI ................... -- -- -- -- (1,206,499) (1,206,499)
----------- --------- ------------ ----------- ----------- -----------
Balance, September 30, 1995 ......... 11,882,404 118,824 10,473,173 (7,358,600) (1,206,499) 2,026,898
Issuance of common stock ............ 300,000 3,000 147,000 -- -- 150,000
Exercise of warrants ................ 215,000 2,150 159,100 -- -- 161,250
Issuance of warrants ................ -- -- 22,000 -- -- 22,000
Net income .......................... -- -- -- 1,215,118 -- 1,215,118
Unrealized gain on
investment in 3CI ................... -- -- -- -- 553,505 553,505
----------- --------- ------------ ----------- ----------- -----------
Balance, September 30, 1996 ......... 12,397,404 $ 123,974 $ 10,801,273 $(6,143,482) $ (652,994) $ 4,128,771
=========== ========= ============ =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) ................................................... $ 1,215,118 $(3,417,869) $ 1,286,123
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization ....................................... 341,561 545,181 645,757
Gain on sale of property, plant and equipment ....................... (1,214) (29,367) (1,315)
Impairment of long-lived assets ..................................... -- 1,238,595 --
Loss from discontinued operations ................................... -- -- 119,493
Gain on disposal of discontinued operations ......................... -- -- (2,229,725)
Changes in assets and liabilities:
Trade accounts receivable, net ...................................... (4,372,709) 1,664,740 (973,283)
Note and other receivable ........................................... 2,300,000 (2,300,000) --
Inventories ......................................................... (1,145,421) (170,807) (224,928)
Prepaid expenses and other assets ................................... (39,661) 132,388 167,479
Accounts payable and accrued liabilities ............................ (38,298) 1,600,105 45,586
----------- ----------- -----------
Net cash used in operating activities ............................... (1,740,624) (737,034) (1,164,813)
----------- ----------- -----------
Cash flows from investing activities:
Purchases of property, plant and equipment .......................... (352,651) (277,812) (122,449)
Proceeds from sale of property, plant and equipment ................. 1,800 87,906 3,614
Proceeds from disposal of discontinued operations ................... -- -- 5,083,488
Decrease in investment in 3CI ....................................... -- -- 67,997
Increase in intangible assets ....................................... -- -- (38,614)
----------- ----------- -----------
Net cash (used in) provided by investing activities ................. (350,851) (189,906) 4,994,036
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from issuance of notes payable ............................. 3,528,211 1,128,821 872,923
Repayments of notes payable ......................................... (1,263,643) (603,251) (5,226,048)
Proceeds from exercise of warrants .................................. 161,250 263,600 518,976
Proceeds from issuance of warrants .................................. 14,000 -- --
Proceeds from issuance of common stock .............................. -- 7,800 --
Repurchase and cancellation of common stock ......................... -- -- (150,000)
----------- ----------- -----------
Net cash provided by (used in) financing activities ................. 2,439,818 796,970 (3,984,149)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents ................ 348,343 (129,970) (154,926)
Cash and cash equivalents at beginning of year ...................... 233,765 363,735 518,661
----------- ----------- -----------
Cash and cash equivalents at end of year ............................ $ 582,108 $ 233,765 $ 363,735
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest .............................................. $ 356,571 $ 289,861 $ 406,115
=========== =========== ===========
Supplemental disclosure of noncash financing activity:
Conversion of note payable to common stock .......................... $ 150,000 $ 25,852 $ --
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996 AND 1995
(1) ORGANIZATION AND SIGNIFICANT BUSINESS TRANSACTIONS
American Medical Technologies, Inc. ("AMT" or the "Company") is a Delaware
corporation engaged in the manufacture of automated teller machines, cash
management security systems and environmental monitoring systems through its
three wholly owned subsidiaries, AnyCard International, Inc., Tidel Cash
Systems, Inc. and Tidel Engineering, Inc. (collectively referred to as
"Tidel").
Prior to February 1994, AMT was engaged in the business of medical waste
management services through its partially owned subsidiary, 3CI Complete
Compliance Corporation ("3CI"). As more fully described in Note 3, AMT disposed
of the majority of its 3CI common stock during the year ended September 30,
1994.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of AMT and its wholly
owned subsidiaries. All significant intercompany items have been eliminated in
consolidation.
RECLASSIFICATIONS
Certain amounts in the prior years' consolidated financial statements have been
reclassified to conform with current year presentation. Such reclassifications
had no impact on net income (loss) for the previously reported.
CASH AND CASH EQUIVALENTS
For purposes of consolidated financial statement presentation and reporting cash
flows, all liquid investments with original maturities at date of purchase of
three months or less are considered cash equivalents.
INVENTORIES Inventories are stated at the lower of cost or market. Cost is
determined using the standard cost method and includes materials, labor and
production overhead which approximates an average cost method. Reserves are
provided to adjust any slow moving materials or goods to net realizable values
as deemed appropriate by management of the Company. See Note 5.
F-7
<PAGE>
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is calculated on
the straight-line method over the estimated useful lives of the assets.
Expenditures for major renewals and betterments are capitalized; expenditures
for repairs and maintenance are charged to expense as incurred.
INTANGIBLE ASSETS
All intangible assets are amortized using the straight-line method over a period
ranging from 5 to 10 years, with the exception of goodwill which is amortized
over 40 years.
During the year ended September 30, 1995, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of".
Accordingly, the Company's long-lived assets and certain identifiable
intangibles are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of any assets may not be
recoverable. In performing the review for recoverability, the Company estimates
the future cash flows expected to result from the use of the asset and its
eventual disposition. If the sum of the expected future cash flows (undiscounted
and without interest charges) is less than the carrying amount of the asset, an
impairment loss is recognized, whereby the carrying amount of the asset is
written-down to the market value or discounted cash flow value.
REVENUE RECOGNITION
Product revenue is recognized when the product is shipped. Revenue from sales is
recorded net of a provision for cash discounts that are anticipated to be earned
and deducted at time of payment by customer.
WARRANTIES
Certain of the Company's products are sold under warranty against defects in
materials and workmanship for a period of one to two years. Parts generally
carry a ninety day warranty. A provision for estimated warranty costs is
included in accrued liabilities and is charged to operations at the time of
sale.
FEDERAL INCOME TAXES
Income taxes are accounted for under the asset and liability method. Under the
asset and liability method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in determining income or loss in the period that includes the
enactment date.
INVESTMENT SECURITIES
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", was adopted by the Company during
the year ended September 30, 1995. Statement 115 establishes standards for
financial accounting and reporting for investments
F-8
<PAGE>
in equity securities that have readily determinable fair values and for all
investments in debt securities. See Note 3.
In accordance with Statement 115, the Company classifies its investment in 3CI
as available for sale, with unrealized gains and losses excluded from earnings
and recorded as a separate component of shareholders' equity.
NET INCOME (LOSS) PER SHARE
Net income (loss) per common and common equivalent share was computed by
dividing the net income (loss) by the weighted average number of common and
common equivalent shares outstanding during the period. For purposes of this
calculation, outstanding warrants and employee stock options are considered
common stock equivalents. Fully diluted earnings per share is materially equal
to primary earnings per share for 1995 and 1994. In 1996, the computation of
fully diluted earnings per share includes additional shares assuming conversion
of a 12% convertible note issued during 1996 that is due December 7, 1996.
STOCK-BASED COMPENSATION
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation", was issued October 23, 1995. Statement 123 encourages companies
to adopt in fiscal years beginning after December 15 1995, a new accounting
method for recognizing stock-based expense based on the estimated fair value of
employee stock options. Statement 123 allows companies to retain the current
approach set forth in APB Opinion 25, "Accounting for Stock Issued to
Employees", provided that expanded footnote disclosure is presented. The Company
does not intend to adopt the fair value method of accounting for stock-based
compensation under Statement 123.
USE OF ESTIMATES
The preparation of the accompanying consolidated financial statements
requires the use of estimates by management in determining the Company's
assets and liabilities at the date of the consolidated financial statements
and the reported amount of revenues and expenses during the period. Actual
results could differ from these estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments", requires the disclosure of fair value
information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate that value.
As of September 30, 1996 and 1995, the carrying amounts of cash, accounts
receivable, prepaid expenses, accounts payable and accrued expenses approximated
fair value because of the short maturity of those instruments. The fair value of
the Company's debt approximates its carrying amount.
F-9
<PAGE>
(3) DISCONTINUED OPERATIONS -- 3CI
On February 7, 1994, AMT sold 1,255,182 shares of its holdings of 3CI common
stock to Waste Systems, Inc. ("WSI") for $5,083,488, resulting in a gain of
$2,229,725. The sale was in connection with the acquisition by 3CI of
substantially all of the assets and liabilities of A/MED, Inc. ("A/MED") and
American Medical Transports Corporation ("AMTC"), both majority owned
subsidiaries of WSI, in exchange for 2,640,350 shares of newly issued 3CI common
stock. The shares sold by AMT, together with the shares issued to the former
shareholders of A/MED and AMTC in the 3CI acquisitions, resulted in a change of
control of 3CI whereby WSI owns a majority of the total outstanding shares of
3CI. The three common Board of Directors members of the Company and 3CI resigned
from the 3CI Board simultaneous with the closing and AMT has no continuing
management control of 3CI. AMT's investment in 3CI now consists of 680,818
shares of the outstanding common stock of 3CI, representing approximately 6.9%
of the total outstanding 3CI shares. At September 30, 1996, the investment is
carried at market value of $893,914 which is net of an unrealized loss recorded
in shareholders' equity of $652,994 in accordance with Statement 115.
The results of 3CI have been reported separately as a component of discontinued
operations in the Consolidated Statements of Operations for the year ended
September 30, 1994. Summarized results of 3CI prior to disposition as well as
AMT's interest in those results are as follows:
1994
-----------
Total revenues ....................................... $ 2,312,413
Loss from operations ................................. (265,823)
Net loss ............................................. (216,042)
Company's interest ................................... (119,493)
(4) NOTE AND OTHER RECEIVABLE
As discussed in Note 13, the Company received a cash payment of $2,000,000 on
October 17, 1995 in connection with the final settlement of certain litigation
and recorded such amount as an account receivable at September 30, 1995.
On May 15, 1995, the Company loaned $300,000 to a non-affiliated corporation
which was under evaluation as a potential candidate for acquisition. The note
bears interest at 12% per annum and is secured by 51% of the outstanding common
stock of the corporation. The note was paid in full on November 30, 1995.
(5) INVENTORIES
Inventories consist of the following at September 30, 1996 and 1995:
F-10
<PAGE>
1996 1995
------------- ------------
Raw materials ...................... $ 2,061,659 $ 1,596,657
Work in process .................... 740,627 262,181
Finished goods ..................... 916,246 1,004,472
Other (demo) ....................... 98,954 61,755
------------- ------------
3,817,486 2,925,065
------------- ------------
Inventory reserve .................. (476,000) (729,000)
------------- ------------
$ 3,341,486 $ 2,196,065
============= ============
During the year ended September 30, 1995, the Company increased its inventory
reserve and recorded a corresponding charge to cost of sales of $300,000 to
reflect a write down of the carrying amount of certain components related to an
earlier model of its environmental monitoring products. As a result of the
litigation pertaining to the environmental monitoring products, management of
the Company does not believe that the value of the components will be realized
from future operations. See Note 13.
In addition, during the year ended September 30, 1995, the Company, in
anticipation of the introduction of a new model of automated teller machine,
increased its inventory reserve and recorded a corresponding charge to cost of
sales of $300,000 to reflect a write down of the carrying amount of certain raw
materials used in the production of an earlier model. During the year ended
September 30, 1996, the Company decreased such reserve $253,000 principally due
to write-offs associated with the discontinuation of that model.
(6) MAJOR CUSTOMERS AND CREDIT RISKS
The Company generally does not require collateral or other security from its
customers and would incur an accounting loss equal to the carrying value of the
accounts receivable if a customer failed to perform according to the terms of
the credit arrangements. The Company has a concentration of credit risk, as a
significant portion of its revenues is from customers in the retail and
petroleum marketing industries. In addition, the Company's product sales are
impacted by various federal, state and local regulatory agencies involved with
regulations related to environmental monitoring. During the year ended September
30, 1994, the Company had sales to two major customers that accounted for more
than 10% of sales in the amounts of $1,827,836 and $1,617,721. None of the
Company's sales to customers accounted for more than 10% of sales during the
years ended September 30, 1996 and 1995.
Sales to customers in foreign countries accounted for 7%, 17% and 14% of the
Company's total sales during the years ended September 30, 1996, 1995 and 1994,
respectively. A breakdown of sales to customers in foreign countries
by geographic area is provided in the following table:
Region 1996 1995 1994
------ ---------- ---------- ----------
Asia/Pacific ............................. $ 704,288 $ 662,232 $ 755,520
Europe ................................... 599,808 1,065,778 920,868
Latin America ............................ 102,841 88,716 105,908
Other .................................... 41,650 1,685 23,959
---------- ---------- ----------
Total .................................. $1,448,587 $1,818,411 $1,806,255
========== ========== ==========
(7) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following at September 30, 1996
and 1995:
F-11
<PAGE>
1996 1995 Useful Life
---------- ---------- ------------
Machinery and equipment ............ $1,173,194 $ 895,828 2 - 10 years
Computer equipment and systems ..... 236,555 184,932 3 - 7 years
Furniture, fixtures and other
improvements ....................... 191,396 169,110 3 - 5 years
---------- ------------
$1,601,145 $1,249,870
========== ============
Depreciation expense was $198,819 and $241,013 for the years ended September 30,
1996 and 1995, respectively. Repairs and maintenance expenses were $41,999 and
$57,966 for the years ended September 30, 1996 and 1995, respectively.
(8) INTANGIBLE ASSETS
Intangible assets consist of the following at September 30, 1996 and 1995:
1996 1995
------------ ------------
Cash Management Systems:
Software ............................. $ 350,000 $ 350,000
Proprietary technology ............... 417,000 417,000
Other technology ....................... 143,613 143,613
Goodwill ............................... 583,224 583,224
Accumulated amortization ............... (556,546) (415,282)
------------ ------------
$ 937,291 $ 1,078,555
============ ============
In connection with the litigation discussed in Note 13, management of the
Company determined that the carrying amount of intangibles relating to earlier
product designs of environmental monitoring systems was not recoverable from
future cash flows expected to be realized. Based on the provisions of Statement
121, which was adopted by the Company during the year ended September 30, 1995,
all costs related to these intangible assets were written off during the year
ended September 30, 1995. The charge of $1,238,595 consisted of $948,104 (net of
accumulated amortization of $454,896) related to environmental monitoring
systems software and proprietary technology, and $290,491 (net of accumulated
amortization of $23,553) related to corresponding goodwill associated with the
environmental monitoring systems.
F-12
<PAGE>
(9) NOTES PAYABLE AND LONG-TERM DEBT
Short-term notes payable consist of the following at September 30, 1996 and
1995:
1996 1995
----------- ---------
Revolving credit note, secured by
substantially all of the assets of
the Subsidiaries; due on demand or
by May 31, 1997, guaranteed by AMT,
interest payable monthly at 2%
above prime .................................... $2,640,387 $984,873
Promissory note due January 26 1996,
interest payable monthly at 12%,
secured by 200,000 shares of 3CI
common stock. Renewed and subsequently
paid March 1996 ................................ -- 250,000
F-13
<PAGE>
1996 1995
---------- ----------
Promissory note due November, 30 1995, interest
payable at maturity at 12%, secured by a note
receivable to the Company from a non- affiliated
corporation. Paid November 30, 1995 ................ -- 300,000
Promissory note due December 27, 1996, interest
payable at maturity at 12%, secured by a first
lien on 200,000 shares and a second lien on
480,818 shares of 3CI common stock. Reduced
$100,000 on December 3, 1996 ....................... 700,000 --
Unsecured promissory note due December 7, 1996,
convertible into 120,000 shares of common stock
of the Company at the option of the payee,
interest payable at maturity at 12%. Converted
on December 7, 1996 ................................ 60,000 --
Unsecured promissory notes due various dates,
interest payable quarterly at 10% to 12% ...........
$50,000 paid during October 1996 ................... 728,499 479,445
---------- ----------
$4,128,886 $2,014,318
========== ==========
During March 1996, the Company extended its revolving credit note until May 31,
1997 and increased the maximum borrowing line to $3,000,000. The terms of the
extended facility contain requirements for maintaining tangible net worth and
certain financial ratios, as well as restrictions on additional borrowings and
payment of dividends. The Company was in compliance with all covenants of the
revolving credit note at September 30, 1996.
Long-term debt consists of the following at September 30, 1996 and 1995:
1996 1995
-------- --------
Promissory note due January 31, 1998,
interest payable quarterly at 12%,
secured by 480,818 shares of 3CI
common stock ..................................... $ 400,000 $ 400,000
Unsecured promissory notes due
January 31, 1998, interest payable
quarterly at 12% ................................. 240,000 240,000
-------- --------
$640,000 $640,000
======== ========
(10) WARRANTS
The Company has outstanding warrants to purchase 4,807,255 common shares at
September 30, 1996. The warrants relate to grants made in connection with debt
and equity issues, acquisitions,
F-14
<PAGE>
directors remuneration and various services rendered. The warrants can be
exercised at prices ranging from $0.50 to $2.50. During the years ended
September 30, 1996 and 1995, the expiration dates for 2,277,255 warrants were
extended until sixty days after the effective date of a registration statement
to be filed by the Company covering the shares underlying the warrants. The
remaining 2,530,000 warrants expire from October 1996 to September 1999.
Included in the warrants outstanding at September 30, 1995 were 200,000
conditional warrants which were exercisable upon attainment of a certain market
price per share of the Company's common stock for a period of fifteen or more
consecutive trading days. These warrants expired on January 31, 1996. Subsequent
to September 30, 1996, the Company issued 267,500 warrants at prices ranging
from $0.90 to $1.00, and expects to issue an additional 442,745 warrants at
similar prices upon successful filing by the Company of a registration statement
covering the shares underlying presently outstanding warrants.
(11) EMPLOYEE STOCK OPTION PLAN
The Company's 1989 Incentive Stock Option Plan (the "Plan") provides for up to
500,000 shares of common stock to be reserved for the purpose of providing
additional incentive to the officers and employees of the Company who are
primarily responsible for its management and growth. Options granted under the
Plan vest over a three-year period and expire no later than 10 years from the
date of grant. The following table represents a summary of the outstanding
options in the Plan:
<PAGE>
Option Price
Stock Options Per Share 1996 1995 1994
- ----------------------- --------------- -------- -------- -------
Outstanding, beginning
of year .................... $0.6875 - $1.75 443,250 420,750 400,750
Granted .................... $0.6875 - $1.75 40,000 220,000 20,000
Canceled ................... $1.3125 - $1.75 (30,000) (197,500) --
-------- -------- -------
Outstanding, end of year ... $0.6875 - $1.75 453,250 443,250 420,750
======== ======== =======
Exercisable, end of year ... 306,581 223,250 322,833
======== ======== =======
(12) INCOME TAXES
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at September 30, 1996
and 1995 are presented as follows:
1996 1995
----------- -----------
Deferred tax assets:
Intangible assets ...................... $ 369,279 $ 595,961
Inventories ............................ 182,020 298,204
Investment in 3CI ...................... 360,475 548,667
Property, plant and
equipment .............................. -- 21,874
Accrued expenses ....................... 207,434 60,568
Other .................................. 62,525 84,552
Net operating loss
carryforward ........................... 1,840,338 2,243,295
----------- -----------
Total gross deferred
tax assets ............................. 3,022,071 3,853,121
Less: valuation allowance .............. (2,959,399) (3,090,490)
Net deferred tax
assets ................................. 62,672 762,631
Deferred tax liabilities:
Property, plant and
equipment .............................. 5,013 --
Settlement ............................. -- 713,049
Accounts receivable .................... 57,659 49,582
----------- -----------
Total gross deferred
tax liabilities ........................ 62,672 762,631
----------- -----------
Net deferred taxes ..................... $ -- $ --
=========== ===========
F-15
<PAGE>
The Company has a federal income tax net operating loss carryforward as of
September 30, 1996 of approximately $5,400,000. The net operating loss
carryforward will expire in various amounts between the years 2001 and 2010 if
not utilized. The net operating losses are subject to limitations should the
ownership of the Company significantly change. Deferred tax expense for the year
ended September 30, 1996 was $131,000. The net change in the total valuation
allowance during the year ended September 30, 1996 was a decrease of
approximately $131,000. Accordingly, there was no book tax expense recorded for
the year then ended.
The Company's effective tax rate applicable to income from continuing operations
of 0% was less than the U.S. federal income tax rate of 34% , after considering
certain permanent differences such as goodwill amortization and meals and
entertainment, because of the realized benefits of a net operating loss
carryforward for which a valuation allowance had been previously established.
In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The Company has established a valuation allowance
for such deferred tax assets to the extent such amounts are not utilized to
offset existing deferred tax liabilities reversing in the same periods.
(13) LITIGATION
In September 1995, the Company, together with its wholly owned subsidiary, Tidel
Engineering, Inc., reached an agreement to settle litigation with third parties
concerning the malfunction of line probes formerly included in the environmental
monitoring system product line. In connection with the settlement, the Company
and its subsidiary were released by the other parties from all liability.
The settlement agreement provided for a payment of $2,000,000 to the subsidiary,
and the reversal of certain accounts payable of $97,202. The payment, which was
received on October 17, 1995, was recorded as a receivable as of September 30,
1995. See Note 4.
The aggregate settlement proceeds of $2,097,202, less related legal and
professional expenses of $1,382,057, resulted in income from settlement of
$715,145 which was included in other income (expense) for the year ended
September 30, 1995.
F-16
<PAGE>
In addition, the Company and its subsidiaries are each subject to certain
litigation and claims arising in the ordinary course of business. In the opinion
of the management of the Company, the amounts ultimately payable, if any, as a
result of such litigation and claims will not have a materially adverse effect
on the Company's financial position.
(14) OTHER COMMITMENTS AND CONTINGENCIES
The Company leases office and warehouse space, transportation equipment and
other equipment under terms of operating leases which expire through 2005.
Rental expense under these leases for the years ended September 30, 1996, 1995
and 1994 was approximately $347,000, $323,000 and $323,000, respectively. The
Company has approximate future lease commitments as follows:
YEAR ENDING
SEPTEMBER 30 AMOUNT
----------
1997 ................................................ $ 305,000
1998 ................................................ 279,000
1999 ................................................ 278,000
2000 ................................................ 288,000
2001 ................................................ 294,000
Subsequent .......................................... 980,000
----------
$2,424,000
==========
(15) RELATED PARTY TRANSACTIONS
The Company receives legal services from a director. Fees paid by the Company
for such services totaled approximately $72,000, $72,000 and $142,000, for the
years ended September 30, 1996, 1995 and 1994, respectively.
The Company provides certain administrative and clerical services to two
entities with whom a director has an affiliation. Fees for these services
totaled $144,000 and $68,000 for the years ended September 30, 1996 and 1995,
respectively.
F-17
<PAGE>
SCHEDULE I
AMERICAN MEDICAL TECHNOLOGIES, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(PARENT COMPANY)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30,
ASSETS 1996 1995
------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents .......................... $ 394,482 $ 4,317
Accounts and note receivable ....................... 198,804 388,434
Prepaid expenses and other assets .................. 20,668 21,959
------------ ------------
Total current assets ........................... 613,954 414,710
Investment in 3CI, at market value ..................... 893,914 340,409
Property, plant and equipment, at cost ................. 95,650 79,570
Accumulated depreciation ........................... (45,872) (30,102)
------------ ------------
Net property, plant and equipment .............. 49,778 49,468
Investment in subsidiaires, at equity .................. 4,815,514 2,853,368
Receivables from subsidiaries .......................... 104,893 474,802
Other assets ........................................... 19,360 17,838
------------ ------------
Total assets ................................... $ 6,497,413 $ 4,150,595
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term notes payable ........................... $ 1,460,000 $ 1,000,000
Accounts payable ................................... 115,686 248,267
Accrued liabilities ................................ 152,956 235,430
------------ ------------
Total current liabilities ...................... 1,728,642 1,483,697
Long-term debt ......................................... 640,000 640,000
------------ ------------
Total liabilities .............................. 2,368,642 2,123,697
------------ ------------
Shareholders' Equity:
Common stock, $.01 par value, authorized 100,000,000
shares; issued and outstanding 12,397,404 and
11,882,404 shares, respectively ................ 123,974 118,824
Additional paid-in capital ......................... 10,801,273 10,473,173
Accumulated deficit ................................ (6,143,482) (7,358,600)
Unrealized loss on investment in 3CI ............... (652,994) (1,206,499)
------------ ------------
Total shareholders' equity ..................... 4,128,771 2,026,898
------------ ------------
Total liabilities and shareholders' equity ..... $ 6,497,413 $ 4,150,595
============ ============
</TABLE>
S-1
<PAGE>
AMERICAN MEDICAL TECHNOLOGIES, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(PARENT COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1996 1995 1994
----------- ----------- ------------
<S> <C> <C> <C>
Revenues ............................................. $ -- $ -- $ --
Costs and expenses:
Selling, general and administrative .................. 557,245 739,279 736,573
Depreciation and amortization ........................ 17,283 16,437 12,190
----------- ----------- ------------
Operating loss ................................... (574,528) (755,716) (748,763)
Interest expense, net ................................ (172,500) (128,727) (230,875)
----------- ----------- ------------
Loss before discontinued operations and
equity in subsidiaries' earnings ................. (747,028) (884,443) (979,638)
Discontinued operations, net of taxes:
Loss from operations ............................. -- -- (119,493)
Gain on disposal ................................. -- -- 2,229,725
----------- ----------- ------------
Income (loss) before equity in
subsidiaries' earnings ........................... (747,028) (884,443) 1,130,594
Equity in subsidiaries' earnings ..................... 1,962,146 (2,533,426) 155,529
----------- ----------- ------------
Net income (loss) .................................... $ 1,215,118 $(3,417,869) $ 1,286,123
=========== =========== ===========
</TABLE>
S-2
<PAGE>
Schedule I
AMERICAN MEDICAL TECHNOLOGIES, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(PARENT COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended September 30,
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) ..................................................... $ 1,215,118 $(3,417,869) $ 1,286,123
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization ..................................... 17,283 16,436 12,190
(Gain) loss on sale of property, plant and equipment .............. 245 (1,027) --
(Increase) decrease in equity in earnings of subsidiary ........... (1,962,146) 2,533,426 (155,529)
Loss from discontinued operations ................................. -- -- 119,493
Gain on disposal of discontinued operations ....................... -- -- (2,229,725)
Changes in assets and liabilities:
Accounts receivable ........................................... 259,539 (81,764) (58,200)
Note receivable ............................................... 300,000 (300,000) --
Prepaid expenses and other assets ............................. (1,709) 31,157 121,976
Accounts payable and accrued liabilities ...................... (207,055) 188,078 (264,932)
----------- ----------- -----------
Net cash used in operating activities ............................. (378,725) (1,031,563) (1,168,604)
----------- ----------- -----------
Cash flows from investing activities:
Purchases of property, plant and equipment ............................ (16,360) (34,285) (3,472)
Proceeds from sale of property, plant and equipment ................... -- 4,306 --
Proceeds from disposal of discontinued operations ..................... -- -- 5,083,488
Decrease in investment in 3CI ......................................... -- -- 67,997
----------- ----------- -----------
Net cash provided by (used in) investing activities ............... (16,360) (29,979) 5,148,013
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from issuance of notes payable ............................... 1,864,000 1,090,000 750,000
Repayments of notes payable ........................................... (1,254,000) (470,000) (5,220,375)
Proceeds from exercise of warrants .................................... 161,250 263,600 518,976
Proceeds from issuance of warrants .................................... 14,000 -- --
Proceeds from issuance of common stock ................................ -- 7,800 --
Repurchase and cancellation of common stock ........................... -- -- (150,000)
----------- ----------- -----------
Net cash provided by (used in) financing activities ............... 785,250 891,400 (4,101,399)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents .............. 390,165 (170,142) (121,990)
Cash and cash equivalents at beginning of year ............................ 4,317 174,459 296,449
Cash and cash equivalents at end of year .................................. $ 394,482 $ 4,317 $ 174,459
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest ................................................ $ 151,700 $ 119,878 $ 267,551
=========== =========== ===========
Supplemental disclosure of noncash financing activity:
Conversion of note payable to common stock ............................ $ 150,000 $ 25,852 $ --
=========== =========== ===========
</TABLE>
S-3
<PAGE>
AMERICAN MEDICAL TECHNOLOGIES, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(PARENT COMPANY)
NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(A) SHORT-TERM NOTES PAYABLE
Short-term notes payable consist of the following at September 30, 1996 and
1995:
1996 1995
---------- ----------
Promissory note due December 27, 1996,
interest payable at maturity at 12%,
secured by a first lien on 200,000
shares and a second lien on 480,818
shares of 3CI common stock. Reduced
$100,000 on December 3, 1996 ................... 700,000 --
Promissory note due January 26 1996,
interest payable monthly at 12%,
secured by 200,000 shares of 3CI
common stock. Renewed and
subsequently paid March 1996 ................... -- 250,000
Promissory note due November, 30 1995,
interest payable at maturity at 12%,
secured by a note receivable to the
Company from a non- affiliated
corporation. Paid November 30, 1995 ............ -- 300,000
Unsecured promissory note due December 7,
1996, convertible into 120,000 shares of
common stock of the Company at the option
of the payee, interest payable at maturity
at 12%. Converted on December 7, 1996 .......... 60,000 --
Unsecured promissory notes due various
dates, interest payable quarterly at 10% to
12%. $50,000 paid during October 1996 .......... 700,000 450,000
---------- ----------
$1,460,000 $1,000,000
========== ==========
(B) LONG-TERM DEBT
Long-term debt consists of the following at September 30, 1996 and 1995:
1996 1995
--------- --------
Promissory note due January 31, 1998,
interest payable quarterly at 12%,
secured by 480,818 shares of 3CI
common stock .................................. $ 400,000 $400,000
S-4
<PAGE>
AMERICAN MEDICAL TECHNOLOGIES, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(PARENT COMPANY)
NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(CONTINUED)
(B) LONG-TERM DEBT (CONTINUED)
1996 1995
-------- --------
Unsecured promissory notes due January 31,
1998, interest payable quarterly at 12% ......... 240,000 240,000
-------- --------
$640,000 $640,000
======== ========
(C) GUARANTEES
AMT has guaranteed the revolving credit note issued by its subsidiaries in the
maximum principal amount of $3,000,000 due May 31, 1997.
(D) DIVIDENDS FROM SUBSIDIARIES
No dividends have been paid to AMT by its subsidiaries as of September 30, 1996.
The subsidiaries are restricted from paying dividends to AMT pursuant to the
revolving credit note issued by due May 31, 1997.
(E) AFFILIATED TRANSACTIONS
AMT receives legal services from a director. Fees paid by AMT for such services
totaled approximately $72,000, $72,000 and $142,000, for the years ended
September 30, 1996, 1995 and 1994, respectively.
AMT provides certain administrative and clerical services to two entities with
whom a director has an affiliation. Fees earned for these services totaled
$144,000 and $68,000 for the years ended September 30, 1996 and 1995,
respectively. No such fees were earned in 1994.
The subsidiaries paid management fees to AMT in the aggregate amount of $180,000
per annum in each of the years ended September 30, 1996, 1995 and 1994. In
addition, AMT bills the subsidiaries for direct expenses paid on their behalf
and from time to time makes interest bearing advances for working capital
purposes.
S-5
<PAGE>
Schedule II
AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Additions
Balance at Charged to Charged to Balance at
beginning costs and other end of
Classification of period expenses accounts Deductions period
- -------------------------------------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
For the year ended September 30, 1996:
Allowance for doubtful accounts $161,143 $ 24,000 $ -- $ 243 $184,900
Inventory reserve ............. 729,000 63,000 -- 316,000 476,000
------- ------ -------- ------- -------
$890,143 $ 87,000 $ -- $316,243 $660,900
======== ======== ======== ======== ========
For the year ended September 30, 1995:
Allowance for doubtful accounts $152,082 $ 10,000 $ -- $ 939 $161,143
Inventory reserve ............. 192,000 696,000 -- 159,000 729,000
------- ------- -------- ------- -------
$344,082 $706,000 $ -- $159,939 $890,143
======== ======== ======== ======== ========
For the year ended September 30, 1994:
Allowance for doubtful accounts $132,709 $ 15,000 $ 4,373 $ -- $152,082
Inventory reserve ............. 151,000 45,000 -- 4,000 192,000
------- ------ -------- ----- -------
$283,709 $ 60,000 $ 4,373 $ 4,000 $344,082
======== ======== ======== ======== ========
</TABLE>
S-6
<PAGE>
INDEX TO EXHIBITS
EXHIBITS
Except as otherwise indicated, the following documents are incorporated by
reference as Exhibits to this Report [the inclusion of certain Exhibits herein
through incorporation by reference to "Form 10 of the Company" refer in each
case to the indicated Exhibits as listed in Item 15.2 of the Company's Form 10
dated November 7, 1988 as amended by Form 8 dated February 2, 1989]:
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
2.01. Copy of Stock Purchase Agreement dated February 4, 1994 between
Waste Systems, Inc. and the Company (incorporated by reference
to Exhibit 1.2. of the Company's Report on Form 8-K filed under
date of February 18, 1994).
2.02. Copy of Option to Purchase 3CI Complete Compliance Corporation
shares dated February 4, 1994 issued by the Company to Waste
Systems, Inc. (incorporated by reference to Exhibit 1.3. of the
Company's Report on Form 8-K filed under date of February 18,
1994).
2.03. Copy of Registration Rights Agreement dated February 4, 1994
between 3CI Complete Compliance Corporation and the Company
(incorporated by reference to Exhibit 1.4. of the Company's
Report on Form 8-K filed under date of February 18, 1994).
3.01. Copy of Certificate of Incorporation of American Medical
Technologies, Inc. (filed as Articles of Domestication with the
Secretary of State, State of Delaware on November 6, 1987 and
incorporated by reference to Exhibit 2 to Form 10 of the
Company).
3.02. Copy of By-Laws of the Company (incorporated by reference to
Exhibit 3 to Form 10 of the Company).
4.01. Form of Series C Warrant of the Company issued to the investors
referred to in Exhibit 4.1. above and providing for the purchase
on or before the expiration of 60 days following the effective
date of a registration statement of the Company covering the
offering to the public of the shares underlying the warrants of
an aggregate of 1,081,250 shares of the common stock of the
Company at an exercise price of $1.25 per share (incorporated by
reference to Exhibit 4.17. to the Company Annual Report on Form
10-K for the year ended December 31, 1991).
4.02. Form of Registration Agreement between the Company and each of
the two purchasers of its common stock in a 1991 private
placement (incorporated by reference to Exhibit 4.22. to the
Company Annual Report on Form 10-K for the year ended December
31, 1991).
4.03. Form of Warrant (Series 01) of the Company issued to the
purchasers referred to in Exhibit 4.3 above (the 14 Warrants 01
issued by the Company to such investors are identical but for
the name of the holder, the date of issue and the number of
shares of the Company's common stock which may be purchased upon
exercise) (incorporated by reference to Exhibit 4.23. to the
Company Annual Report on Form 10-K for the year ended December
31, 1991).
4.04. Form of Warrant (Series 03) of the Company issued to the
purchasers of its common stock as referred to in Exhibits 4.3.
above (the 14 Warrants 03 issued by the Company to such
investors are identical but for the name of the holder, the date
of issue and the number of shares of the Company's common stock
which may be purchased upon exercise) (incorporated by reference
to Exhibit 4.25. to the Company Annual Report on Form 10-K for
the year ended December 31, 1991).
4.05. Form of Warrant (Series 04) of the Company issued to the
purchasers of its common stock as referred to in Exhibits 4.3.
above (the 14 Warrants 04 issued by the Company to such
investors are identical but for the name of the holder, the date
of issue and the number of shares of the Company's common stock
which may be purchased upon exercise) (incorporated by reference
to Exhibit 4.26. to the Company Annual Report on Form 10-K for
the year ended December 31, 1991).
4.06. Copy of form of series TEC common stock purchase warrant
(Warrant No. TEC--01) of the Company issued to Harry Argovitz
and Rose Argovitz as joint tenants with right of survivorship
covering 200,000 shares of the Company's common stock and
providing for an exercise price of $2.00 per share during an
exercise period expiring March 31, 1996 (identical warrants but
for (i) the name of the holder (ii) the number of shares covered
and (iii) the exercise price of $2.50 per share rather than
$2.00 were issued to the two individuals referred to in Exhibit
4.3. above) (incorporated by reference to Exhibit 4.1. of the
Company's Report on Form 8-K filed under date of October 14,
1992).
4.07. Copy of form of series BOD common stock purchase warrants of the
Company issued to each of the five directors of the Company as of May
31, 1991, each such warrant providing for the purchase on or before
the expiration date referred to in Exhibit 4.2. above of 50,000
shares at an exercise price of $0.625 per share (incorporated by
reference to Exhibit 4.21. of the Company's Report on Form 10-K for
the year ended September 30, 1992).
4.08. Copy of form of series BOD common stock purchase warrants of the
Company issued to each of the six directors of the Company as of
February 1, 1992, each such warrant providing for the purchase
on or before the expiration date referred to in Exhibit 4.2.
above of 50,000 shares of common stock at an exercise price of
$1.25 per share (incorporated by reference to Exhibit 4.22. of
the Company's Report on Form 10-K for the year ended September
30, 1992).
4.09. Copy of form of series BOD common stock purchase warrants of the
Company issued to each of the seven directors of the Company as
of January 5, 1995, each such warrant providing for the purchase
on or before January 19, 1997 of 75,000 shares of common stock
at an exercise price of $1.25 per share (incorporated by
reference to Exhibit 4.16. of the Company's Report on Form 10-K
for the year ended September 30, 1994).
4.10. Copy of form of series BOD common stock purchase warrants of the
Company issued to each of the seven directors of the Company as
of October 23, 1995, each such warrant providing for the
purchase on or before October 23, 1998 of 50,000 shares of
common stock at an exercise price of $0.625 per share
(incorporated by reference to Exhibit 4.15. of the Company's
Report on Form 10-K for the year ended September 30, 1995).
4.11. Copy of Warrant No. JOW-02 of the Company issued to J. Otis
Winters under date of October 23, 1995 covering 150,000 shares
of the Company's common stock and providing for an exercise
price of $0.625 per share during an exercise period expiring
October 23, 1998 (incorporated by reference to Exhibit 4.16. of
the Company's Report on Form 10-K for the year ended September
30, 1995).
4.12. Copy of Warrant No. JCF-02 of the Company issued to James C.
Ford under date of November 15, 1994, covering 120,000 shares of
the Company's common stock and providing for an exercise price
of $0.75 per share during an exercise period expiring November
15, 1997 (incorporated by reference to Exhibit 4.20. of the
Company's Report on Form 10-K for the year ended September 30,
1994).
4.13. First Amended and Restated Loan Agreement executed by and
between the Tidel and the The Frost National Bank d/b/a
Creekwood Capital Group (incorporated by reference to Exhibit
4.01. of the Company's Report on Form 10-Q for the quarterly
period ended December 31, 1994).
4.14. Revolving Credit Note executed by the Tidel, jointly and
severally, payable to the order of the The Frost National Bank
d/b/a Creekwood Capital Group (incorporated by reference to
Exhibit 4.02. of the Company's Report on Form 10-Q for the
quarterly period ended December 31, 1994).
4.15. Guaranty Agreement executed by the Company (incorporated by
reference to Exhibit 4.03. of the Company's Report on Form 10-Q
for the quarterly period ended December 31, 1994).
4.16. Security Agreement (Accounts, General Intangibles, Instruments
and/or Inventory) executed by AnyCard International, Inc.
(incorporated by reference to Exhibit 4.04. of the Company's
Report on Form 10-Q for the quarterly period ended December 31,
1994).
4.17. Security Agreement (Goods) executed by AnyCard International,
Inc. (incorporated by reference to Exhibit 4.05. of the
Company's Report on Form 10-Q for the quarterly period ended
December 31, 1994).
4.18. Security Agreement (Accounts, General Intangibles, Instruments
and/or Inventory) executed by Tidel Cash Systems, Inc.
(incorporated by reference to Exhibit 4.06. of the Company's
Report on Form 10-Q for the quarterly period ended December 31,
1994).
4.19. Security Agreement (Goods) executed by Tidel Cash Systems, Inc.
(incorporated by reference to Exhibit 4.07. of the Company's
Report on Form 10-Q for the quarterly period ended December 31,
1994).
4.20. Security Agreement-Pledge executed by the Company covering all
shares of AnyCard International, Inc. (incorporated by reference
to Exhibit 4.08. of the Company's Report on Form 10-Q for the
quarterly period ended December 31, 1994).
4.21. Modification of Security Agreement-Pledge (modifying Security
Agreement-Pledge previously executed by the Company in favor of
Creekwood Capital Corporation covering all shares of Tidel Cash
Systems, Inc.) (incorporated by reference to Exhibit 4.09. of
the Company's Report on Form 10-Q for the quarterly period ended
December 31, 1994).
4.22. Modification of Security Agreement-Pledge by Tidel Cash Systems,
Inc. (modifying Security Agreement-Pledge previously executed by
Tidel Cash Systems, Inc. in favor of Creekwood Capital
Corporation covering all shares of Tidel Cash Systems, Inc.)
(incorporated by reference to Exhibit 4.10. of the Company's
Report on Form 10-Q for the quarterly period ended December 31,
1994).
4.23. Modification of Security Agreements by Tidel Engineering, Inc.
((Accounts, General Intangibles, Instruments and/or Inventory)
and (Goods) modifying the respective Security Agreements
previously executed by Tidel Engineering, Inc. in favor of
Creekwood Capital Corporation)) (incorporated by reference to
Exhibit 4.11. of the Company's Report on Form 10-Q for the
quarterly period ended December 31, 1994).
4.24. Intellectual Property Collateral Assignment executed by Tidel
Engineering, Inc. in favor of The Frost National Bank d/b/a
Creekwood Capital Group (incorporated by reference to Exhibit
4.12. of the Company's Report on Form 10-Q for the quarterly
period ended December 31, 1994).
4.25. Intellectual Property Collateral Assignment executed by AnyCard
International, Inc. in favor of The Frost National Bank d/b/a
Creekwood Capital Group (incorporated by reference to Exhibit
4.13. of the Company's Report on Form 10-Q for the quarterly
period ended December 31, 1994).
4.26. Intellectual Property Collateral Assignment executed by Tidel
Cash Systems, Inc. in favor of The Frost National Bank d/b/a
Creekwood Capital Group (incorporated by reference to Exhibit
4.14. of the Company's Report on Form 10-Q for the quarterly
period ended December 31, 1994).
4.27. Financing Statement executed by the Company (incorporated by
reference to Exhibit 4.15. of the Company's Report on Form 10-Q
for the quarterly period ended December 31, 1994).
4.28. Financing Statement executed by AnyCard International, Inc.
(incorporated by reference to Exhibit 4.16. of the Company's
Report on Form 10-Q for the quarterly period ended December 31,
1994).
4.29. Financing Statement executed by Tidel Cash Systems, Inc.
(incorporated by reference to Exhibit 4.17. of the Company's
Report on Form 10-Q for the quarterly period ended December 31,
1994).
4.30. Special Deposit Agreement and Grant of Security Interest in Bank
Account among AnyCard International, Inc., Creekwood Capital
Corporation and Texas Commerce Bank National Association
(incorporated by reference to Exhibit 4.18. of the Company's
Report on Form 10-Q for the quarterly period ended December 31,
1994).
4.31. Special Deposit Agreement and Grant of Security Interest in Bank
Account among Tidel Engineering, Inc., Creekwood Capital
Corporation and Texas Commerce Bank National Association
(incorporated by reference to Exhibit 4.19. of the Company's
Report on Form 10-Q for the quarterly period ended December 31,
1994).
4.32. Modification of Warrant Agreement granting to Creekwood Capital
Corporation the right to purchase through May 13, 1996 up to
30,000 shares of the Company's common stock at a price of $2.00
per share executed by the Company (incorporated by reference to
Exhibit 4.20. of the Company's Report on Form 10-Q for the
quarterly period ended December 31, 1994).
4.33. Guaranty of Validity of Collateral executed by James T. Rash and
J. Otis Winters, individually, in favor of The Frost National
Bank d/b/a Creekwood Capital Group (incorporated by reference to
Exhibit 4.21. of the Company's Report on Form 10-Q for the
quarterly period ended December 31, 1994).
10.01. Copy of 1989 Incentive Stock Option Plan of the Company
(incorporated by reference to Appendix A of the Company's Proxy
Statement filed under Regulation 14A with respect to the Annual
Meeting of Shareholders held June 13, 1989).
10.02. Copy of Lease Agreement dated February 21, 1992 between the
Company, as Lessee, and San Felipe Plaza, Ltd., as Lessor,
related to the occupancy of the Company's executive offices
(incorporated by reference to Exhibit 10.10. of the Company's
Report on Form 10-K for the year ended September 30, 1992).
10.03. Copy of Lease dated as of December 9, 1994 (together with the
Addendum and Exhibits thereto) between Booth, Inc., a Texas
corporation, as Landlord and Tidel Engineering, Inc., as Tenant,
covering approximately 65,000 square feet of manufacturing and
office premises at 2310 McDaniel Drive, Carrollton, Texas
(incorporated by reference to Exhibit 10.7. of the Company's
Report on Form 10-K for the year ended September 30, 1994).
10.04. Copy of Agreement dated October 30, 1991 between ACS and Tidel
Engineering, Inc. (incorporated by reference to Exhibit 10.14.
of the Company's Report on Form 10-K for the year ended
September 30, 1992).
10.05. Copy of EFT Processing Services Agreement dated February 3, 1995
by, between and among Affiliated Computer Services, Inc.
("ACS"), AnyCard International, Inc. and the Company related to
the electronic fund transfer services to be provided by ACS to
AnyCard (incorporated by reference to Exhibit 10.9. of the
Company's Report on Form 10-K for the year ended September 30,
1995).
10.06. Copy of Amendment No. 1 dated as of September 14, 1995 to
Exhibit 10.05. above (incorporated by reference to Exhibit
10.10. of the Company's Report on Form 10-K for the year ended
September 30, 1995).
10.07. Copy of Purchase Agreement dated February 3, 1995 between ACS
and AnyCard International, Inc. related to the purchase by ACS
of AnyCard Systems (incorporated by reference to Exhibit 10.11.
of the Company's Report on Form 10-K for the year ended
September 30, 1995).
10.08. Copy of Amendment No. 1 dated as of September 14, 1995 to
Exhibit 10.07. above (incorporated by reference to Exhibit
10.12. of the Company's Report on Form 10-K for the year ended
September 30, 1995).
11.01 Statement of Computation of Net Income (Loss) Per Share for the
three-year period ended September 30, 1996. (Previously Filed)
22.1. The Registrant has three subsidiaries doing business in the
names set forth below:
State of Percent
Name Incorporation Owned
---- ------------- -------
Tidel Cash Systems, Inc. Delaware 100%
AnyCard International, Inc. Delaware 100%
Tidel Engineering, Inc. Delaware 100%
E-5
