U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 For the quarterly period ended September 30, 1997
|_| Transition report under Section 13 or 15(d) of the Exchange Act For the
transition period from ______________ to ______________ :
Commission file number 0-20887
TELIDENT, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
MINNESOTA 41-1533060
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
ONE MAIN STREET S.E., SUITE 85
MINNEAPOLIS, MINNESOTA 55414
(Address of principal executive offices) (Zip Code)
(612) 623-0911
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes __X__ No _____.
APPLICABLE ONLY TO CORPORATE ISSUERS
Number of shares outstanding of each of the issuer's classes of equity
securities, as of September 30, 1997: i) 6,938,185 shares of Common Stock, par
value $.02 per share; ii) 150,000 shares of Series I Class A Convertible
Preferred Stock, par value $.02 per share; iii) 1,111,111 shares of Series II
Class A Convertible Preferred Stock, par value $.02 per share.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS.
TELIDENT, INC.
CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, June 30,
1997 1997
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 893,184 $ 22,319
Trade accounts receivable, net of allowance for doubtful 598,189 432,111
accounts of $37,160 and $40,000, respectively
Inventories 370,636 430,506
Other 47,215 37,710
------------- -------------
Total current assets 1,909,224 922,646
FURNITURE AND OFFICE EQUIPMENT, less accumulated 259,297 264,051
depreciation of $219,555 and $138,433, respectively
INTANGIBLE ASSETS, less accumulated amortization of $119,468 113,269 99,429
and $262,739, respectively
OTHER ASSETS 5,855 30,855
------------- -------------
$ 2,287,645 $ 1,316,981
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 327,560 $ 299,684
Accrued expenses 96,191 113,229
Deferred revenue 5,156 1,950
Current portion of long-term debt 13,506 15,913
Notes payable - bank 191,166 101,716
Debentures and interest payable 53,750 77,875
------------- -------------
Total current liabilities 687,329 610,367
LONG TERM DEBT, less current portion 17,948 20,903
DEBENTURES PAYABLE -- 87,500
------------- -------------
Total liabilities 705,277 718,770
------------- -------------
COMMITMENTS
SHAREHOLDERS' EQUITY:
Preferred stock, $.02 par value, 10,000,000 and 2,500,000 shares
authorized, respectively
Series I, convertible into common stock at the rate of one
common share for each preferred share, 150,000 shares
outstanding at both dates 3,000 3,000
Series II, convertible into common stock for a period of one year
at i) one common share for each preferred share or ii) if the
Average Price, as defined, is less than $1.125, then each share
of preferred shall be convertible into the number of shares of
common stock equal to $1.125 divided by 80% of the Average
Price, 1,111,111 shares outstanding at September 30, 1997 22,222
Common stock, $.02 par value, 40,000,000 shares authorized,
6,938,185 and 6,948,526 shares outstanding, respectively 138,764 138,971
Additional paid-in capital 14,677,603 13,517,626
Accumulated deficit (13,259,221) (13,061,386)
------------- -------------
Total shareholders' equity 1,582,368 598,211
------------- -------------
$ 2,287,645 $ 1,316,981
============= =============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TELIDENT, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
September 30,
1997 1996
------------ ------------
Restated - Note 1
<S> <C> <C>
Net sales $ 504,798 $ 826,369
Cost of sales 163,830 257,316
------------ ------------
Gross profit 340,968 569,053
Operating expenses:
Sales and marketing 178,572 336,074
Research and development 121,230 288,380
General and administrative 236,099 289,254
------------ ------------
Total operating expenses 535,901 913,708
------------ ------------
Loss from operations (194,933) (344,655)
Interest income 9,167 14,793
Interest expense (12,069) (112,515)
------------ ------------
Net loss $ (197,835) $ (442,377)
============ ============
Deemed preferred stock dividends, including $50,787 of cumulative dividends
at September 30, 1997 $ (348,837) $ (17,382)
============ ============
Net loss applicable to common stock $ (546,672) $ (459,759)
============ ============
Net loss per common share $ (.08) $ (.08)
============ ============
Weighted average number of shares outstanding
6,941,669 5,541,034
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TELIDENT, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Number of Number of Amount of Amount of Additional
common preferred preferred common paid-in Accumulated
shares issued shares issued stock stock capital deficit
------------- ------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, June 30, 1997 6,948,526 150,000 $ 3,000 $ 138,971 $13,517,626 $ (13,061,386)
Preferred stock issued in private
placement, net of offering
expenses of $56,373 -- 1,111,111 22,222 -- 1,171,405 --
Common stock offset against
note receivable (10,341) -- -- (207) (11,428) --
Net loss -- -- -- -- -- (197,835)
----------- ----------- ----------- ----------- ----------- -------------
BALANCE, September 30, 1997 6,938,185 1,261,111 $ 25,222 $ 138,764 $14,677,603 $ (13,259,221)
=========== =========== =========== =========== =========== =============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TELIDENT, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
September 30,
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (197,835) $ (442,377)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 31,800 54,231
Common stock issued for services -- 10,500
Changes in assets and liabilities:
Trade accounts receivable (166,078) (204,933)
Inventories 59,870 (126,101)
Other assets 3,860 260,429
Trade accounts payable 27,876 162,513
Other liabilities (19,194) 32,713
------------ ------------
Net cash used in operating activities (259,701) (253,025)
Cash flows from investing activities:
Payments for intangible assets (24,440) (79,084)
Purchase of furniture and office equipment (16,446) (24,353)
------------ ------------
Net cash used in investing activities (40,886) (103,437)
Cash flows from financing activities:
Payments on notes payable-bank (350,510) (1,335,050)
Borrowings from notes payable-bank 439,960 325,000
Payments on borrowings from others (111,625) (443,090)
Proceeds from issuance of preferred stock 1,193,627 --
Proceeds from issuance of common stock -- 2,898,619
Preferred stock dividends -- (11,948)
Preferred stock redemption -- (50,000)
------------ ------------
Net cash provided by financing activities 1,171,452 1,383,531
Net increase in cash for the period 870,865 1,027,069
Cash beginning of period 22,319 448,654
------------ ------------
Cash end of period $ 893,184 $ 1,475,723
============ ============
Supplemental schedule of non-cash financing
activities:
Common stock offset against note receivable $ 11,635 $ --
------------ ------------
Conversion of notes payable to common stock $ -- $ 229,340
============ ============
Common stock issued for services $ -- $ 10,500
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TELIDENT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The condensed financial statements included in this Form 10-QSB are
unaudited. However, in the opinion of the Telident, Inc. (the "Company"), the
financial statements include all adjustments, consisting of normal recurring
adjustments, necessary for the fair presentation of the results and balances for
the interim periods.
The results of operations for the three-month period ended September 30,
1997 do not necessarily indicate the results to be expected for the full year.
These statements should be read in conjunction with the Company's consolidated
financial statements and notes thereto, contained in the Company's Annual Report
on Form 10-KSB for the year ended June 30, 1997.
The unaudited condensed statements of operations for the three months ended
September 30, 1997 have been restated to properly reflect the beneficial
conversion feature of the preferred stock issued in July 1997, in accordance
with EITF D-60. This adjustment increased deemed preferred stock dividends and
previously reported net loss applicable to common stock by $312,500. Accordingly
net loss per common share increased from $.03 to $.08 for the three months ended
September 30, 1997.
2. INVENTORIES
Inventories are stated at the lower of cost or market using the first in,
first out method, and consisted of the following:
September 30, June 30,
1997 1997
----------- -----------
Raw materials $ 386,962 $ 416,735
Work in progress 1,733 336
Finished goods 71,941 103,435
Inventory reserve (90,000) (90,000)
----------- -----------
$ 370,636 $ 430,506
=========== ===========
3. SHAREHOLDERS' EQUITY
ISSUANCE OF SERIES II CLASS A CONVERTIBLE PREFERRED STOCK - On July 27,
1997, FAMCO II LLC ("FAMCO"), a Minnesota limited liability corporation,
purchased 1,111,111 shares of the Company's Series II Class A Convertible
Preferred Stock for $1,250,000 ($1.125 per share). FAMCO is managed by Family
Financial Strategies, Inc.
The Series II Class A Convertible Preferred Stock contained a beneficial
conversion feature. The value of the beneficial conversion feature, $312,500,
was recorded as a deemed preferred stock dividend at the date of issuance, which
increased the net loss available to holders of common stock in the calculation
of net loss per share
CUMULATIVE UNDECLARED DIVIDENDS - The Company has not paid dividends on
either series of its preferred stock since March 31, 1997. At September 30,
1997, there are $50,787 of cumulative undeclared dividends on its two series of
preferred stock.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TELIDENT, INC.
February 13, 1998 By: /s/ W. Edward McConaghay
- ------------------------- --------------------------------------------
Date W. Edward McConaghay, President
(Principal Executive Officer)
February 13, 1998 /s/ Carolyn L. Wright
- ------------------------- --------------------------------------------
Date Carolyn L. Wright, Controller
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 893,184
<SECURITIES> 0
<RECEIVABLES> 635,349
<ALLOWANCES> 37,160
<INVENTORY> 370,636
<CURRENT-ASSETS> 1,909,224
<PP&E> 478,852
<DEPRECIATION> 219,555
<TOTAL-ASSETS> 2,287,645
<CURRENT-LIABILITIES> 687,329
<BONDS> 0
0
25,222
<COMMON> 138,754
<OTHER-SE> 1,418,382
<TOTAL-LIABILITY-AND-EQUITY> 2,287,645
<SALES> 504,798
<TOTAL-REVENUES> 504,798
<CGS> 163,830
<TOTAL-COSTS> 163,830
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (12,069)
<INCOME-PRETAX> (197,835)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (197,835)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
